In spite of Trump’s announcement last month that “Obamacare is finished, it’s dead, it’s gone,” it’s not gone.
Nearly everyone is still required by law to carry health insurance.
That requirement is called the Individual Mandate and it was included in the Affordable Care Act. The IRS recently announced that during the 2017 tax filing season, “Taxpayers remain obligated to follow the law and pay what they may owe at the point of filing.” Click here and here for more information from the IRS.
All of this would be completely unnecessary if we had California Medicare for All, but we don’t have it, at least not yet.
So for now, everyone should get insured, and not just because it’s the law.
According to a September 2017 report by the Kaiser Family Foundation:
Going without coverage can have serious health consequences for the uninsured because they receive less preventive care, and delayed care often results in serious illness or other health problems. Being uninsured also can have serious financial consequences. The outcome of current debate over health coverage policy in the United States has substantial implications for people’s coverage, access, and overall health and well-being.
But if you can’t get insurance because of a hardship, or your religion, etc.,
. . . there are exemptions to the mandate. If any of them apply to you, you won’t face a penalty for being uninsured (but you have to file the correct paperwork).
Exemptions fall into five main categories
- Income- or Affordability-Related exemptions apply if the lowest-cost insurance available to you would cost more than 8.13% of your income or, if your earnings are so low that you don’t have to file an income tax return at all.
- Hardship exemptions, such as homelessness, eviction, foreclosure, domestic violence, natural disaster, medical expenses you couldn’t pay, etc.
- Membership-Based exemptions apply if you belong to a federally recognized Indian tribe, a healthcare-sharing ministry or a religious group that objects to all types of insurance (including Social Security and Medicare).
- Legal Status exemptions apply if you live abroad, are incarcerated, or are “unlawfully present” in the United States (i.e. undocumented)
- The Medicaid Expansion exemption: This is a key exemption that doesn’t apply to Californians. It only applies to people who live in states who did not expand Medicaid under the Affordable Care Act. Californians aren’t eligible for this exemption because California expanded Medi-Cal in 2013. If you don’t live in California and don’t know if your state expanded Medicaid, click here to find the current status of your state as of January 2017, courtesy of Kaiser Family Foundation.
Here’s an IRS exemption eligibility tool.
Are you exempt?
- If you’re eligible for an exemption, you need to include IRS Form 8965 with your income tax return.
Some exemptions require special forms or actions on your part. (Nothing is easy.) Some exemptions can be claimed directly on your tax return, but others must be granted by your state’s healthcare exchange (such as Covered California). Here’s a handy chart from the IRS detailing available exemptions and who grants them. And here’s a link to Healthcare.gov with additional information about how to get exemptions you are eligible for.
Not Exempt?
- You’d better get health insurance or you may face a penalty.
Where to buy health insurance?
If you’re a California resident and an American citizen, you can apply for health insurance through Covered California or through a local health insurance agent.
- Here’s a link to the California Department of Insurance page on Finding an Agent or Broker.
If you decide against getting health insurance, you may be subject to fees for not being covered (Healthcare.gov).
- It is recommended that you discuss your particular situation with a qualified tax preparer if you have multiple family members with different insurance statuses or coverage gaps during the year.
How much time do you have to get insured for 2018?
The enrollment period in California runs from November 1, 2017 to January 31, 2018. (In many other states, Trump has cut back enrollment to expire on December 15, but not California).
Help with Income Taxes
- IRS: Free-Tax-Return-Preparation-for-You-by-Volunteers
- AARP: Taxaide
- Also, several online income tax services allow you to use their programs to file easy returns.
- There may be more resources in your community, too!
HEAL California makes no representations or warranties in relation to the information provided here, which we obtained from the IRS, TurboTax and other sources (see links, above). We at HEAL California are neither tax nor health insurance professionals. If you have any specific questions about your taxes or health insurance, you should consult a qualified tax professional and/or a licensed insurance agent.