Tax Tips

Avoid penalties for not having minimum essential coverage

To avoid a penalty for not having health insurance, you must be enrolled in a plan that qualifies as minimum essential coverage (MEC). You won’t be subject to a penalty as long as you have coverage under any of the following:

  • A health plan bought through the Health Insurance Marketplace.
  • An individual health plan bought outside the Health Insurance Marketplace, if it meets the standard for qualified health plans.
  • A “grandfathered” individual insurance plan you’ve had since March 23, 2010, or earlier.
  • A job-based plan, including a retiree plan and COBRA coverage.
  • Medicare Part A or Part C (Part B coverage by itself doesn’t qualify).
  • Most Medicaid coverage, except for limited coverage plans.
  • The Children’s Health Insurance Program (CHIP).
  • A parent’s plan.
  • A student health plan (check with your school to see if the plan counts as minimum essential coverage).
  • A health care plan for Peace Corps volunteers.
  • A health care plan through the Department of Veterans Affairs.
  • Most TRICARE plans.
  • Department of Defense Nonappropriated Fund Health Benefits Program.
  • Refugee Medical Assistance.
  • State high-risk pools for plan or policy years that started on or before December 31, 2014 (check with your high-risk pool plan to see if it qualifies as minimum essential coverage).

If you don’t have MEC, you are required to pay a fee called the individual shared responsibility payment for being uninsured. Examples of health plans that don’t count as coverage include:

  • Coverage only for vision care or dental care.
  • Workers’ compensation.
  • Coverage only for a specific disease or condition.
  • Plans that offer discounts on medical services.

You’ll owe the shared responsibility payment for any month you, your spouse or your tax dependent don’t have health insurance that qualifies as MEC. This fee will be paid when you file your federal tax return for the year you don’t have coverage.