Massachusetts requires most residents age 18 and older to maintain health insurance that meets the state's Minimum Creditable Coverage (MCC) requirements. If you didn't have qualifying coverage for all or part of the year, you may qualify for an exemption that reduces or eliminates a Massachusetts health insurance penalty.
Program Entry
To enter an exemption for Massachusetts Schedule HC:
- Massachusetts Return
- Health Care Information (Schedule HC)
- When prompted, "Indicate the time period that you were enrolled in a Minimum Creditable Coverage (MCC) health insurance plan(s)," select No MCC/None.
- Exemption Questions
Religious Exemption
You may qualify for a religious exemption if you have sincerely held religious beliefs that prevent you from obtaining and maintaining health insurance.
When claiming this exemption, Massachusetts will ask whether you received medical health care during the year. If you received certain types of medical care, additional review may be required to determine whether a penalty applies.
Do I Need Approval?
You do not need advance approval from the Massachusetts Health Connector to claim a religious exemption.
Certificate of Exemption
A Certificate of Exemption is available to taxpayers who received approval from the Massachusetts Health Connector for an exemption from the health insurance requirement.
If approved, the Health Connector issues a certificate number that must be entered on Schedule HC.
Do I Need Approval?
You must obtain the Certificate of Exemption from the Massachusetts Health Connector before claiming it on your return.
Affordability Exemption
You may qualify for an affordability exemption if qualifying health insurance was not reasonably affordable based on your income and circumstances.
Massachusetts evaluates whether you had access to affordable:
- Employer-sponsored health insurance
- Government-subsidized health insurance
- Private health insurance available through the Massachusetts Health Connector or private marketplace
Affordability is determined using income-based worksheets and state guidelines.
Do I Need Approval?
Separate approval is generally not required. Massachusetts determines eligibility based on the answers entered in the Schedule HC affordability section.
Federal Poverty Level Exemption
Taxpayers whose income is at or below 150% of the Federal Poverty Level (FPL) are generally exempt from the Massachusetts health insurance penalty.
Massachusetts uses a Federal Poverty Level worksheet to determine eligibility.
What Is the Tax Penalty Appeal Question?
Do You Wish to Appeal the Tax Penalty?
This question appears when Massachusetts determines that you may be subject to a health insurance penalty for lacking qualifying coverage.
Selecting Yes allows the Massachusetts Health Connector to review your circumstances and determine whether the penalty should be waived or reduced.
Common appeal reasons include:
- Financial hardship
- Homelessness
- Eviction or foreclosure proceedings
- Utility shutoff notices
- Significant unforeseen expenses
- Serious illness or family emergencies
- Natural disasters
- Other circumstances beyond your control that prevented you from obtaining coverage
Additional hardship situations may also qualify for review.
Important
Choosing Yes does not automatically remove the penalty.
The Massachusetts Health Connector reviews the appeal and makes the final determination. Supporting documentation may be requested after the return is filed.
What Happens If My Appeal Is Approved?
If the Health Connector approves your appeal:
- The health insurance penalty may be reduced or removed.
- No penalty is assessed while the appeal is being reviewed.
- You may need to provide documentation supporting your hardship claim.
Important Notes
- Most Massachusetts residents age 18 and older are required to maintain health insurance that meets MCC requirements.
- Exemption questions generally only need to be completed if qualifying coverage was not maintained for the entire year.
- A Certificate of Exemption requires approval from the Massachusetts Health Connector.
- Religious and affordability exemptions generally do not require advance approval.
- Keep copies of any exemption certificates, Health Connector correspondence, and Forms MA 1099-HC with your tax records.
- Eligibility requirements must be met before an exemption can eliminate a penalty.
- Taxpayers with income at or below 150% of the Federal Poverty Level are generally exempt from the penalty.