Health Care Individual Shared Responsibility


Starting in January 2014, the individual shared responsibility provision (ISRP) of the Affordable Care Act health care law requires you and everyone in your family, including children, to have qualifying health care coverage (known as minimum essential coverage or MEC) in each month of the year.

If you don’t have coverage and don’t qualify for an exemption, you must make an individual shared responsibility payment when you file your federal income tax return.

if you don't have minimum essential coverage, you must have an exemption or make a shared responsibility payment

Download the full ISRP fact sheet.

Most people have minimum essential coverage in every month and will simply need to check a box on the return. 

If you’re not already covered under an employer health plan or a government-sponsored program, you may get coverage through the Marketplace each year during open season. You may be able to help pay for coverage with the Premium Tax Credit, if your income is within certain guidelines.

If you meet certain criteria, you’ll be exempt from the individual shared responsibility provision, meaning you won’t have to obtain coverage or make a shared responsibility payment (see What should I do? for more information).

The Individual Shared Responsibility Provision Payment Estimator can help you estimate the amount you may have to pay if you did not have minimum essential coverage during the year.

Find out if you have qualifying coverage

If you already have qualifying coverage in every month, you don’t need to do anything else until tax time, when you report your coverage on your return.

For purposes of the individual shared responsibility provision, you are treated as having qualifying coverage for a month if you are enrolled in and entitled to receive benefits under a plan or program that’s identified as minimum essential coverage.

If you need to get coverage, go to the Marketplace to learn about enrollment. Consider obtaining coverage for the current year if you haven’t already, to avoid future problems.

If you didn’t have qualifying coverage for the whole year, you may qualify for an exemption for the months you were without coverage.

Determine if you’re exempt from having coverage or making the payment

There are different types of exemptions from the requirement to have qualifying health care coverage. Some are obtained from the Marketplace and others are claimed on your tax return, but all exemptions, even those obtained from the Marketplace, must be reported on your tax return. 

You are automatically exempt if you don’t have to file a return because your income is below your filing threshold.

You also are exempt from the requirement to have qualifying health care coverage or make a shared responsibility payment if you:

  • Are considered to have no affordable coverage options because the minimum amount you must pay for the annual premium is more than 8% of your household income
  • Have a gap in coverage for less than three consecutive months
  • Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group that’s explicitly exempt from the requirement

To see a full list of exemptions visit IRS.gov’s Individual Shared Responsibility Provision – Exemptions page. The chart there will also tell you whether you need to apply for the exemption through the Marketplace or can wait to claim the exemption on your tax return. More information is also available on IRS Publication 5172, Facts about Health Coverage Exemptions

If you obtain an exemption through the Marketplace, you will receive a special number, called an Exemption Certificate Number (ECN). Keep this in a secure place and report it on the federal tax return you file at the end of each tax year.  For additional information about how to get Marketplace exemptions and their exemption process, visit HealthCare.gov/exemptions.

If you do qualify for an exemption, you'll need to follow the Form 8965 instructions and file IRS Form 8965, Health Coverage Exemptions with your income tax return.

If you or your dependent(s) don’t qualify for an exemption, and either didn’t have coverage or only had a partial year of qualifying coverage

If you weren’t covered and weren’t exempt for a month, then you’ll be required to report that information when you file your federal tax return and will owe a shared responsibility payment

If you can claim a child or another individual as a dependent for federal income tax purposes, you are also responsible for making the payment if your dependent doesn’t have coverage or an exemption.

Making a Shared Responsibility Payment

If you need to make a payment because you didn’t have coverage or an exemption, you will make the payment when you file your 2015 federal income tax return in 2016.

You can use IRS Form 8965 instructions to figure out the amount you owe — it includes a Shared Responsibility Payment Worksheet, which will run you through all the variables.

In general, the payment is either a percentage of your household income or a flat dollar amount, whichever is greater. The rates have changed by year, and will continue to be adjusted.

2014

The greater of:

  • 1% of your household income that is above your tax return filing threshold OR
  • $95 per adult and $47.50 per child under 18, to a maximum of $285

2015

The greater of:

  • 2% of your household income that is above your tax return filing threshold OR
  • $325.00 per adult and $162.50 per child under 18 subject to a maximum amount*

2016

The greater of:

  • 2.5% of your household income that is above your tax return filing threshold OR
  • $695.00 per adult and $347.50 per child under 18, subject to a maximum amount*

After 2016 the flat dollar amounts may increase with inflation.

*The "maxiumum amount" is never more than the national average premium for a “bronze level” health plan that is offered through the Marketplace and provides coverage for the applicable family size involved. This ensures that the payment amount is never more than the approximate cost of basic coverage for a year.

For each month you or your dependents don’t have qualifying coverage and weren’t exempt, you will owe 1/12 of the annual payment.

The Individual Shared Responsibility Provision Payment Estimator can help you estimate the amount you may have to pay if you did not have minimum essential coverage during the year.

I had full qualifying coverage

If you had minimum essential coverage for a full year, simply file your individual tax return and check the appropriate box. You don’t owe a shared responsibility payment and don’t need to do anything more.

I had partial coverage

If you had qualifying coverage for some months but not a full year, you may need to make a shared responsibility payment for the months you weren’t covered, unless you qualified for an exemption.

I have an exemption from coverage

When you file your federal tax return, you’ll need to report any exemptions by completing IRS Form 8965Health Coverage Exemptions. Carefully follow the instructions for the individual tax return that you are using as well as the instructions for IRS Form 8965.

I did not have qualifying health coverage or an exemption from coverage

It’s likely that you’ll owe a shared responsibility payment with your taxes. See What should I do? for more details.

Tax Issue: Premium Tax Credit

IRS.gov Interactive Tax Assistant - Am I Required to Make an Individual Shared Responsibility Provision Payment?

IRS Form 8965, Health Coverage Exemptions

IRS Instructions for Form 8965

IRS Publication 5187, Health Care Law: What’s New for Individuals and Families

IRS Publication 5185, Making a Shared Responsibility Payment … What you need to Know

IRS Fact Sheet about Health Coverage Exemptions: What Are They, How to Obtain Them, and How to Claim Them

IRS.gov - The Individual Shared Responsibility Provision

IRS.gov - Questions and Answers on the Individual Shared Responsibility Provision

IRS Webinar - ACA Individual Shared Responsibility Provisions

IRS Podcast - Individual Shared Responsibility-Overview (MP3) English | Spanish

IRS Video - Individual Shared Responsibility Provision: English | Spanish | ASL

HealthCare.gov - Exemptions

Individual Shared Responsibility Provision Payment Estimator

Have a different tax issue?  Browse common issues and situations at Get Help.

Is your tax problem more complex?  If your issue is causing you financial hardship, you have tried repeatedly and are not receiving a response from the IRS, or you feel your taxpayer rights are being violated, consider contacting TAS.

Do you feel that you need help from a tax professional but can’t afford one? You may be eligible for representation from an attorney, CPA, or enrolled agent associated with a Low Income Taxpayer Clinic.

Last modified July 12, 2016
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