RI Health Insurance Mandate

The mandate is a requirement that all non-exempt Rhode Islanders have qualifying health coverage. Sources of qualifying health coverage include coverage through their employer or purchased directly from a health insurance carrier, Medicare, Medicaid, or a health plan purchased through HealthSource RI, the state’s health exchange. Failure to have coverage may result in a state personal income tax-time penalty.

All Rhode Islanders are required to have qualifying health coverage, unless they are otherwise exempt (see Exemptions Section).

Rhode Island’s mandate went into effect on January 1, 2020.

The Affordable Care Act, approved by Congress and signed into law by then-President Barack Obama in March 2010, required most Americans to have health care coverage or pay a penalty per family member on their federal income tax return. Exemptions to that requirement were available for certain people who qualified.

Through the federal Tax Cuts and Jobs Act, the federal penalty for not having health coverage after January 1, 2019 was reduced to $0. The penalty was still in effect for the entire year in 2018.

Legislation passed by the General Assembly and signed by Governor Gina M. Raimondo on July 5, 2019, enacts the requirement and penalty here in Rhode Island.  This law requires all non-exempt members of your household to have health coverage starting in January 2020.
If you do not have coverage and do not qualify for an exemption, you will be assessed a penalty when filing personal income taxes for the state of Rhode Island.

In 2019, 96% of Rhode Islanders have health coverage. The reduction of the federal mandate penalty to $0 led Rhode Island to enact a state level mandate. This is an important tool in keeping Rhode Islanders covered and maintaining their access to affordable health care for when they need it.

No. No penalty will be imposed on any individual for any month during which the individual is a legal resident of another state. The penalty will apply only to Rhode Island residents – and to part-year Rhode Island residents for the period during which they were Rhode Island residents.

Generally, a penalty will be assessed when individuals go without coverage. There are some exceptions to this rule, however, and they are called exemptions. See below for more detail about exemptions available.

Exemptions can be claimed in one of two ways, depending on the exemption type. It is important to know that some exemptions are claimed through a Rhode Island personal income tax filing, and others are requested through an application submitted to HealthSource RI (please refer to the table below).

Exemptions granted by the RI Division of Taxation will be claimed through personal income tax Form RI-1040 for RI residents and Form RI-1040NR for part-year RI residents. There is no separate application process. The following exemptions will be available:

[1] Indexed annually by Federal regulation.

The exemption application through HealthSource RI is available here. Please review and complete the application, if needed. Application submission instructions are found at the end of the application. If you have questions, call HealthSource RI at 855-840-4774.

Please refer to the table below for more information about exemptions processed by HealthSource RI.

[2] Indexed annually by Federal regulation.

You can receive a hardship exemption through HSRI for yourself or another member of your tax household for the applicable tax year if you experienced a hardship that prevented you from obtaining minimum essential coverage. Hardship exemptions usually cover the month before the hardship, the months during which the hardship is experienced, and the month after the hardship has occurred.

Please refer to the chart in the exemption application for examples of hardship exemptions. For these exemptions, you will need to include documents that support your application. If you can’t obtain the documents, call HealthSource RI at 1-855-840-4774.

A job-based health plan covering only the employee that costs 9.86% or less of the employee’s household income is considered “affordable.”

• For the employee, affordability is based on only the premium you’d pay for self-only (individual) coverage.
• For other members of the household (not the employee), affordability is based on the premium amount to cover everyone in the household.
• The employee’s total household income is used. Total household income includes income from everybody in the household who’s required to file a tax return.

If a job-based plan is “affordable,” and meets the “minimum value” standard, you’re not eligible for premium tax credits through HealthSource RI.  More information is available here.

If HealthSource RI denies your request for an exemption, you will receive a denial notice and may file an appeal. Appeals must be filed within 30 days of the denial notice.  Please review the denial notice for instructions on how to file an appeal.

An insurance plan that’s certified by HealthSource RI, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the Affordable Care Act. All qualified health plans meet the Affordable Care Act requirement for having health coverage, known as “minimum essential coverage.”

The law requires all non-exempt Rhode Islanders to have minimum essential coverage. Any of the following types of coverage count as minimum essential coverage:
• An employer-sponsored health coverage plan (including self-insured plans, COBRA coverage and retiree coverage);
• A health plan offered in the individual market, including a qualified health plan offered by HealthSource RI, the state’s health insurance exchange; health coverage offered by certain student health plans; and catastrophic coverage;
• The federal Medicare health coverage program, including coverage under Medicare Part A and coverage under Medicare Advantage plans;
• The state Medicaid program;
• The government’s Children’s Health Coverage Program (CHIP);
• The TRICARE program (which generally applies to the military);
• Certain types of veterans’ health coverage administered by the U.S. Department of Veterans Affairs (sometimes called the Veterans Administration, or VA);
• Health plans related to Peace Corps volunteers;
• Coverage under the Department of Defense Non-appropriated Fund Health Benefit Program;
• Refugee Medical Assistance supported by the Administration for Children and Families;
• Coverage under an expatriate health plan;
• Self-funded health coverage offered to students by universities (if the sponsor of the program has applied to the U.S. Department of Health and Human Services to be recognized as minimum essential coverage);
• Other coverage recognized by the U.S. Secretary of Health and Human Services as minimum essential coverage.

The following types of coverage are not considered minimum essential coverage:
• Limited-scope dental benefits;
• Limited-scope vision benefits;
• Benefits for long-term care, nursing home care, home health care, community-based care, or any combination of these;
• Coverage only for a specific disease or illness;
• Hospital indemnity or other fixed indemnity coverage;
• Medicare supplemental health coverage;
• Any other similar benefits that are limited in scope.
You or members of your household may incur a penalty if they do not have “minimum essential coverage”, even if you have coverage under one or more, or any combination, of the following:
• Coverage only for accident, or disability income coverage, or any combination of those;
• Coverage issued as a supplement to liability coverage;
• Liability coverage, including general liability coverage and automobile liability coverage;
• Workers’ compensation or similar coverage;
• Automobile medical payment coverage;
• Credit-only coverage;
• Coverage for on-site medical clinics; and
• Other similar coverage under which benefits for medical care are secondary or incidental to other coverage benefits. 

Yes, most Rhode Islanders have health coverage already. By maintaining health coverage throughout the year, members of your household can avoid the penalty. 

Most taxpayers have qualifying health coverage for all 12 months in the year. Therefore, they will simply check a box on the Rhode Island return, indicating that they had coverage for the previous calendar year, just as they checked a box on the federal return in prior years.  Proof of insurance documents (such as Form 1095) should be retained and kept with your tax records for future reference. These documents may need to be supplied upon request.

For more information about coverage for part of the year, please see the questions about the tax penalty below.

Qualifying for coverage through HealthSource RI depends on your expected income, household size, access to health coverage through an employer, and other information. Some Rhode Islanders and their families may also qualify for federal financial assistance to help purchase coverage.

If you purchase health coverage through HealthSource RI:
• It will count for purposes of Rhode Island’s mandate and will exempt you from Rhode Island’s tax penalty.
• You may be eligible for a federal tax credit – which will reduce the cost of your premium.
• You can also find out if you qualify for coverage at no cost to you through the Medicaid program.
HealthSource RI can assist you in determining if you and your family qualify for low or no cost health coverage or federal financial assistance to help make your health coverage more affordable.

If you would like to know more, contact HealthSource RI using our live web chat or by phone at 1-855-840-4774.

Please remember, all health coverage that qualifies as minimum essential coverage satisfies the mandate.

If you (or your dependents) do not have health coverage during a calendar year, a penalty will be assessed through the Rhode Island personal income tax return that you file for that specific year.

The fee is calculated either as 2.5% of your yearly household income or per person ($695 per person and an additional $347.50 per child under age 18), whichever amount is higher.

• Using the percentage method, only the part of your household income that’s above the yearly tax filing requirement (as defined below) is counted.
• Using the per person method, you pay only for people in your household who don’t have insurance coverage.

If the income percentage method is higher, the maximum penalty can be no more than the cost of the total annual premium for an average bronze plan sold through HealthSource RI.

If you have coverage for part of the year, the fee is 1/12 of the annual amount for each month you (or your tax dependents) don’t have coverage. One short gap in coverage does not count against you.  If you’re uninsured only 1 or 2 consecutive months, you don’t have to pay the fee at all.

What happens if I do not file taxes, but my income exceeds the tax filing threshold?

If you fail to file a Rhode Island personal income tax return and you have a balance due, you will be subject to a late-filing penalty, late-payment penalty, and interest that currently accrues at a rate of 18%. The Division of Taxation will issue a bill.

If a person is eligible to enroll through HSRI and is assessed a penalty, that person will be eligible for a special enrollment period (SEP) under R.I. Gen. Laws § 42-157-12. The tax filer will have sixty (60) days from the date he or she is assessed a penalty to complete enrollment in a health plan through HealthSource RI for the current year. Click here for more information.

If the federal mandate is again enforced through a comparable penalty, Rhode Island’s mandate penalty will no longer be assessed, under R.I. Gen. Laws § 44-30-101(j).

What happens if my family income falls below the tax filing threshold?

If your household income is lower than the tax filing threshold, your household is not required to pay a penalty for not having health coverage. When this is applicable, filers should claim code NC on the IND-HEALTH for the months in which they did not have insurance to avoid being assessed a penalty for those months. The tax filing threshold is the standard deduction for your filing status plus $4,700* per exemption.

As an example, a married couple filing jointly with 2 children (or dependents) would have a standard deduction of $20,050* plus $4,700* times 4 exemptions ($18,800*).  The minimum for this family of would be $38,850*.

*Please note this example uses figures for the Tax Year 2023. Below is a chart you may reference for Tax Year 2023:

Please visit the RI Division of Taxation’s mandate information page to learn more about reporting requirements.