Exemptions from Requirement to Have Coverage
Who doesn’t need an exemption from the requirement?
You do not need to file an exemption application and are still exempt from the coverage requirement if your income is low enough that you do not have to file taxes, even if you file a return in order to get a refund of money withheld from your paycheck (but you can file for the affordability exemption if you are unsure if you meet the filing threshold). If you file taxes, coverage gaps can be noted on your plan year tax filing.
2019 Exemptions & Catastrophic Coverage
Starting with the 2019 plan year, for which you’ll file taxes in April 2020, the Shared Responsibility Payment no longer applies. This payment is sometimes known as the health care “mandate” or “penalty.” From 2019 on, you don’t need an exemption in order to avoid the penalty.
If you’re 30 or older and want to enroll in a “Catastrophic” plan for 2019, you must claim a hardship exemption or affordability exemption (based on marketplace or job-based insurance being unaffordable) to qualify. A Catastrophic health plan offers lower premiums, but has higher out-of-pocket costs than other plans on the marketplace. They offer protection against very high bills if you’re seriously hurt or injured, but may not be a good choice for families who need to seek regular or frequent health care. Learn more about Catastrophic plans .[Note: If you’re under 30, you may enroll in a Catastrophic plan whether you have an exemption or not.]
The list below includes events that may qualify for a hardship exemption and the document types (if any) that should accompany your application if you’re 30 or older and seeking enrollment in Catastrophic coverage:
|Homelessness||No document needed|
|Eviction or facing eviction or foreclosure||Eviction or foreclosure notice|
|Shut off notice from a utility company||Copy of the notice received from an electric, gas, or water utility company that service was or will be shut off|
|Domestic violence||No document needed|
|Death of family member||Death certificate, notice or other official death notification|
|Fire, Flood, or Other Disaster causing substantial property damage||Copy of policy or fire record, insurance claim, or news source about the event|
|Bankruptcy within the last three years||Copy of bankruptcy filing documents or Discharge of Bankruptcy notice from bankruptcy court|
|Uncovered medical expenses resulting in substantial debt||Copy of medical expenses|
|Unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member in the last three years||Copies of medical bills, statements or receipts, or receipts for transportation|
|Child claimed as tax dependent who is denied Medicaid or MCHP coverage and another person is required by court order to provide medical support for the child||Copy of court order and evidence of Medicaid program denial, if denial was not issued on the marketplace
Applies to 2017 and 2018 shared responsibility payment (penalty) relief only
|As a result of an eligibility appeals decision, you were determined eligible for enrollment in a qualified health plan (QHP) or financial assistance for a QHP for a period when you weren’t enrolled because of the initial determination.||Maryland Health Connection will provide this document.|
|Ineligible Medicaid determination because state didn’t expand Medicaid eligibility (Not available in Maryland)||N/A|
|Another hardship not listed here||On case-by-case basis; document provided should be as specific as possible as to the details and extent of the hardship.|
You also may qualify to enroll in catastrophic coverage based on an affordability exemption if the cost of marketplace coverage or coverage offered from your employer is not affordable. If you qualify for an unaffordability exemption, it will apply only to months in the future, not previous months.
- Marketplace coverage is considered unaffordable if the lowest cost Bronze-level plan available to you through Maryland Health Connection in the tax year is more than 8.16% percent of your household income.
- The total cost to you must be more than 8.16 percent, accounting for any premium tax credit you would qualify for if you enrolled in that plan.
- If you qualify for this exemption, it may apply to everyone on your tax return.
Job-based health insurance is considered unaffordable in different ways, depending on how the coverage is offered:
- For the employee: The annual premium for the lowest cost self-only plan (a plan that covers only you and no other members of your family) is more than 8.16 percent of household income
- For the employee’s family: The annual premium for the lowest cost family plan is more than 8.16 percent of household income
View and complete the Application for Exemption to enroll in catastrophic coverage.
You should get a written response from the Maryland Health Connection within two weeks. If your exemption is approved, you’ll get an Exemption Certificate Number (ECN) that you’ll enter in your application on Maryland Health Connection to open Catastrophic plans for selection. If you need help applying the ECN and selecting a Catastrophic plan, please contact the Call Center for assistance at (855) 642-8572.
2018 Exemptions from Tax Penalty
Prior to the 2019 tax year, most people were required to have qualifying health coverage or pay a fee sometimes called the “mandate,” “Shared Responsibility Payment,” or “penalty” for the months they didn’t have insurance. But if you qualify for a health coverage exemption, you don’t need to pay the fee for the months you didn’t have health coverage.
Exemptions are available based on a number of circumstances, including certain hardships, some life events, health coverage or financial status, and membership in some groups. You don’t have to pay the fee for any month you have qualifying health coverage. If you’re uncovered only one or two months, you don’t have to pay the fee for any month.
2017 and 2018 exemptions that do not require an application to the marketplace
- You don’t have to file a tax return because your income does not meet the tax filing requirement
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You were uninsured for no more than two consecutive months of the year
- You’re incarcerated. For these purposes, incarcerated means that you are serving a term in prison or jail.
- Incarceration doesn’t include being on probation, parole, or home confinement.
- You’re not considered incarcerated if you’re being held but not convicted of a crime.
- You can claim this exemption for any month you are incarcerated for at least one day.
- You’re a U.S. citizen living abroad, a certain type of non-citizen, or not lawfully present.
- A member of your tax household was born or adopted during the year. This exemption applies only to the month of the event and the month before. You can claim this exemption only if you’re also claiming another exemption.
- A member of your tax household died during the year. This exemption applies only to the month of the death and the month before. You can claim this exemption only if you’re also claiming another exemption.
- For 2018. You had a financial hardship or other circumstances that prevented you from getting health insurance. This exemption is available without an application for the 2018 tax year only.
- For 2017. You had a financial hardship or other circumstances that prevented you from getting health insurance. An application must be submitted for this exemption for the 2017 tax year. Review and complete the application for a 2017 hardship exemption
- A list of hardship events is available
For 2017 and 2018, the following exemption requires an application to the marketplace
- Religious Sect exemption. You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare. To claim this exemption, you must be a member of a religious sect or division that:
- Is recognized by the Social Security Administration as conscientiously opposed to accepting any insurance benefits, including Social Security and Medicare, AND
- Has been in existence since Dec. 31, 1950.
- If you get this exemption, you won’t have to reapply for an exemption unless you turn 21 or leave your religious sect.
- If you have one, send a copy of an approved IRS Form 4029, Application for Exemption from Social Security and Medicare Taxes and Waiver of Benefits, with required signatures with your Exemption application
- If you already have an Exemption Certificate Number (ECN) from a previous tax year for membership in a religious sect, you can use the same ECN to complete Form 8965 of your federal tax return. You’ll need to provide that ECN on your Form 8965 every year when you file your federal taxes as long as your membership status doesn’t change.
- You can also claim this exemption on your Form 8965 without an ECN. If you claim it that way, you’ll also need to claim it each year.
Review and complete the application for a 2017 Religious Sect exemption.