The requirements as set forth by the Affordable Care Act mandate that nearly every American citizen is expected to sign up for a healthcare coverage plan or face paying a penalty called the Shared Responsibility Payment for failing to do so. However, there are some exceptions to this rule as a number of exemptions currently exist under the law. Anyone who fits into one of these exempt groups will not be required to meet compliance with the Shared Responsibility Payment.
These exemptions are quite varied and wide-ranging, whether you’re dealing with a financial hardship, belong to a religious organization, or can’t receive coverage through your employer. You may qualify for one of the many exemptions that have been defined under the standards of the Affordable Care Act, including the following.
There are a few guidelines for individuals and families who may qualify for an exemption from Obamacare requirements as a result of their income level. Even though the Affordable Care Act was designed to provide access to affordable healthcare for everyone, there may still be some citizens who still can’t afford to pay for health insurance.
For example, if the least expensive insurance plan available in the Marketplace or through an employer costs over 8% of your household income, then you will not be expected to obtain coverage and are therefore exempt from the Individual Mandate. In addition, if you are not required to file taxes as determined by your level of income, then you also won’t be required to pay the Shared Responsibility Payment penalty.
Low-income individuals and families may have the ability to obtain health insurance through government programs such as Medicaid as the Affordable Care Act allowed for the expansion of this program in a number of states. The new mandates have opened up Medicaid to more potential candidates who earn up to 138% of the federal poverty line to apply for health insurance.
However, only 29 states as well as the District of Columbia expanded their Medicaid provisions. That means that anyone currently living within the remaining 21 states could find becoming eligible for Medicaid difficult. Anyone who falls into this latter category won’t be mandated to pay the Shared Responsibility Payment.
Native American Exemptions
You could qualify for an exemption if you are part of a Native American tribe. In order to be considered under this exemption, you must demonstrate proof of membership in a tribe that is recognized by the federal government, which also extends to any Alaska Native Claims Settlement Act Corporation Shareholder, or be enrolled or qualify for healthcare services in an Indian health care provider or the Indian Health Service.
Only those tribes that are on the list of federally-recognized tribes that is published annually as per the Federally Recognized Indian Tribe List Act of 1994 will be considered eligible to qualify for the exemption. Anyone who falls under this eligibility must check that they are still exempt each year as the list could change with each annual update.
You may qualify for an exemption under religious conscience exceptions. These extend to any individual who is part of a religious organization or sect that is currently recognized for exemption by the Internal Revenue Service and/or the Social Security Administration and has a conscientious objection to healthcare or health insurance, including Social Security and Medicare.
Determinations for those organizations that qualify are based on a set of stringent criteria under the law and not every religious group may fall under the required guidelines. In addition, any individual already enrolled as part of a recognized healthcare sharing ministry may also qualify for an exemption with proof of enrollment in that approved entity.
If you are one of the 2.2 million individuals who are currently incarcerated in the United States federal and state prison system or county jail, then you will be considered exempt from obtaining health insurance under the Affordable Care Act. As per the mandates, anyone who is detained for a minimum of one day in any recognized correctional facility is exempt from the requirement for the month in which they were detained.
Once you are released from custody, you will then be expected to obtain some form of health coverage. This would trigger a “qualifying event” which is defined as a special enrollment period that falls outside of the open enrollment period when anyone can apply for new coverage or change an existing plan. During that special enrollment period you have a finite amount of time, typically 30 days, to find affordable coverage in the Marketplace or get covered by an employer.
If these options are not applicable, you may apply for coverage under Medicaid or CHIP. The requirements for coverage and the applicable penalties for failing to obtain proper coverage would become valid after release unless eligibility for another exemption applies.
The preceding groups are some of the most common exemptions that are available to individuals who are seeking to be excluded from the Affordable Care Act. However, there are other exemptions for those who are claiming reasons of hardship who could be eligible to avoid the penalties for non-compliance.
These include a current status of being homeless or having been evicted within the past six months. Anyone facing an eviction or a foreclosure may also qualify. Filing for bankruptcy will also trigger an exemption. Individuals who have had their services disconnected by a utility company may also qualify. Victims of domestic violence or anyone dealing with the recent death of a close family member could be exempt as well as any individual who has suffered substantial property damage from disaster, either natural or man-made.
There are additional potential exemptions as related to health coverage or other medical-related hardship, such as a cancellation of your current policy and alternative coverage options are too expensive, anyone who has accrued a major amount of medical debt within the past two years, or an increase in monthly expenses as a result of caring for sick, disabled, or aged family members, among others.