8848 / How does a taxpayer who may be exempt from the Affordable Care Act requirements obtain the exemption?

Editor’s Note: The 2017 tax reform legislation repealed the Affordable Care Act individual mandate that required individuals to purchase health insurance or pay a penalty for tax years beginning after December 31, 2018. The employer mandate and reporting requirements were not repealed.

An individual who may have been exempt from the ACA individual penalty provisions could often obtain a certificate of exemption from the health insurance exchanges. With respect to the religious and hardship exemptions, this was the only method of claiming the exemption. Individuals claiming the exemption based upon membership in an Indian tribe or incarceration could either obtain a certificate of exemption from the exchanges or claim the exemption on the federal tax return when the return was filed in the subsequent tax year. Exemptions for lack of affordable coverage, a short coverage gap, and certain hardships were required to be claimed on the taxpayer’s federal income tax return.

Individuals who were exempt from the shared responsibility provision because their income for the year fell below the filing threshold, so that they were not required to file a federal tax return for the year, did not need to take any action in order to obtain the exemption.¹