Hardship Exemptions: Things You Need To Know

Hardships are financial situations and other circumstances that keep you from getting health insurance. If you qualify for a hardship exemption, you don’t have to pay a fee for the months you were uncovered.

To claim a hardship health coverage exemption, you must fill out an application, print it, and mail it to the Health Insurance Marketplace. If your exemption is approved, you claim it when you file your federal income tax return.

Under the Affordable Care Act, most people must pay a fee if they don't have health coverage that qualifies as "minimum essential coverage." One exception is based on showing that a "hardship" prevented them from becoming insured.
Most people must have qualifying health coverage or pay a fee for the months they don’t have insurance but if you qualify for a health coverage exemption you don’t need to pay the fee.

see also: Clues To Getting An Affordable Health Insurance

Important Facts About Health Coverage Exemptions

• Exemptions are available based on a number of circumstances, including certain hardships, some life events, health coverage or financial status, and membership in some groups.
• You claim most health coverage exemptions on your federal tax return. Some require you to fill out and mail an application to the Marketplace.
• You don’t have to pay the fee for any month you have qualifying health coverage. If you’re uncovered only 1 or 2 months, you don’t have to pay the fee for any month.

To be eligible for Hardship Exemption, the following must be applicable:

1. You were homeless
2. You were evicted or were facing eviction or foreclosure
3. You received a shut-off notice from a utility company
4. You experienced domestic violence
5. You experienced the death of a family member
6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
7. You filed for bankruptcy
8. You had medical expenses you couldn’t pay that resulted in substantial debt
9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
10. You claim a child as a tax dependent who’s been denied coverage for Medicaid and CHIP for 2016, and another person is required by court order to give medical support to the child. In this case you don’t have to pay the penalty for the child.
11. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace in 2016
12. You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid in 2016 under the Affordable Care Act
13. Your "grandfathered" individual insurance plan (a plan you’ve had since March 23, 2010 or before) was canceled because it doesn’t meet the requirements of the Affordable Care Act and you believe other Marketplace plans are unaffordable
14. You had another hardship.  

          How Long Does It Last? 

Hardship exemptions usually cover the month before the hardship, the months of the hardship, and the month after the hardship, but in some cases the Marketplace may provide the exemption for additional months, up to a full calendar year.

• For people ineligible for Medicaid only because a state hasn’t expanded Medicaid coverage, the hardship exemption will be granted for the whole calendar year.
• For people eligible for Indian Health Services, the hardship exemption lasts as long as you remain eligible.
• For people under 21 who are eligible for an exemption due to religious conscience, you’ll need to reapply if you remain a member when you turn 21.

It is important to note that there’s no hardship exemption based only on employment status. But several health coverage exemptions apply to people with no or little income.

Hardship Exemption And Catastrophic Coverage

• If you’re granted a hardship exemption, you can enroll in a Catastrophic health plan. Your exemption notice includes details.

• Catastrophic health insurance plans have low monthly premiums and a very high deductible. They may be an affordable way to protect yourself from worst-case scenarios, like getting seriously sick or injured. You pay most routine medical expenses yourself.

• You don’t have to buy a Catastrophic plan if you get a hardship exemption. It’s just a lower-cost coverage option available to you.

• To buy Catastrophic coverage with a hardship in the Marketplace, you’ll enter your Exemption Certificate Number (ECN) on your application. When you compare plans you’ll see available Catastrophic plans. If you buy a Catastrophic plan outside the Marketplace, provide your ECN to the insurance company selling the plan.