Exemptions from the requirement to have health insurance

In the following article, we will help you to figure out if you qualify for a Health Insurance Coverage Exemption. Until recently, under the Affordable Care Act, it used to be required for most citizens to have insurance that would qualify as minimum essential coverage or else to pay a federal tax penalty for proceeding without it. There used to be two ways to waive the said penalty:

  • To be enrolled in minimum essential coverage. This way gave you an option to be uninsured for up three months in a year.
  • To qualify for an Health Insurance Coverage Exemption.

In 2019, these rules changed. After the repealment of federal tax penalty, you will not have it if you will turn out without health insurance that would qualify as a minimum essential coverage. If you are uninsured in 2019, you may not be charged with a penalty, but you may want to consider insurance coverage options to ease your pay for healthcare during the year. For year 2019 , there is no exemption required unless you are 30 or older and want to subscribe for extremely unlucrative catastrophic health insurance.

Several exemptions still valid for year 2018 and prior. We will site the major ones of these in the below table broken down by type and category.

Exemption Category
Short Coverage Gap Health coverage-related
Aggregate self-only coverage considered unaffordable Affordability
Members of a healthcare sharing ministry Group Membership
Incarceration Hardship
General hardship Hardship
Determined ineligible for Medicaid in a state that did not expand Medicaid Health coverage-related
Coverage is considered unaffordable Affordability
Citizens living abroad and certain noncitizens Other
Resident of a state that did not expand Medicaid Health coverage-related
Members of Indian Tribes Group Membership
Members of certain religious sects Group membership
Coverage considered unaffordable based on projected income Affordability

The unaffordability of health insurance

There are two general cases when the health insurance is considered unaffordable:

  1. An income of an individual doesn’t meet tax-filing requirements.
  2. The lowest-priced medical insuranceexceeds 8.05% of your total household income.

Existing hardship exemptions

There is a number of situations in a citizen’s life that can render insurance financially or logistically impossible. The affordable Care Act classifies these under ”hardship exemptions.”

These include, for example: The death of a family member, eviction or facing eviction, homelessness, among others. The list of these exemptions is quite long. Make sure to consult HealthCare.gov to see if your current life situation is cited as a hardship exemption. You can apply at HealthCare.gov for the exemption while describing your case in detail and further waiting a follow-up from the government insurance specialist.

Other exemptions

Members of certain groups may potentially be subject to exemption. These include:

  • Individuals belonging to a recognized healthcare sharing ministry;
  • Individuals belonging to a recognized religious sect with religious objections to insurance;
  • Individuals belonging to a federally recognized tribe.

There are several of other additional exemptions, which include, most notably:

  • Serving a prison or jail term;
  • Adopting a family member;
  • The death of a member of your tax household;
  • living outside of the country.

Make sure to consult HealthCare.gov to see if your current life situation is cited as exemption.

How to get an exemption?

Exemptions are claimed and obtained via:

  • Tax return forms;
  • gov;
  • State health insurance exchange.

Make sure to address a tax professional or HealthCare.gov specialists to figure out the best way to claim your exemption.

What to do if you are not supposed to file a tax return?

If an individual’s income is below the filing threshold set by the controlling organizations, then they are automatically exempt and no further action would be required on the part of the individual. If an individual is not required to file a tax return while they do it nevertheless, they are advised to use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return. This will result in no penalty payments.