Most Americans are required to have health coverage
As of January 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a tax penalty. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some people will be exempt from the mandate (how to apply), some will be eligible for hardship exemptions (for a defined period of time), while others may be eligible for financial assistance to help them pay for the cost of health insurance.
In North Carolina, since the state did not expand the Medicaid program, nearly 500,000 people will fall in the coverage gap, and are not required to have coverage or pay a penalty. See our calculator to see if you fall into the coverage gap.
What types of coverage satisfies this requirement?
- Coverage under certain government-sponsored plans (e.g. Medicaid, NC Health Choice for children, and Medicare)
- Retiree health plans
- Employer-sponsored plans, with respect to any employee
- Student health plan
- TRICARE (current service members and military retirees, their families, and survivors)
- Plans in the individual market
- Grandfathered health plans
- Any other health benefits coverage, such as a state health benefits risk pool, as recognized by the HHS Secretary
Other plans may qualify.
Individuals who have a religious exemption, those not lawfully present in the United States, and incarcerated individuals are exempt from the minimum essential coverage requirement.
Are there other exceptions to when the penalty may apply?
Yes. A penalty will not be assessed on individuals if:
- You’re uninsured for less than 3 months of the year
- The lowest-priced coverage available to you would cost more than 8% of your household income
- You don’t have to file a tax return because your income is too low (learn about the filing limit [PDF])
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You’re a member of a recognized health care sharing ministry
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
- You’re incarcerated (either detained or jailed), and not being held pending disposition of charges
- You’re not lawfully present in the U.S.
- You qualify for a hardship exemption
If any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the penalty:
- You were homeless
- You were evicted in the past 6 months or were facing eviction or foreclosure
- You received a shut-off notice from a utility company
- You recently experienced domestic violence
- You recently experienced the death of a close family member
- You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
- You filed for bankruptcy in the last 6 months
- You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
- You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
- You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child.
- As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
- You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act
- Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
- You experienced another hardship in obtaining health insurance
To apply for a hardship exemption, use this exemption form: Individuals who experience hardships (PDF). See instructions to help you fill out an exemption application (PDF).
How long a hardship exemption lasts
Hardship exemptions are usually provided for the month before the hardship, the months of the hardship, and the month after the hardship. However, the Marketplace may provide the exemption for additional months after the hardship, including up to a full calendar year.
- For a hardship exemption based on affordability, the exemption will be granted for the remaining months in the coverage year.
- For people ineligible for Medicaid only because a state hasn’t expanded Medicaid coverage, the hardship exemption will be granted for the whole calendar year.
- For people eligible for Indian Health Services, the hardship exemption will be granted on a continuing basis. It may be kept for future years without having to submit another application. This is true as long as there are no changes to your membership in a tribe or eligibility for services from an Indian health-care provider.