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Individual Mandate

The Affordable Care Act (ACA) requires almost every individual and each of his or her dependents to have health insurance coverage.  If they do not have health insurance, they must claim an exemption or pay a tax penalty on his or her federal income taxes the following year.


What health insurance satisfies the individual mandate?

You do not need to pay a penalty nor seek an exemption if you are enrolled in any of the following for the entire year:
  • Public Health Insurance Plans: Medicare Part A and Part C; Medicaid; Child Health Plus; TRICARE; plans for Peace Corps volunteers; plans from Veterans Affairs; Administration for Children and Families’ Refugee Medical Assistance program; and the Department of Defense’s Non-appropriated Fund Health Benefits Program of the Department of Defense. 
  • Private Insurance Plans: Plans offered through your job, including retiree plans and COBRA health insurance; plans offered through the New York State of Health or purchased directly from an insurer in the individual market; self-funded student health plans that begin on or before December 31, 2014; and plans grandfathered in from before the ACA.  In addition, group health plans from overseas employers for U.S. citizens residing abroad.
If employer-based coverage is available to you, but it is on a non-calendar year enrollment, you are counted as satisfying the individual mandate for months in 2014 before enrollment opens at your job.  The IRS outlines this “Transition Relief” in this notice (pdf).

Certain types of limited-benefits coverage satisfy the individual mandate. The penalty is waived if you have coverage for the medically needy through the Medicaid Excess Income Program, coverage through a Section 1115 Demonstration Project, line-of-duty coverage, space available care in a uniformed services facility, or Medicaid solely relating to family planning, tuberculosis, pregnancy, or emergency medical conditions.  Penalties may not be waived in future years for individuals with these forms of limited-benefit coverage.  The IRS outlines this “Transition Relief” in this notice (pdf).





What are the exemptions from the penalty?

You may qualify for an exemption from the penalty if you have experienced one of these limited situations:

You are exempt for the entire month that includes at least one day in which you have an exemption. 




How much will I have to pay if I don't have health insurance?

In most cases, you have to pay a penalty for each month during which you did not have health insurance coverage. 

The penalty will depend on your individual circumstances, including your family size and household income.

You can estimate your tax penalty using this online tax penalty calculator.

The penalty starts in 2014 and increases over time. See the chart below for how the penalties are determined.


2014 2016
Individuals  

 $95 per adult annually  
$695 per adult annually  
Children

$47.50 per child annually   

$374.50 per child annually
Families

Up to $285 per family or 1% of household income over the threshold that requires you to file taxes (whichever is greater)          

Up to a total of $2,085 or 2.5% of household income over the threshold that requires you to file taxes (whichever is greater)                                
In any year, the penalty is capped at the national average cost (the premium for a bronze plan covering all members of your household offered in the Marketplaces).




How can I get an exemption?

Below are brief descriptions about these exemptions. Multiple exemptions may apply to your unique situation.  To learn more, visit the NY State of Health online here or call them at 1-855-355-5777.

Lack of Affordable Coverage

You may be eligible for this exemption if you or your family members do not have access to coverage through an employer or NY State of Health that is affordable.
  • There are several ways in which employer-sponsored insurance may not be affordable, including if the cost to enroll your family members in insurance offered by your employer exceeds 8% of your household income.
  • Similarly, you may be able to claim this exemption if the lowest cost bronze plan available in NY State of Health is more than 8% of your household income.
To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form before the month(s) you want to claim exempt.





Hardship that Prevents You from Getting a Qualified Health Plan
You may be eligible for this exemption if you experience a domestic or financial situation that causes an unexpected increase in essential expenses or if buying a plan would significantly cut into the cost of food, shelter, clothing or other necessities.
  • You may also be able to seek this exemption if you experience another kind of hardship or if, based on your expected income, you cannot afford coverage offered through an employer or NY State of Health.
To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form as soon as possible.

What happens when a hardship exemption ends?  You may qualify for a special health insurance enrollment period.



Religious Conscience Objection
You may claim this exemption if you are a member of a recognized sect or division and follow established tenets or teachings of such sect or division.

To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form as soon as possible.  Once you secure this exemption, you do not need to reapply in future years unless you turn 21 or leave your religious sect or division.




Member of a Health Care Sharing Ministry
You may claim this exemption if you are a member of a health care sharing ministry. A health care sharing ministry is an organization that facilitates sharing of health care costs between individual members who have common ethical or religious beliefs in the United States.

To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form as soon as possible.  If you want this exemption for months in 2014 after December 2014, claim on your 2015 federal tax returns.




Membership in an Indian Tribe
You may claim this exemption if you are a member of a federally recognized Indian tribe or eligible for services through an Indian health care provider.

To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form as soon as possible.  Once you secure this exemption, you do not need to reapply in future years unless you lose tribe membership or become ineligible for Indian health services.



Incarceration

You may be eligible for this exemption if you are confined after the disposition of charges in a jail, prison, or similar penal institution or correctional facility.  It is only available for the months you were incarcerated.

To apply: Submit this form (pdf) to the federal Marketplace at the address listed on the form as soon as possible.  If you want this exemption for months in 2014 after December 2014, claim on your 2015 federal tax returns.




Enrolled in Coverage Between January 1, 2014 and March 31, 2014

Since the first year of open enrollment for private health insurance was until March 31, 2014, the federal government has created a special exemption that individuals can claim if they are uninsured at the beginning of 2014, but enrolled in health insurance before March 31, 2014.  Read more about this exemption in this letter (pdf).

To apply: No action is required.



Uninsured for a Short Period of Time
You may be eligible for this exemption if you have a short coverage gap of less than three months in a row.  If there is more than one of these gaps in the year, you will only be granted an exemption for the first gap.

If employer-based coverage is available to you, but it is on a non-calendar year enrollment, the months in 2014 before enrollment opens at your job are not counted towards the short gap in coverage’s three month maximum.

To apply: Claim on your federal tax returns in April 2015.



Reside Outside the United States
You may claim this exemption if you are a U.S. citizen residing aboard for at least 330 days per year, or are a resident of a U.S. territory.

To apply: Claim on your federal tax returns in April 2015.



Household Income Below the Filing Threshold
You are automatically exempt from the penalty for not obtaining health insurance if you do not earn enough to file taxes.
  • If you end up filing a tax return even though you were not required to do so, you may still be able to claim this exemption.
  • You can find out if you have to file a federal tax return with the IRS Interactive Tax Assistant (ITA).

To apply: No action is required.



Not Being Lawfully Present
You are automatically exempt from the penalty if you are not a citizen or national of the U.S., or an alien lawfully present in the U.S.

To apply: No action is required.




Sources:
NY State of Health (NYSOH) website
https://nystateofhealth.ny.gov/exemptions.html

Department of Health and Human Services. Patient Protection and Affordability Act; Exchange Functions; Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions. Final rule.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-15530.pdf

You can also learn more about the federal regulations at the IRS website on Questions and Answers on the Individual Shared Responsibility Provision of the Affordable Care Act.



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