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During tax filing season, the Administration is once again reminding consumers of the changes they are seeing on their tax returns related to their health coverage. The Administration understands that consumers have questions about these changes and is committed to providing information and tools to help them understand the requirements. As part of this commitment, Treasury is providing information about the exemptions from the requirement to have health coverage if individuals could not afford coverage or met other conditions, and about how to claim an exemption during tax filing.
The following fact sheets on exemptions are also available from the Department of Health and Human Services:
FACT SHEET: Claiming a Health Coverage Exemption
The Affordable Care Act is making health insurance more affordable, helping more people get covered, and improving the quality of care that millions of Americans receive. Under the Affordable Care Act, individuals are required to have health coverage or else qualify for an exemption from the coverage requirement. Individuals who don’t have coverage will have to make a payment when filing their tax returns unless they qualify for an exemption. It is important for individuals to know that exemptions are available and to understand the steps they need to take to request one.
If you qualify, receiving an exemption is simple and easy, and means you won’t have to make a payment. There are a variety of exemptions available. You can claim most exemptions on your tax return, but some exemptions are only available through the Health Insurance Marketplace. See the chart available here for more information on the types of exemptions available and how to apply. An online tool is available on HealthCare.gov to help consumers who did not have health coverage last year understand if they might qualify for an exemption. To find out if you qualify for an exemption, use the IRS interactive tool: Am I Eligible for a Coverage Exemption or Required to Make an Individual Shared Responsibility Payment?
Who’s Exempt from Having Health Coverage?
You may be exempt from the requirement to have health coverage if:
The cost of coverage would have been too high as a share of your income (Coverage Considered Unaffordable) : If you would have had to pay more than 8.05 percent of your household income for health coverage in 2015 and 8.13 percent in 2016. For more information see Exemption information if you couldn’t afford health coverage.
You were without coverage for only a short period of time (Short Coverage Gap): If you were without coverage for one period of less than three consecutive months during the year. For more information see Exemption information if you had a short gap in health coverage.
Your state did not expand Medicaid (Resident of a state that did not expand Medicaid): If you live in a state that did not expand Medicaid and your income is below 138% of the Federal Poverty Level. For more information, see: Exemption information if your state didn’t expand Medicaid.
You experienced a hardship (General Hardship) : If you experienced a hardship that prevented you from obtaining coverage, such as if you had medical expenses that resulted in substantial debt, if a close family member passed away, or if you experienced domestic violence, among other hardships, you may be eligible for an exemption. To receive this exemption, you will have to apply through the Marketplace; you cannot qualify for this exemption on your tax return. For more information, see Exemption information if you experienced a hardship.
You qualify for one of the many other exemptions, if you:
You were without coverage for only a short period of time (Short Coverage Gap): If you were without coverage for one period of less than three consecutive months during the year. For more information see Exemption information if you had a short gap in health coverage.
Your state did not expand Medicaid (Resident of a state that did not expand Medicaid): If you live in a state that did not expand Medicaid and your income is below 138% of the Federal Poverty Level. For more information, see: Exemption information if your state didn’t expand Medicaid.
You experienced a hardship (General Hardship) : If you experienced a hardship that prevented you from obtaining coverage, such as if you had medical expenses that resulted in substantial debt, if a close family member passed away, or if you experienced domestic violence, among other hardships, you may be eligible for an exemption. To receive this exemption, you will have to apply through the Marketplace; you cannot qualify for this exemption on your tax return. For more information, see Exemption information if you experienced a hardship.
You qualify for one of the many other exemptions, if you:
• were unable to renew existing coverage in 2015;
• have income below the requirement for filing a tax return;
• are a member of an Indian Tribe or eligible for coverage through Indian health service;
• were living abroad;
• were incarcerated;
• were covered by certain types of limited benefit Medicaid;
• were a member of a health care sharing ministry; or
• were a member of certain religious sects.
How do I claim an exemption?
Most exemptions for 2015 are available on your tax return, and are simple and easy to claim. A few exemptions must be granted by the Marketplace.
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- Tax return: If you qualify, simply select the exemption that fits your situation when filing your taxes and include Form 8965 with your tax return.
- Through the Marketplace: You can apply for an exemption through the Marketplace by filling out the correct form at https://www.healthcare.gov/fees-exemptions/apply-for-exemption/. If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to enter on IRS Form 8965 and include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your Exemption Certificate Number.
Where can I go for help?
We want to make this process easy. If you have questions about Marketplace exemptions or about your Exemption Certificate Number, visit HealthCare.gov/taxes, or call the Marketplace call center at 1-800-318-2596.
If you have questions about how to claim an exemption on your tax return, visit the Internal Revenue Service webpage on exemptions, available here. Most people use software to file their taxes, which is the easiest way to complete your tax return as it guides you through the process and does all the math. Resources are available to help you file your taxes, including free tax filing services if you meet certain income requirements:
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