Are there exemptions from the penalties provided by the Affordable Care Act for those who have difficulties paying for health insurance?

Aligning Individual Medical Mandate Penalties With the Open Enrollment Period

There has already been talk of penalties for those who do not have health coverage either through individual carriers or the Affordable Care Act (ACA). Is it possible to avoid these penalties?

Exemptions

On October 28, the Centers for Medicare and Medicaid Services (CMS) issued guidance in the form of a Q&A to establish “hardship exemptions” with respect to the individual mandate penalties, which are also known as the shared responsibility payment. Health and Human Services (HHS) is authorized to establish an exemption for individuals who enroll in health plans through the Marketplaces in the final weeks of the open enrollment period that ends on March 31, 2014.

The guidance states: “Specifically, if an individual enrolls in a plan through the Marketplace prior to the close of the initial open enrollment period, when filing a federal income tax return in 2015 the individual will be able to claim a hardship exemption from the shared responsibility payment for the months prior to the effective date of the individual’s coverage, without the need to request an exemption from the Marketplace.”

For example, if an individual purchases coverage on a Marketplace on February 16, 2014, the coverage wouldn’t take effect until April 1, 2014 or later. By establishing the hardship exemption, HHS is providing relief for individuals in such a situation so they would not be liable for a penalty in 2015.

No other individuals or group are eligible for such hardship exemptions.

If you have any questions about the Affordable Care Act, Covered California, or if you wish to receive an insurance quote through an independent carrier, please contact us online or call us at 714-482-9500.