QUESTION

Are there exemptions to the penalty? What are they and how do I apply for them?

Individuals with no coverage | Individual Responsibility Requirement (Individual Mandate)
ANSWER

Yes. If you did not have health insurance coverage in 2018, you may be eligible for an exemption from the federal tax penalty if any of the following apply to you:

  • Coverage is considered unaffordable because the cost of an employer-sponsored plan or lowest cost bronze plan through the marketplace is 8.05 percent or more of actual household income (as computed on a tax return) or projected household income in 2018.
  • Coverage is considered unaffordable because the combined cost of employer-sponsored coverage for two or more family members is 8.05 percent or more of actual household income in 2018.
  • Are not a U.S. citizen, a U.S. national, or a resident alien lawfully present in the U.S.
  • Are a U.S. citizen or resident living abroad*
  • Had a gap in coverage for less than three consecutive months during the year
  • Participate in a recognized health care sharing ministry or are a member of a recognized religious sect with objections to health insurance
  • Are a member of a federally recognized Indian tribe or eligible for services through an Indian Health Care Provider
  • Are incarcerated
  • Won’t file a tax return because your income is below the tax filing threshold
  • You were determined ineligible for Medicaid solely because the state you resided in did not expand Medicaid
  • Your household income is below 138% of FPL and at any time during the year, you were a resident of a state that did not expand Medicaid
  • Are engaged in service through the AmeriCorps State and National, VISTA or NCCC program and are covered by short-term duration coverage or self-funded coverage provided under these programs
  • Received pregnancy-only Medicaid coverage, coverage through enrollment of an unborn child in CHIP, or Medicaid medically needy coverage with limited benefits that is not considered minimum essential coverage
  • Experienced a hardship making it difficult to purchase insurance (e.g., homelessness, eviction, foreclosure, death of a close family member, domestic violence, and unpaid medical bills). (26 U.S.C. § 5000A (e)); 45 C.F.R. § 155.605; IRS, Individual Shared Responsibility Provision-Exemptions: Claiming or Reporting; HealthCare.gov, Hardship exemptions, forms & how to apply; CMS, Guidance on Claiming a Hardship Exemption through the Internal Revenue Service (IRS), September 12, 2018; 83 Fed. Reg. 16930, April 17, 2018).

*Additional requirements apply, listed here.

**If you are a resident of Massachusetts, the District of Columbia or New Jersey and do not have health insurance coverage in 2019, exemptions from the tax penalty may differ. Check with your state insurance department to find out more – a list of state departments of insurance is available under our Other Resources, Where to Go for Help.



In general, most exemptions can be claimed when you file your taxes. There are some exemptions, however, that can only be claimed by applying to the marketplace for an exemption certificate. These are: you are a member of a recognized religious sect objecting to health insurance, you have a "general hardship,"^ your projected income makes coverage unaffordable, you are determined ineligible for Medicaid solely because the state did not expand the program, and you served in the AmeriCorps, VISTA or NCCC programs and had short-term duration coverage or self-funded coverage provided through these programs. The full list of available exemptions and how they can be claimed is available here.

The exemption for those whose gross income falls below the applicable return filing threshold is available automatically, meaning those who are eligible for this exemption do not have to file taxes although they can choose to file a return. If an individual qualifies for this exemption, the exemption applies to the individual’s spouse and anyone the individual would have claimed as a dependent.


^For the 2018 plan year, the federal government will allow individuals to claim a hardship exemption by directly filing with the IRS without submitting any documentation or providing written explanation (however, consumers are asked to keep documentation showing qualification(s) for the hardship exemption with their tax records). (CMS, Guidance on Claiming a Hardship Exemption through the Internal Revenue Service (IRS), September 12, 2018).

(45 C.F.R. § 155.605; IRS, Individual Shared Responsibility Provision-Exemptions: Claiming or Reporting).

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