Orlando Harmon
If you don't have health coverage, you may have to pay a fee. However, you can apply for an exemption in certain cases, such as financial hardship, homelessness, bankruptcy, eviction, or foreclosure. There are two types of exemptions: affordability and hardship. To apply for an exemption, you need to download and fill out an application form, providing all the required information and acceptable proof for yourself and your tax household. Once you submit your application, you will receive a response within 30 days. If your application is approved, you will be provided with an Exemption Certificate Number (ECN) to enroll in a health plan.
| Characteristics | Values |
|---|---|
| When to apply | If you need an exemption for past months, apply when you file your tax return. |
| Who can apply | People who are 30 or older and want to enroll in a "Catastrophic" health plan. People who are under 21 and eligible for an exemption due to religious conscience. People who are eligible for Indian Health Services. People who are ineligible for Medicaid. |
| How to apply | Download the form and follow the instructions to fill out a health coverage exemption application. Submit the application online, by fax, or by mail. |
| Requirements | Provide all required information and acceptable proof for you and your tax household. Requirements are explained in the application for each exemption type. |
| Fee | If you qualify for an exemption, you don't have to pay a fee for the months the exemption applies. |
| Exemption types | Affordability and hardship. |
| Hardship exemptions | Cover the month before the hardship, the months of the hardship, and the month after the hardship. May be provided for additional months, up to a full calendar year. |
| Reasons for hardship exemptions | Homelessness, bankruptcy, eviction, foreclosure, death of a family member, natural disasters, unexpected increases in necessary expenses, etc. |
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What You'll Learn
How to apply for a health coverage exemption
If you don't have health coverage, you may be required to pay a fee. However, you can apply for a health coverage exemption in certain cases. If your exemption is approved, you won't have to pay the fee for the months the exemption applies.
There are two main types of exemptions: affordability and hardship. You can qualify for an affordability exemption if the lowest-priced coverage available to you, through either a marketplace or job-based plan, would cost more than a certain percentage of your household income. This percentage varies by tax year: 8.17% for 2023, 7.97% for 2024, and 7.28% for 2025.
Hardship exemptions cover a range of circumstances, including financial hardship and other situations that prevent you from obtaining health insurance. Some examples include homelessness, eviction, utility shut-off notices, domestic violence, death of a family member, natural disasters, bankruptcy, unexpected medical expenses, and caring for an ill or disabled family member. Hardship exemptions typically cover the month before, the months of, and the month after the hardship. However, the Marketplace may grant exemptions for additional months, up to a full calendar year, in certain cases.
To apply for a health coverage exemption, you generally need to submit an application form. Depending on your state, you may be able to submit your application online, by fax, or by mail. Some states, like California, have their own exemption processes through programs like Covered California. If you qualify for an exemption, you will receive an Exemption Certificate Number (ECN) that you can use to enrol in a "Catastrophic" health plan. Remember that exemption requirements and processes may vary by state and specific circumstances, so be sure to review the relevant state and program information.
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What is an exemption certificate number (ECN)
An Exemption Certificate Number (ECN) is a number provided by Covered California in the exemption approval notice. This number is required on Form FTB 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty, to prove that Covered California granted you an exemption from the penalty. If you disagree with the decision regarding your eligibility for an exemption, you can file an appeal or a complaint within 90 days of the date of your exemption notice.
In California, ECN stands for Exemption Certificate Number. You can obtain your ECN from Covered California, the California healthcare marketplace. Not all exemptions require a confirmation number, so it is important to check the list of exemptions that require an ECN. Once you obtain your ECN from HealthCare.Gov, you can follow the steps to enter that information into TurboTax.
If you applied for an exemption through a Health Insurance Marketplace but have not received a response, you can obtain a preliminary waiver of the tax penalty. This means you can file your taxes without paying the tax penalty. Once your application is reviewed, you will be informed if your exemption is approved or if you need to pay the penalty.
If you are 30 or older and want to enrol in a "Catastrophic" health plan, you will need to apply for an exemption and obtain an ECN. A Catastrophic health plan offers lower-priced coverage that protects you from high medical costs in the event of a serious injury. There are two types of exemptions: affordability and hardship. You may qualify for this exemption if the lowest-priced coverage available to you would cost more than 7.97% of your household income.
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Who needs to apply for an exemption
If you don't have health coverage, you may be required to pay a fee. However, in certain cases, you can apply for an exemption from this fee. For instance, if you live in California or the District of Columbia, you can apply for an exemption through Covered California or DC Health Link, respectively. If you're unsure whether you need to apply for an exemption, it's recommended that you apply anyway.
There are two types of exemptions: affordability and hardship. Affordability exemptions are for those who cannot afford any available health coverage options. This applies if the lowest-priced coverage available to you would cost more than 7.97% of your household income. Hardship exemptions are for those who have experienced difficulties in obtaining health insurance due to various reasons. These reasons include financial hardship, homelessness, eviction, bankruptcy, and unexpected increases in necessary expenses due to caring for a family member. If you have faced any of these hardships, you may be eligible for a hardship exemption.
Additionally, specific exemptions are available for certain groups. For example, if you are under 21 and have a religious objection to health insurance, you can apply for an exemption, but you will need to reapply after you turn 21. Similarly, if you are eligible for Indian Health Services, your hardship exemption will last as long as you remain eligible for those services.
It's important to note that exemptions are not based on employment status. Furthermore, if you are 30 or older and wish to enrol in a "Catastrophic" health plan, you will need to apply for an exemption. These plans offer lower-priced coverage for serious injuries or illnesses. However, if you are under 30, you can enrol in a "Catastrophic" plan without needing an exemption.
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Types of exemptions: affordability and hardship
If you don't have health coverage, you may be required to pay a fee. However, you can get an exemption in certain cases. There are two types of exemptions: affordability and hardship. Affordability exemptions apply if you or anyone in your tax household has access to health insurance through a job or a government scheme, but you cannot afford it. To be eligible, the insurance must be considered unaffordable. Affordability is calculated based on the lowest-cost coverage available to you through an employer or government scheme, relative to your projected annual household income. For example, in 2023, the coverage is considered unaffordable if it costs more than 8.17% of your projected annual household income.
If you want an affordability exemption for the entire calendar year, you must request it before January 1 of that year. If you need this exemption for previous months, you can apply for it when you file your tax return. You can qualify for this exemption if you experienced financial hardship or other circumstances that prevented you from getting health insurance. These circumstances include, but are not limited to, homelessness, eviction or the threat of eviction, utility shut-off notices, domestic violence, death of a family member, natural disasters, bankruptcy, substantial debt due to unexpected medical expenses, and unexpected increases in necessary expenses due to caring for a family member.
Hardship exemptions typically cover the month before the hardship, the months of the hardship, and the month after the hardship. However, in some cases, exemptions may be granted for additional months, up to a full calendar year. For instance, if you are ineligible for Medicaid solely because your state has not expanded Medicaid coverage, the hardship exemption will be granted for the entire year. Similarly, if you are eligible for Indian Health Services, the exemption lasts as long as you remain eligible. On the other hand, if you are under 21 and eligible for a religious conscience exemption, you must reapply once you turn 21.
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Where to apply for an exemption
If you live in the United States, you can apply for a health coverage exemption via the Health Insurance Marketplace®. You can download the exemption application form from HealthCare.gov and submit it online, by fax, or by mail. If you live in California, you can apply for a Covered California exemption for tax years 2020 and later. You can submit your application online, by fax, or by mail. If you live in the District of Columbia, you can visit DC Health Link to apply for an exemption.
If you need an exemption for past months, you can apply for it when you file your tax return. You can qualify for this exemption if you experienced financial hardship or other circumstances that prevented you from getting health insurance, such as homelessness, eviction, bankruptcy, or a natural disaster.
For those who are under 30 and wish to enrol in a "Catastrophic" health plan, you do not need an exemption. However, if you are 30 or older, you must apply for an exemption to enrol in this type of plan. Affordability and hardship exemptions are available for this situation.
It's important to note that you no longer need an exemption to avoid paying a tax penalty for not having health coverage. However, if you don't have health coverage, you may still have to pay a fee, and getting an exemption can help you avoid this in certain cases.
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Frequently asked questions
A health coverage exemption is an exemption from paying a fee for not having health insurance.
You can qualify for a health coverage exemption if you had a financial hardship or other circumstances that prevented you from getting health insurance. This includes homelessness, bankruptcy, eviction, foreclosure, and unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
You can apply for a health coverage exemption by downloading and filling out an exemption application form. You can submit your application online, by fax, or by mail.
After you submit your application, it will be reviewed to determine if you qualify for an exemption. If you are granted an exemption, you will be provided with an Exemption Certificate Number (ECN) that you can use to enrol in a "Catastrophic" health plan if you are 30 or older.
