Exempt from Fine – Failing to Buy Insurance

In an earlier post, I highlighted some of the costs associated with NOT buying health insurance, all being non-financial. After looking at this, many people think, “I just don’t care, I’m not buying it and you can’t make me!”. They might be right! There are 2 relatively easy ways to get out of the fine for failing to buy insurance – 1. just pay the fine, 2. find an exemption.

If you qualify for an exemption you don’t have to buy health coverage OR pay the fine! Below I’ve listed some of the exemptions to the Individual Responsibility Requirement (Obamacare fine) per CMS training for brokers, assistors & navigators.

Common Exemptions

  • Uninsured for less than 3 months out of the year. If you bought insurance with a April 1 effective date, you’re in the clear. However if you miss that 4th month, the fine depends on how long you had coverage. For this example, 8/12 ths of what you would have owed had you been insured all year. (8 months covered, 4 months uncovered)
  • The lowest-priced coverage available to the consumer would cost more than 8.5% of the consumers household income. Generally, if you fall within this range in Nevada, you would be eligible for Medicaid. Medicaid is free for those who qualify. If you decided to walk by Medicaid and not enroll, you would still be on the hook for failing to buy insurance.
  • The individual does not have to file a tax return because his/her income is too low. Usually elderly or children fall within this bracket. If you’re not sure please visit IRS.gov.
  • Member of a federally recognized tribe or eligible for services through and Indian healthcare provider.
  • The individual is a member of a health care sharing ministry.
  • Member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare.
  • Incarcerated, and is not awaiting the disposition of charges. Prisoners are eligible for other forms of healthcare while incarcerated.
  • Not lawfully present in the United States. Non-documented immigrants are not eligible for tax credits to buy health insurance.
  • Experienced a qualified hardship as defined by the Affordable Care Act.

Contact us!

This is an incomplete list and no advice pertaining to this list, this website, or from this office constitutes tax advice. I highly suggest you contact a CPA for complete information about The Affordable Care Act fines and penalties for failing to buy insurance. To find more information please visit www.healthcare.gov.