Do I HAVE to Sign Up for Obamacare?

The Affordable Care Act, or "Obamacare", is now accepting enrollment. Basically the Act mandates uninsured Americans choose a health insurance provider and pay for coverage. If you do not enroll by March 31st of this year, you are subject to the Individual Shared Responsibility Payment, a fee you incur for not paying an insurance company money for health care or otherwise having coverage (like Medicaid).

In 2014, this fee is the greater of $95 a year or 1% of your income. Next year it's $325. By 2016, the fee increases to $695 or 2.5% of your income, whichever is greater. If you cannot afford to pay these fines out-of-pocket, the IRS will withhold it from your tax refund. In addition, a fee of $47.50 applies to each uninsured child, each year.

If you make between 100% and 400% of the poverty level, you qualify for a tax subsidy that can lower the cost of insurance by lowering the premiums you pay under the Affordable Care Act's Marketplace plans. If you do not make at least 100% of the poverty limit, you do not qualify for lower costs, meaning an uninsured father with a family of 4 making less than $23,550 annually will have to pay full price out-of-pocket for Obamacare coverage.

If you do not qualify for Medicaid coverage because your state did not opt to expand it, and you are living below the poverty line, you will have to pay full price for health insurance or be fined for not having coverage.

See https://www.healthcare.gov/will-i-qualify-to-save-on-monthly-premiums/ for income limits regarding tax subsidies for Obamacare.

Of course you can always purchase health insurance on your own. But if you can not afford coverage, don't want coverage, and want to avoid being fined for not having coverage, look for personal exemptions to the fee.

You can:

1. Sign up for Medicaid. Having Medicaid deems you "covered" and not required to sign up for Obamacare. Many states were persuaded into expanding Medicaid coverage, so if you did not qualify in the past you may want to re-apply. If you're accepted, you now have Medicaid coverage and if you're denied, you can use your rejection letter to exempt yourself from paying the fee for not having Obamacare. Exemptions are explained in more detail below. To find out if your state expanded Medicaid coverage, use the Kaiser Family Foundation Subsidy Calculator page linked to the right.
2. Have a qualifying circumstance: The following is a list of situations in which you would be exempted from paying the fee for not being insured:

Circumstantial Exemptions

• If you are uninsured less that 3 months annually
• The lowest coverage you can find costs more than 8% of your annual income
• Your exempt from filing a Federal Tax Return due to low income
• You are a member of an Native American tribe or qualify for Indian Health Services
• You belong to a ministry that shares health care
• If your religion rejects insurance
• If you are in jail
• If you are not in the United States legally
• If you are experiencing a "hardship" (explained below)

Hardship Exemptions

• Homelessness
• Eviction or facing eviction
• Shut-off notice recipient
• Victim of domestic violence
• Death of a family member
• Property damage sustained by natural disaster
• Bankruptcy
• Unpaid medical bills
• Expenses for a sick, disabled or elderly family member
• Someone else is court-ordered to pay for your child's medical coverage (exempts you from paying the fee for an uncovered child that does not qualify for CHIP/Medicaid)
• If you do not qualify for Medicaid in a state that did not expand Medicaid coverage
• Your insurance was cancelled and you cannot afford an Obamacare Marketplace plan

If you meet any of these qualifications, you can be exempt from the Individual Shared Responsibility Payment fee incurred for not having insurance coverage.

Most of the exemption reasons listed above require documentation of your claim to be submitted with an exemption application. Usually it is just a copy of the notice you have received that verifies your claim (like your shut-off notice, unpaid medical bills, etc).

For Hardship Exemptions: To see a list of required documentation, and to print the application, visit http://marketplace.cms.gov/getofficialresources/publications-and-articles/hardship-exemption.pdf

For Circumstantial and All Other Exemptions: Find the appropriate exemption for to fill out and submit in the linked list of forms near the bottom of the page at https://www.healthcare.gov/exemptions/

If you have chosen to apply for an exemption to the Individual Shared Responsibility Payment fee for not having insurance coverage, keep in mind the following simple facts:

1. You are still uninsured.
2. Your exemption is only good for one year. Next year you will have to reapply for it, or be subject to the fee again.

But if you, like many Americans, are working hard to stay off welfare and don't have a penny to spare, applying for a fee exemption may help you keep your tax refund and give you a little breathing room, at least for now.