The individual shared responsibility provision,[1] less formally known as the individual mandate, was the health insurance mandate imposed on individuals by the Affordable Care Act in the United States until tax year 2019. This individual mandate required most individuals and their families to have a certain minimal amount of health insurance, with certain exemptions. Otherwise, they were required to pay the individual shared responsibility payment as a fine.[2][3] It was one of the many Affordable Care Act tax provisions. The federal tax penalty for violating the mandate was eliminated by the Tax Cuts and Jobs Act of 2017, starting in 2019.[4] (In order to pass the Senate under reconciliation rules with only 50 votes, the requirement itself is still in effect, just with the fine set to $0).[5][6][7][8]
Starting January 2014, individuals and their families must have at least minimum essential coverage.[1][9] Individuals may be exempt from health insurance coverage in some cases:
Individuals and their families who have no health insurance, are required to make the shared responsibility payment.[10]
The Patient Protection and Affordable Care Act signed in 2010 imposed a health insurance mandate to take effect in 2014. On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax within Congress's taxing power in the case National Federation of Independent Business v. Sebelius.
The federal tax penalty for violating the mandate was zeroed out by the Tax Cuts and Jobs Act of 2017, starting in 2019. This raised questions about whether the Affordable Care Act was still constitutional,[6][7][8] but in California v. Texas, the Supreme Court ruled that plaintiffs who had challenged the law on this basis lacked standing to sue.[11]
Whether health care coverage qualifies as minimum essential coverage depends largely on the type of coverage it is.[12] Most coverage that people have is considered to be minimum essential coverage. However, coverage providing only limited benefits does not qualify as minimum essential coverage.[12]
| Coverage type | Examples | Qualifies as minimum
essential coverage? |
|---|---|---|
| Employer-sponsored coverage |
|
Yes |
| Individual health coverage |
|
Yes |
| Coverage under government-sponsored programs |
|
Yes |
| Coverage that provides limited benefits |
|
No |
If individuals or anyone in their families claim an exemption from minimum essential coverage, individuals are not required to make a shared responsibility payment. If individuals have a gross income below the tax return filing threshold for a certain year, they are automatically exempt from the shared responsibility provision for that year.[13]
Most exemptions are claimed using Form 8965, Health Coverage Exemptions[14], when a tax return is filed. However, certain exemptions must be granted by the health insurance marketplace in advance, like coverage exemptions for certain hardship situations and for members of certain religious sects.[13]
| Exemptions | Granted by marketplace,
claimed on tax return, or either |
|---|---|
| Coverage is considered unaffordable | Tax return |
| Income below the return filing threshold | Tax return |
| Citizens living abroad | Tax return |
| Nonresidents | Tax return |
| Member of Indian tribe | Either |
| Member of certain religious sects | Marketplace |
| General hardship | Marketplace |
| Resident of a state that did not expand Medicaid | Either |
Individuals without minimum essential coverage were required to make the shared responsibility payment until the end of tax year 2018, unless they qualified for exemptions. When the Tax Cuts and Jobs Act went into effect in 2018, it eliminated this tax penalty as of tax year 2019. The worksheets located in the instructions[15] to Form 8965, Health Coverage Exemptions, could be used to figure the shared responsibility payment amount that was due while still in effect. The annual payment amount was a percentage of the household income in excess of the return filing threshold or a flat dollar amount, whichever was greater.[16][17]