If you didn’t have health insurance coverage for any portion of 2014, you may encounter a surprise on your income tax return. Americans are now required to carry health coverage, unless they qualify for an exemption. Those who did not will face a fee, called the “Individual Shared Responsibility Payment.”
There are two kinds of exemptions; some can be handled directly on your tax return, while others require application and approval. That approval process can involve a 2-3 week waiting period, so now is a good time to get going on it if you haven’t already done so.
Exemptions which can be handled directly on your tax return include:
- Income-based exemptions (i.e. if your income is low enough that the law agrees that you can’t afford health insurance).
- Only a short gap in coverage (less than 3 months)
- Not lawfully present in the United States
- Member of a health-care sharing ministry
- Member of a Federally-recognized Indian tribe
- If you had coverage beginning on or before May 1, 2014, you have an automatic exemption for the months before that. NOTE: this exemption is unique to 2014, because the open enrollment period was extended until March 31. The same exemption will not be available in future years
- Employer coverage with a non-calendar plan year, so you were not able to join your employer plan until, for example, July 1. This exemption is available only in 2014.
Exemptions requiring application and approval. You need to apply for these exemptions through the health insurance marketplace (www.healthcare.gov), and if you are approved, you will be issued an Exemption Certificate Number which must be added to the tax return.
- Hardship exemptions. Even if your income appeared to be high enough that you could afford insurance, the marketplace may grant you an exemption if you faced certain hardships, such as homelessness or eviction, domestic violence, large medical expenses, disaster, and others.
- Religious objections. If you are a member of a recognized religious sect whose members object to insurance, you may apply for an exemption.
- AmeriCorps coverage available to those serving in AmeriCorps, VISTA, or NCCC.
The list above is not 100% comprehensive, nor does it give all the details. If you (or someone you know) were uninsured for part of 2014, I recommend you go to www.healthcare.gov/exemptions to find out if you qualify for an exemption.
At that link, you will also find information about the fee for being uninsured. Although the fee for 2014 will be fairly small, it will go up in 2015, and again in 2016, so now is the time to consider enrolling in health insurance. Go to www.healthcare.gov for details.