How Much Is the Health Insurance Penalty for a Family?

Calculate how much you'll owe if your family doesn't have health insurance

Calculate your family's shared responsibility payment. Know exactly how much you'll owe for being uninsured. Valentine/Getty Images

Will your family have to pay a tax penalty for not having health insurance? How much is the family health insurance penalty? Will it be cheaper to go without family health insurance and pay the penalty, or to buy health insurance?

Knowing the amount of your penalty can help you budget for it, but calculating the penalty for a family can be trickier than calculating the penalty for an individual.


A controversial part of the Affordable Care Act, the individual mandate requires Americans to have health insurance. Those who don’t have coverage face a penalty tax, the shared responsibility payment. Some Americans are exempt from the requirement to have health insurance coverage; the IRS noted that for the 2014 coverage year, 7.5 million tax filers were subject to the penalty, but 12 million others claimed an exemption from the penalty.

Each state has a health insurance exchange to help families and individuals find insurance. Subsidies are available to help low-income families afford health insurance. But, if you’re accustomed to going without insurance and don’t qualify for a subsidy, you’ll have to squeeze this new expense out of the family budget or you’ll owe the penalty tax.

How To Calculate the Family Health Insurance Penalty

First, take a look at the penalty table below. Then, read on to learn how to use it so you don't pay too much.

Year 2014 Year 2015 Year 2016 After 2016
income based penalty 1% of income above filing threshold 2% of income above filing threshold 2.5% of income above filing threshold 2.5% of income above filing threshold
minimum penalty amount $95 $325 $695 $695 + inflation adjustment

The penalty your family will owe is either a fixed minimum amount or a percentage of your family’s income, whichever is larger. The percentage-of-income penalty usually hits middle-class or wealthier families. It ensures that the penalty isn't so small it's merely a nuisance. The fixed minimum penalty usually hits lower-income families. It ensures everyone pays at least a minimum penalty.

Here’s how you figure out your family's penalty.

  1. Calculate the family’s minimum penalty.
  2. Calculate the family’s percentage-of-income penalty.
  3. Compare the two results; you’ll owe the larger of the two.

How to Calculate the Family’s Minimum Penalty

To calculate the family’s minimum penalty, add together the individual penalty amounts for each family member using the penalty for the appropriate year from the table below.

Two rules make the family’s minimum penalty smaller:

  • The individual penalty is halved for children under 18 years old.
  • The family’s minimum penalty is capped at three times the individual penalty.


Tom and Sandy have 3 young children. Nobody in the family has health insurance. They need to calculate the family’s minimum penalty for the year 2015.

The table shows the minimum penalty is $325 for each individual in the family. But, only the adults owe the full amount. The minimum penalty for each of the kids is half that amount, or $162.50.

$325 (for Tom) + $325 (for Sandy) + $162.50 (for child 1) + $162.50 (for child 2) +$162.50 (for child 3) = $1,137.50 (for the family)

But, a family’s minimum penalty maxes out at three times the individual minimum penalty, or $325 x 3 = $975. Since $1,137.50 is larger than $975, they’ll use $975 for the amount of their minimum family penalty as they move forward with their calculations.

How to Calculate the Family’s Percentage-of-Income Penalty

Figure the percentage-of-income penalty for the family based on the entire household’s income. From the table below, the penalty percentage for 2015 is 2% of the income above the filing threshold.

  • Tip: Don't pay the government too much. Only pay the health insurance penalty on the portion of your income that's over the filing threshold. Subtract the filing threshold from your income before calculating the penalty.
  • Tip: The filing threshold is the amount of income that requires you to file a tax return. People with incomes below the filing threshold don’t have to file an income tax return; those with incomes above the threshold must file.
  • Tip: The filing threshold for 2015 is $10,300 for single filers, $13,250 for head-of-household filers, and $20,600 for married couples filing jointly. For other years, you can get the filing threshold for the year in question from publication 501 at the IRS forms and publications page.


Tom and Sandy together earned $100,500 in 2015. They file their taxes as a married couple filing jointly, so they’ll use $20,600 as an estimate of their filing threshold, subtracting it from their income before they calculate the percentage.

$100,500 - $20,300 = $80,200
The family’s income - the filing threshold = the portion of their income to be penalized.

$80,200 x 0.02 = $1,604
The portion of income to be penalized x the 2% penalty (0.02) = their percentage-of-income penalty.

Pulling it All Together: Know What You’ll Owe

Now that you’ve calculated your family’s minimum penalty and your family’s percentage-of-income penalty, you need to compare them. Your family’s shared responsibility payment will be based on the larger of those two amounts.

There are a few situations that might decrease your family’s penalty.

  • Will your family have health insurance for part of the year?
    Only pay the penalty for the months your family is uninsured. For example, if your family was uninsured for seven months of the year, you would only pay seven-twelfths of the yearly health insurance penalty.
  • Do you have a large penalty?
    The penalty maxes out at the national average cost of a bronze-tier family health plan for that year. This figure changes each year, but you can estimate it using the 2015 figure of $1,020 per month or $12,240 per year for a family of five or larger. For families with fewer than five people, use the national average cost of a bronze-tier health plan for individuals ($207 per month or $2,484 per year) and multiply it by the number of uninsured individuals in the family.
  • Can’t find affordable health insurance?
    If you can’t find family health insurance that costs less than 8.13 percent of your household income in 2016 (8.16 percent in 2017), your family may be exempt from the penalty. The 8.13 percent figure is based on what your family has to pay for the coverage, not on the cost before employer contributions or premium subsidies.


    Tom and Sandy’s minimum family penalty for 2015 was $975. Their family’s percentage-of-income penalty was $1,604. Since their percentage-of-income penalty is larger than the minimum penalty, that’s the figure their family penalty will be based on. If their family was uninsured all year, they would have owed a shared responsibility payment of $1,604 when they filed their 2015 income taxes by April 15, 2016.

    The $1,604 they owed is well below the national average cost of a bronze-tier health plan for a family of five ($12,240) so that penalty cap doesn't affect them.

    However, if they were only uninsured part of the year, their penalty would be lower. Let's say Sandy switched jobs in July, and her new employer offered health insurance. If the entire family was covered by health insurance starting in September, then they were only uninsured for the first 8 months of the year. In this case, they only have to pay the penalty for the portion of the year they were without coverage.

    $1,604 x 8/12 = $1069.33
    The yearly penalty amount x the part of the year they were uninsured = the final family penalty owed.

    In this case, Tom and Sandy owe a shared responsibility payment of $1069.33 because their family lacked health insurance coverage for 8 months of 2015. Along with their 2015 income taxes, this penalty tax was due to the IRS by April 15, 2016.

    Was this page helpful?
    Article Sources