Penalty for Not Having Health Insurance: What You Need to Know

If you’re wondering about the penalty for not having health insurance in 2025, you’re not alone—and the answer isn’t as straightforward as it used to be. Back when the Affordable Care Act (ACA) first rolled out, there was a clear-cut federal individual mandate that required everyone to have qualifying health coverage or face a tax penalty. While the federal government officially reduced that penalty to $0 in 2019, several states have stepped up with their own health insurance mandates—and their own penalties for not complying. In this article, we’ll break down where you’ll still pay a fine, how much it could cost you, who’s exempt, and why skipping health coverage might cost you more in out-of-pocket medical expenses than just the penalty itself. If you’re navigating the ACA marketplace, state-level insurance laws, or just trying to avoid fines for being uninsured, this guide is your go-to resource.

Wait, So Is There Still a Penalty for Being Uninsured?

At the federal level—nope, not anymore.

The federal individual mandate penalty was reduced to $0 starting in 2019, thanks to the Tax Cuts and Jobs Act of 2017. That means you won’t owe the IRS a dime for not having coverage… unless you live in a state that enforces its own mandate.

States That Still Penalize You for Not Having Health Insurance

Some states said, “Not so fast!” and created their own mandates and penalties. Here’s a breakdown of where you’ll still be fined:

✅ California

• Penalty: Up to $900 per adult and $450 per dependent child
• Applies if you’re uninsured for more than 3 months

✅ Massachusetts

• Penalty: Varies based on income and age (up to $1,908/year)
• Applies to adults over 18

✅ New Jersey

• Penalty: Based on income and household size (up to $3,900/year)

✅ Rhode Island

• Penalty: Same formula as the former federal mandate

✅ Vermont

• Mandate exists but no financial penalty—yet

✅ District of Columbia

• Penalty: Mirrors the old ACA formula (up to $700+)

Note: Other states may add mandates in the future. Always check your state’s marketplace or department of insurance for updates.

How Are These Penalties Calculated?

Each state has its own math, but most follow a formula similar to the ACA’s original mandate, which looked like this:

• 2.5% of your annual household income, or
• A flat dollar amount (whichever is higher)

States may adjust the percentages and caps, but most base it on income, tax filing status, and the number of uninsured months.

Exemptions From the Penalty

Not everyone has to pay. You may qualify for an exemption if you:

• Make below a certain income level
• Can’t afford available coverage (cost exceeds a % of income)
• Have a short coverage gap (under 3 months)
• Are experiencing hardship (eviction, domestic violence, etc.)
• Are a member of a recognized religious sect
• Live in a state without a mandate

States typically have their own exemption applications or processes, so don’t assume federal rules cover everything.

Why It’s Still Risky to Go Without Health Insurance

Even if you dodge the financial penalty, going without insurance can cost you big time:

• Emergency room visits can run $1,000+
• Ambulance rides aren’t free
• Prescription drugs cost more out-of-pocket
• Routine checkups? Good luck paying out of pocket without sweating

A single broken arm could wipe out your savings faster than you can say “deductible.”

Is Marketplace Insurance Affordable?

Actually, yes—especially with current subsidies.

Thanks to recent updates to the ACA, more people than ever qualify for premium tax credits, making plans much more affordable—even free in some cases.

Pro Tip: Visit healthcare.gov or your state exchange to shop and compare.

Final Thoughts: Should You Risk It?

If you live in a state with a health insurance mandate, skipping coverage isn’t just risky—it could be costly. And even in states without penalties, uninsured medical bills are no joke. The smart move? Check your state laws, see what you qualify for on the marketplace, and get covered. Peace of mind is cheaper than a $3,000 hospital bill (or a $900 fine).

❓FAQs

Is there a federal penalty for not having health insurance?
No, the federal penalty was reduced to $0 starting in 2019.

What happens if I don’t have health insurance in California?
You may owe a penalty of up to $900 per adult and $450 per child.

Can I be exempt from the health insurance penalty?
Yes, exemptions apply for low income, hardship, short gaps, and more—based on your state’s rules.