The Department of Treasury last week released fact sheets with information on five of the most common exemptions to the individual mandate under the Affordable Care Act (ACA).
Just 4% of Obamacare subsidies were correct. What happens to the rest?
Under the ACA's individual mandate, most U.S. residents who did not purchase coverage in 2014 will be subject to penalties of $95 for an adult or 1% of an individual's taxable income, whichever is higher. As many as six million U.S. residents could be subject to the individual mandate penalty this year, according to federal officials. However, about 50% of uninsured U.S. residents are unaware of the penalty, according to a recent Urban Institute survey.
There are more than 30 total potential exemptions to the individual mandate, according to The Hill.
According to Intuit, which sells the tax software TurboTax, 20 million or more individuals who were uninsured in 2014 could be eligible for an exemption. However, Intuit in January estimated that more than 19 out of 20 people who might be facing a penalty had not applied for an exemption, which the company said "means many people may pay more in taxes than they should."
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Details of fact sheets
The department released six total fact sheets, including one providing a general overview of claiming exemptions to the individual mandate. The department also released fact sheets relating to exemptions for uninsured individuals in 2014:
- For whom coverage would have been considered "unaffordable" because they would have had to pay more than 8% of their household income in annual premiums;
- Who could qualify for "hardship" exemptions as the result of factors such as losing a family member, having costly medical expenses or being a survivor of domestic violence;
- Who had low incomes and lived in one of the 21 states that had not expanded Medicaid under the ACA;
- Who were uninsured for a time period of less than three straight months during 2014 and qualify for a "short gap" exemption; and
- Who were eligible to receive services from an Indian health care provider (Ferris, The Hill, 3/27; Treasury release, 3/27).
The takeaway: Although there are dozens of ways that Americans can qualify for an exemption from the ACA's individual mandate, many may have to pay the penalty because they did not apply for those exemptions.
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