Health Coverage Requirement ¹

• A taxpayer is required to have a qualifying health care coverage or a coverage exemption for themselves, their spouse (if filing jointly), and anyone taxpayer can or do claim as a dependent, or make a shared responsibility payment with their return and report it on Schedule 4.
• Taxpayers are treated as having coverage for any month in which they have coverage for at least 1 day of the month, that covered all of 2018 or a combination of qualifying health care coverage and coverage exemption(s) for every month of 2018,
• If a taxpayer can claim any part-year exemptions or exemptions for specific members of their household, use Form 8965. This will reduce the amount of your shared responsibility payment.

Disclaimer: The tax penalty for not having coverage will be suspended effective in 2019.

Claiming Exemptions 

Not everyone is required to have a qualifying health care coverage. Every taxpayer will have to assess whether or not they meet the exception. If they meet the exception then there is no requirement to make a shared payment. 

Exemption must be granted by the marketplace or claimed on an income tax return. 

Examples of exemptions that may only be claimed on a tax return includes:

• Coverage is considered unaffordable 
• Short coverage gap
• Citizens living abroad
• Non-Citizens exceptions

If a taxpayer is not required to file a federal income tax return for a year because the gross income is below the return filing threshold, the taxpayer is automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. If the income is below the filing threshold for your filing status and taxpayer choose to file a tax return for any reason, then complete Part II of Form 8965, to claim a coverage exemption. The taxpayer is not required to make a shared responsibility payment if they are exempt from the coverage requirement because they have income below the filing threshold.

¹ citing IRS, Health Coverage Requirement, IRS.gov