Do you or your employees have questions about who qualifies for health insurance exemptions under the ACA? If so, it’s important to get those questions answered, since those who don’t have it could face penalties that will only increase in the coming year.
The law does allow for some exemptions, and they apply to a surprisingly large number of those who are currently uninsured. There are about 2 dozen exemptions in all (including religious reasons), but here are the 5 most common groups who qualify.
1. Those living in states that didn’t expand Medicaid
There were 23 states that chose not to expand their Medicaid programs in 2014, leaving a lot of people uninsured whose incomes fall at or below 138 percent of poverty (around $27,000 for a family of 3). These individuals face the double whammy of not being eligible for Medicaid coverage in their state and not being able to receive subsidies to buy insurance through the Marketplace because their incomes are too low.
The initial requirement was for these folks to apply for Medicaid and be denied or get a hardship exemption by applying through the Marketplace. However, due to recent changes, this exemption can now be claimed on their 2014 tax return.
2. Those whose income is too low to file a tax return
Since single people who earn less than $10,150 or married couples who earn less than $20,300 don’t have to file a tax return, then they’re also exempt from the health insurance mandate.
No action is needed to file for this exemption, since there’s not even a tax return required.
3. Those who can’t afford health insurance
Even with the subsidies, health insurance is still too expensive for many Americans. The rule is that those whose cheapest plan option is more than 8 percent of their income qualify for an exemption.
Many can stay under the 8 percent threshold by purchasing plans the least expensive plan available. However, by doing so they’ll often have to shoulder much more of the cost in other areas like deductibles and copays.
Those who qualify for this exemption can claim it on their tax return or apply for an exemption certificate through the Marketplace.
4. Those who can’t afford the coverage available to another family member
In many cases one family member may have “affordable” health care for the whole family that’s available through their employer, because under the law only the cost of the employee’s insurance is taken into consideration when determining if it’s “affordable” (under the 8 percent threshold). If one family member has coverage, then no one else in the family can apply for subsidies in the Marketplace.
This means that the total cost for insurance for the family may still exceed the 8 percent threshold, in which case only the other family members (not the employee) would qualify for an exemption.
5. Those who are facing hardships
There is a long list of hardships (such as foreclosure, bankruptcy, or medical expenses) that may qualify individuals for other exemptions. Most require them to apply through the Marketplace and complete the necessary forms, as well as provide additional documentation to support the claim.