Penalties for Not Having Health Insurance in Massachusetts

Massachusetts has legalized penalties for a lack of health insurance.
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In 2006, the Massachusetts legislature passed the Health Care Reform Act, requiring almost all of its citizens to obtain minimum levels of health insurance or face penalties. The law requires the majority of state residents over age 18 who meet minimum income standards to purchase health care coverage or pay penalties when filing state tax returns. The state requires enrollment in plans meeting its minimum creditable coverage levels. If you don't enroll, you'll face monthly penalties.

Employer Penalties

The HCRA requires employers with a minimum of 11 full-time employees to offer their workers a group health plan and pay a share of monthly premiums. If the employer does not obey these provisions, it must pay a contribution of approximately $295 annually as of 2011 for each employee into the state's Health Safety Net Trust Fund. Employers with at least 11 full-time employees must set up a plan allowing employees to purchase health insurance through a payroll deduction using pretax dollars. If the employer does not follow this law, the state charges a Free Rider Surcharge for employees who do not purchase health insurance and state's free care program, the Health Safety Net.

Individual Penalties

Penalties for not obtaining health insurance coverage depend on your age, family size and income. Penalty amounts are based on half of the cost of the cheapest state insurance plan you can purchase, known as the Commonwealth Choice plan. If you have a gap in coverage up to 90 days, penalties are not assessed. Residents with incomes at or below 150 percent of Federal poverty guidelines are not subject to penalties. As of 2012, those incomes are $16,344 for individuals, with a family of four earning up to $33,528. Penalties are payable when filing your state taxes. To avoid penalties, file Health Care Information Schedule HC when filing your Massachusetts income taxes.


Certain state residents who can afford health insurance but choose not to purchase it may qualify for a waiver or exemption. If buying health insurance conflicts with your religious beliefs, you may qualify for an exemption.

Residents unable to find affordable health insurance are exempt from penalties. The state has an online tool, the Commonwealth Connector, which helps find affordable plans for residents based on income and number of family members. You must show that an affordable plan is unavailable for your circumstances for the penalty exemption.

Residents suffering from financial hardships may file a certificate of exemption prior to Dec. 1 of the year the hardship occurred to qualify for an exemption. If approved, no penalty is issued. If a resident does owe a penalty but can prove financial hardship preventing health insurance purchase even though meeting income standards, the person can file an appeal when filing Massachusetts income taxes. If you think you have an appropriate reason for not purchasing health insurance, you can also file an appeal when filing state income taxes.

The Numbers

In 2012, the maximum penalty for people 27 and older with incomes exceeding 300 percent of the FPL is $105 for every month you remain uninsured, up to $1,260 annually. For those with incomes less than 300 percent of the FPL, penalties range between $19 and $58 for every uninsured month, or $228 to $696 annually. Young adults between the ages of 18 and 26 whose incomes exceed 300 percent of the FPL pay somewhat lower penalties than their older counterparts. In 2011, these individuals paid $72 per month, for a total of $864 annually.

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