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Don't have insurance? How to claim an exemption

You may qualify for a coverage exemption and avoid penalties

Most people know by now that the Affordable Care Act requires all Americans who can afford insurance to carry it. This piece of the law is called the individual mandate, and those who don’t comply with it will be fined when they file their taxes for the year they lacked insurance. The penalty is called the “individual shared responsibility payment.”

It’s tax season, so many Americans are having to either report that they had insurance coverage for 2015, or figure out if they owe the fine. What many uninsured people don’t realize, however, is that the individual mandate does not apply to everyone. There are exemptions, and if you qualify for one, you can avoid paying the penalty.

A common exemption is the short gap exemption. If you lacked coverage for two months or less, you can claim the short gap exemption on your tax return and avoid the fine.

Other exemptions are related to affordability, certain groups of people or hardships. Read on to find out what the exemptions are and how to apply for them. And even if you don't qualify for an exemption, you still may be eligible for a special enrollment period to get coverage. Click here to find out

Affordability

Employer-based or marketplace insurance is too expensive
Who qualifies: The monthly premium for the lowest-cost plan available to you is more than 8.05% of your household income.
How to apply: Claim on your tax return or fill out and send an application to the Marketplace

You are not required to file a tax return because your income is too low
Who qualifies: If you’re under 65 and your 2015 income is less than $10,300, you don’t have to file a tax return
How to apply: Ironically, you do have to file a tax return in order to claim this exemption

You would have qualified for Medicaid if your state had expanded it
Who qualifies: Those with incomes below 138% of the poverty level in the 23 states that didn’t expand Medicaid (You can find poverty levels here, and a list of states that didn’t expand Medicaid here.)
How to apply: Claim on your tax return

Certain groups

American Indians, Alaska Natives and anyone else eligible for Native health services
Who qualifies: Any members of a federally recognized Tribe. (Find a list here.)
How to apply: Claim on your tax return or fill out and send an application to the Marketplace

●Members of a healthcare sharing ministry
Who qualifies: Members of a healthcare sharing ministry, which is a group of people with the same religious beliefs that share healthcare costs, that has been in existence since 2000.
How to apply: Claim on your tax return or fill out and send an application to the Marketplace

●Opposed to insurance
Who qualifies: Members of a religious sect that has been in existence since 1951 and is recognized by the Social Security Administration as opposed to insurance.
How to apply: Fill out and send an application to the Marketplace

●Incarcerated
Who qualifies: People who were serving a term in prison or jail during 2015. This exemption applies only to the months you were incarcerated.
How to apply: Claim on your tax return or fill out and send an application to the Marketplace

Non-residents
Who qualifies: U.S. citizens living abroad or citizens of a foreign country with which the U.S. has an income tax treaty
How to apply: Claim on your tax return

Hardship

Who qualifies: If you experienced any of the following—homelessness, eviction or foreclosure, received a shutoff notice from a utility company, domestic violence, the death of a family member, a natural disaster, bankruptcy, medical expense you couldn’t pay or unexpected expense increases related to caring for an ill, disabled, or aging family member.
How to apply: Fill out and send an application to the marketplace.

For a list of exemption applications, click here

If you liked this post, you may also like “I missed open enrollment. Will I have to pay a fine?"

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