Do I need to buy health coverage?
Starting in 2014, every person needs to have health coverage or make a payment on their federal income tax return called the "shared responsibility payment." To avoid the "shared responsibility payment," or penalty, you need to have insurance that qualifies as minimum essential coverage. Also, some people are exempt from making this payment.
You do not have to pay a penalty if you are enrolled in any of the following types of health coverage:
- Health insurance purchased on the New York Marketplace or other individual health insurance you already have
- Health insurance received from a job, COBRA, or retiree plans
- Child Health Plus
- 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 begin on or before Dec. 31, 2014
Other plans may also qualify. Ask your health insurance provider. If you do not already have health insurance that is considered minimum essential coverage, you may apply for help paying for your health insurance through the New York Marketplace. You may be eligible for help paying for health coverage.
How much is the penalty?
The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:
- 1% of your yearly household income. The maximum penalty is the national average yearly 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 penalty increases every year. In 2015, it’s 2% of income or $325 per person. In 2016 and later years, it’s 2.5% of income or $695 per person. After that, the penalty is adjusted for inflation.
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. You are not subject to a penalty if you’re uninsured for less than 3 months.
Who doesn't have to pay the penalty?
There are other 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 have an affordability hardship as explained below.
- People who have an affordability hardship because the health insurance offered through a job is unaffordable as explained below.
- People who experience hardships, including, but not limited to, homeless, domestic violence, facing eviction or are experiencing a fire or flood. A complete list of hardships that may qualify for an exemption is on the exemption application 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.
- People who are members of a federally recognized 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.
- People who are without health insurance coverage for less than 3 months during the year.
If you are approved for an exemption, it means you will not have to pay a penalty to the Internal Revenue Service (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 hardship exemption?
You may qualify for an exemption if health coverage available through a job or the New York Marketplace is unaffordable.
For an affordability hardship exemption, you can either:
- Claim this exemption when you file your 2014 federal tax return, which is due in April 2015; or
- Apply for the exemption using the appropriate form as explained below.
If you are offered health coverage through a job, but would like to apply for an affordability hardship exemption, use the following form:
If you are not offered coverage through a job, you may qualify for help paying for health coverage through the New York Marketplace. Even if you are eligible for financial help, you can apply for an exemption. You can apply for an affordability hardship exemption if you think you cannot afford to purchase health insurance due to your projected income in the coming year.
The first step in determining whether you qualify for this exemption is to apply for help paying for your health coverage. The cost of health coverage is considered unaffordable if the cost of the lowest cost bronze plan available for you to purchase on the New York State of Health Marketplace, minus your advanced premium tax credit (APTC), exceeds 8% of your projected modified adjusted gross income. To get your APTC amount and the cost of the lowest cost bronze plan available to you, you must first apply on the New York Marketplace for help paying for your health insurance.
Follow the steps below to apply for the affordability hardship exemption:
- Apply for help paying for health insurance on the Marketplace.
- 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 an exemption based on membership in a health care sharing ministry; membership in a federally-recognized tribe; or being incarcerated:
You have two options:
- You can claim these exemptions when you file your 2014 federal tax return, which is due in April 2015; or
- You can apply for the exemption using the appropriate form:
For an exemption based on membership in a recognized religious sect whose members object to insurance; eligibility for services through an Indian health care provider; or one of the hardships described above (other than an affordability hardship):
- You can apply for the exemption using the appropriate form:
For an exemption based on having a gap in coverage for less than three months, or not being lawfully present in the United States:
- This will be handled when you file your 2014 federal income taxes.
Call the Marketplace at 1-855-355-5777 for more information about exemptions or how to apply for an exemption.