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Do I HAVE to Sign Up for Obamacare?

Updated on January 12, 2014

Enrollment for Obamacare is Now Open

Pay for coverage or pay a fee.
Pay for coverage or pay a fee. | Source

Get Covered or Pay a Fine

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.

The "Individual Shared Responsibility Payment" is a Fee

If you can afford health insurance but choose not to buy it, you must pay a fee known as the "individual shared responsibility payment". If you can not afford health insurance and do not qualify for Medicaid, you still owe this fee if uninsured.
If you can afford health insurance but choose not to buy it, you must pay a fee known as the "individual shared responsibility payment". If you can not afford health insurance and do not qualify for Medicaid, you still owe this fee if uninsured.

Tax Subsidies Not Available to the Working Poor

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 for income limits regarding tax subsidies for Obamacare.

Kaiser Family Foundation Subsidy Calculator

An interactive calculator that figures your insurance premiums (what you pay) and subsidies (what assistance you may receive) under Obamacare.  Also tells you if your state decided to expand Medicaid.
An interactive calculator that figures your insurance premiums (what you pay) and subsidies (what assistance you may receive) under Obamacare. Also tells you if your state decided to expand Medicaid. | Source

What To Do?

If you find yourself in a tough situation with no money for insurance OR fines, you may qualify for an exemption that would excuse you from paying the fine for not having insurance.
If you find yourself in a tough situation with no money for insurance OR fines, you may qualify for an exemption that would excuse you from paying the fine for not having insurance.

What Can I Do to Avoid Obamacare and its Fees?

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.

Applications are Available Online

For a complete list of exemptions and forms to apply for one, visit
For a complete list of exemptions and forms to apply for one, visit | Source

How Do I Apply for Exemption?

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

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

Keep In Mind

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.


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    • SmallOak profile imageAUTHOR

      Small Oak 

      4 years ago from The Here and Now

      stanfrommarietta thanks for your input - all valid and popular points. Why we SHOULD sign up is a hot topic right now, but why and if we HAVE to isn't as widely broadcasted. Many American's living shut-off notice to shut-off notice without a penny to spare do not know this could be an option in place of having their income tax refund withheld, so I wrote this article for just this particular issue alone. I was always baffled why I didn't get information directly on what was required of us before they start fining us - you know, a simple letter mailed to me would've sufficed. Thanks for taking the time to write - you should turn all that into a hub, it'd be a solid one. Take care.

    • stanfrommarietta profile image


      4 years ago

      I forgot, SmallOak, often unexpected costs for the young are having a baby (or worse, babies). Those can run into 5 digits and sometimes, when there are prenatal complications, complications during the delivery, infant and mother care, pediatric care for the growing child, upwards into millions of dollars. The only way you can be morally responsible for yourself when you let others share in your costs is to have insurance. You will share in their costs throughout your life, and they will share in yours when the time comes.

      As for you and your husband getting better jobs: That won't happen unless there is more new money flowing around in the economy creating demand for goods and services. Then businesses will start investing, borrowing and investing, expanding, hiring, and as more people are being hired, they will have incomes and start demanding goods and services also. That will only come about if the Federal government, which has the authority and power to create money, creates it for deficit spending. During deflations, like the present recession, new money will not be inflationary. We are producing below our capacity with millions out of work. Only when we reach full production and full employment again, will we have to put constraints on government spending. But we are nowhere near that now. So, think carefully about who to elect to Congress. There are those who have a totally false and wrong conception of the finances of our Federal government. They think, like Ross Perot did, that the Federal government is a business, and should be run like a business. It must balance its budgets, spend within its means. But the Federal government is not run to make a profit, but to provide services for the general good. And people think business people have the savvy to make decisions about the Federal government. The fact is they don't, no more than your understanding of household finances, or state and local government finances. All of those need to get their money from elsewhere to spend. Unlike them the Federal government can and should create and spend money into circulation during recessions and depressions. It should be restrained in spending during inflations (which are normally not as bad, if moderate, than recessions, in the effects on lives of citizens. While there has been low inflation over the past 20 years, the cost of goods has still dropped. Compare the costs of a personal computer or smartphone with what they were 8 years ago. You have billions more memory, faster CPU chips, and smarter software, all for about the same or lower prices. So, we don't have serious inflation now. Automobiles now cost more, but you get a much better product. Home prices were inflated beyond their actual worth by the lax lending of the mortgage banks. The bubble burst, and because of the collateral bets and hedges more was lost than just the costs of the foreclosed homes.

      So, you need to elect people to Congress who are willing to do deficit spending. You and your grandchildren will not have to pay for it. It is paid off all the time by the money creator, the Federal government, or it is postponed indefinitely by swapping old debt for new at the Treasury. So, the debt is not handled by taxpayers. And much government spending is not spending taxpayer money. It takes a whole different way to understand federal government finances. It is a system where the central government is the money creator and issuer by spending newly created money. But all it is doing is making available needed money, which simply serves as quantitative representations of debt obligations in units of account (e.g. dollars) between parties in the economy. When economy is growing or needs to regrow, more money is needed for the new debt obligations involving more goods and services and government is where much of it comes from. The government doesn't need taxes to spend. The people need the government to create and spend its money so that they can pay their taxes with it and also serve as medium of exchange.

    • stanfrommarietta profile image


      4 years ago

      I think we all have a moral responsibility to buy insurance on the ACA. Here's why:

      If you have the insurance, then you are responsible for your health care costs.

      If you don't have it, then, if you do unexpectedly get sick, injured and get care at the ER or clinic or hospital, the costs for your care are not absorbed by the hospital or clinic. They are passed on to those who can pay in the form of higher prices for services and materials rendered. They are paying for your care. That is a tort. A tort is a harm inflicted, knowingly or unknowingly onto another, and you are responsible, and a remedy is required. Your not having insurance means others are harmed by having to pay what are actually your bills. The 'tax' for not buying the insurance is such a remedy. But you do not get anything in the way of health benefit from paying the tax.

      So, you think you are young and healthy and likely will not need to cover any health costs for the coming year. So, why buy the insurance? It's to be a responsible person.

      You cannot be certain that you will not have health care costs in the coming year. A lot of young and healthy people have accidents in their cars, at work on the job, at home, and they need some care. If you do not have insurance you are liable. And if you let others pay a portion of your costs without your sharing in them, you are mooching, a dead beat, etc.. Then you are irresponsible. A moral deadbeat.

      Furthermore just thinking of this insurance as for the upcoming year is too narrow of a perspective. You will have to cover yourself for your whole life. You are responsible for yourself. It has been determined that the average person's lifetime costs for health care are about $300,000. Most of that comes near the end of life in the senior years.

      If you hope to have low premiums when you get old, you will hope there are other young healthy persons in the insurance pool who are sharing in the costs of the members of the pool. Premiums are effectively the cost of estimated care for the coming year for all members divided by the number of members in the pool. There are additional costs for reasonable profit, administrative costs, etc.. but this is basically how premiums are calculated. Estimated costs are determined by the insurance company based on past experience. They may factor in something for possible inflation. But by and large what keeps costs low year after year is the healthy, young people in or coming into the pool. The more people who do not actually make claims, the more their share of the premiums covers the costs of the older who will have costs. So, if by the time you become old yourself and are being charged thousands of dollars for your care, you hope the insurance system has signed up enough young people, like you once were, to share in the costs. That is what makes the insurance affordable.

      Health insurance is a lifetime obligation. Each year you can think of your premiums as paying installments on your ultimately high costs near the end of your life.

    • SmallOak profile imageAUTHOR

      Small Oak 

      4 years ago from The Here and Now

      Claire thanks for commenting and sharing your story. Clearly what American's who work 40-60+ hours a week need is 3 months of figuring this stuff out. My husband and I are both self employed and just found out he makes too much for Medicaid, and too LITTLE for any subsidies! Working hard to stay off welfare, he will owe more out-of-pocket than someone making nearly double his annual income. We can't afford it and we can't afford the fines, either, so I wrote this article after researching what to do from the website. We have a qualifying circumstance (3 of them actually), so I'll file a fee exemption for him this year and we'll go on without insurance like we always have. That fixes nothing with our current healthcare system, but I'm biting my tongue on personal opinion here in leiu of informing the hardworking poor of their options in a straight forward, no b.s. manner. After reading your story I hope your new policy has some good anti-anxiety med coverage lol...if the pharm companies have their say it surely will. Take care.

    • clairewait profile image


      4 years ago from North Carolina

      I think it is funny that "homelessness" is a qualifying hardship, as if anyone who is homeless is currently worrying about healthcare. Obamacare was death cherry on top of what would have otherwise a perfectly good 2013. We're now covered, though the circumstances aren't completely ideal, and it seems the worst of "getting through" is at least over. I honestly wonder if they've continued to work out the website kinks and bugs. Feel free to my Obamacare horror story here:


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