Do I need to have health coverage?
Starting in 2014, most people need to have health coverage or pay a penalty or fine on their federal income tax return called the “shared responsibility payment.” To avoid this penalty, you need to have insurance that qualifies as minimum essential coverage. You do not have to pay a penalty if you are enrolled in any of the following types of health coverage:
- Health insurance purchased through NY State of Health or minimum essential coverage purchased from a health insurance company directly
- Health insurance received from a job, COBRA, or retiree plan
- Child Health Plus
- Refugee Medical Assistance
- Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
- Peace Corps Volunteer plans
- Self-funded health coverage offered to students by universities for plan or policy years that began on or before Dec. 31, 2014
Other plans may also qualify. Check with your insurance provider to see if your plan meets the requirements.
If you do not have health insurance that is considered minimum essential coverage, you may get help paying for health coverage through NY State of Health. Check the NY State of Health Tax Credit and Premium Estimator to see if you are eligible.
How much is the penalty?
There are two ways to calculate the penalty. If you have a penalty, you will pay the fine that is more expensive. The penalty for 2014 is either:
- 1% of your yearly household income that is above the tax return filing threshold for your filing status, OR
- $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
You will not pay more than the national average yearly premium for a bronze plan bought through the Marketplace in 2014.
The penalty increases every year. In 2015, it will be 2% of your yearly household income or $325 per adult ($162.50 per child under 18 years). In 2016 and later years, it will be 2.5% of yearly household income or $695 per adult ($347.50 per child under 18 years). The penalty is adjusted for inflation after 2016.
If you are uninsured for part of the year, you will pay 1/12 of the yearly penalty for each month you are uninsured. Generally, you do not have to pay the penalty if you are uninsured for less than 3 months. Click here for more information on penalties from the Internal Revenue Service's (IRS) website.
Who doesn't have to pay the penalty?
There are reasons why people may not have to pay a penalty for not having health insurance. People who may be exempt from the requirement to have health insurance or pay a penalty include:
- People who cannot afford health insurance because the insurance offered through a job or the Marketplace is unaffordable, as explained in the section below.
- People who experienced hardships that prevented them from getting health coverage, including but not limited to: experiencing homelessness or domestic violence, facing eviction or experiencing a fire, flood, or other disasters that caused substantial damage to their property. A complete list of hardships that may qualify is on the hardship exemption form.
- People whose income is so low that purchasing health insurance during the tax year was unaffordable.
- Members of a recognized religious sect with religious objections to health insurance.
- Members of a health care sharing ministry.
- Members of a federally recognized Indian tribe or eligible for services through an Indian Health Services provider.
- People who are incarcerated.
- People who are not required to file a federal income tax return because their income is too low. Click here for information about filing limits.
- People who are not lawfully present in the United States. For information on who is considered lawfully present in the United States, click here.
- People who are without health insurance coverage for less than 3 months during the year.
- People who have coverage through a Marketplace or non-Marketplace health plan effective May 1, 2014 and did not have health insurance in the previous months of 2014.
If you are approved for an exemption, it means you will not have to pay a penalty to the IRS for not having health insurance. However, it also means that you will have to pay for the entire cost of your medical care.
How do I apply for an affordability exemption if health coverage through a job is unaffordable?
You may apply for an exemption if health coverage available through a job is unaffordable. This means that the cost of the health coverage available through a job to you or your family is more than 8% of your household income.
You can either:
- Claim this exemption when you file your 2014 federal tax return, due in April 2015 OR
- Apply for the exemption using the form for people who want to apply for an exemption based on coverage being unaffordable.
What if I do not have health coverage through a job and cannot afford coverage through NY State of Health?
If your job does not offer coverage or you cannot afford to buy health coverage through NY State of Health, you can complete the form for people who want to apply for an exemption based on coverage being unaffordable. You need to provide more information with this form to find out if you qualify for an exemption.
Health coverage is considered unaffordable if the lowest cost bronze plan available to you through NY State of Health is more than 8% of your projected modified adjusted gross income after the advance premium tax credit (APTC) has been applied to the cost of the plan. To know how much APTC you will receive and the cost of the lowest cost bronze plan available, you must first apply through NY State of Health for help paying for health coverage.
Follow the steps below to apply for the affordability hardship exemption:
- Apply for help paying for health coverage through NY State of Health.
- Make a copy of your Eligibility Determination notice that shows your maximum APTC.
- From the Plan Selection Section's ‘Find a Plan’ Screen, click on the "Apply for an Exemption" button. Print the entire page which includes the maximum APTC amount and cost information about the lowest cost bronze plan available to you.
- Complete the form for people who want to apply for an exemption based on coverage being unaffordable.
- Follow the directions on the form to submit the application and appropriate documents.
What if I don’t file income taxes because my income is too low?
You do not need to apply for an exemption. This is true even if you file a return in order to get a refund of money withheld from your paycheck. You won’t have to make the shared responsibility payment. Click here for information about filing limits.
How do I apply for another type of exemption (for reasons other than affordability)?
For exemptions based on:
- Membership in a health care sharing ministry,
- Membership in a federally-recognized Indian tribe or
- Being incarcerated
You have two options:
- You can claim these exemptions when you file your 2014 federal tax return, due in April 2015
- You can apply for the exemption using one of the forms below:
For exemptions based on:
- Membership in a recognized religious sect whose members object to insurance,
- Eligibility for services through an Indian health care provider or
- Experiencing hardships (other than an affordability hardship)
You can apply for the exemption using one of the forms below:
For exemptions based on:
- Gap in coverage for less than three months
- Having coverage through a Marketplace or non-Marketplace health plan effective May 1, 2014 (and did not have health insurance before May 1, 2014)
- Not being lawfully present in the United States
When will I find out if I have been approved for an exemption?
If you are claiming an exemption when you file your federal tax return, the IRS will notify you of the approval. If you applied for an exemption by completing any of the forms described above, the federal Marketplace will notify you of the approval (the Exemption Certificate Number) or will request for more information from you if they cannot process your application.
Please do not send your exemption application or materials to NY State of Health. NY State of Health does not accept, process, or approve applications for exemptions.
You can call the federal Marketplace at 1-800-318-2596 about the status of your exemption application.