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In 2017, the Affordable Care Act’s individual shared responsibility provision entered its fourth year of enforcement. Commonly referred to as the individual mandate, the shared responsibility provision requires that most Americans to do one of the following:
The ACA allows everyone to go without minimum essential coverage for a single period of up to three months. After that, unless you qualify for an exemption, as mentioned above, you will likely owe the tax penalty. How much you owe depends on the year and how long you went without health insurance. For every month you are uninsured and not exempt, you will owe 1/12th of the annual payment.
The tax penalty has increased substantially each year since the shared responsibility provision took effect in 2014. Previous penalties were as follows:
The greater of these amounts:
The greater of these amounts:
Penalties are paid when you file your federal income taxes for the same year (i.e., 2014 penalty paid with 2014 taxes). If you do have to file taxes because your gross income is below your filing threshold, you are automatically exempt from the shared responsibility payment for that year.
If you skip minimum essential coverage in 2016 and are not otherwise exempt, the penalty will be the greater of these amounts2:
The payment will be owed when you file your 2016 taxes. The tax filing threshold is subject to change from year to year, and you can find the most up to date information available at IRS.gov. See IRS Publication 17 for more information on who needs to file a federal tax return and filing threshold amounts.
2016 will be the last year in which the shared responsibility payment dramatically increases. In 2017 and beyond, the penalty will remain the same as the 2016 amounts plus an inflation adjustment.
As mentioned above, if you are not required to file a federal tax return due to income, you are automatically exempt from the Obamacare tax penalty. There are several other exemptions for which you may be eligible, and you can read more about them at IRS.gov. It is wise to speak with a tax professional or licensed health insurance producer to discuss exemptions, confirm your eligibility, and determine if and how you should apply for one.
Call the number at the top of your screen to discuss your coverage options with a licensed health insurance producer. If you have had a qualifying life event, you may be eligible for a special enrollment period for an Obamcare plan.
Otherwise, you could owe a tax penalty but may still want to consider other benefit plans that are not ACA compliant but could help you save money on healthcare until you secure minimum essential coverage.
Originally posted on September 23, 2016
 Internal Revenue Service. “Individual Shared Responsibility Provision.” Last reviewed or updated March 3, 2016. https://www.irs.gov/affordable-care-act/individuals-and-families/individual-shared-responsibility-provision
 IRS.gov. “The Individual Shared Responsibility Payment – An Overview.” Last updated Dec. 1, 2015. https://www.irs.gov/Affordable-Care-Act/The-Individual-Shared-Responsibility-Payment-An-Overview
 Internal Revenue Service. “Individual Shared Responsibility Provision – Reporting and Calculating the Payment.” Last reviewed or updated Aug. 2, 2016. https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-calculating-the-payment