Health Insurance
States That Still Fine You for Not Having Health Insurance (2026)
By the PolicyZen Team · Updated March 2026 · 7 min read
In 2017, Congress zeroed out the federal individual mandate penalty — the fine you paid on your federal tax return for going uninsured under the Affordable Care Act. Starting in 2019, there was no federal tax penalty for not having health insurance.
Most people assume this means the mandate is gone entirely. It's not. Six states and Washington D.C. have their own individual mandates — and they will fine you on your state tax return if you go without qualifying coverage.
States with active individual mandates: California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington D.C. (Maryland passed a mandate but has not activated the penalty.)
State-by-State Breakdown
| State | Mandate Since | Penalty (2025–2026) | Details |
|---|
| California |
2020 |
$900/adult, $450/child (minimum); or 2.5% of household income above filing threshold — whichever is greater |
Reported on CA state tax return; penalty is per month uninsured |
| Massachusetts |
2006 (original; predates ACA) |
Up to 50% of the cost of the cheapest available coverage you could have bought |
The original state mandate — Massachusetts invented this approach; enforced since 2006 |
| New Jersey |
2019 |
$695–$3,012/adult depending on income; $347.50/child; maximum of 2.5% of income |
Mirrors the structure of the former federal penalty |
| Rhode Island |
2020 |
$695/adult, $347.50/child (minimum); or 2.5% of income — whichever is greater |
Uses same structure as federal penalty before zeroing-out |
| Vermont |
2020 |
No financial penalty currently — mandate exists but penalty not yet activated |
Vermont passed the mandate framework; penalty amount set annually; currently $0 |
| Washington D.C. |
2019 |
$745/adult, $372.50/child; maximum 2.5% of income |
D.C. residents subject to D.C. tax return penalty |
What Counts as "Qualifying Coverage"
You won't face a penalty if you have any of the following (in most mandate states):
- Employer-sponsored health insurance (including COBRA)
- Individual or family plan purchased through the ACA marketplace
- Medicare (any part)
- Medicaid or CHIP
- TRICARE or VA coverage (military/veteran)
- Health sharing ministry plans — check your specific state; some states accept these, others don't
- Short-term health plans — generally do NOT qualify in mandate states
Short-term health plans don't count: These plans are cheap and widely advertised, but they don't meet ACA minimum standards and don't satisfy the individual mandate in any state that has one. If you're in California, NJ, RI, or DC and you have a short-term plan, you will still owe the penalty.
Common Exemptions
Every mandate state has exemptions that eliminate or reduce the penalty. Common ones include:
- Affordability hardship: If the cheapest available coverage would cost more than a defined percentage of your income (typically 8%), you may be exempt
- Income below filing threshold: If your income is below the state tax filing requirement, no penalty
- Short coverage gap: Most states allow a gap of one to three consecutive months without a penalty
- Religious exemption: Members of recognized religious sects opposed to insurance (typically Amish, Mennonite)
- Hardship exemption: Homelessness, eviction, domestic violence, recent bankruptcy, death of a family member, natural disaster
- Incarceration
Why This Matters if You Move
People move to California or New Jersey from states with no mandate and go uninsured during the gap between jobs — without realizing they'll owe a penalty on their state taxes. The penalty isn't typically enormous, but it can be hundreds of dollars, and it can be a surprise if you didn't know the mandate exists.
If you move to a mandate state mid-year, you owe the penalty for the months you were uninsured while a resident. If you move out of a mandate state mid-year, you only owe for the months you lived there without coverage.
Frequently Asked Questions
Does the federal government still require health insurance?
No. The federal individual mandate penalty has been $0 since 2019. You will not owe any federal tax penalty for going uninsured, regardless of what state you live in. Only the six states and D.C. listed above can penalize you, and only on your state tax return.
How does the state find out I didn't have insurance?
Insurers report coverage information to your state tax authority, similar to how employers report wages to the IRS. When you file your state tax return in a mandate state, you'll typically be asked to confirm your coverage months. Your insurer's report of your coverage period will be checked against your answer. Gaps will trigger the penalty calculation.
I'm self-employed in California and can't afford coverage. What can I do?
First, check if you qualify for Medi-Cal (California's Medicaid program) — in 2024, eligibility was expanded to all California adults regardless of immigration status. If your income is between 138% and 400% of the federal poverty level, you may qualify for significant subsidies on Covered California. If coverage is still unaffordable after subsidies, you may qualify for the affordability hardship exemption. Tax professionals or Covered California navigators can help you determine your options.
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