To know for certain if you qualify for the "Coverage Considered Unaffordable" exemption, prepare your income tax return. Coverage is considered unaffordable if the minimum amount you would have paid for
premiums is more than 8.05% of your household income.
TurboTax has a tool that may help to see if you qualify for an exemption: Click https://turbotax.intuit.com/tax-tools/ Click on the Affordable Care Act Exemption Check icon to get started.
See IRS Form 8965 for additional information: https://www.irs.gov/pub/irs-pdf/i8965.pdf#page=9
If somebody is eligible for health insurance through an employer (including through a family member’s employer):
You will need to contact your employer(s) to find out the lowest cost you would have paid for insurance. If there is more than one person on your tax return, you also need to find out the lowest cost it would cost to insure them (see footnote about adjustments).
- If the cost for ONLY the employee is over 8.05% of your Household Income, the employee qualifies for the “Not Affordable” penalty waiver.
- If the combined cost to insure the employee and spouse is over 8.05% of your Household Income, the spouse qualifies for the penalty waiver, but NOT the employee (unless the first bullet point applies).
- If the combined cost to insure the employee and the dependents (such as a family policy) is over 8.05% of your Household Income, the dependents qualify for the “Not Affordable” penalty waiver, but NOT the employee (unless the first bullet point applies).
- If (1) Both you and your spouse are offered employer insurance, (2) each of your cost for ONLY the employee was less than 8.05%, (3) neither employer offered a ‘family’ plan that was less than 8.05% of your Household Income, AND (4) the combined cost of to insure each employee separately is over 8.05% of your Household Income, then both employees qualify for the penalty waiver.
