Is Health Insurance Mandatory?

is health insurance mandatory text overlaying image of a woman If you remember the passage of the Affordable Care Act (or ACA, also commonly known as Obamacare), you probably remember that it was a bit controversial at the time. One of the reasons it was controversial was that it included a health insurance mandate. Meaning that is was mandatory to ++enroll in an insurance plan through the ACA Marketplace (or have a state-funded plan), or pay a tax penalty at the end of the year. 

But since the law’s passage in 2010, it has undergone a few changes. Leaving a lot of people confused about its requirements. So if you’re wondering whether health insurance is mandatory, the answer is: it depends. And even if you aren’t required by law to have health insurance, you definitely should. Not having a plan might save you a little money now, but you could be hit with large medical bills in the future if you don’t have coverage. And not only that, but the ACA didn’t just mandate coverage, it also made sure that plans cover all sorts of preventive care. So, you can stay healthier with an ACA-approved plan. 

Below, we’ll go over what’s mandatory when it comes to health insurance, based on where you live. As well as give you some tips on how to get the best plan for you. 

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Affordable Care Act Mandate

The objective of the Patient Protection and Affordable Care Act (ACA), which was passed into law in 2010, was to increase access to health insurance for all Americans. This was true even for people with preexisting conditions, who before the ACA was passed often had trouble getting coverage. 

One of the ways that the Affordable Care Act effectively made having health insurance mandatory was by imposing a tax penalty for those who did not have coverage. And why did it create this mandate and tax penalty? The same reason it created the Open Enrollment Period. Which is the only time you can buy health insurance (unless you have a Special Enrollment Period granted to you). So that people would buy health insurance before they got sick, and the risk pool would be spread among everyone, not just those who needed their insurance right at that moment.

So now that we’ve looked briefly at why there was a mandate when the law was passed. What about right now? If you don’t have health insurance, what are the consequences?

As of now, there are none, at least on the federal level. As of January 1, 2019, the federal government no longer requires its citizens to carry health insurance. The ACA is still in effect, but that part of the law has been done away with. But that doesn’t necessarily mean you’re off the hook: health insurance requirements now depend on the state you live in. 

State Health Insurance Mandates

Despite the fact that having health insurance is not mandatory on a federal lever anymore, a number of states either already have coverage mandates on the books or are attempting to pass laws that would make having health insurance mandatory. In the states that have mandates, you will have to pay some sort of penalty if you do not have adequate coverage.

The states that health insurance is mandatory are:

  • California
  • Massachusetts
  • New Jersey
  • Rhode Island
  • Vermont

Additionally, the states of Connecticut, Hawaii, Maryland, and Minnesota, along with the state of Washington, have all attempted to pass legislation that would health insurance mandatory for residents.

In the states where having health insurance is mandatory, coverage can be obtained through the Health Insurance Marketplaces that are run by the state. The guidelines for obtaining and retaining coverage are comparable to those outlined in the Affordable Care Act (ACA). Below we’ve highlighted the state mandates, but for more information make sure to check out our state-by-state health insurance guides.

California Mandate

In California, people who don’t have health insurance will have to pay a fine of 2.5% of their household income or at least $750 per adult and $375 per dependent under 18 every year, adjusted for inflation each year. The penalty can’t be more than the average state premium for a Bronze plan on the California exchange for the size of the household, and the penalty doesn’t apply if the premium is more than 8.3% of the household income.

There are a few exemptions, which would keep you from having to pay the penalty, such as:

  • Religious exemptions – You or a member of your family may be eligible for a religious conscience exemption if you adhere to a religion that forbids private health insurance as a concept, or has a firm belief that physical illness can be cured solely through spiritual means.
  • Hardship exemptions – If you are unable to obtain health coverage because you are facing financial challenges, such as being homeless, have an eviction notice, experiencing a natural disaster, experiencing domestic violence, filing for bankruptcy, etc. You might get an exemption from the penalty.
  • Affordability exemption – If the monthly premium for the least expensive plan that is available to you would cost more than 8.27% of your household income, you are exempt from the tax penalty.
  • Small coverage gap exemptions – If you only went without coverage for less than 3 months. you will not have a penalty.
  • Indigenous people exemptions – If you are part of a federally recognized Native American Nation, health insurance is not mandatory.

Massachusetts Mandate

The state of Massachusetts has one of the highest levels of insurance coverage in the United States. 97.5% of this state’s residents have health insurance, since the state mandates that all residents have insurance. The individual mandate in Massachusetts was in place well before the individual mandate in the Affordable Care Act, and its healthcare laws served as a guide for the individual mandate in the ACA. 

In Massachusetts, the amount of the penalty varies depending on your income, age, and the size of your family. It can, though, be as much as 50% of the minimum monthly premium payment that you would have qualified for through Health Connector. The health insurance exchange in Massachusetts. But the tax penalty cannot be more than the cost of the least expensive plan for which you are eligible.

If you live in Massachusetts and are unable to afford one of the state’s health insurance plans. You will not pay fines for going without coverage. In most cases, this means your household income is at or below 150% of the federal poverty level. 

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New Jersey Mandate

In New Jersey, the penalty you have to pay if you do not maintain a health insurance policy is known as the Shared Responsibility Payment. This penalty is calculated according to both household income (including that of any dependents) and family size. The fine, though, cannot exceed the state median premium for Bronze health plans. 

There are exceptions to the mandate under New Jersey law. You may be exempt from purchasing health insurance if, for instance, you are unable to afford the plans offered by the Marketplace or your employer. The cost of the plan premiums can’t be more than 8.05% of your annual household income. In addition, those who cannot comply due to a religious belief may be exempt from having to pay the penalty.

Rhode Island Mandate

In Rhode Island, if you do not have health insurance that complies with the ACA, you will be subject to the same penalty that existed under the federal individual mandate. The fines go up each year to keep pace with inflation. But the maximum penalty per household cannot exceed the annual cost of a typical Rhode Island Bronze plan.

Vermont Mandate

When filing state taxes in Vermont, residents are obligated to disclose whether or not they are covered by health insurance. You will not be fined for not having medical insurance here, though. Unlike in other states that have passed individual mandate laws.

Although there is currently no financial penalty for Vermont residents who do not comply with the state’s individual health insurance mandate. This is not to say that there will never be such a penalty. If you live in Vermont and have to have health insurance that complies with the Affordable Care Act but don’t, you should know that lawmakers are considering imposing a penalty.


  • What if I have a gap in my insurance?

If you had insurance, but let it lapse for less than three consecutive months, that is a short gap in coverage. You probably won’t have to pay a penalty in this case. Even in places like Vermont, California, New Jersey, Rhode Island, Massachusetts, or Washington, DC. To avoid tax penalties, though, you should not let your policy lapse more than once a year. And be sure to accurately report it on your state tax return. You will need to reapply for exemption in subsequent years if this continues to be an issue. 

  • Why would anyone go without health insurance?

There are a variety of reasons why someone would go without health insurance. Some people might think they can’t afford it, while others may have questions about the health insurance enrollment process. It’s also possible that former employees have no idea they no longer have access to their former employer’s group health plan. Make sure you and your family have protection against the risks of not having health insurance. If you have any problems or questions, EZ.Insure is here to assist you. 

  • What is so risky about not having health insurance?

Without health insurance, you expose yourself to a number of serious dangers. If you need medical attention but don’t have health insurance, for instance, you’ll have to pay for it entirely out-of-pocket. This could be prohibitively expensive; in fact, medical bills are a leading cause of personal bankruptcy. Of course, you might also be subject to a local income tax penalty. And you will also be less likely to get preventive care that can keep you healthy. In light of all this, you and your loved ones need adequate insurance coverage. 

Let EZ Help

You can find a plan that fits your budget and provides adequate coverage by comparing different options. But we get that this can feel a bit overwhelming. So come to EZ before you go to the trouble of comparing on your own. We will save you time and effort by quickly comparing the various options in your area. If you’re looking for affordable coverage that still meets your family’s needs, our licensed agents can help you compare plans from the nation’s best-known insurers. We provide unbiased plan comparisons and advice at no extra cost. Free quotes are available by entering your zip code in the box below. Or by calling 877-670-3557 to speak directly with an agent.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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