Taxpayers who may qualify for an exemption to pay the penalty in their 2014 tax return if not covered by essential health insurance

·         Uninsured for less than three months of the year

·         Income falls below the threshold required to file a federal tax return

·         Incarcerated and not being held pending disposition of charges

·         Coverage available is not affordable (annual premiums are more than 8% of household

·         income)

·         Member of recognized health care sharing ministry

·         Member of a federally recognized tribe or eligible for services through an Indian Health Services provider

·         Member of a recognized religious sect with religious objections to insurance including Social Security and Medicare

·         Not lawfully present in the United States

If individuals have certain circumstances that affect their ability to purchase health insurance coverage, they may qualify for a hardship exemption. Some reasons a taxpayer could request a hardship exemption are:

·         Homelessness

·         Eviction in the past six months or faced eviction or foreclosure

·         Received a shut-off notice a utility company

·         Death of a close family member

·         Flood, fire, or other disaster that caused substantial damage to his or her property

·         Bankruptcy filed in the past six months

·         Substantial debt due to unpaid medical expenses in the last 24 months

·         Unexpected increase in necessary expenses due to caring for an ill, disabled, or aging family member

·         Dependent child was denied coverage in Medicaid and CHIP and another person is required by court order to provide medical support for the child

·         Eligibility for enrollment in a qualified health plan through the marketplace only after an eligibility appeals decision that lowers costs on monthly premiums or cost-sharing reductions for a time period when not enrolled in a plan through the Marketplace.

·         Ineligibility for Medicaid because the taxpayer's state did not expand Medicaid under the ACA

·         Insurance plan cancelled by the insurance company and no affordable plans are available in the Marketplace

If individuals do not maintain minimum essential coverage and do not qualify for an exemption, he or she must pay the individual shared responsibility payment with their tax return.

For 2014 the individual shared responsibility payment is the greater of:

1% of household income that is above the tax return threshold for filing status or flat dollar amount of $95 per adult and $47.50 per child limited to a max of $285.

Payment amounts are scheduled to increase over the next few years to either 2.5% of income above filing threshold or $695 per adult and $347.50 per child.