Q: Am I still required to buy health insurance? And will I be penalized if I don't?—S. Paradise, Norfolk, Va.

A. Yes, and yes. Everyone is still required to have health insurance that meets the minimum coverage standards set by the Affordable Care Act. That means a plan that includes a comprehensive set of  benefits and covers at least 60 percent of your medical costs. 

If you don’t have insurance, you’ll pay a hefty fine unless you qualify for an exemption (more on exemptions here).

It’s not surprising that many people are confused about the status of the law and the penalty. Republicans in Congress made repeated attempts to repeal and replace the ACA, and President Donald Trump has loosened several provisions through executive orders. And over the months the ACA was being debated, the IRS issued conflicting statements about whether or not it would enforce the penalty for people who did not have health insurance.

More on open enrollment

But for the time being, anyway, the ACA is the law of the land, and earlier this month the IRS issued its latest decree: It said it would reject electronically filed tax returns of individuals who did not check the box indicating that they and everyone on their return is covered—unless they qualify for an exemption.

If you owe the penalty and don’t pay it when you file your return, you will lose any refunds you’re due for the current or future tax years. The IRS also said nonpayment could also hold up the processing of paper returns and delay refunds.

The purpose of the fine is to encourage people, especially those who are younger and healthier, to buy insurance. The idea is that creating an overall healthier, and less costly pool of people to insure, premiums would come down overall. According to a poll from the Kaiser Family Foundation, 26 percent of people who bought insurance on the ACA marketplace exchanges said the penalty is a major reason they bought insurance. But 90 percent said they’d still buy insurance even if the government stopped enforcing it.


Send us your question about signing up for health insurance through your employer, Medicare, or the ACA exchanges.
 

The uninsured are among the least aware that they can be fined for not buying insurance. According to the Kaiser poll, 41 percent of uninsured people, vs. one-third of all people, said they don’t know the status of the penalty. And 63 percent of the uninsured said they don’t know how much the penalty is. Twenty-four percent think it’s less than $1,000.

It can be a lot more than that. For 2018, the penalty is $695 for each adult and $347.50 for each child without insurance. The amount is capped at $2,085 per family, or 2.5 percent of your family income, whichever is higher.

Open enrollment for people who buy health insurance on the ACA exchanges kicks off next Wednesday. For people on employer plans, the sign-up period is later in November. (Medicare open enrollment started Oct. 15.) If you’re thinking of going without insurance next year, at least be aware of what that decision can cost you.