Claiming Minimum Coverage Exemption

By | April 24, 2014

How do you claim a minimum coverage exemption from the healthcare law?

Claiming an exemption will vary by the type of exemption.

  • The exemption for religious conscience and most hardship exemptions are available only to go to the Health Insurance Market, also known as an Affordable Insurance Exchange and request an exemption certificate. Information is available about the final rules for these exemptions.
  • Exemptions to members of Indian tribes, members of ministries to share health care and people who are incarcerated are available either to go to the market or exchange and request an exemption certificate, or claim the exemption as part of presenting a federal tax return.
  • Exemptions for unaffordable coverage, short interruptions in coverage, certain adversities and individuals that are not present in the United States, by law, can only be claimed as part of filing a federal tax return. The exemption for those below the threshold for filing a federal income tax return, is automatically available. No need to take any special measures.

Claiming Minimum Coverage Exemption

The provision of shared responsibility of individuals takes effect in 2014. You will not have to justify coverage or waivers or making payments to file your federal tax return for 2014 and 2015.  Insurers have a requirement, to provide all those who cover each year the information that will help them prove they had coverage. 


2014 Health Care Coverage Penalty

The penalty in 2014 is calculated one of 2 ways. If you or your dependents don’t have insurance that qualifies as minimum essential coverage you’ll pay whichever of these amounts is higher:

  • 1% of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1% rate. (If income is below $10,150, no penalty is owed.)