Does Your State Charge a No-Insurance Penalty? What You Need to Know Before Dropping Coverage
When the federal government zeroed out the health insurance penalty under the Tax Cuts and Jobs Act, many Americans assumed that the financial risk of being "uninsured" had vanished. However, several states quickly stepped in to create their own individual mandates. If you live in a state with its own healthcare laws, dropping your coverage could lead to a significant, unexpected bill when you file your state taxes. Understanding these local requirements is essential for anyone considering a transition between plans or thinking about going without coverage for a short period. States with Health Insurance Mandates As of now, several states (and the District of Columbia) require residents to maintain "Minimum Essential Coverage" (MEC). If you reside in one of these areas and do not have a valid exemption, you may face a financial penalty. 1. California California’s individual mandate is one of the most robust in the nation. The state uses the revenue from these penalt...