Health insurance is not required in Colorado. No state law forces you to carry coverage, and the federal tax penalty for being uninsured has been $0 since 2019.1Office of the Law Revision Counsel. 26 USC 5000A – Requirement to Maintain Minimum Essential Coverage You will not be fined, taxed, or charged a fee for going without a plan. The real reason to think carefully about coverage is not the law; it is what a single hospital bill can do to your finances.
Why There Is No Penalty
The Affordable Care Act originally required most Americans to maintain health insurance or pay a tax penalty called the shared responsibility payment. The Tax Cuts and Jobs Act of 2017 reduced that penalty to $0 for tax years beginning after December 31, 2018.1Office of the Law Revision Counsel. 26 USC 5000A – Requirement to Maintain Minimum Essential Coverage The mandate still sits in federal law on paper, but owing nothing means there is nothing to enforce.
Colorado never added a state-level penalty on top. California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia all created their own individual mandates with real financial consequences after the federal penalty went to zero. Colorado did not. Your Colorado state return contains no line asking about your insurance status and no charge for going without.
What Being Uninsured Actually Costs
No penalty is not the same as no cost. A single emergency room visit or unexpected surgery can generate bills that take years to pay. Hospitals and providers negotiate discounted rates with insurers, and uninsured patients are often billed at the full list price, which can run several times higher than the negotiated rate. Medical expenses contribute to roughly two-thirds of personal bankruptcies in the United States, a share that did not meaningfully drop even after the ACA expanded coverage.
Going without coverage also means skipping routine care. Preventive screenings, chronic disease management, and mental health treatment all become out-of-pocket expenses, and most people simply put them off. By the time an uninsured person does seek care, conditions are often more advanced and more expensive to treat. Given the subsidies and low-cost programs available in Colorado, the math usually favors having some form of coverage.
How to Get Covered in Colorado
Several paths exist depending on your situation.
Connect for Health Colorado is the state’s official marketplace for individuals and families buying private plans. It is the only place to access federal premium tax credits and cost-sharing reductions. Plans are grouped into bronze, silver, and gold tiers based on how costs are split between you and the insurer.2Colorado Department of Health Care Policy and Financing. Information About Buying Health Insurance
Employer-sponsored coverage is still the most common source for working-age Coloradans. Group rates tend to be lower, and the employer pays part of the premium. If your employer offers a plan that meets federal affordability and minimum value standards, you generally will not qualify for marketplace subsidies.
Health First Colorado, the state’s Medicaid program, provides free or very low-cost coverage for residents who meet income guidelines. Adults generally qualify at up to 133% of the federal poverty level, children at up to 142%, and pregnant women at up to 195%, with limits increasing by household size.3Colorado Department of Health Care Policy and Financing. Medicaid Income Chart Child Health Plan Plus (CHP+) covers children and pregnant women in households earning too much for Medicaid but under 260% of the federal poverty level.4Colorado Department of Health Care Policy and Financing. Child Health Plan Plus (CHP+) You can apply for either at any time through Colorado PEAK, by phone at 1-800-221-3943, by mail, or in person at a county office.5Health First Colorado. Apply Now
OmniSalud lets Colorado residents who do not qualify for Medicaid, CHP+, or marketplace coverage because of immigration status shop for and enroll in health plans. Enrollees with household income below 150% of the federal poverty level may qualify for additional savings on silver-level plans.6Connect for Health Colorado. OmniSalud
When You Can Enroll
Marketplace plans are not available year-round. Open Enrollment through Connect for Health Colorado runs from November 1 through January 15.2Colorado Department of Health Care Policy and Financing. Information About Buying Health Insurance Outside that window, you can only enroll if you have a qualifying life event: losing job-based coverage, getting married, having or adopting a child, moving, or a significant change in household income. Each event opens a 60-day Special Enrollment Period, and you will usually need documentation to prove it happened.7Connect for Health Colorado. Connect for Health Colorado Miss the window and you generally wait until the next Open Enrollment.
Medicaid and CHP+ work differently. You can apply any time of year, and coverage can start as soon as you are approved.
Help Paying for a Plan
The premium tax credit is the main form of federal help with marketplace premiums. For 2026, eligibility has reverted to pre-pandemic rules: household income must fall between 100% and 400% of the federal poverty level.8Congress.gov. Enhanced Premium Tax Credit and 2026 Exchange Premiums The enhanced subsidies from the Inflation Reduction Act expired on January 1, 2026, so the “subsidy cliff” at 400% is back. Exceed that threshold by a dollar and you lose premium assistance entirely.
The share of income you are expected to put toward premiums has also gone up for 2026 compared with 2024 and 2025, so even people who still qualify will pay more out of pocket.8Congress.gov. Enhanced Premium Tax Credit and 2026 Exchange Premiums Cost-sharing reductions, which lower your deductible and copays, stack on top of premium tax credits if you choose a silver plan and your income falls in the eligible range.
Colorado has also created the Colorado Option, a set of standardized plans sold on the individual and small-group markets. These plans were required to cut premiums by 15% by 2025, and for 2026 onward, premium increases are capped at U.S. medical inflation.9Colorado Division of Insurance. Colorado Option Colorado Option plans include several services at no cost regardless of your deductible: primary care visits, mental health and substance use treatment, prenatal and postnatal care, and diabetic supplies including continuous glucose monitors. They are sold through Connect for Health Colorado and are open to anyone buying individual coverage or to small employers with fewer than 50 workers.
If You Just Lost Job-Based Coverage
Losing employer coverage opens a 60-day Special Enrollment Period on the marketplace, so comparing a subsidized marketplace plan against your other options is worth doing before you commit.
Federal COBRA may let you keep your existing plan. It applies to employers with 20 or more employees and generally runs for up to 18 months after a job loss or reduction in hours. The price is steep: you pay the full premium yourself plus up to a 2% administrative fee, which typically runs two to three times what came out of your paycheck, because the employer is no longer contributing. For spouses and dependents who experience a second qualifying event, such as divorce or the death of the covered employee, COBRA can extend to 36 months total.10CMS.gov. COBRA Continuation Coverage
If your employer is too small for federal COBRA, Colorado’s own continuation and conversion law fills the gap for employees of smaller employers who would otherwise have no option.11Connect for Health Colorado. What Is Colorado Continuation and Conversion
No Penalty Still Means Tax Paperwork if You Buy a Marketplace Plan
Being uninsured triggers no tax consequences in Colorado. Buying marketplace coverage does. If you enrolled through Connect for Health Colorado, the marketplace sends you Form 1095-A early each year with details about your coverage and any advance premium tax credits paid on your behalf.12Internal Revenue Service. About Form 1095-A, Health Insurance Marketplace Statement You use that form to complete Form 8962 and reconcile the credits on your federal return.
If you received more in advance credits than your actual income justified, you owe the difference back. If you received less, the extra comes to you as a refund. Skipping Form 8962 means losing eligibility for advance credits and cost-sharing reductions the following year.13Internal Revenue Service. Reconciling Your Advance Payments of the Premium Tax Credit This trips up people who assume that because there is no penalty for being uninsured, insurance has no tax implications at all.