Starting in 2014, the Affordable Care Act requires that most people will be required to have health insurance or pay a penalty. There will be some exemptions.
How much will I have to pay if I don't have health insurance?
Most individuals will have to pay a penalty for each month that they did not have health insurance coverage. You pay the penatly at the end of the year, when you file your taxes.
The penalty will depend on your individual circumstances, including your family size and household income. For example, penalties for children will be lower than those charged for uninsured adults.
The penalty will start in 2014 and increase over time as demonstrated below:
$95 per adult annually
$695 per adult annually
$47.50 per child annually
$374.50 per child annually
Up to $285 per family of 1% of household income (whichever is greater)
Up to a total of $2,085 or 2.5% of household income (whichever is greater)
In any year, the penalty is capped at the national average cost (premium) for a bronze plan offered in the Marketplaces.
The applicable dollar amount (e.g., $695 per adult) will be adjusted annually to reflect changes in the cost-of-living.
What are the exemptions?
Exemptions from the requirement that individuals have health insurance or else pay a penalty are limited to certain types of situations.
Individuals who can claim the following types of circumstances may qualify for an exemption:
- A religious conscience objection
- A hardship that would prevent you from buying a qualified health plan
- A member of a health care sharing ministry
- A member of a federally-recognized Indian tribe
- Have a household income below the tax filing threshold
- Are not ‘lawfully present’ in the U.S.
- Have a short gap in coverage
- Cannot afford coverage
- Other limited types of hardships - including waiting to buy coverage until the end of open enrollment
When should I claim an exemption?
Some exemptions can only be applied for in advance or during the calendar year, while others can only be claimed when you file your taxes.
If you want to claim an exemption, contact NY State of Health promptly to find out when you must apply for the exemption and how to do so.
Depending on the type of exemption, you may have to apply to a federal agency (Department of Health and Human Services or the Internal Revenue Service) or go through NY State of Health.
Is there more information describing each type of exemption?
Below are brief descriptions about these exemptions. To learn more, visit the NY State of Health online here or call them at 1-855-355-5777.
Religious conscience objection
This exemption may be claimed if you are a member of a recognized sect or division and follow established tenets or teachings of such sect or division.
Hardship that prevents you from getting a qualified health plan
This exemption may be claimed 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.
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.
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.
Membership in an Indian tribe
This exemption is available if you are a member of a federally recognized Indian tribe or eligible for services through an Indian health care provider.
Household income below the filing threshold
You do not have to do anything to claim this exemption. 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).
Not being lawfully present
If you are not a citizen or national of the U.S., or an alien lawfully present in the U.S., you do not have to pay a penalty for not having health insurance.
Uninsured for a short period of time
You can claim this exemption if you have a short coverage gap of less than three months. If there is more than one of these gaps in the year, you will only be granted an exemption for the first gap.
Lack of affordable coverage
You may claim 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.
Certain other hardships
There are other limited instances in which you may qualify for a hardship exemption. For example, if you and your spouse both have access to employer-sponsored coverage and the cost of self-only coverage for these two plans combined exceeds 8% of your household income, you may be eligible for a hardship exemption.
The federal government will also allow people to get health insurance until the end of the initial open enrollment period - March 31, 2014 - and not incur a penalty for being uninsured prior to the start of this coverage. Read more about this hardship exemption in this letter (pdf).
NY State of Health 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
Department of Treasury, Internal Revenue Service. Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage. Final regulations. http://www.ofr.gov/(X(1)S(zemlxgzofiy20jarx01iug4u))/OFRUpload/OFRData/2013-21157_PI.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.