Affordable Care Act tax penalties ending, but not until 2019

October 31, 2018

Land Line Staff


Open enrollment for the Affordable Care Act starts Nov. 1 and runs through Dec. 15. Coverage begins Jan. 1.

Although the Tax Cuts and Jobs Act of 2017 eliminates the tax penalty associated with the Affordable Care Act’s individual mandate, those changes do not take effect until the 2019 tax year. That means if you did not have health insurance for all or portions of 2018, you may still end up owing a tax penalty for the year.

The penalty for not having an ACA-compliant plan or forgoing coverage in 2018 is the greater of $695 per adult and $347.50 per child for a maximum of $2,085 or 2.5 percent of adjusted household income. The percentage penalty is capped at an amount equal to the national average premium for a bronze plan, the minimum coverage available by law. Fees are paid as a part of the filing process for federal income tax returns.

Although the individual mandate requires most Americans to carry a minimum level of insurance coverage, there are some exceptions and special qualifications. Those exemptions include certain religious groups and Native American tribes, incarcerated individuals; people who have VA medical care, and people who live in states that have not expanded Medicaid programs and would have qualified for Medicaid under the expanded coverage.