Obamacare or the Patient Protection and Affordable Care Act (PPACA) exists to give more affordable health care to Americans but under its mandate, these individuals are also required to have at least a minimum health coverage or else they have to pay the tax penalty.
An open enrollment period is provided under the health care reform wherein individuals can change or apply for insurance health plans. Failure to do so within the dates provided makes an individual uninsured and liable for penalty. However, this is not always the case because some Americans are entitled to exemptions. Here is a list of the tax exemptions under ObamaCare.
There is what is known as a tax return filing threshold. This is the minimum taxable amount of your gross income that will be deducted from you and will also depend on your status, if you are single, married or head of the family. If your health insurance plan cost is higher than 8% of the tax threshold, you are automatically exempted. And if the minimum amount of the filing threshold according to your age and filing status is higher than your income, exemption is also allowed.
Under ObamaCare, Americans are required to have a minimum essential coverage and failure to have one might result to paying the Individual Shared Responsibility Payment. However, you may exempt to pay the penalty if you have encountered some hardships in life which fall under the hardship exemption list. Some cases require proof or documentation while others do not.
Situations That Need Documentation
1. If your house is about to be foreclosed, you are facing eviction or have been evicted within the last six months, you have to submit the notice of foreclosure and eviction.
2. If you are unable to pay any of your utility bills and have been sent a notice that the service will be disconnected, a copy of the notice needs to be submitted.
3. If you have suffered the loss of an immediate member of the family, you have to submit a copy of the death certificate or obituary.
4. If you have recently filed for bankruptcy within the last 180 days, forward a copy proving you filed for one.
5. If you do not have the capacity to pay for your medical expenses for the last two years or you have medical bills to pay as a result of caring for an elderly parent, a disabled member of the family or a sick member of the family, you have to present copies of the medical expenses and bills.
6. If your property has been damaged from natural disasters or fire, you have to submit any evidence of the event, insurance claim or report you have filed with the authorities.
7. If you live in a state without Medicaid expansion and were denied eligibility, you just have to present the notice stating so.
8. If you have filed an eligibility appeal on lower cost of premiums, a quality health plan from the Marketplace or cost-sharing reductions and have received a decision, you can forward the decision notice for your appeal.
9. If you have lost you current health care insurance coverage and you do not have the capacity to pay for a new health insurance plan, present a copy of the coverage cancellation.
10. If your child has been denied coverage either from CHIP (Children’s Health Insurance Program) or Medicaid or someone is ordered to pay for the child’s medical support, show a proof of the denial of coverage as well as a copy of the order from the court.
Note: Hardship cases which do not require documentation can either be you have been a victim of domestic violence or you are considered homeless.
If you are a member of a religious sect that is recognized by Social Security Administration, you can be exemption under religious exemptions.
Sharing Ministry Exemption
This is granted to individuals who are members of a Health Sharing Ministry, any organization that is responsible for sharing health care costs among its members and belonging to religious ministries or share same ethical beliefs and operates in the U.S.
If you have coverage but lost it for three consecutive months during the year as a result of circumstance like losing your job, you can be exempted under the Short Coverage Gap Exemption. However, if the gap occurs several times a year, you can be exempted from the first instance.
Open Enrollment Exemption
Another exemption that is somehow similar with the Short Coverage Gap Exemption is the one you can get which can be granted for a month if you will enroll within certain dates during the open enrollment period.
- If you are a member of an Indian tribe recognized by the federal government or are eligible to receive health services from an Indian health care provider, you can be exempted.
- If you are a non-U.S. citizen or have been living outside the United States for at least 360 days, an exemption can also be given to you.
- If you have in prison, you are exempted.
- If you think you are eligible for a hardship exemption, see to it that you do so early and that you need to file for approval and wait for the confirmation notice.
- You will be receiving an Exemption Certificate Number (ECN) which you can be used if you are eligible for a catastrophic plan. A catastrophic plan can be applied for by individuals under 30 years of age who are looking to get covered for emergency situations and are not expecting to need medical services several times within the coverage period.
- There is also what is known as the special enrollment period. This is the chance given to those who were not able to apply for health insurance during the open enrollment dates but have valid reasons determined by certain reasons like a major life change.
- Hardship exemptions usually begins a month before a hardship and ends a month after the circumstance, thus duration varies.