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Personal Income Tax Technical Information Release 07-18 |
Massachusetts Department of Revenue |
Individual Mandate Penalties for Tax Year 2008
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 2008 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 2008, individuals who are deemed able to afford health insurance but fail to comply are subject to penalties for each month that they are uninsured in the tax year.[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 Commonwealth Health Insurance Connector Authority (the Connector).
These penalties apply only to adults who are deemed able to afford health insurance. On an annual basis, the 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 Connector asserting that hardship prevented them from purchasing health insurance (and thus that they should not be subject to tax penalties).[2]
For 2008:
- Individuals with incomes up to 150% of the Federal Poverty Level are not subject to any penalty for failure to purchase health insurance, as those at this income level are not required to pay an enrollee premium for Commonwealth Care health insurance.
- Penalties for individuals with incomes from 150.1 to 300% of the Federal Poverty Level will be half of the lowest priced Commonwealth Care enrollee premium that could be charged to an individual at the corresponding income level.
- Penalties for individuals with incomes more than 300% of the Federal Poverty Level will be:
- Half of the lowest priced Commonwealth Choice Young Adult Plan premium (without prescription drug coverage) for individuals up to age 26.
- Half the lowest priced Commonwealth Choice Bronze premium (without prescription drug coverage) for those 27 and above.
- Penalty rates for tax year 2008 are based on the Commonwealth Health Insurance Connector’s plan prices as of January 2008. The Department anticipates issuing an updated penalty schedule for tax year 2009.
- Penalties for married couples without health insurance (with or without children) will equal the sum of individual penalties for each spouse.
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Penalties for 2008 |
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Individual Income Category* |
150.1-200% FPL |
200.1-250% FPL |
250.1-300% FPL |
Above 300% FPL Age 18-26 |
Above 300% FPL Age 27+ |
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Penalty |
$17.50/month $210/year |
$35/month $420/year |
$52.50/month $630/year |
$56/month $672/year |
$76/month $912/year |
* Compare individual’s annual family household income to chart immediately below to determine applicable Federal Poverty Level (FPL).
Federal Poverty Level – Annual Income Standards
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Family Size |
150% FPL |
200% FPL |
250% FPL |
300% FPL |
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1 |
$15,612 |
$20,808 |
$26,016 |
$31,212 |
|
2 |
$21,012 |
$28,008 |
$35,016 |
$42,012 |
|
3 |
$26,412 |
$35,208 |
$44,016 |
$52,812 |
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4 |
$31,812 |
$42,408 |
$53,016 |
$63,612 |
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5 |
$37,212 |
$49,608 |
$62,016 |
$74,412 |
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6 |
$42,612 |
$56,808 |
$71,016 |
$85,212 |
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7 |
$48,012 |
$64,008 |
$80,016 |
$96,012 |
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8 |
$53,412 |
$71,208 |
$89,016 |
$106,812 |
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For each additional person add |
+$5,400 |
+$7,200 |
+$9,000 |
+10,800 |
This Schedule reflects the Federal Poverty Level standards for 2008.
/s/ Navjeet K. Bal
Navjeet K. Bal
Commissioner of Revenue
NKB:MTF:adh
251826
TIR 07-18
April 7, 2008
[1] A resident who has access to affordable health insurance but who does not obtain the coverage, and to whom an exception does not apply, is subject to penalties under G.L. c. 111M, § 2. The penalty will be assessed for each of the months the individual did not meet the requirements of the health care mandate, provided, that there is no penalty in the case of a lapse in coverage of 63 days or less. For more information regarding the health care individual mandate, including exceptions from the mandate and appeal rights of taxpayers in connection with the penalty under G.L. c. 111M, § 2, see the Department of Revenue regulation 830 CMR 111M.2.1: Health Insurance Individual Mandate; Personal Income Tax Return Requirements.
[2] See the Connector’s 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 Connector pursuant to 956 CMR 6.05.
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