Under the Massachusetts Health Care Reform Law, most adults 18 and over are required to obtain health insurance that meets minimum coverage standards (known as minimum creditable coverage).
If the state considers you able to afford health insurance, but do not purchase it, you will be charged penalties for each month that you are without health insurance during the tax year. Those who are deemed unable to afford health insurance are not penalized.
Reporting Health Insurance Information on Your Tax Return
Residents and certain part-year residents have to file form Schedule HC with their Massachusetts tax return. This form is used to report information regarding health insurance coverage during the year. If you have private health insurance you should receive a Form MA 1099-HC from your health insurance carrier that will provide you with information used to fill out Schedule HC.
Where Can I Get Affordable Insurance?
If you don't have insurance, check out the state’s health insurance website, the Commonwealth Health Connector (the Connector). The Connector is an independent state agency that helps Massachusetts residents find health insurance coverage and avoid tax penalties. This agency offers low cost and no cost plans that meet the minimum coverage standards and carry the state’s seal of approval for quality and affordability.
Limits on Penalties
Penalties for lack of insurance are paid with your Massachusetts income tax return. Penalty amounts cannot exceed 50% of the minimum monthly insurance premium you would have qualified for through the Connector. A gap in insurance coverage of 63 days or less is not penalized.
Each year the state establishes affordability standards that determine whether individuals and families can afford health insurance. If you cannot afford health insurance by these standards you are not subject to penalties.
Exemption for Religious Beliefs and Low Income
A religious exemption is available for anyone who has a sincere religious belief that is the basis for not purchasing health insurance coverage. But beware, if you are claiming a religious exemption and you received medical care during the tax year (such as an emergency room visit) you may be subject to a penalty if it is determined that you could have afforded health insurance. Preventative dental care, vaccines, and physical exams required by your employer or other third party are not considered medical care for purposes of this exemption.
You can also apply for a Certificate of Exemption through the Connector website. This certificate serves as proof that you are exempt from penalties due to the inability to afford the required insurance coverage.