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Technical Information Release

Technical Information Release TIR 20-1: Individual Mandate Penalties for Tax Year 2020

Date: 01/07/2020
Referenced Sources: Massachusetts General Laws

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 2020 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 2020, 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).[1] 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.[2]

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 to assert that hardship prevented them from purchasing health insurance and therefore, they should not be subject to tax penalties.[3]

For 2020:

  • Individuals with incomes less than or equal 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, 2020.
  • Penalties for individuals with incomes greater than 300% of the Federal Poverty Level will be half of the lowest priced individual Bronze premium, based on the Health Connector’s prices for these plans as of January 1, 2020.
  • 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.

Individual
Income
Category*

150.1-200%
FPL

200.1-250%
FPL

250.1-300%
FPL

Above 300%
FPL

 

Penalty

$22/month
$264/year

$43/month
$516/year

$65/month
$780/year

$135/month
$1,620/year

* 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

1

$18,735

$24,980

$31,225

$37,470

2

$25,365

$33,820

$42,275

$50,730

3

$31,995

$42,660

$53,325

$63,990

4

$38,625

$51,500

$64,375

$77,250

5

$45,255

$60,340

$75,425

$90,510

6

$51,885

$69,180

$86,475

$103,770

7

$58,515

$78,020

$97,525

$117,030

8

$65,145

$86,860

$108,575

$130,290

For each additional person add:

$6,630

$8,840

$11,050

$13,260

This schedule reflects the 2019 Federal Poverty Level standards (for 2020 eligibility).

 

                                                                                    /s/Kevin W. Brown
                                                                                    Kevin W. Brown
                                                                                    Acting Commissioner of Revenue

 

KWB:RHF:wm

January 7, 2020

TIR 20-1



 

[1] Note that the Health Connector interprets 63 days to mean 3 calendar months. See https://www.mahealthconnector.org/wp-content/uploads/rules-and-regulations/AdminBulletin03-10.pdf.

[2] The monthly penalties apply to each month in which an individual lacks minimum creditable coverage (i.e., lacks health insurance coverage altogether, or lacks health insurance coverage meeting minimum creditable coverage standards). For more information regarding the health care individual mandate and minimum creditable coverage, including exceptions from the mandate and appeal rights of taxpayers in connection with the penalty under G.L. c. 111M, § 2, see Department of Revenue regulation 830 CMR 111M.2.1: Health Insurance Individual Mandate; Personal Income Tax Return Requirements, and Health Connector regulations 956 CMR 6.00: Determining Affordability for the Individual Mandate and 956 CMR 5.00: Minimum Creditable Coverage.

[3] See Health Connector regulation 956 CMR 6.00: Determining Affordability for the Individual Mandate. The Affordability and Premium Schedules contained in the Massachusetts personal income tax forms are adopted by the Board of the Health Connector pursuant to 956 CMR 6.05. 

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