Massachusetts residents who fail to comply with the state’s mandatory health 
insurance requirement – widely regarded as a model for the Affordable Care Act – may be subject to penalties equal to half of what they would have had to pay for insurance premiums.
The Massachusetts Department of Revenue announced the penalties for the 2016 tax year for failing to to comply with the state’s health care insurance mandate. The penalties are imposed through a taxpayer’s state income tax return.
The state requires adults 18 and older to buy health insurance if they are “deemed able” to afford the coverage. Under this provision, individuals whose income is less than 150% of the Federal Poverty Level, or FPL, (currently $17,655 for a single person) are exempt from the penalty for non-compliance.
Those with income above 150% of FPL up to 300% who fail to obtain insurance face a penalty equal to half of the premium for the lowest cost plan offered by the state’s “ConnectorCare” program.
Individuals whose income is above 300% of the FPL who don’t buy insurance are subject to penalties that vary by age. Those between 18 and 30 will be charged half of the lowest priced individual Catastrophic Plan offered on ConnectorCare. Those 31 and above will be charged half of the premium for a Bronze-level plan.
Married couples who don’t comply with the insurance mandate are subject to a penalty equal to the sum of the individual penalties for each spouse.
Taxpayers who fail to obtain ACA-compliant insurance may also face a “shared responsibility payment” or penalty payable with their federal income tax return. To avoid penalizing these individuals twice, the state allows them to deduct the amount of the federal penalty from the Massachusetts health care penalty they may owe.
