What is the penalty for not having health insurance in 2016?

Be aware of 2016 IRS tax filing requirements to report your health insurance coverage.

Even though the future of the Affordable Care Act is uncertain, the law is currently in effect.  This includes the requirement to report information about your health plan coverage on your income tax return.  The vast majority will simply need to check a box on their 2016 tax return to indicate they had health coverage all year.  Those who chose not to purchase health insurance may have to pay a fee, or claim an exemption if they qualify.  Know your responsibilities when it comes to filing your taxes.

Employer or non-marketplace coverage

Employer or Non-Marketplace Coverage affects more than 75 percent of taxpayers. This includes those with Medicare, Medicaid, CHIP, Healthy Michigan Plan, TRICARE, or VA health coverage. If you had this type of coverage during 2016 for yourself, your spouse (if filing jointly), and anyone you claim as a dependent, you will simply check a box on your tax return.  You may receive Form 1095-B or Form 1095-C in the mail from your employer, insurance company, or the government program that provides your coverage.  It describes the coverage you had for the year. You do not need to attach this information to your tax return.  Just keep it in a safe place with your other tax records.

Marketplace coverage

About 8.8 million Americans had coverage through a Marketplace Health Plan in 2016. Just like last year, you will receive a Form 1095-A in the mail from the Marketplace.  Once you know your final income for 2016, you must reconcile the difference between the amounts of financial assistance you received to help lower the cost of your premiums with the actual amount you should have received based on your 2016 earnings. To figure this out, use IRS Form 8962 along with the Instructions.


If you had no health coverage in 2016, you might qualify for an IRS exemption or a Marketplace exemption. Click here to find out about exemptions and how to claim them.  If you can afford to buy insurance and choose not to, you will have to pay a fee based on your income unless you qualify for an exemption. The fee for 2016 and 2017 is $695 per adult and $347.50 per child under 18, with a maximum of $2085.  For more information, go to IRS.gov or healthcare.gov/taxes.

Need help?

If you think there are errors on your Form 1095-A from the Marketplace, you can request a review to determine if a correction is necessary. Go to HealthCare.gov, or call the Health Insurance Marketplace call center at 1-800‑318-2596. TTY users should call 1-855-889-4325.  Find local application assisters at localhelp.healthcare.gov or Enroll Michigan

Many people who signed up for Marketplace coverage can get free assistance filling out their taxes at a local VITA – Volunteer Income Tax Assistance or AARP-Tax Aide site.

Take the time to understand your responsibilities for filing your 2016 income tax return with health insurance coverage information.  Tax time is also a good time to do a financial check-up. You can take our Financial Health Survey and get your score to learn about ways to improve your financial health. Be sure to check out Michigan State University Extension and MIMoneyHealth.org for great tips on many financial topics plus programs in the Events column.

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