DC Health Insurance Penalty: Who Owes It, How Much It Is for 2026, and How to Qualify for an Exemption

DC still requires residents to have qualifying health coverage, qualify for an exemption, or pay a DC shared responsibility payment on their DC income tax return. For a full year without coverage in 2026, the payment is the greater of two amounts: a flat $845 per adult and $422.50 per child, up to $2,535 for the family, or 2.5% of family income above the federal tax filing threshold. Either way it is capped at $4,965 per uncovered person, for up to five people, according to DC Health Link (opens in a new tab). The federal penalty is a separate rule, and it has been zero since tax year 2019, according to the IRS (opens in a new tab).

Who must have coverage in DC, and what counts?

The District's individual responsibility requirement began in 2019. It is set out in DC Code § 47-5102 (opens in a new tab), and DC Code § 47-5103 (opens in a new tab) creates the District payment for tax years beginning after December 31, 2018. The rule reaches DC residents and their dependents. It is a rule for individuals and families filing a DC return, not a requirement placed on a business buying coverage for its employees.

Under DC Code § 47-5101 (opens in a new tab), minimum essential coverage follows the federal definition in effect on December 15, 2017, and it also includes the Immigrant Children's Program and certain qualifying multiple-employer welfare arrangements. In practical terms, qualifying coverage pays for a broad range of services such as doctor visits, hospital stays, emergency care and prescription drugs, according to DC Health Link (opens in a new tab). Employer plans, DC Health Link plans and qualifying public coverage such as Medicaid and Medicare fall in that group.

DC Healthcare Alliance is the exception. Alliance coverage does not meet the individual mandate, according to DC Health Link's Alliance FAQ (opens in a new tab), although enrollment in the Alliance is listed as an exemption you claim on the DC tax return. If the Alliance is your only coverage, plan to claim that exemption when you file.

What are your three options under DC's rule?

For each month of the year, you and everyone in your tax household land in one of three places, according to DC Health Link (opens in a new tab) and § 47-5102 (opens in a new tab):

1. You had qualifying coverage. No payment is owed for that month.
2. You qualify for an exemption. Most exemptions are claimed on the DC tax return; a few need approval from DC Health Link first.
3. Neither applies. You owe the DC shared responsibility payment for that month, figured on your DC return.

The payment goes to the District through the tax system. It is not a premium paid to an insurer, and it does not buy any coverage. It is reported on Schedule HSR, the DC Health Care Shared Responsibility schedule filed with Form D-40, according to the Office of Tax and Revenue (OTR) (opens in a new tab).

How much can the 2026 payment be?

DC uses two calculations and charges the greater of them, up to a cap. For someone without qualifying coverage for all of 2026, DC Health Link (opens in a new tab) lists these figures:

• Flat amount: $845 for each adult and $422.50 for each child, with the family total for this calculation topping out at $2,535.
• Income amount: 2.5% of family income above the federal tax filing threshold. For 2026 those thresholds are $16,100 for single filers and $32,200 for married couples filing jointly.
• Cap: $4,965 per uncovered person, the District's average bronze-plan premium, multiplied by the number of uncovered household members up to five. For five or more uncovered members, the cap is $24,825.

As an example of the flat amount, a household with two uninsured adults and one uninsured child for the full year would start from $845 plus $845 plus $422.50, or $2,112.50. If 2.5% of that household's income above the filing threshold is larger, the larger figure applies, up to the cap.

The bronze-plan cap is where DC departs from the old federal formula. § 47-5103 (opens in a new tab) starts from the federal calculation but substitutes the District's average bronze-plan premium for the national average when setting the maximum. The figures change every year. The adult flat amount was $795 for tax year 2025, according to an OTR notice of tax changes (opens in a new tab), and the $845 figure applies to 2026.

What if you were uncovered for only part of the year?

The payment is figured month by month. A month in which you had qualifying coverage carries no payment, according to DC Health Link (opens in a new tab), so the flat amount shrinks when only part of the year was uncovered.

Short gaps have their own exemption. A gap of less than three consecutive months without coverage is an exemption you claim on the DC tax return, so someone who lost a job in March and started a new employer plan in May can claim it for those months when its conditions apply.

Moving matters too. § 47-5101 (opens in a new tab) excludes the months when a person was a resident of another jurisdiction. If you moved to DC in July, the months you lived elsewhere are not counted toward the DC payment, and the same is true for the months after you moved away.

In a household where some people were covered and others were not, the calculation applies only to the uncovered people and their uncovered months. The taxpayer is responsible for the payment on a dependent's uncovered months, and spouses who file jointly are jointly liable, under § 47-5103 (opens in a new tab). Keep the coverage records for each person, such as the tax forms your plan or DC Health Link sends, since Schedule HSR asks for the months each person was covered or exempt.

Do you qualify for a DC exemption?

DC splits its exemptions into two groups, and the group decides how you claim it.

Most exemptions are claimed directly on the DC tax return, according to DC Health Link's exemptions tool (opens in a new tab). They include:

• Income below the applicable DC filing requirement, or generally low income.
• Less than three consecutive months without coverage.
• Not living in DC during the uncovered months.
• Enrollment in DC Healthcare Alliance coverage.
• Being a US citizen living abroad.
• Not being lawfully present.
• Membership in a health care sharing ministry.
• Membership in a qualifying religious sect conscientiously opposed to accepting health benefits.
• Incarceration.
• Certain situations involving dependents and who is responsible for their coverage.

The second group needs an application to DC Health Link and an eligibility decision before you rely on it. That group covers affordability and general hardship. DC Health Link lists hardship circumstances such as eviction or foreclosure, a utility shutoff, domestic violence, the death of a family member, damage from a disaster, bankruptcy, pregnancy, coverage or employer coverage that was unaffordable, unpaid medical expenses, increased caregiving expenses, enrollment errors or misconduct, and certain appeal-related situations. DC Code § 47-5104 (opens in a new tab) is the law behind that split: it allows most claims on the form the CFO prescribes and requires an application to the Health Benefit Exchange Authority for affordability and general hardship.

The affordability exemption application (opens in a new tab) asks for a financial-assistance eligibility notice along with household income and employer-coverage information. Gather those documents, plus anything that shows the hardship, before you apply. DC Health Link answers exemption questions at (855) 532-5465.

How do you report the result on your DC return?

Schedule HSR travels with Form D-40. The 2025 D-40 instructions from OTR (opens in a new tab) set out the steps:

• If every member of your shared responsibility family had qualifying coverage for every month, mark the matching box on the D-40 and enter zero on line 25. You do not need Schedule HSR.
• If anyone lacked coverage for any month, complete Schedule HSR to figure the payment or claim an exemption.
• In Part III, list each household member's name, taxpayer identification number, exemption code and exempt months. One person can have more than one exemption type, each on its own line.
• The amount from Schedule HSR carries to D-40 line 25 and is paid with the rest of your DC tax, using Form D-40P or MyTax.DC.gov (opens in a new tab).

The 2026 payment belongs on the 2026 DC return, filed in 2027. The 2025 return was due April 15, 2026, according to the OTR forms page (opens in a new tab). When OTR publishes the tax-year 2026 Schedule HSR instructions, use that version for the 2026 calculation.

Does the federal penalty still apply?

No. The federal individual shared responsibility payment was reduced to zero for tax year 2019 and every year after, according to the IRS (opens in a new tab), so there is no federal payment for going without coverage in 2026.

DC's payment is separate from that federal rule and still applies. The District built its payment on the federal formula in § 47-5103 (opens in a new tab) and kept it in force after the federal amount dropped to zero. A DC resident can owe nothing on the federal return and still owe the District on Schedule HSR.

Can you get coverage now?

DC Health Link sells individual and family plans during open enrollment each year, and it publishes the current open-enrollment dates on its individuals page (opens in a new tab). Check those dates there before you plan around a deadline.

Outside open enrollment, a qualifying life event can open a special enrollment period. The DC Health Link coverage-now page (opens in a new tab) lists these events:

• Losing comprehensive coverage, including losing Medicaid.
• Marriage or a legal domestic partnership.
• A birth, adoption or foster placement.
• Divorce, legal separation or the end of a domestic partnership.
• Becoming a new DC resident.
• Certain changes in income.
• Gaining citizenship or lawful presence.
• Release from incarceration.
• Membership in a federally recognized tribe or an ANCSA Corporation.

The page asks whether the event happened in the past 60 days or whether coverage will end in the next 60 days, so act soon after a job loss or a move. DC Medicaid takes applications at any time of year, according to DC Health Link's Medicaid page (opens in a new tab).

What financial help may be available?

One DC Health Link application checks eligibility for several kinds of help at once: Medicaid, premium tax credits, cost-sharing reductions and enrollment in a DC Health Link plan, according to the DC Health Link financial-assistance FAQ (opens in a new tab). Premium tax credits lower the monthly premium, and cost-sharing reductions lower what you pay when you use care.

DC Medicaid is open to qualifying DC residents year-round. DC Health Link also connects people to the DC Healthcare Alliance, though Alliance coverage alone does not meet the mandate. How the Alliance works with private coverage and financial help depends on your circumstances, according to DC Health Link's Alliance and private plan FAQ (opens in a new tab), so ask DC Health Link before you change plans.

Where can you get help, and how do you check a broker?

For enrollment, eligibility, exemptions and coverage questions, contact DC Health Link (opens in a new tab) at (855) 532-5465, TTY 711. Trained and certified DC Health Link assisters help for free. For Schedule HSR and other DC tax questions, use OTR's individual tax resources (opens in a new tab) and MyTax.DC.gov. For a complaint about an insurer, start at the DC Department of Insurance, Securities and Banking (DISB) (opens in a new tab) and follow its current complaint process.

If a broker or assister is helping you, check them two ways. Confirm the person's DC license with the DC insurance license lookup (opens in a new tab), and confirm DC Health Link certification through the broker and assister directory on DC Health Link's enrollment-help pages. Then ask:

• Are you licensed by DISB, and are you certified by DC Health Link?
• Are you acting as a broker, an assister or an insurer representative?
• Which plans and carriers can you discuss?
• Does this coverage meet DC's individual responsibility requirement?
• Does the plan include the doctors, hospitals, prescriptions and services I need?
• What are the premium, deductible, copayments, coinsurance and out-of-pocket maximum?
• Am I eligible for Medicaid, premium tax credits or cost-sharing reductions?
• What documents do I need for enrollment or an exemption application?
• What happens if my income, address, household or employer coverage changes?
• When does coverage start, and how do I report an enrollment or eligibility problem?

Frequently asked questions

Is the DC payment owed every month?

It is figured by month. Each month without qualifying coverage or an exemption adds to the amount, and each covered month adds nothing, according to DC Health Link (opens in a new tab).

Does DC Healthcare Alliance count as coverage?

No. Alliance coverage does not meet the individual mandate, according to DC Health Link (opens in a new tab). Alliance enrollment is a tax-return exemption category, so claim it on Schedule HSR for those months.

Who pays for a child's uncovered months?

The taxpayer who claims the dependent is responsible for the dependent's payment, and spouses filing jointly are jointly liable, under DC Code § 47-5103 (opens in a new tab).

Do I need approval before claiming an exemption?

Only for affordability and general hardship, which need an application to DC Health Link. The others, such as a gap of less than three consecutive months, are claimed on Schedule HSR with your return.

Can I sign up for a DC Health Link plan after losing my job?

Losing comprehensive coverage is a qualifying event for a special enrollment period, according to DC Health Link (opens in a new tab). Apply within the window it shows, which is tied to events in the past 60 days or coverage ending in the next 60 days.

Next steps

Go month by month for each person in your household, mark what was covered, check the exemptions, and file Schedule HSR when anyone had an uncovered month. If you are uninsured now, check DC Health Link for open enrollment or a special enrollment period, and apply for Medicaid at any time if you may qualify. If you run a business and your question is about coverage for employees rather than your own household, start with what a DC business typically insures. Riskado's directory lists insurance agencies across the US, including the District, by city and by category.