How to Fill Out Massachusetts Schedule HC: Coverage and Penalties

To fill out Massachusetts Schedule HC, copy your insurance carrier’s name, Federal Identification Number, and subscriber ID from your Form MA 1099-HC onto the top of the schedule, check the box for each month you had qualifying coverage during the tax year, and then either claim an exemption or complete the penalty worksheet for any uncovered months. The form gets enclosed with your Form 1 (or Form 1-NR/PY if you’re a part-year resident), and every Massachusetts resident age 18 or older who files a state return has to include it.¹

What You Need Before You Start

The one document that makes Schedule HC straightforward is Form MA 1099-HC, the Individual Health Insurance Responsibility Disclosure. Your insurance carrier is required to mail it by January 31.² If it hasn’t arrived, sign into your carrier’s member portal to download it or call the number on your insurance card. It doesn’t come from the state.³

Three pieces of information transfer straight from the 1099-HC onto Schedule HC:

The insurance carrier name exactly as printed, which may be a parent company rather than the brand on your ID card.
The Federal Identification Number in Box 2. Use this number, not any other FID your carrier might use for IRS filings.²
Your subscriber ID number, which the Department of Revenue uses to match your return against carrier records.

If a 1099-HC arrived from your insurer, your plan meets the state’s Minimum Creditable Coverage standard. Most employer plans and MassHealth qualify. High-deductible plans, short-term medical policies, and out-of-state plans with limited benefits sometimes do not — if you’re unsure and no 1099-HC arrived, call the carrier directly before filing.

Filling In the Coverage Section

Below the carrier information, Schedule HC has a month-by-month grid. Check the box for every month your 1099-HC shows you were covered. Accuracy counts: the Department of Revenue cross-references your entries against data the carriers submit separately.

Switched insurers mid-year? Report each carrier and check off the months covered under each plan. The carrier name and FID must match each respective 1099-HC exactly.

Part-year residents check only the months during which they lived in Massachusetts.

If You Had a Coverage Gap

A gap of three consecutive calendar months or fewer generates no penalty and needs no exemption code.⁴ The Health Connector reads this as 63 consecutive days or fewer. Longer gaps require either an exemption or a penalty.

Common exemption grounds listed in the Schedule HC instructions include:

Income at or below 150% of the Federal Poverty Level.
Religious beliefs against medical intervention.
Financial hardship such as eviction, utility shutoff, or unmanageable medical debt.
Coverage being unaffordable based on the Health Connector’s annual affordability schedule.

To claim an affordability exemption, compare your income to the percentage thresholds in the Schedule HC instructions. If the cheapest plan available to you cost more than the applicable percentage of your income, coverage is treated as unaffordable. Keep any hardship documentation in your personal files; do not attach it to the return.⁵

Calculating the Penalty

If you had uncovered months and no valid exemption, complete the Health Care Penalty Worksheet in the Schedule HC instructions. The worksheet counts your penalty months after applying the grace period, multiplies by the monthly amount for your income bracket, and produces a total. Enter that total on Form 1, Lines 35a and 35b, or on Form 1-NR/PY, Lines 39a and 39b for part-year residents.⁶

The monthly penalty amounts for tax year 2026 are:

At or below 150% FPL: no penalty.
150.1–200% FPL: $26 per month.
200.1–250% FPL: $51 per month.
250.1–300% FPL: $76 per month.
300.1–400% FPL: $117 per month.
Above 400% FPL: $211 per month.

A full uncovered year at the top bracket comes to $2,532. For married couples filing jointly, add each spouse’s individual penalty together. The total is capped at 50% of the minimum monthly premium you would have qualified for through the Health Connector.⁴

Appealing Instead of Paying

If you think the penalty shouldn’t apply, you can appeal, and there’s one detail that trips people up: do not calculate or enter a penalty amount on your return when appealing. Leave the penalty lines blank. Fill in the appeal oval on Schedule HC for yourself (and your spouse if applicable), which authorizes the Department of Revenue to share your return information with the Health Connector. File pages 1 through 3 of Schedule HC with your return.⁷

After filing, the Health Connector sends a letter asking you to state your grounds in writing and submit supporting documentation. Respond by the deadline in that letter, because missing it means automatic dismissal. The Health Connector may schedule a hearing where you present your claims under oath. If the appeal is denied or dismissed, the Department of Revenue bills you for the full penalty.⁷

Submitting the Form

Schedule HC is enclosed with your primary state return — Form 1 for full-year residents or Form 1-NR/PY for part-year residents.⁸ Filing electronically through commercial tax software or MassTaxConnect attaches it automatically and reduces the risk of data-entry mismatches.

Filing on paper? Place Schedule HC behind Form 1 (or Form 1-NR/PY) and mail to:

Refund expected: Mass. DOR, PO Box 7000, Boston, MA 02204.
Payment enclosed: Mass. DOR, PO Box 7003, Boston, MA 02204.
Courier delivery (FedEx, DHL, etc.): Massachusetts DOR, 200 Arlington Street, Chelsea, MA 02150.

⁹

Before sealing the envelope, verify every carrier name, FID number, and subscriber ID against the 1099-HC. Mismatches are the most common reason the Department of Revenue sends follow-up notices. Keep a copy of Schedule HC and the original 1099-HC for at least three years, since the Department can request verification during that window.¹⁰

1
General Court of Massachusetts. Massachusetts Code Chapter 111M – Individual Health Coverage
2
Mass.gov. Learn About Health Care Reform as an Insurance Carrier
3
Mass.gov. 1095-B and 1099-HC Tax Form
4
Mass.gov. TIR 26-1 – Individual Mandate Penalties for Tax Year 2026
5
Massachusetts Health Connector. Affordability Schedule
6
Mass.gov. Massachusetts Assessment of Tax Penalties
7
Mass.gov. Learn How to Appeal the Health Care Penalty
8
Mass.gov. 2024 Schedule HC Health Care Information
9
Mass.gov. Mailing Addresses for Massachusetts Tax Forms
10
Internal Revenue Service. How Long Should I Keep Records