If our family was offered unaffordable health insurance by my husband's employer, do we qualify for the health care penalty exemption?

[roxmartinez]

We don't have health insurance.

[HelenaC · Accepted solution]

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.

[roxmartinez]

I haven't checked the premiums for insurance offered by the marketplace. I checked the insurance tables provided by my husband's employer and they are unaffordable since it would cost more than 8.05% to insure me and my children. I started the income tax return and it says we qualify for the exemption, but I just want to be sure.

The turbotax tool provided on the link didn't help me since our exemption is based on how affordable are the insurance plans, and the tool only asks you questions about financial hardship, bankruptcy, etc... It did asked for our income but not for the health insurance premiums offered by us. So, therr's no way it could tell me if we qualify for the exemption based on affordabily. We do not qualify for the exemption based on that other criteria.

[TaxGuyBill]

After you check with the employer about the cost of insurance, most likely it will be "not affordable" for YOU and the KIDS, but NOT for your husband.

[roxmartinez]

Can the 8.05% only based on my husband's job health insurance premiums or do I need to check the marketplace as well and see if those are"affordable"? In other words, can we qualify for the exemption only if one of the two are considered unaffordable, or both of them need to be considered unaffordable to avoid the tax penalty?

[roxmartinez]

My husband has insurance. Me and my children don't.

[roxmartinez]

Thank you for the help!

[TaxGuyBill]

You do not check the Marketplace if you were eligible for employer insurance.

So if the lowest cost to insure you and your children through the employer is over 8.05% of your "Household Income", you and the kids qualify for the "Not Affordable" exemption.