Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting
The individual shared responsibility provision of the Affordable Care Act requires you and each member of your family to have basic health insurance coverage (also known as minimum essential coverage), qualify for an exemption, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage or to claim an exemption. Find out if you qualify for an exemption or must make a payment by using our interactive tool, Am I required to make an Individual Shared Responsibility Payment.
You will claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040, Form 1040A, or Form 1040EZ. You can file any of these forms electronically. For more information on Form 8965, see the instructions. For any month that you or your dependents do not have coverage or qualify for an exemption, you will have to make a shared responsibility payment. See our Individual Shared Responsibility Provision – Reporting and Calculating the Payment page for more information about the payment.
How you get coverage exemption depends on the type of exemption. You can obtain some exemptions only from the Marketplace while others you may claim when you file your tax return. You can obtain some exemptions from the Marketplace or by claiming them on your tax return.
If the Marketplace grants your coverage exemption, they will send you a notice with your unique Exemption Certificate Number or ECN. Keep this notice with other important tax information.
You will enter your ECN on Form 8965 in column C of Part I, Marketplace-Granted Coverage Exemptions for Individuals.
If the Marketplace hasn’t processed your exemption application before you file your tax return, complete Part I of Form 8965 and enter “pending” in Column C for each person listed. If you claim the exemption on your return, you do not need an ECN from the Marketplace.
For a coverage exemption that you qualify to claim on your tax return, all you need to do is file Form 8965, Health Coverage Exemptions, with your tax return. You do not need to call the IRS or obtain the exemption in advance.
You will use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim coverage exemption if your income is below the filing threshold for your filing status but you choose to file to file a tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to claim this exemption.
You may claim other coverage exemptions on your tax return using Part III of Form 8965, Coverage Exemptions for Individuals Claimed on Your Return. Use a separate line for each individual and exemption type claimed on the return.
This chart shows the types of exemptions available. It also indicates whether the exemption they must be (a) granted by the Marketplace, (b) claimed on an income tax return, or (c) either granted by the Marketplace or claimed on a tax return. For additional information about how to get exemptions that the Marketplace may grant, visit HealthCare.gov/exemptions.
Exemptions and who grants them
|Exemptions||May only be granted by Marketplace||May be granted by Marketplace or claimed on tax return||May only be claimed on tax return|
|Coverage is considered unaffordable - The minimum amount you would have paid for employer-sponsored coverage or a bronze level health plan (depending on your circumstances) is more than 8 percent of your actual household income for the year as computed on your tax return. Also see coverage considered unaffordable based on projected income listed below, which provides a prospective exemption granted by the Marketplace if the minimum amount you would have paid for coverage is more than 8 percent of your projected household income for the year.|
|Short coverage gap - You went without coverage for less than three consecutive months during the year. For more information, see question 22 of our questions and answers.|
|Income below the return filing threshold - Your gross income or your household income is less than your applicable minimum threshold for filing a tax return. Learn more about household income.|
Citizens living abroad and certain noncitizens - You are:
If you meet one of these conditions, you qualify for this exemption even if you have a social security number (SSN).
|Members of a health care sharing ministry - You are a member of a health care sharing ministry, which is an organization described in section 501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.||
|Members of Indian Tribes - You are a member of a Federally-recognized Indian tribe, including an Alaska Native Claims Settlement Act (ANCSA) Corporation Shareholder (regional or village), or you were otherwise eligible for services through an Indian health care provider or the Indian Health Service.|
|Incarceration - You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges.|
|Members of certain religious sects - You are a member of a religious sect in existence since December 31, 1950, that is recognized by the Social Security Administration (SSA) as conscientiously opposed to accepting any insurance benefits, including Medicare and Social Security.|
|Aggregate self-only coverage considered unaffordable - Two or more family members' aggregate cost of self-only employer-sponsored coverage exceeds 8 percent of household income, as does the cost of any available employer-sponsored coverage for the entire family.|
|Gap in coverage at the beginning of 2014 - You had a coverage gap at the beginning of 2014 but you either (1)enrolled in, or are treated as having enrolled in, coverage through the Federally-facilitated Marketplace by March 31, 2014, (2) enrolled in, or are treated as having enrolled in, coverage through a state-based Marketplace by March 31, 2014, or any extension of the March 31 open enrollment deadline, or (3) enrolled in coverage outside of the Marketplace with an effective date on or before May 1, 2014. See this HHS Question and Answer.|
|General hardship - You experienced circumstances that prevented you from obtaining coverage under a qualified health plan, including, but not limited to, homelessness, eviction, foreclosure, domestic violence, death of a close family member, and unpaid medical bills. Learn more about the criteria for this exemption.|
|Coverage considered unaffordable based on projected income - You do not have access to coverage that is considered affordable based on your projected household income.|
|Determined ineligible for Medicaid in a state that did not expand Medicaid coverage - You are determined ineligible for Medicaid solely because the State in which you live does not participate in Medicaid expansion under the Affordable Care Act.|
|Resident of a state that did not expand Medicaid - Your household income is below 138 percent of the federal poverty line for your family size and at any time in 2014 you reside in a state that does not participate in Medicaid expansion under the Affordable Care Act. *|
|Unable to renew existing coverage - You were notified that your health insurance policy was not renewable and you consider the other plans available unaffordable. See HHS guidance and HHS Question and Answer for more information..|
|Gap in CHIP coverage - You applied for CHIP coverage during the initial open enrollment period and were found eligible for CHIP based on that application but had a coverage gap at the beginning of 2014. See HHS guidance for more information.|
|AmeriCorps coverage - You are engaged in service in the AmeriCorps State and National, VISTA, or NCCC programs and are covered by short-term duration coverage or self-funded coverage provided by these programs.|
|Limited benefit Medicaid and TRICARE programs that are not minimum essential coverage - You are enrolled in certain types of Medicaid and TRICARE programs that are not minimum essential coverage (available only in 2014).|
|Employer coverage with non-calendar plan year beginning in 2013 - You were eligible, but did not purchase, coverage under an employer plan with a plan year that started in 2013 and ended in 2014 (available only in 2014).|
* Resident of a state that did not expand Medicaid in 2014 including Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Mississippi, Montana, North Carolina, Nebraska, New Hampshire, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wyoming, or Wisconsin