The Affordable Care Act requires all individuals to have qualifying health coverage or pay a tax penalty. Specifically, the Affordable Care Act mandates that individuals must:
- Have qualifying health coverage called minimum essential coverage;
- Qualify for a health coverage exemption; or
- Make a shared responsibility payment on their tax return for months without coverage or an exemption.
An individual can qualify for an exemption if he or she meets one of the following:
- The lowest-cost coverage available from his or her employer is considered unaffordable;
- The person has a gap in coverage that is less than 3 consecutive months;
- The person qualifies for an exemption for one of several other reasons, including having a hardship that prevents obtaining coverage or belongs to a group specifically exempt from the coverage requirement.
The IRS has an interactive tool to help determine if an exemption is available. Click here to access the tool.
