Find out if you have qualifying coverage
If you already have qualifying coverage in every month, you don’t need to do anything else until tax time, when you report your coverage on your return.
For purposes of the individual shared responsibility provision, you are treated as having qualifying coverage for a month if you are enrolled in and entitled to receive benefits under a plan or program that’s identified as minimum essential coverage.
If you need to get coverage, go to the Marketplace to learn about enrollment. Consider obtaining coverage for the current year if you haven’t already, to avoid future problems.
If you didn’t have qualifying coverage for the whole year, you may qualify for an exemption for the months you were without coverage.
Determine if you’re exempt from having coverage or making the payment
There are different types of exemptions from the requirement to have qualifying health care coverage. Some are obtained from the Marketplace and others are claimed on your tax return, but all exemptions, even those obtained from the Marketplace, must be reported on your tax return.
You are automatically exempt if you don’t have to file a return because your income is below your filing threshold.
You also are exempt from the requirement to have qualifying health care coverage or make a shared responsibility payment if you:
- Are considered to have no affordable coverage options because the minimum amount you must pay for the annual premium is more than 8% of your household income
- Have a gap in coverage for less than three consecutive months
- Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group that’s explicitly exempt from the requirement
To see a full list of exemptions visit IRS.gov’s Individual Shared Responsibility Provision – Exemptions page. The chart there will also tell you whether you need to apply for the exemption through the Marketplace or can wait to claim the exemption on your tax return. More information is also available on IRS Publication 5172, Facts about Health Coverage Exemptions.
If you obtain an exemption through the Marketplace, you will receive a special number, called an Exemption Certificate Number (ECN). Keep this in a secure place and report it on the federal tax return you file at the end of each tax year. For additional information about how to get Marketplace exemptions and their exemption process, visit HealthCare.gov/exemptions.
If you do qualify for an exemption, you'll need to follow the IRS Form 8965 instructions and file IRS Form 8965, Health Coverage Exemptions with your income tax return.
If you or your dependent(s) don’t qualify for an exemption, and either didn’t have coverage or only had a partial year of qualifying coverage
If you weren’t covered and weren’t exempt for a month, then you’ll be required to report that information when you file your federal tax return and will owe a shared responsibility payment.
If you can claim a child or another individual as a dependent for federal income tax purposes, you are also responsible for making the payment if your dependent doesn’t have coverage or an exemption.
Making a Shared Responsibility Payment
If you need to make a payment because you didn’t have coverage or an exemption, you will make the payment when you file your 2015 federal income tax return in 2016.
You can use IRS Form 8965 instructions to figure out the amount you owe — it includes a Shared Responsibility Payment Worksheet, which will run you through all the variables.
In general, the payment is either a percentage of your household income or a flat dollar amount, whichever is greater. The rates have changed by year, and will continue to be adjusted.
The greater of:
- 1% of your household income that is above your tax return filing threshold OR
- $95 per adult and $47.50 per child under 18, to a maximum of $285
The greater of:
- 2% of your household income that is above your tax return filing threshold OR
- $325.00 per adult and $162.50 per child under 18 subject to a maximum amount*
The greater of:
- 2.5% of your household income that is above your tax return filing threshold OR
- $695.00 per adult and $347.50 per child under 18, subject to a maximum amount*
After 2016 the flat dollar amounts may increase with inflation.
*The "maxiumum amount" is never more than the national average premium for a “bronze level” health plan that is offered through the Marketplace and provides coverage for the applicable family size involved. This ensures that the payment amount is never more than the approximate cost of basic coverage for a year.
For each month you or your dependents don’t have qualifying coverage and weren’t exempt, you will owe 1/12 of the annual payment.
The Individual Shared Responsibility Provision Payment Estimator can help you estimate the amount you may have to pay if you did not have minimum essential coverage during the year.