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Small Business Employee Benefits and HR Blog

The ACA's Individual Mandate Hardship Exemptions

The Affordable Care Act's "individual mandate" provision requires all Americans to either have minimum essential coverage, or pay a fee at tax time. Unless, that is, you qualify for an exemption. There are several different exemptions including hardship exemptions. This article provides an overview of the ACA's individual mandate exemptions.Individual Mandate Hardship Exemptions

Exemptions From the Individual Mandate

If you don’t have minimum essential coverage, you may qualify for an exemption from the individual mandate penalty (also called the individual shared responsibility feeif:

  • You had one gap in coverage for less than 3 consecutive months during the year

  • The lowest-priced coverage available to you would cost more than 8% of your household income

  • You don’t have to file a tax return because your income is too low ($10,150 for individuals in 2014 and $20,300 for a family)

  • You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider

  • You’re a member of a recognized health care sharing ministry

  • You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare

  • You’re incarcerated (either detained or jailed), and not being held pending disposition of charges

  • You’re not lawfully present in the U.S.

  • You qualify for a hardship exemption (described below)

Individual Mandate Hardship Exemptions

According to healthcare.gov, if any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the individual mandate penalty:

  • You were homeless

  • You were evicted in the past 6 months or were facing eviction or foreclosure

  • You received a shut-off notice from a utility company

  • You recently experienced domestic violence

  • You recently experienced the death of a close family member

  • You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property

  • You filed for bankruptcy in the last 6 months

  • You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt

  • You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member

  • You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child.

  • As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace

  • You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act

  • Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable

  • You experienced another hardship in obtaining health insurance

Have a question about the individual mandate exemptions? See these FAQs on Fines, Coverage and Exemptions, or leave a comment below.

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