October 29, 2014

Health Insurance Marketplace - Exempt Based Upon Hardship

Question:

According to HealthCare.gov, some individuals who don't have a qualified health insurance plan may be exempt from making the individual shared responsibility payment. I was reading the list of exemptions from the penalty, and I noticed one of them was called a hardship exemption.

What is meant by hardship? And what do I have to do in order to qualify for the exemption?

Answer:

Yesterday, we gave an overview of all the exemptions from the fee for not having health care coverage. One of the exemptions we mentioned was based on hardship.

Below are just a few of the circumstances that may qualify you for a hardship exemption. If you would like to know all 14 circumstances of hardship that might qualify an individual to be exempt from the fee, you can read the list at HealthCare.gov.
  1. You received a shut-off notice from a utility company
  2. You filed for bankruptcy in the last 6 months
  3. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
  4. You recently experienced the death of a close family member
  5. You had medical expenses you couldn't pay in the last 24 months that resulted in substantial debt
  6. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
  7.  You experienced another hardship obtaining health insurance

In order to qualify for a hardship exemption, you must follow the instructions on this application form and submit it to the Marketplace (same as HealthCare.gov). The instructions note that after the application form is submitted, you should hear back within 1-2 weeks concerning whether or not you have been granted the exemption. 

If you get an exemption from the Marketplace, you must keep the letter that the Marketplace sends you with your exemption certificate number (ECN). You will need the ECN when filing your personal, federal taxes. 

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