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- Massachusetts Department of Revenue
Technical Information Release TIR 16-2: Individual Mandate Penalties for Tax Year 2016
Table of Contents
TIR 16-2: Individual Mandate Penalties for Tax Year 2016
Pursuant to G.L. c. 111M, § 2, the Department of Revenue is issuing this Technical Information Release to announce the penalty schedule for individuals who fail to comply in 2016 with the requirements under the Massachusetts Health Care Reform Act (the Act). See St. 2006, c. 58, as amended. The Act requires most adults 18 and over with access to affordable health insurance to obtain it. In 2016, individuals must be enrolled in health insurance policies that meet minimum creditable coverage standards defined in regulations adopted by the Commonwealth Health Insurance Connector Authority (the Health Connector). Individuals who are deemed able to afford health insurance but fail to comply are subject to penalties for each month of non-compliance in the tax year (provided that there is no penalty in the case of a lapse in coverage of 63 consecutive days or less). The penalties, which will be imposed through the individual’s personal income tax return, shall not exceed 50% of the minimum monthly insurance premium for which an individual would have qualified through the Health Connector.
These penalties apply only to adults who are deemed able to afford health insurance but who did not enroll in available coverage. On an annual basis, the Health Connector establishes separate standards that determine whether individuals, married couples and families can afford health insurance, based on their incomes and affordable health insurance premiums. Those who are not deemed able to afford health insurance pursuant to these standards will not be penalized. Individuals also have the opportunity to file appeals with the Health Connector asserting that hardship prevented them from purchasing health insurance (and, thus, that they should not be subject to tax penalties).
- Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for non-compliance, as those at this income level are not required to pay an enrollee premium for ConnectorCare health insurance.
- Penalties for individuals with incomes from 150.1 to 300% of the Federal Poverty Level will be half of the lowest priced ConnectorCare enrollee premium that could be charged to an individual at the corresponding income level, based on the ConnectorCare enrollee premiums as of January 1, 2016.
- Penalties for individuals with incomes greater than 300% of the Federal Poverty Level will be:
- ages 18-30: half of the lowest priced individual Catastrophic Plan offered through the Health Connector; and
- ages 31 and above: half of the lowest priced individual Bronze premium, based on the Health Connector’s prices for these plans as of January 1, 2016.
- The Department anticipates issuing an updated penalty schedule for tax year 2017.
- Penalties for married couples who do not comply with the individual mandate rules (with or without children) will equal the sum of individual penalties for each spouse.
- Interaction with Federal Health Care Shared Responsibility Payment. Beginning January 1, 2014, the Affordable Care Act instituted a federal mandate on individuals to obtain health insurance. For tax years beginning on or after January 1, 2014, if a nonexempt individual fails to obtain health insurance meeting federal standards, the person is liable for a “shared responsibility payment” that must be reported on his or her federal income tax return. To prevent assessing a taxpayer both a Massachusetts penalty and a federal penalty, the amount of any federal health care shared responsibility payment is allowed as a reduction of the Massachusetts health care penalty owed.
|Penalties for 2016|
|150.1-200% FPL||200.1-250% FPL||250.1-300% FPL||Above 300% FPL
* Compare individual’s annual family household income to chart immediately below to determine applicable Federal Poverty Level (FPL).
** Yearly penalty amounts listed above based on non-compliance for entire year.
Federal Poverty Level – Annual Income Standards
|Family Size||150% FPL||200% FPL||250% FPL||300% FPL|
|For each additional person add||+$6,240||+$8,320||+$10,400||+$12,480|
This schedule reflects the 2015 Federal Poverty Level standards (for 2016 eligibility).
Commissioner of Revenue
January 25, 2016