Buying the Cheapest Plan

Not eligible for Tax Credits?

No tax credits for health insurance?

As everyone who purchases private health insurance is keenly aware when you age your premiums also go up.  When you reach your late fifties and early sixties, it goes way up. Without tax credits that cost continues to rise.

If your family income is less than 400% of the Federal Poverty level (FPL), (2015 about $36,000 for a couple) you probably qualify for tax credits.  And that’s a good thing for tax credits have the ability to significantly lower your health insurance premiums, depending upon your actual percentage of the FPL.

But what if you make more than 400% of the FPL and are not eligible for tax credits, yet your premium is still very high due to your age.

You may qualify for an exemption from being required to purchase health insurance due to the coverage being “unaffordable”.  For this exemption, the coverage is considered unaffordable if the annual premium for the lowest priced Bronze plan costs more than 8% of your household income. In short, if the least expensive qualified plan you can buy still costs you more than 8% of your annual income, you’re not going to pay a fine for not having coverage.

Case in point.  I have a 62-year-old client who lives in Washoe County. His income is $50,000 per year, putting him above 400% of the Federal Poverty Level (no tax credits for him), non-tobacco user. The lowest priced Bronze plan, according to the Nevada Division of Insurance, is $521.65 per month or $6259 a year. That works out to about 12.5% of his income, making it unaffordable, by definition.

How do you apply for the unaffordable coverage exemption?  Enter code “A” on Form 8965 of your tax return.  Be sure you have the numbers to back it up.  Instructions for Form 8965. For more detailed information please contact your CPA, contact us or visit

With all that said, I never recommend anyone go without health coverage because you don’t know what major health issue is waiting to wipe you out financially.

Jake Young