Affordable Care Act (ACA)
(Also known as "Obama-care")

Information on this page is a quick view of common reasons why individuals in our district may be exempted from ACA compliance, and is summarized from data found in various IRS publications.

For more complete details of how ACA compliance affects a tax return,
go to IRS Pub 4012 page H-4.

Part I: Exemptions

Under the provisions of the Affordable Care Act (ACA), all citizens of the US - living in the US - must either have health insurance (at a level which the government classifies as Minimum Essential Coverage [MEC] or better) or pay a penalty (a Shared Responsibility Payment, or SRP) for not having health insurance.

There are situations, however, where a person or family can be exempt from paying the penalty if they meet certain criteria. The purpose of this page is to help you identify when a person or family qualifies for an exemption.

ACA Exemptions And Where They Are Documented
Marketplace-Granted Coverage Exemptions for Individuals. The taxpayer must present a letter from the Marketplace documenting any exemption(s) granted to any individual(s) on the tax return.
Form 8965  Part I
Household income or gross income is below the filing threshold.   (See Part II, below.)
Form 8965  Part II
Exemption for individuals claimed on the tax return.   (See Part III, below.)
Form 8965  Part III
Of course, in TaxSlayer the exemption cannot be directly entered on Form 8965.  Instead, go to TaxSlayer and click on 'Health Insurance' in the left side navigation tree.  When the window refreshes, navigate forward as needed to get to the place(s) where the exemption(s) can be entered.  Each tax return is unique for that taxpayer/ family, so it is impossible to predict on this page what the path(s) will be for an unknown return scenario.

Part II: Filing Thresholds
Refer to Pub 17, Chapter 1, Page 5 (or Pub 4012, Page A-1) for full details.

The filing thresholds shown in the third column represent the taxpayer's MAGI (or Modified AGI), + the MAGI of all dependents who must also file a return.  The MAGI amount includes the taxpayer's (and dependent's) AGI (Form 1040, line 37) + Tax-exempt Interest (Form 1040, Line 8b) + Excluded Foreign Income (Form 2555).

If the taxpayer's total MAGI is below the filing threshold for his/her filing status, you should claim this exemption.   Go to TaxSlayer and click on 'Health Insurance' in the left side navigation tree.   When the window refreshes, answer questions until you come to 'Are you claiming a hardship exemption because your gross income is below the filing threshold?'   Check the box for that exemption, select Continue, then answer questions as appropriate.

Part III: Exemptions For Individuals Claimed On The Tax Return

NOTE: The content of this box is not a complete list.
Refer to the instructions for Form 8965, Page 3 for the full list of exemptions and conditions.

  • Coverage is considered unaffordable [Exemption Code A] - The minimum amount you would have paid for employer-sponsored coverage or a bronze level health plan (depending on your circumstances) is more than a certain percentage (8.13 percent for 2016) of your actual household income for the year as computed on your tax return.
          > To make this determination, use the ACA Affordability Calculator.

  • Aggregate self-only coverage considered unaffordable [Exemption Code G] - Two or more family members' aggregate cost of self-only employer-sponsored coverage is more than a certain percentage (8.13 percent for 2016) of your actual household income, as does the cost of any available employer-sponsored coverage for the entire family.
          > To make this determination, use the ACA Affordability Calculator.

  • Resident of a state that did not expand Medicaid [Exemption Code G] - Your household income is below 138 percent of the federal poverty line for your family size, and at any time during the year you reside in a state that does not participate in Medicaid expansion under the Affordable Care Act. (This includes Florida.)

  • Short coverage gap [Exemption Code B] - You went without coverage for less than three consecutive months during the year. (You must consider November and December of the previous year when determining if there were three consecutive months without coverage.)

  • Members of a health care sharing ministry [Exemption Code D]

  • Member of a Federally-recognized Indian tribe [Exemption Code E]

  • Incarceration [Exemption Code F]
  • 2016 Federal Poverty Level Chart

    NOTE:The dollar figures in this table refer to the MAGI (Modified Adjusted Gross Income) of the taxpayer, plus the MAGI of all dependents who must file a tax return.  (MAGI = AGI [Form 1040, line 37] + Tax-exempt Interest [Form 1040, Line 8b] + Excluded Foreign Income [Form 2555].)  Data is from IRS Pub 4012.

    General Rules For Using The Poverty Level Chart

  • Below 138%: Can claim an ACA exemption (in Florida) because of being a resident of a state which did not expand medicaid.

  • Between 100% and 400%: Eligible for assistance in paying for health insurance premiums. This assistance is given as a Premium Tax Credit (PTC) towards the taxpayer's total tax bill.  If the taxpayer and/or dependent received this assistance during the year (directly paid to the insurance provider) is is called Advanced Premium Tax Credit (APTC). If the taxpayer or dependent received too much APTC, the excess has to be repaid with the tax return.