The most wonderful time of year again: tax season. I think my CPA is one of the only people actually excited for this time of the year, and I say that with respect.


If you are one of the many Americans navigating the Affordable Care Act, trying to understand what you do or don’t have to pay is complex.  By default, you must have some sort of health insurance coverage in the US or have an “exemption” or exception. The beauty is that there are many exceptions…


You may be surprised what will allow you to be exempt from paying a tax penalty for not having health insurance. Here are a few common hardships that I see as a healthcare lawyer.


Did you have medical expenses you couldn’t afford to pay?


One of the most stressful situations is having medical debt that you are struggling to overcome.  Your situation may qualify you for a hardship and allow you to fill out a hardship application.  It makes sense right? If you had medical expenses you could not pay, why should you be paying a penalty on top of that for not having health insurance?


Do you have someone close to you that you are caring for due to a medical condition?


This is a tough situation for anyone, and it is a recognized hardship.  Whether they are a significant other or family member, assert yourself to save money.  As long as you have copies of the bills from procedures you can follow the same process as before.  Fill out the hardship form and send it into the Marketplace.  Speak with your tax professional as well.


Was your health insurance too expensive for you?


Despite subsidies to help lower costs, health insurance may not be affordable under your situation.  You know your finances the best.  If coverage is too expensive for you, you’ll qualify for an exemption. The general rule is you get the affordability exemption if the lowest-priced plan is more than 8% of your household income.


See all of the exemptions with more details here

There is even an
“exemption finder” here.


Pro tip: on the hardship form you can list multiple hardships if applicable.


Make sure you take the time to check for any exemptions that can save you money, especially if this is your first time doing taxes or your health situation was difficult.  The more you know; the more money in your pocket!

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