Starting in 2014, an individual must (1) have minimum essential coverage, or (2) have an exemption from the shared responsibility payment or (3) make a shared responsibility payment when filing federal income tax.
It is the payment imposed by the federal government to an individual who does not have health insurance coverage and does not qualify for an exemption.
An exemption from the shared responsibility payment means a person isn't required to have coverage or make a payment if they don't have minimum essential coverage.
There are nine categories of people who are exempt from the requirement to have health coverage and any penalties that may result from not having coverage. These categories are:
- Individuals who cannot afford coverage. Individuals are exempt if their monthly contribution toward coverage exceeds 8 percent of household income. In the individual market, a person's contribution is based on the premium for the lowest cost bronze plan after any APTC.
- Individuals with household income below the tax filing threshold. Individuals are exempt if their annual household income is so low that they are not required to file a tax return.
- Enrolled members of federally recognized Tribes, descendant of enrolled Tribal member, and individuals eligible for the Indian Health Service are exempt.
- Individuals who experience a hardship. Individuals who have experienced a hardship in their capability to obtain coverage under a qualified health plan are exempt.
- Individuals who experience a short coverage gap. individuals do not have to pay any penalties if they are uninsured for a period up to three months during the year.
- Members of certain religious groups. Members of a recognized religious group or division who, by reason of adherence to the tenets of teaching of the group or division, are conscientiously opposed to the acceptance of any private or public insurance that makes payments or provides services for medical care.
- Members of a health care sharing ministry. Persons must be members of a health care sharing ministry (as defined in IRC 5000A(d)(2)(B)).
- Incarcerated individuals. Does not include individuals who are incarcerated pending the disposition of charges.
- Non-citizens. Individuals who are not citizens or nationals of the United States or aliens lawfully present in the United States.
To receive a certificate of exemption, you must either claim an exemption on your federal tax return or apply to the federal Department of Health and Human Services (HHS). Which of these two methods you must use will depend on which of the above categories apply to your situation. In some cases, you may choose either of the two options. The table below shows which process to use for each category of exemptions. (When more information is available on how to apply for an exemption, we will provide further details about the process. Please check back.)
|Category of Exemption||Claim on Tax Return||Apply to HS|
|Income below filing threshold||x|
|Member of Indian Tribe||x||x|
|Short coverage gap||x|
|Health care sharing ministry||x||x|
These exemptions are granted to individuals determined to have suffered a hardship with respect to the capability to obtain coverage in a qualified health plan. Hardship exemptions will be available to the following groups of individuals:
- Individuals who have no offer of affordable coverage in a month based on their projected annual income
- Individuals who in addition to one or more employed members of their family have been determined eligible for affordable self-only employer-sponsored coverage, but for whom the aggregate cost of employer-sponsored coverage for all the employed members of the family is unaffordable
- Certain individuals who are not required to file an income tax return but who technically fall outside the exemption for those with household income below the income tax filing threshold
Individuals who are American Indians, as well as their spouses and descendants, who are eligible for services through an Indian health care provider
Exemptions for religious reasons and members of Indian Tribes are ongoing, meaning the people who receive these exemptions are not required to annually renew the exemption. However, if a person under the age of 21 is granted a religious conscience exemption, he or she must submit a new application for an exemption upon reaching the age of 21. The duration of hardship exemptions varies based on individual circumstances. Exemptions for being incarcerated and for being a member of a health care sharing ministry apply only for months when the individual was actually incarcerated or actually a member of the health care sharing ministry. All other exemptions are good for the calendar year in which an applicant submitted an application for such exemption.
You can contact Healthcare.gov to get answers to your questions about exemptions