ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Obamacare Help: Fees And Exemptions For Not Having Health Insurance

Updated on November 22, 2013
Source

A poor start to the Healthcare Marketplace is leaving would-be insurance applicants with lukewarm attitudes towards the new healthcare policy. Website capacity (traffic reaching 250,000 in the first week — four to five times more than projected) and errors that delayed or crashed a person's application made for woefully low enrollment figures for the Marketplace's first two months of operation.

The clock counting down to the March 31, 2014 deadline is still working fine though, by when all persons are expected to:

  • Have a Qualified Health Plan (as defined by the Affordable Care Act)
  • Make an "Individual Shared Responsibility Payment" for not having health insurance (Marketplace or otherwise)
  • Apply for an exemption to the fees


Persons are encouraged to try (or retry) using the regularly updated website or use alternate Marketplace channels to acquire insurance — which can be found in my step-by-step Marketplace registering guide.

If you'd like to know more about these "no coverage" fees and how to obtain exemptions to them, this article covers:

  • The Fees (a.k.a. — the "Individual Shared Responsibility Payment")
  • Exemptions (including "Qualifying Life Events")
  • Ways to Apply For Exemptions
  • Bonus: What is (and isn't) a Qualified Health Plan


By no means is this a "how-to" for getting out of paying. If you've read my other Healthcare Marketplace pieces — I'm not advocating one side of the "Obamacare" argument or other, just trying to help people navigate it (it seems to be here to stay, like it or not). The fees and exemptions to them herein can all be found on the Marketplace site, you just don't have to go fishing for them now.

The Fees:

All persons without insurance (and ineligible for exemption) must pay the "Individual Shared Responsibility Payment" fee.
All persons without insurance (and ineligible for exemption) must pay the "Individual Shared Responsibility Payment" fee. | Source

The purpose of the "Individual Shared Responsibility Payment" is to discourage people from continuing without a form of health insurance in the United States. A damagingly-expensive practice of using emergency rooms in leu of medical insurance has led to increased costs for insured patients.

According to Blue Shield of California, uninsured ER visits add nearly $1,200 in annual expenses to insured families in the state.

Due in part to how expensive ER care is ($321 for ER strep throat treatment versus $91 at a general California practitioner), this is also due to uninsured patients not paying their costs.

Typically, what occurs is that the hospital collects a fraction of the bill (often only what the patient can pay), then the government covers another fraction, and the remaining enormity of the bill is split among insured patients. The fees are an attempt to discourage the behavior.

Beginning March 31 next year, uninsured persons will either be charged $95/adult in a family ($47.50 for children under 18) or 1-percent of their annual income — whatever will cost more.

If you fall into the 1-percent group, your fee will not exceed the cost of a typical "bronze tier" Marketplace insurance plan (this means certain people will actually pay as much as insurance would have cost them anyway).

In 2015, the fees increase to $325/adult or 2-percent of your yearly income. In 2016: 2.5-percent or $695/adult. They'll keep getting heftier every year.

Additionally, you're required to pay the full costs of your healthcare as well as the fee (without protection from skyrocketing costs that have driven many people into bankruptcy). If you're uninsured for only part of a year, you pay 1/12th of the fees for every month you weren't covered — unless you were only uninsured for three months or less (more of that in Exemptions).

Paying the fees for a year are filed with your taxes in April of the next year.

TIP: Failure to pay your fees will result in the IRS withholding their sum from your future refunds, but no liens, levies, or criminal action of any kind will be taken against you.

It isn't 'criminal' to not pay your fee, but their value will be withheld from your tax refunds.
It isn't 'criminal' to not pay your fee, but their value will be withheld from your tax refunds. | Source

Exemptions:

Exemptions to the "Shared Individual Responsibility Payment" are split into two types: "exemptions" and "hardship exemptions" — circumstances where the government excuses you from healthcare responsibilities (because basically, you have bigger problems that year).

Standard Exemptions

  • Being uninsured for less than three months of a year (the first three months, before the end on an enrollment period in March, before filing taxes and fees in April)

  • The cheapest plan available to you still costs more than 8-percent of your annual income

  • You don't file tax returns because your income is too low

  • You're a member of a Federally recognized tribe and eligible for an Indian Health Service Provider

  • You're a member of a Federally recognized Healthcare Sharing Ministry

  • You belong to a religious sect that objects to insurance (in all forms: social security, Medicare, etc)

  • You're incarcerated and not awaiting the disposition of charges against you

  • You're not legally present in the U.S.

Hardship Exemptions

  • You are homeless

  • You've been evicted/foreclosed on/facing either process within a six-month period

  • You've received a shut-off notice from a utilities company

  • You've been the victim of domestic violence

  • You've recently experienced the death of a close family member

  • You've been the recent victim of a fire, flood, or other natural disaster/human action that was substantially damaging

  • You've filed for bankruptcy within a six-month period

  • You've incurred medical costs you couldn't pay within a 24-month period

  • You've experienced unexpected increases in your necessary expenses while caring for an ill/disabled/aging family member

  • You're expected to claim a child as a tax-dependent because they were denied for Medicaid or C.H.I.P. (and the court ordered someone must support the child) — this exempts you from paying the fee for the child

  • Trough appeal, you become eligible for 1) enrolling in a Healthcare Marketplace plan, 2) lower monthly premiums, or 3) lower out-of-pocket costs that were otherwise preventing you from obtaining healthcare

  • You're found ineligible for Medicaid (presumably unable to afford a Marketplace plan either) because your state did not expand its Medicaid eligibility under the Affordable Care Act

Qualifying Life Events

Should you not enroll in a new Qualified Healthcare Plan (Marketplace, Medicare/Medicaid, etc) by the end of an enrollment period, you cannot sign up for insurance until the next enrollment period.

Unless one of these has occurred to you:

  • You've moved to a new state

  • "Certain changes in Income" (this wasn't elaborated to on the Marketplace site, calling 1-800-378-2596 may be necessary to determine your eligibility)

  • Your family-size changes (death or birth)

Ways to Apply For Exemptions:

There are multiple ways to apply for these exemptions (sometimes the exemption-type dictates your choices).

If applying to be exempt based on —

  • Coverage being too costly for you (the 8-percent of income stipulation)

  • Membership in a Healthcare Sharing Ministry

  • Membership in a Federally Recognized Tribe

  • Being incarcerated (and not awaiting disposition of charges against you)

— you can claim these exemptions when filing your tax returns or when applying to the Healthcare Marketplace.

Applying for an exemption because of —

  • Membership in a recognized religious-sect that objects to insurance

  • Eligibility for services through an Indian Healthcare Provider

— these exemptions can only be claimed through the Marketplace (not taxes).

If you're exempt because your income is too low to tax, there is no need to apply for this exemption. Because there's no tax-filings on your record, you're essentially invisible to the issue.

Even if you file a return for the purpose of obtaining a refund from a withheld paycheck, you're still not required to pay the "Shared Individual Responsibility Payment".

TIP: If unemployed and wonder if you are exempt from purchasing insurance or paying fees, visit the Marketplace site. Exemption due to unemployment is determined case-by-case — and filling out an application or calling the Marketplace phone number are the only ways to be sure.

There's no fixed exemption for being unemployed, your household income (including an employed spouse's) can determine benefits and exemptions in your situation.
There's no fixed exemption for being unemployed, your household income (including an employed spouse's) can determine benefits and exemptions in your situation. | Source

What Is (And Isn't) a Qualified Health Plan:

Qualified Health Plans are any insurance plan the government recognizes for meeting minimum coverage requirements (as per the A.C.A.). Details on these minimum requirements can be found in my hub on selecting a Marketplace insurance policy (but the short of it is — anything in the Marketplace and forms of government-aid healthcare).

Qualified Plans

  • Individual Policies (that meet the minimum coverage requirement)

  • Job-based policies (that do the same)

  • Medicare and Medicaid

  • C.H.I.P. (Children's Health Insurance Program)

  • TRICARE (military-serviceperson insurance)

  • Veterans Benefits

  • Peace Corp Volunteer plans

  • CHAMPVA

  • Spina Bifida Healthcare Benefits Program

  • Self-funded healthcare plans offered to students by their university (that take effect before the March 31 deadline)

Plans That DO NOT Qualify

  • Plans for dental or vision only

  • Workers Compensation

  • Coverage for only specific diseases and conditions (I'm not sure why the Spina Bifida-plan escapes this chopping block, but that may have to do with the extent of services covered by it for treating that condition)

  • Plans that only offer discounts on medical services

After the enrollment deadline, the only options left to you are applying for exemptions that can be filed with your taxes – or paying the fees for being uninsured.

Having a better idea now (hopefully) of what the "Individual Shared Responsibility Payment" fees are as well as how you may be exempt from them — you have until March 31, 2014 to either obtain a form of approved health insurance or apply for exemptions within the Marketplace.

Comments

    0 of 8192 characters used
    Post Comment

    • quildon profile image

      Angela Joseph 

      4 years ago from Florida

      Whew! Thanks for clearing that up! Voted up and useful.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)