Tax 101: Health Coverage Exemptions

Posted by on Sep 18, 2015 in Insurance Tips | Comments Off on Tax 101: Health Coverage Exemptions

Am I Exempt from ObamaCare?

Under the Affordable Care Act (ObamaCare), most individuals are required to pay a penalty if they do not have health coverage that meets ObamaCare’s guidelines. However, some individuals may qualify for an exemption, whether it is related to income, group coverage, financial hardship, etc.

Here are a few facts to consider before going any further.

What Qualifies as Minimum Coverage Under ObamaCare?

The following plan types qualify as “minimum coverage” under the Affordable Care Act.

  • Medicare Part A or Part C
  • Most Medicaid
  • Any Marketplace coverage plan
  • Any individual insurance plan purchased through the Marketplace
  • Any job-based coverage
  • Children’s Health Insurance Program (CHIP)
  • Most individual plans purchased outside of the Marketplace
  • Most TRICARE plans
  • Some veterans health coverage

Also, keep in mind that individuals under the age of 26 may still receive coverage under a parent’s health insurance plan. If you’re still wondering whether your coverage qualifies, consult a tax professional or check HealthCare.Gov for more details.

Types of Exemptions from ObamaCare

There are several different types of possible exemptions. Some examples include: individuals who cannot afford coverage because the minimum amount is more than 8% of household income, citizens living abroad, members of certain religions, and individuals who are incarcerated.

For a checklist to see if you qualify for an exemption, click here.

Financial Hardship

Individuals who cannot afford health coverage due to financial hardship may be exempt from the penalty. Many circumstances are included in this exemption, including but not limited to:

  • eviction/foreclosure
  • homelessness
  • death of close family member
  • fire/flood/natural disaster resulting in significant property damage
  • filing for bankruptcy
  • significant debt related to medical expenses
  • individual insurance cancelled, other Marketplace options seemed too expensive

What You Need to Know

While you may qualify for an exemption due to financial hardship or other circumstances related to difficulty in obtaining health coverage for yourself or a family member, you will need to provide proper documentation that illustrates your circumstances when filing your tax return. Because health coverage has seen numerous changes in the past few years, it is helpful to work with someone who understands the ins and outs of the Affordable Care Act to ensure that you are filing properly.

The tax experts at Baker Retirement & Wealth Management, P.C. have been serving the greater Evansville area for nearly thirty years. We can help you understand the Affordable Care Act and how it impacts your taxes. If you have questions about which forms you may need to prove your financial situation, click here to download a list. To get started on your taxes, call the Baker team today at 1-866-244-3517.

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