Massachusetts hikes tax penalty for the uninsured

BOSTON — Massachusetts taxpayers who lack health insurance will be digging a little deeper into their pockets in the next tax year, with the state increasing penalties for the uninsured.

Individuals and married couples who can afford, but don’t get health insurance coverage in 2025 will pay a tax penalty next year ranging from $300 to $2,244, depending on their individual or household income, state Department of Revenue Commissioner Geoffrey Snyder said in a memo.

That’s a slight increase from the previous tax cycle, when the penalty ranged from $388 to $2,100 a year.

Under the new policy, the penalties will be imposed through the individual’s personal income tax return and can’t exceed 50% of the minimum monthly insurance premium for which an individual would have qualified through Health Connector, the state’s health exchange, according to the state agency.

An individual filer with income between $22,590 and $30,120, or 150% to 200% of the federal poverty level, who doesn’t have qualifying health coverage during the 2025 tax year, could be subject to a penalty of $25 a month, or $300 a year, DOR said.

The agency said the tax penalties apply only to adults who are deemed able to afford health insurance but who did not enroll in available coverage. Individuals with incomes below $22,590 are exempt from the requirement.

“Those who are not deemed able to afford health insurance pursuant to these standards will not be penalized,” the agency said. “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 penalties.”

In 2006, then-Gov. Mitt Romney, a Republican, signed a law making health insurance mandatory in Massachusetts and setting up an insurance exchange. The law became the template for the federal Affordable Care Act, known as Obamacare.

But Massachusetts law, like Obamacare, sets a penalty for individuals and households who refuse to get insurance. The Tax Cuts and Jobs Act of 2017 eliminated the federal tax penalty for not having health insurance, leaving Massachusetts and a handful of other states as the only ones with a tax penalty.

More than 98.3% of working-age adults in Massachusetts are insured, according to the latest data from the state Center for Health Policy and Analysis, which tracks health care trends.

The uninsured are disproportionately Hispanic, adults aged 19 to 64, males, and have a family income below 300% of the federal poverty level, CHIA said.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.

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