Are There Exemptions From The ObamaCare Penalty?

ObamaCare open enrollment for 2015 gets under way today, yet those who remain uninsured may qualify for penalty exemptions


by Chris Woodward

Source: One News Now

The federal government requires virtually all Americans to have some form of health insurance. Those who don't comply with this requirement face what the government calls a "fee." Also known as "the penalty," the "individual shared responsibility payment," or the "individual mandate," this payment may, under certain circumstances, be waived for those who remain without health insurance coverage.

According to Healthcare.gov, the federal government's health insurance marketplace, individuals may qualify for an exemption from the penalty for not being insured if:

  • You're uninsured for less than 3 months of the year

  • The lowest-priced coverage available to you would cost more than 8 percent 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

  • You're incarcerated (either detained or jailed), and not being held pending disposition of charges

  • You're not lawfully present in the U.S.

  • You qualify for a hardship exemption.

According to Healthcare.gov, individuals may qualify for a "hardship" exemption from the penalty if:

  • You were homeless

  • You were evicted in the past 6 months or were facing eviction or foreclosure

  • You received a shut-off notice from a utility company

  • You recently experienced domestic violence

  • You recently 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 in the last 6 months

  • You had medical expenses you couldn't pay in the last 24 months 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 don't have to 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 where you weren't enrolled in 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.

  • The length of a hardship exemption varies depending on an individual's situation.

Devon Herrick, senior fellow at the National Center for Policy Analysis, says while the list of exemptions from paying penalties is "quite long," not everyone who applies will qualify.

"The best estimate we have comes from the Congressional Budget Office, and they estimate that nearly 80 percent of the uninsured will actually get some type of exemption," Herrick explains. "I think the most common exemption is hardship."

With open enrollment only running today through February 15, the window for signing up for health insurance coverage in 2015 is smaller than during the first enrollment period.  People who signed up for coverage during the previous enrollment period will either have to renew their current coverage or pick another plan.

Forms for applying for penalty exemptions are available at Healthcare.gov.