What Is the Penalty for Not Having Health Insurance in NJ?

New Jersey requires its residents to maintain health insurance coverage. Following the repeal of the federal penalty, the state implemented its own mandate to ensure residents are insured. This requirement is enforced through a provision in the state’s income tax law known as the Shared Responsibility Payment (SRP). Individuals who fail to secure qualifying health coverage for themselves and their dependents, and who do not qualify for an exemption, will face this financial penalty on their state tax return.

Who is Subject to the Penalty

The requirement to maintain health coverage applies to all New Jersey residents who are required to file a state income tax return. The mandate stipulates that residents must be enrolled in a plan that qualifies as Minimum Essential Coverage (MEC). Having MEC for each month of the year for every member of the household satisfies the state requirement and avoids any potential penalty.

Minimum Essential Coverage encompasses a wide range of health plans, including:

• Employer-sponsored health insurance
• Individual plans purchased through the state’s official health insurance marketplace, Get Covered NJ
• Government-sponsored programs such as Medicare Part A and most Medicaid plans, including NJ FamilyCare
• Certain types of veterans’ health coverage and TRICARE

Insurers and employers are required to send informational forms at the beginning of the tax season that confirm the type of coverage held during the year. These documents serve as proof of coverage when filing a state tax return. Without this qualifying coverage, a resident is considered uninsured and may be subject to the Shared Responsibility Payment.

Calculating the Shared Responsibility Payment

The Shared Responsibility Payment is the greater of two possible calculations. The first method is based on a percentage of household income, set at 2.5% of the income that exceeds the New Jersey tax filing threshold. The second method is a flat-dollar amount of $695 per adult and $347.50 per child under 18. The state will impose whichever amount is higher.

A cap exists on the total penalty amount, ensuring it does not exceed the statewide average annual premium for a bronze-level health plan. For the 2025 tax year, the penalty for an individual is capped at $4,284. The cap for a family varies based on income and size. This ceiling ensures the penalty does not become more expensive than purchasing baseline insurance coverage.

Available Exemptions from the Penalty

Even if a New Jersey resident was uninsured for part or all of the year, they may be exempt from the Shared Responsibility Payment if they meet specific criteria. One of the most common exemptions is for individuals whose income is below the state’s tax filing threshold. These individuals are not required to file a tax return and are therefore not subject to the penalty.

Another exemption is for a short gap in coverage. A resident can be uninsured for a period of less than three consecutive months during the year without incurring a penalty. This allows for brief periods of non-coverage that might occur between jobs or when transitioning between different insurance plans. If a coverage gap lasts for three months or more, the penalty will apply for each month of non-coverage starting with the third month.

Coverage may also be deemed unaffordable, providing another path to an exemption. If the lowest-cost bronze plan available would cost more than a certain percentage of an individual’s household income, they are not required to pay the penalty. Other specific circumstances that qualify for an exemption include membership in a federally recognized Native American tribe or a recognized health care sharing ministry.

Reporting Coverage and Paying the Penalty

The process of reporting health coverage status and paying any owed penalty is integrated directly into the annual New Jersey income tax filing. Residents must complete and attach Schedule NJ-HCC, the New Jersey Health Care Coverage form, to their Form NJ-1040. This schedule is where taxpayers affirm whether they, their spouse, and their dependents had Minimum Essential Coverage for each month of the tax year.

To complete Schedule NJ-HCC, taxpayers will reference federal forms provided by their insurer or employer. These forms, 1095-A (for marketplace plans), 1095-B (from insurers), or 1095-C (from large employers), serve as official proof of coverage. These documents detail who was covered and for which months of the year, and this information is transferred to the state schedule.

If a Shared Responsibility Payment is owed, it is calculated using a worksheet and the final amount is entered on the main NJ-1040 form. The penalty is added to the taxpayer’s total tax liability for the year. It becomes part of the overall amount due with the tax return or is subtracted from any refund owed. The payment is subject to the same collection procedures, including interest and penalties for non-payment, as regular state income tax.