Recent Tax Updates

2014 Health Care Coverage Exemptions, How to Apply for One, and New Exemption Lookup Tool

February 26, 2015

Individuals who did not have health insurance coverage for all or part of 2014 will not owe an additional tax (penalty) for not having health insurance if they qualify for an exemption. In fact, most individuals who did not have health coverage will qualify for an exemption.

What follows is information on the new exemption lookup tool that was recently added to, as well as a listing of the exemptions available to individuals for Tax Year 2014 and how to apply for them.

New Exemptions Lookup Tool

To help individuals (who did not have health insurance during 2014) determine what exemption they may qualify for, a new health care coverage exemption tool has been added to  Once an individual answers a few questions the tool will let them know:

  • What exemptions may apply to them
  • Details to help them decide whether or not to apply
  • Step-by-step instructions on how to apply, including links to any forms they may need to complete

Exemptions Available for 2014 and How to Apply For One

Exemptions that may be applied for when filing a 2014 federal return:

  • 2014 health coverage is considered unaffordable
  • Individual’s income is below the filing threshold (Form 8965, Part II)
  • Individual was a U.S. Citizen living abroad
  • Individual not lawfully present in the U.S.
  • Individual is a member of a Federally recognized Indian tribe
  • Individual is a member of a health care sharing ministry
  • Individual was incarcerated
  • Aggregate Self-Only coverage is considered unaffordable
  • Individual did not have insurance for more than 3 months at beginning of 2014 due to enrolling for insurance at a Marketplace by March 31
  • Individual is a resident of a State that did not expand Medicaid and income was below 138% of federal poverty line
  • Gap in CHIP coverage at the beginning of 2014
  • Individual chose not to participate in employer coverage and the employer plan started in 2013 and ended in 2014
  • Individual enrolled in a limited Medicaid or TRICARE program that was not considered minimum essential coverage

See Page 2 of the Form 8965 instructions for further information on how to apply for one of these exemptions when filing the 2014 federal return.

Exemptions that must be applied for through the Marketplace:

  • Individual was a member of a recognized religious sect whose members object to insurance. See the Members of Recognized Religious Sects or Divisions Exemption Application form on for more information.
  • One of the following Marketplace defined hardship exemptions:
    • Individual is homeless
    • Individual was evicted in the past 6 months or was facing eviction of foreclosure
    • Individual received a shut-off notice from utility company
    • Individual recently experienced domestic violence
    • Individual recently experienced the death of a close family member
    • Individual experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to their property
    • Individual filed for bankruptcy in last 6 months
    • Individual had medical expenses that they could not pay in the last 24 months
    • Individual had unexpected increase in necessary expenses due to caring for an ill, disabled, or aging family member
    • Individual expects to claim a child as tax dependent who has been denied coverage in Medicaid and CHIP
    • Due to an eligibility appeals decision, individual is eligible for:
      • Enrollment in Marketplace plan;
      • Lower costs on monthly premiums; or
      • Cost sharing reductions for a time period when individual was not enrolled in a Marketplace plan.
    • Individual is determined ineligible for Medicaid because State did not expand Medicaid eligibility (Should have taken place when person applied for insurance at Marketplace and ECN should have already been received)
    • Individual received a notice stating that their current health insurance plan is being cancelled and other available plans are unaffordable
    • Individual was engaged in service in AmeriCorps State and National, VISTA, or NCCC programs and were covered by short-term duration coverage or self-funded coverage provided by these programs (Would use code 14 - other when filling out the application)

See the Hardships Exemption application on for more information on how to apply, and to see what documentation is needed, for each of the hardship exemptions listed above.