How Easy is an Obamacare Tax Penalty Exemption?

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natureexplorer
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How Easy is an Obamacare Tax Penalty Exemption?

Post by natureexplorer » Mon Apr 17, 2017 7:13 am

How easy is it to qualify for one of the Obamacare tax penalty exemptions?

I looked at the list of exemptions and it seems like the hardship definitions include some that you might meet already or that you might be able to meet more cheaply than paying the penalty.

Indeed, some of them seem to be too easy to be true. How easy can it actually be done legally and easily?

Official list of hardship exemptions:
https://www.healthcare.gov/health-cover ... xemptions/

PDF form to apply for a hardship exemption containing additional details:
https://marketplace.cms.gov/application ... mption.pdf

It seems that some of hardship reasons exempt you for three years.

Here are some examples that seemed interesting (numbers based on the form numbering):

3. You received a shut-off notice from a utility company
Required documentation: Shut off notice from an electric, water/sewer, or gas utility company that says service has been or will be shut off. The document must show that the shut off happened in this calendar year or up to two calendar years prior.
Could you just stop paying your electric bill until they send the notice and then paying the bill (including late fees) and be exempted for two years?

4. You experienced domestic violence
Required documentation: None.
How vague is the definition of domestic violence? What counts?

5. You experienced the death of a close family member.
Required documentation: Death certificate, death notice from newspaper, funeral service program, funeral
expenses, coroner's report, military notification of death, or other official notice
of death. The document must show that the death happened in this calendar
year or up to two calendar years prior.
What's the definiton of a close family member? Does a nephew count? Does a grand parent count? Does an uncle count? Does the death actually need to have had a significant financial or emotional effect on you?

7. You filed for bankruptcy
Required documentation: Bankruptcy filing document from a court or other legal authority. The document
must show that the bankruptcy happened in this calendar year or up to two
calendar years prior.
Can you file and then withdraw the filing and thereby formally satisfy criterion?

8. You had medical expenses you couldn't pay.
Required documentation: One or more medical bills. The bill(s) must be for this calendar year or up to two
calendar years prior.
Can you just not pay $1 on your last medical bill? Surely it won't go into collection over $1.

It's an interesting that one has to apply for the exemption and it gets either approved or denied. So how easy is that? For example, can you just check "domestic violence" and they will automatically approve it?

Are there law firms that specialize in assisting with such applications?

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dwickenh
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by dwickenh » Mon Apr 17, 2017 7:26 am

To claim a hardship health coverage exemption, you must fill out an application, print it, and mail it to the Health Insurance Marketplace. If your exemption is approved, you claim it when you file your federal income tax return.

The "If your exemption is approved" is the part I am unsure about. The future is now in someone else's hands and you can't be sure of their decision.

Dan
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RudyS
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by RudyS » Mon Apr 17, 2017 8:41 am

Once you have the exemption, you report it on your tax return. I would wager that somewhere in the process the IRS takes a look at your income/resources. So even if you have the exemption from the marketplace, you aren't out of the woods yet.

MikeMak27
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by MikeMak27 » Mon Apr 17, 2017 8:49 am

The "you experienced domestic violence" exemption is the easiest one to qualify for. All you have to do is claim it, and they will approve it. They are not allowed under the law to ask any further questions.
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natureexplorer
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by natureexplorer » Mon Apr 17, 2017 8:52 am

RudyS wrote:Once you have the exemption, you report it on your tax return. I would wager that somewhere in the process the IRS takes a look at your income/resources. So even if you have the exemption from the marketplace, you aren't out of the woods yet.
Interesting.

natureexplorer
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by natureexplorer » Mon Apr 17, 2017 8:58 am

MikeMak27 wrote:The "you experienced domestic violence" exemption is the easiest one to qualify for. All you have to do is claim it, and they will approve it. They are not allowed under the law to ask any further questions.
Very interesting! So there won't be any follow-up calls? They just have to approve it basically?

I noticed on the form that they state that they may call or send letters asking for more information. So they won't do this for domestic violence?

I just googled this some more and found the following interesting analysis:
http://www.lacrosseteaparty.com/2015/01 ... e-mandate/
it creates a perverse incentive to claim spousal abuse to save money
In it, it also has the very broad official definiton of domestic violence.

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jharkin
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by jharkin » Mon Apr 17, 2017 9:04 am

You are going through a lot of trouble/planning on how to get away with being uninsured.

Have you done a similar level of planning to determine how you will pay the 6-7 figure bills if you get in a car accident and break your back without medical coverage?

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dm200
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by dm200 » Mon Apr 17, 2017 9:07 am

8. You had medical expenses you couldn't pay.
Interesting. BUT - if you had health insurarance, then maybe you could have paid the small portion not covered by insurance??? :confused

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dm200
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by dm200 » Mon Apr 17, 2017 9:08 am

jharkin wrote:You are going through a lot of trouble/planning on how to get away with being uninsured.
Have you done a similar level of planning to determine how you will pay the 6-7 figure bills if you get in a car accident and break your back without medical coverage?
Exactly..

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HueyLD
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by HueyLD » Mon Apr 17, 2017 9:28 am

In this thread ( viewtopic.php?f=2&t=205527 ), the OP said that he has excellent health insurance through a foreign insurer that fully covers me in the US.

To the OP, the hardship application form requires you to sign and certify as follows:

"I agree that:

• I’m signing this application under penalty of perjury, which means I’ve provided true answers to all the questions on this form to the best of my knowledge. I know that I may be subject to penalties under federal law if I intentionally provide false or untrue information."

Nate79
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by Nate79 » Mon Apr 17, 2017 9:45 am

I do not understand why all the worry about the ACA penalty. It is a voluntary penalty without any repercussion or penalty to not paying. You may decide to voluntarily pay it or it will be deducted from your tax refund. But if you do not get a tax refund (or adjust your withholdings so you don't have a refund) then there is no penalty to not paying the ACA penalty. This is the law.

pintail07
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by pintail07 » Mon Apr 17, 2017 9:54 am

It is my understanding that the only way currently to enforce the law is deducting through a refund. However, the tax plus interest follows you the rest of your life is what I was told by the IRS. So it could follow to death before collection. Maybe statute of limitations would erase debt, not very clear.

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jharkin
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by jharkin » Mon Apr 17, 2017 9:55 am

HueyLD wrote:In this thread ( viewtopic.php?f=2&t=205527 ), the OP said that he has excellent health insurance through a foreign insurer that fully covers me in the US.
Aha... ok this makes sense then. Seems like a duplicate thread in that case, or at least the OP should mention this in the first post. We dont all scan every thread .....

Chuck
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by Chuck » Mon Apr 17, 2017 10:12 am

jharkin wrote:Have you done a similar level of planning to determine how you will pay the 6-7 figure bills if you get in a car accident and break your back without medical coverage?
Aside from the issue at hand, but.... Auto insurance?

I'm pretty sure medical insurance will refuse to pay costs related to a motor vehicle accident.

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dm200
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by dm200 » Mon Apr 17, 2017 10:46 am

Chuck wrote:
jharkin wrote:Have you done a similar level of planning to determine how you will pay the 6-7 figure bills if you get in a car accident and break your back without medical coverage?
Aside from the issue at hand, but.... Auto insurance?

I'm pretty sure medical insurance will refuse to pay costs related to a motor vehicle accident
.
No first hand experience, but I am quite sure health/medical insurance would cover such matters. Say, for example, that I hit a tree and broke my arm? I would expect my insurance - provider to cover that, the same as if I fell down the stairs or were assaulted on the street.

What will happen, though, where injuries are from an auto accident is that your health insurance will go to great lengths to have somebody's insurance pay for or reimburse for such injuries.

Rupert
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by Rupert » Mon Apr 17, 2017 10:52 am

Chuck wrote:I'm pretty sure medical insurance will refuse to pay costs related to a motor vehicle accident.
100% not true. The med insurer may seek reimbursement from an auto policy that covers the accident, but they'll pay. You aren't required to have auto insurance aside from liability, which wouldn't cover your own medical expenses anyway.

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jharkin
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by jharkin » Mon Apr 17, 2017 11:43 am

I just threw out an off the cuff example of an unexpected healthcare cost... first idea that popped into my head. . I could just as easily said broke a leg, got diagnosed with cancer, etc....


In any case I believe the others are right that health ins will cover accident injuries and then go after the other parties liability insurance if they are at fault.

Chuck
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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by Chuck » Mon Apr 17, 2017 12:35 pm

Thanks, I learned something. I heard the thing about health insurance not covering MV accident injury from a medical provider. Thankfully I have no first hand experience.

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Re: How Easy is an Obamacare Tax Penalty Exemption?

Post by LadyGeek » Mon Apr 17, 2017 3:29 pm

Discussions of dishonest behavior or bypassing the law is totally unacceptable.

This thread has run its course and is locked.
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