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Understanding Health Care Exemptions

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The Affordable Care Act or Obamacare has been controversial ever since it was passed. Many people praised it for attempting to lower the price of health insurance, while others condemned it for forcing people to get health insurance or pay fines. Critics of the law, and those struggling to find insurance, may be unaware of its exemptions. Understanding healthcare exemptions may help you avoid tough Obamacare fines.

Healthcare Exemption Definition

Generally speaking, people who have no healthcare must pay a yearly fine. As of 2015, homes without health insurance must pay $695 per adult or 2% of their household income. However, a series of exemptions were written directly into the law long before it was ever passed. These exemptions were designed to help people who simply couldn't afford either health insurance or the fees.

Possible Exemptions

There are a wide variety of healthcare exemptions for which you can apply. You may not qualify for every kind of exemption, but there's a good chance you may for at least one. Available exemptions and examples of each include:

  • Income exemptions. If the lowest-priced insurance option available to you is more than 8% of your household income, you are exempt.
  • Health coverage exemptions. If you were uninsured for no more than two consecutive months of the year, you are exempt.
  • Group membership exemptions. If you belong to a federally recognized Native American tribe, you don't need Obamacare.
  • Hardship exemptions. If you are homeless, you are exempt from Obamacare fines.
  • Incarceration. If you are currently serving a jail or prison term, you are exempt from Obamacare.
  • Living abroad. If you spent at least 330 full days outside of the U.S. during a 12-month period or were a resident of another country for a full tax year, you are exempt.

False Controversies

Around the time Obamacare was signed, a series of e-mails were circulated stating that healthcare exemption were possible only for Muslims...and that the law created a precedence for the creation of Sharia Law in America.

This confusion was caused by the "Religious Conscience Exemption," which stated that people of religious faiths that shunned insurance were exempt from Obamacare. While this applies to Muslims, it also applies to Scientologists, and Christian Scientists. And it has absolutely nothing to do with Sharia.

If you're still confused about healthcare exemptions or aren't sure if you qualify, talk to your tax preparation specialist (such as Wasserman Accountancy Corporation). They can help fully explain each exemption and can help ensure you include the exemption in your tax return.