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It’s 2020, and Americans are still confused about the health insurance laws in this country, and rightfully so. In 2010, President Obama passed one of the most comprehensive pieces of healthcare legislation in US history, which included an individual mandate requiring every citizen to enroll in health insurance or face a tax penalty.
However, as part of an effort to repeal the Affordable Care Act, President Trump vowed to eliminate the individual mandate. Some states are fighting back, which leads us to the question at hand. Are you required to have health insurance in 2020? Per usual, the answer is a bit more complicated than you may expect.
Is Health Insurance Mandatory In 2020?
As of January 1, 2019, health insurance is no longer mandatory at the federal level. However, there are still some states that require residents to enroll in medical coverage as of 2020. Those states include:
- New Jersey
- Rhode Island
- Washington DC
If you are a resident of any of the mentioned states, and you forego health coverage, you will face a tax penalty, unless you qualify for an exemption.
Other states are planning on following suit in the coming years. Those states include Connecticut, Maryland, and Hawaii.
When The Individual Mandate Changed
As mentioned above, mandated health insurance began in 2014, which also happened to be the year the Affordable Care Act (Obamacare) went into effect. The question is, why was having health insurance mandatory so short lived? Was it that much of a failure?
The jury is still out on whether the individual mandate was successful or not, but there is one thing for certain. Requiring Americans to enroll in insurance coverage was the lifeline of Obamacare, something President Trump knew all too well.
When President Trump took office, he vowed to repeal the ACA. After a few unsuccessful attempts, he decided to go after the health insurance mandate, which he hoped would cause an unravelling of the healthcare system at the time.
On January 20, 2017, President Trump signed an executive order referred to as Obamacare Relief, which called for the end of the individual mandate as of 2019. In the immediate aftermath, health insurance premiums began to rise in anticipation of few Americans enrolling in insurance coverage.
States That Still Require Health Insurance
In an effort to keep health insurance prices down, and ensure more people remain covered, some states decided to take power back into their own hands. While health insurance may not be required on the federal level moving forward, the states of California, Massachusetts, New Jersey, Vermont, Rhode Island, and Washington DC are mandating residents enroll in coverage or face a tax penalty.
Make sure to check back, because more states already have plans to follow suit. Other states considering making health insurance mandatory include Connecticut, Maryland, and Hawaii. You can expect additional states to pass similar legislation as well.
Penalty For No Health Insurance
Just what are the tax penalties for not having health insurance in 2020? At the federal level, you won’t be required to pay a dime. However, if you live in any of the following states, here are the penalties you may be facing:
California Health Insurance Penalty -
If you are a resident of the state of California, and don’t have health insurance in 2020, you can expect a tax penalty of $695 per adult and $347.50 per child, or 2.5% of your annual income. Whichever is higher.
Massachusetts Health Insurance Penalty -
If you are a resident of the state of Massachusetts, and don’t have health insurance in 2020, you can expect a tax penalty anywhere between $264 to $1,524. If you make under $18,210 a year, you will be exempt.
New Jersey Health Insurance Penalty -
If you are a resident of the state of New Jersey, and don’t have health insurance in 2020, you can expect a tax penalty anywhere between $695 and $4,500. The amount you owe will depend on the size of your family and tax bracket you fall under.
Rhode Island Health Insurance Penalty -
If you are a resident of the state of Rhode Island, and don’t have health insurance in 2020, you can expect a tax penalty of $695 per adult and $347.50 per child, or 2.5% of your annual income. Whichever is higher.
Vermont Health Insurance Penalty -
If you are a resident of the state of Vermont, and don’t have health insurance in 2020, the jury is still out on what you will pay. While the state has passed legislation requiring health insurance, they have not decided on a penalty as of yet.
Washington DC Health Insurance Penalty -
If you are a resident of Washington DC, and don’t have health insurance in 2020, you can expect a tax penalty of $695 per adult and $347.50 per child, or 2.5% of your annual income. Whichever is higher.
Do You Still Need Insurance Coverage?
No, you don’t need health insurance coverage, but you won’t be doing yourself any favors by choosing to forego medical coverage. In fact, according to wide ranging studies, including this one reported by the Kaiser Family Foundation, medical providers routinely charge people without insurance 2 to 4 times more than those with insurance coverage.
If you are relatively young and healthy, choosing not to enroll in medical coverage is risky, but understandable. However, if you don’t fall into the young or healthy category, choosing not enroll in a health plan is an incredibly risky move that could send you spiraling into medical debt.
So, the answer to the question is no, you do not need health insurance (unless you live in a state where it is required). However, it’s always a good idea to stay covered.
Finding The Right Health Plan
Even for the most savvy consumers, finding the right health insurance plan is no easy order. Luckily, through FirstQuote Health, finding the right insurance policy is now easier than ever.
Our proprietary algorithm has already helped hundreds of thousands of Americans just like you find the coverage they need at a price they can afford. To get started, simply enter your zip code, answer a few questions, and find health insurance quotes in your area that fits your needs.