How Much Is the Health Insurance Penalty for a Family?

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

Starting in 2014, most Americans had to maintain minimum essential health insurance coverage or face a tax penalty. That continued to be the case through the end of 2018, but the penalty was reset to zero starting in January 2019, under the Tax Cuts and Jobs Act that was enacted in late 2017. There are still a few states where a penalty continues to apply for people who are uninsured in 2019 and future years, but in most areas of the country, there is no longer a penalty for going without minimum essential coverage.

Man and woman with child sitting at kitchen counter with a laptop

Image © Valentine / Getty Images

But since the penalty still applied throughout 2018, people will still see it on their 2018 tax returns that are being filed in early 2019. 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 didn’t have coverage (from 2014 through 2018) face a penalty tax, the shared responsibility payment.

Some Americans have been exempt from the requirement to have health insurance coverage (in many cases because coverage wasn't considered affordable): 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. For 2015, there were 6.5 million tax returns that included individual mandate payments, but nearly twice as many people (12.7 million tax filers) claimed an exemption.

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 people who opted to go without health insurance despite not qualifying for an exemption have been subject to penalties when they filed their tax returns.

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 2016-2018
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 (for children, it's half this amount) $95 $325 $695 $695 

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 2018.

The table shows the minimum penalty is $695 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 $347.50.

$695 (for Tom) + $695 (for Sandy) + $347.50 (for child 1) + $347.50 (for child 2) +$347.50 (for child 3) = $2,432.50 (for the family)

But, a family’s minimum penalty maxes out at three times the individual minimum penalty, or $695 x 3 = $2,085. Since $2,432.50 is larger than $2,085, they’ll use $2,085 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 above, the penalty percentage for 2018 is 2.5% 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 2018 is $12,000 for single filers, $13,600 for head-of-household filers, and $24,000 for married couples filing jointly (under age 65). 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 2018. They file their taxes as a married couple filing jointly, so they’ll use $24,000 as an estimate of their filing threshold, subtracting it from their income before they calculate the percentage.

$100,500 - $24,000 = $76,500
The family’s income minus the filing threshold = the portion of their income to be penalized.

$76,500 x 0.025 = $1,912.50
The portion of income to be penalized multiplied by the 2.5% penalty (0.025) = 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.

  • Did your family have health insurance for part of the year?
    Only pay the penalty for the months your family was 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 changed each year (as health insurance premiums increased), but for 2018, it was $3,396 for a single individual and $16,980 for a family of five or more.
    For families with fewer than five people, use the national average cost of a bronze-tier health plan for individuals ($283 per month or $3,396 per year) and multiply it by the number of uninsured individuals in the family.
  • Can’t find affordable health insurance?
    If you couldn't find family health insurance that cost less than 8.05 percent of your household income in 2018, your family may be exempt from the penalty. The 8.05 percent figure is based on what your family would have had to pay for the coverage, not on the cost before employer contributions or premium subsidies.


Tom and Sandy’s minimum family penalty for 2018 was $2,085 using the flat-rate calculation. Their family’s percentage-of-income penalty was $1,913. Since their flat-rate penalty is larger than their percentage-of-income penalty, that’s the figure their family penalty will be based on. If their family was uninsured all year, they will owed a shared responsibility payment of $2,085 when they filed their 2018 income taxes by April 15, 2019.

The $2,085 they owed is well below the national average cost of a bronze-tier health plan for a family of five in 2018 ($16,980) 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.

$2,085 x 8/12 = $1390
The yearly penalty amount multiplied by 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 $1,390 because their family lacked health insurance coverage for 8 months of 2018. Along with their 2018 income taxes, this penalty tax is due to the IRS by April 15, 2019.

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

By Elizabeth Davis, RN
Elizabeth Davis, RN, is a health insurance expert and patient liaison. She's held board certifications in emergency nursing and infusion nursing.