Am I legally required to enroll in health care coverage?
If you live in the U.S., and you’re not currently incarcerated, the answer is probably yes. Certain people in special situations (explained below) are excused from this requirement. Unless you have one of these situations, you MUST enroll in health care coverage, or else you must pay a penalty fee when you file taxes. This legal requirement is called the “individual mandate,” and the tax penalty is called the “shared responsibility fee.”
Exemptions to the Individual Mandate: If you qualify for an exemption, you don’t have to pay a penalty even if you don’t have health care coverage. You may qualify for an exemption if one of the following situations applies to you:
- Currently incarcerated: You’re currently in jail or prison serving a sentence for a conviction. This doesn’t include being held for a case that’s still pending—for example, you’ve been charged but not yet convicted.
- Short coverage gap: Your uninsured period is shorter than 3 months (back-to-back) during the year.
- Not lawfully present: You don’t have citizenship or lawful immigrant status in the U.S.
- Not required to file taxes: You’re not legally required to file a tax return because your income is too low.
- Unable to afford coverage: You can’t afford the cheapest coverage available to you, because it would cost more than 8% of your household income.
- Indian tribe: You belong to a federally recognized Indian tribe, or you’re eligible for services through an Indian Health Services provider.
- Sharing ministry: You’re a member of a recognized health care sharing ministry.
- Religious conscience: You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare.
- Hardship: You’ve had financial or domestic difficulties that kept you from enrolling in health care, such as homelessness, a death in the family, bankruptcy, a medical emergency, or a natural disaster. Filing for a hardship requires you to fill out special forms.
A Note About Individual Mandate Exemptions
Even if you qualify for an exemption, you still can apply and get health care coverage to help pay for medical expenses. An exemption just means that you don’t have to pay the penalty fee—called the “shared responsibility fee”—if you one of the exemption situations applies to you, and you don’t get health care coverage.
For most of these situations, you must apply to get an exemption. The process varies by situation.
If you have questions about the forms you need, or if you aren’t sure how to get an exemption for your situation, call Covered California at 1-800-300-1506 (TTY 1-888-889-4500) or the federal government’s Health Insurance Marketplace at 1-800-318-2596 (TTY 1-855-889-4325). Or you may try calling Health Consumer Alliance (HCA), a non-profit organization dedicated to providing information about and helping Californians to get health care. For a list of local HCA call centers, please visit: http://healthconsumer.org/index.php?id=partners.
YOU DON’T need to APPLY FOR AN EXEMPTION IF…
- You have a short coverage gap;If you are not required to file taxes because your income is too low;If you are not lawfully present;You are currently incarcerated (But note: Once you’re released, the individual mandate will apply to you, so you’ll need to get health coverage at that time. See PG. 462 for more information.)
The fee is either a flat dollar amount or a percent of your household income—whichever is greater. The fee is set to increase each year from 2014 to 2016. The fee amount you must pay is based on how many months you go without health care during the year. For every month you aren’t enrolled in health care, you owe 1/12th of the annual penalty fee. But note: As explained below, the law gives you a free pass for periods that are shorter than 3 months back-to-back. Covered California, https://www.coveredca.com/faqs/Tax-Penalty/#102. ↑
Frequently Asked Questions, Covered California, https://www.coveredca.com/faqs/Tax-Penalty/#102. Only the amount of income above the tax filing threshold—about $10,000 for an individual—is used to calculate this penalty. For more information, please visit: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/. The amount for child under 18 is $4,750. The maximum penalty per family is $285. For more information, please visit: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/. The amount per child under 18 is $162.50. The maximum penalty per family is $975. After 2015, the shared responsibility fee will increase to 2.5% of income of $695 per person in 2016. Only the amount of income above the tax-filing threshold, about $10,000 for an individual, is used to calculate this penalty. For more information please visit: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/. ↑
Frequently Asked Questions, Covered California, https://www.coveredca.com/faqs/Tax-Penalty/#102, www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/. ↑
Covered California, https://www.coveredca.com/faqs/Tax-Penalty/#102, www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/. For detailed lists of noncitizen categories who are “qualified” to get health care through Covered California, see: http://www.bia.gov/WhoWeAre/BIA/OIS/TribalGovernmentServices/TribalDirectory/. If you are not a citizen and you are not on these lists, you qualify for an exemption. ↑
Tax Penalty, Covered California, https://www.coveredca.com/faqs/Tax-Penalty/#102, www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/. A federally recognized tribe is “any Indian or Alaska Native tribe, band, nation, pueblo, village or community that the Department of the Interior acknowledges to exist as an Indian tribe.” https://www.healthcare.gov/glossary/federally-recognized-tribe. For a current list of recognized tribes, see: http://www.bia.gov/WhoWeAre/BIA/OIS/TribalGovernmentServices/TribalDirectory/. ↑