There is a lot of talk about ObamaCare and the Affordable Care Act in the news.
Who will not owe ObamaCare (ACA) Penalty?
Many taxpayers may wonder if they will end up owning penalties under the ACA. The good news is that it is pretty easy to determine if you will owe a penalty or not under ObamaCare. This list below will help people quick determine if they need to consult a tax expert to verify if they owe a bigger penalty for not having health insurance when they file taxes.
You won’t pay an ObamaCare penalty if:
- you are covered by your employer health insurance
- you are covered by the government insurance such as Medicare Medicaid, CHIP, TRICARE or the VA
- you already have purchased coverage that – at a minimum – meets the requirements for a Bronze plan under the ACA
- your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income (this is increasing to 8.05 percent for 2015)
- your income is below the income tax filing threshold
- You had a short gap in coverage during the year, that lasted no more than three months (if you’re uninsured for more than three months, the penalty is prorated)
- you qualify for a religious exclusion
- you are a member of a Native American tribe
- you are an undocumented immigrant
- you are in prison
Taxpayers Enrolling in New Health Care Plans
- People who enrolled near the end of the 2014 open enrollment window and had coverage effective May 1, 2014 are still exempt from the penalty as long as they maintained coverage the rest of the year, even if they had no coverage for the first four months of 2014
- If your health plan was cancelled as a result of the ACA, and you don’t believe the new options available to you are affordable, you qualify for a hardship exemption and you’re also eligible to purchase a catastrophic plan regardless of your age. If you qualify for a hardship exemption because your plan was cancelled in 2013 or is being cancelled in 2014, your exemption (and eligibility for a catastrophic plan) is valid through October 1, 2016.
- You qualify for a hardship exemption
This list should give taxpayers a good idea if they will owe penalties under the ACA.