Affordable Care Act

Everyone is required to have health insurance. This means:

  • If you have health insurance, including Medicare or Medicaid, you're good to go. You may even qualify for the Premium Tax Credit (PTC) if you bought insurance through the Health Insurance Marketplace.
  • If you don't have insurance, you may have to pay a penalty for the months you were uninsured and didn't have any exemptions.
  • A qualifying reason for not having health insurance is called a penalty exemption.

Exemptions to Paying a Fee

There are several exemptions to paying a fee for not having health insurance, including the following:

  • You're uninsured for less than 3 months of the year.
  • The lowest-priced coverage available to you would cost more than 8.16% of your household income.
  • You don't have to file a tax return because your income is too low.
  • You're a member of a federally recognized tribe or eligible for services through an Indian Health Services provider.
  • You're a member of a recognized health care sharing ministry.
  • You're a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare.
  • A member of your household was born, adopted, or died.
  • You're incarcerated (either detained or jailed), and not being held pending disposition of charges.
  • You're not lawfully present in the U.S. or are a U.S. citizen living abroad
  • You're enrolled in certain Medicaid programs that aren't minimum essential coverage
  • You're a resident of a state that didn't expand Medicaid

Additionally, if you have any of the circumstances below that affect your ability to purchase health insurance coverage, you may qualify for a hardship exemption:

  • You were homeless.
  • You were evicted or were facing eviction or foreclosure.
  • You received a shut-off notice from a utility company.
  • You experienced domestic violence.
  • You experienced the death of a close family member.
  • You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
  • You filed for bankruptcy.
  • You had medical expenses you couldn't pay that resulted in substantial debt.
  • You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
  • You expect to claim a child as a tax dependent who's been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
  • As a result of an eligibility appeals decision, you're eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren't enrolled in a QHP through the Marketplace.
  • You were determined ineligible for Medicaid because your state didn't expand eligibility for Medicaid under the Affordable Care Act.
  • Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
  • You experienced another hardship in obtaining health insurance.

You can use the exemptions tool on HealthCare.gov to find out if you qualify for a penalty exemption.

If you're applying for an exemption based on: being uninsured for less than 3 months, coverage being unaffordable, membership in a federally-recognized tribe or eligibility for services through an Indian care provider, membership in a health care sharing ministry, being incarcerated, not being lawfully present in the U.S., or a resident of a state that didn't expand Medicaid (and your household income is less than 138% of the federal poverty line), you can claim your exemption when you fill out your federal tax return using the TaxHawk software.

If you're applying for an exemption based on: hardship as explained above, membership in a religious sect whose members object to insurance, ineligible for Medicaid because your state didn't expand Medicaid, or were enrolled in certain Medicaid programs that aren't considered minimum essential coverage, you must fill out an exemption application to the Health Care Marketplace and get a Marketplace exemption certificate to enter on your tax return.

Form to apply for a hardship exemption
Form to apply for a religious sect exemption

If you'd like to purchase your health insurance through the Health Insurance Marketplace and avoid paying a fee in future tax years, visit healthcare.gov.

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