Is It Bad To Have A Lapse In Health Insurance? 
Having a lapse in coverage means that you 're responsible for 100 % of expenses if you have an illness or injury occur during this period because the plan would not be in force , thus not providing any coverage . The idea of insurance is to protect yourself in the event of a catastrophic financial event by shifting the risk to a third party -LRB- the insurance company -RRB- . If you do not have health insurance in force , then you 're taking on all of the risk yourself instead of passing it off to the insurance company by paying a monthly premium . Please note , under the Affordable Care Act , if you 're without active coverage for more than 90 days , you may be subject to a penalty . In 2014 , the penalty is calculated in one of two ways : 1 -RRB- 1 % of your yearly household income featuring a maximum penalty as the national average yearly premium for a bronze plan .2 -RRB- $ 95 per person for the year -LRB- If under age 18 , then $ 47.50 -RRB- featuring a maximum penalty per family of $ 285 under this method . These figures will increase in 2015 and 2016 - penalties will be adjusted for inflation in future years . 