Do You Have Healthcare Exemptions (Obamacare/Affordable Care Act)?

Due to tax law changes, beginning Jan. 1, 2019, you'll no longer be required to have minimum essential coverage. Each January you'll still get an IRS Form 1095 from your pay center listing the coverage you had during the previous tax year.

The following will pertain to tax year 2018: Individuals without health coverage or who experience a gap in coverage may qualify for an exemption. The type of exemption depends on how the exemption can be obtained.

Granted by the Marketplace:
You will need an Exemption Certificate Number to claim the exemption. This number is provided to you by the Marketplace.

Members of certain religious sects - you are a member of a religious sect that opposes to accepting any insurance benefits. (instructions per Healthcare.gov)

To claim this exemption you must be a member of a religious sect or division that:

• Is recognized by the Social Security Administration as conscientiously opposed to accepting any insurance benefits, including Social Security and Medicare, AND
• The sect has been in existence since December 31, 1950."

If approved, you don’t have to reapply on a yearly basis, unless you turn 21 or leave the religious sect.

You will have to complete an initial application for this exemption and mail to the Marketplace.

Ineligible for Medicaid based on a state's decision not to expand Medicaid coverage - "The Marketplace found that you would have been determined ineligible for Medicaid solely because the state in which you resided didn't participate in Medicaid expansion under the Affordable Care Act." (instructions per Healthcare.gov)

Coverage considered unaffordable based on projected income - "The Marketplace determined that you didn't have access to coverage that is considered affordable based on your projected household income." (instructions per Healthcare.gov)

• "Coverage is considered unaffordable if the lowest cost Bronze-level plan available to you through the Marketplace in tax year is more than 8.16% of your household income."
• "The total cost to you must be more than 8.16%, accounting for any premium tax credit you would qualify for if you enrolled in that plan."
• "If you qualify for this exemption, it may apply to everybody on your tax return."

Certain Medicaid programs that are not minimum essential coverage - "The Marketplace determined that you were:" (Form 8965 Instructions)

(1) "enrolled in Medicaid coverage provided to a pregnant woman that is not recognized as minimum essential coverage;

(2) enrolled in Medicaid coverage provided to a medically needy individual (also known as Spend-­down Medicaid or Share­-of­-Cost Medicaid) that is not recognized as minimum essential coverage; or

(3) enrolled in Medicaid coverage provided to a medically needy individual and were without coverage for other months because the spend-­down had not been met."

Claimed on tax return:

If you are eligible, you may claim one of the following exemptions on your tax return and an exemption certificate is not required from the Marketplace.

Gross income or Household income below the return filing threshold – Your household income is below the minimum threshold for filing a tax return (see table below).

Coverage is considered unaffordable – The amount you would have paid for employer-sponsored coverage or a bronze level health plan (depending on your circumstances) is more than 8.05% of your actual household income for the year as computed on your tax return.

Short coverage gap - "Anyone with a gap in health coverage of no more than 2 consecutive months can claim this exemption." (Instructions from Healthcare.gov)

"If anyone else on your tax return qualifies, you can claim this exemption for them too when you file your taxes." 

• "You’re considered covered any month you had qualifying health coverage for even 1 day."
• "If gap was 3 months or more, you can’t claim this exemption for any of those months."
• "If your coverage gap crosses calendar years, the months without coverage of the second tax year aren’t counted for the exemption for the first tax year. But the uncovered months from the first year are counted for the exemption for the second tax year."
• "If you had 2 or more gaps in coverage during the year you can claim this exemption only for the months of your first coverage gap. This is true even if both gaps are less than 3 months."

Citizens living abroad and Certain noncitizens - "You were:" (Form 8965 Instructions)

• "A U.S. citizen or a resident alien who was physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months;
• A U.S. citizen who was a bona fide resident of a foreign country or countries for an uninterrupted period that includes the entire tax year;
• A bona fide resident of a U.S. territory;
• A resident alien who was a citizen or national of a foreign country with which the U.S. has an income tax treaty with a nondiscrimination clause, and you were a bona fide resident of a foreign country for an uninterrupted period that includes the entire tax year;
• Not lawfully present in the U.S and not a U.S. citizen or U.S. national. For more information about who is treated as lawfully present in the U.S. for purposes of this coverage exemption, visit www.HealthCare.gov or;
• A nonresident alien, including (1) a dual­ status alien in the first year of U.S. residency and (2) a nonresident alien or dual­ status alien who elects to file a joint return with a U.S. spouse. This exemption doesn't apply if you are a nonresident alien for the taxable year, but met certain presence requirements and elected to be treated as a resident alien. For more information, see Pub. 519."

Members of a health care sharing ministry - You were a member of a health care sharing ministry. 

• "A health care sharing ministry is a tax-exempt organization whose members": (instructions from HealthCare.gov)
• "Share a common set of ethical or religious beliefs, AND
•  Share medical expenses in accordance with those beliefs, even after a member develops a medical condition"
• "The health care sharing ministry must have been in existence and sharing medical expenses continuously since December 31, 1999."

Members of Indian tribes - "If you’re a member of a federally recognized Indian tribe, an Alaska Native shareholder, or are otherwise eligible for services from an Indian health care provider, you may qualify for a health coverage exemption." (instructions from HealthCare.gov)

• "You qualify for this exemption if you're:"
• "A member of a federally recognized Indian tribe
• An Alaska Native Claims Settlement Act (ANCSA) Corporation Shareholder (regional or village)
• Otherwise eligible for services from an Indian health care provider or through the Indian Health Service."
• "You qualify for the exemption for any month you had any of these statuses for at least 1 day, or for the full year if you had the status all year."
• "You can claim this exemption for yourself or anyone else on your federal tax return who qualifies."

Incarceration - "You were in a jail, prison, or similar penal institution or correctional facility after the disposition of charges." (Form 8965 Instructions) For additional information, please click here to visit HealthCare.gov.

Aggregate self-only coverage considered unaffordable - "Two or more family members' aggregate cost of self ­only employer­ sponsored coverage was more than 8.05% of household income, as was the cost of any available employer ­sponsored coverage for the entire family." (Form 8965 Instructions)

Resident of a state that did not expand Medicaid coverage - "Your household income was below 138% of the federal poverty line for your family size and at any time in 2018 you resided in a state that didn't participate in the Medicaid expansion under the Affordable Care Act." (Form 8965 Instructions)

• "You must have lived in one of these states at any time in 2018: Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin or Wyoming."
• "Your yearly income for 2018 was below 138% of the federal poverty level. In most U.S. states, that is about $16,643 for an individual, $22,411 for a couple, or $33,948 for a family of 4."

General hardship - The Marketplace no longer determines nor issues a certificate for a hardship exemption beginning in tax year 2018. You may claim that exemption on your tax return.  Please click here for additional information for hardship exemptions. 

Member of tax household born or adopted during the year - "The months before and including the month that an individual was added to your tax household by birth or adoption. You should claim this exemption only if you also are claiming another exemption on your Form 8965." (Form 8965 Instructions)

Member of tax household died during the year - "The months after the month that a member of your tax household died during the year. You should claim this exemption only if you also are claiming another exemption on your Form 8965." (Form 8965 Instructions)

 Tax return filing threshold is the amount of gross income an individual of your age and with your filing status (e.g., single, married filing jointly, head of household) can make before they are required to file a tax return. You must file a return if your Gross income exceeds the amounts listed below. You would not be eligible for this particular exemption if you are required to file a tax return.

 2018 Federal Tax Filing Requirement Thresholds