AFFORDABLE CARE ACT - INDIVIDUALS
Visit IRS.gov/aca for more information about the Affordable Care Act (aka Obama Care)
Find Out if Your Health Coverage is Qualifying Coverage under the Health Care Law
The Affordable Care Act (ADA) requires you and each member of your family to have qualifying health care coverage, qualify for an exemption from the responsibility to have minimum essential coverage, or make an individual shared responsibility payment when you file your federal income tax return. For purposes of ADA, qualifying health care coverage is also known as minimum essential coverage.
Minimum existential coverage includes:
Minimum essential coverage does not include coverage that may provide limited benefits.
Minimum existential coverage includes:
- Health plans offered in the individual market - plans offered by a health insurance issuer licensed by a state, including a qualified health plan offered through the federally-facilitated or a state-based Health Insurance Marketplace.
- Grandfathered health plans - plans that were in existence on March 23, 2010 and haven't been changed in ways that substantially cut benefits or increase costs for consumers - for more information, visit Healthcare.gov.
- Government-sponsored programs
- Medicare Part A
- Medicaid, except for certain programs
- The Children's Health Insurance Program, better known as CHIP
- Coverage under the TRICARE program, except for certain programs
- Coverage consisting of the medical benefits package for eligible veterans
- Civilian Health and Medical Program of the Department of Veterans Affairs
- Comprehensive health care for children suffering from spina bifida who are the children of Vietnam veterans and veterans of covered service in Korea
- A health plan for Peace Corps volunteers
- The Non-appropriated Fund Health Benefits Program of the Department of Defense
- Employer-sponsored plans - coverage that you have through your employer, including:
- A plan or coverage offered in the small or large group market within a state
- A self-insured group health plan for employees
- The Non-appropriated Fund Health Benefits Program of the Department of Defense
- A government plan, such as the Federal Employees Health Benefits Program
- COBRA coverage
- Retiree coverage
- Other coverage designated by the Department of Health and Human Services
- Coverage under Medicare Part C - Medicare Advantage
- Refugee Medical Assistance
- Employer coverage provided to business owners who are not employees
- Coverage under a group health plan provided through insurance regulated by a foreign government if it meets certain requirements.
Minimum essential coverage does not include coverage that may provide limited benefits.
What Kind of Health Insurance Qualifies as Minimum Essential Coverage?
The individual shared responsibility provision requires you and each member of your family to have basic health insurance coverage – also known as minimum essential coverage – qualify for an exemption, or make an individual shared responsibility payment when you file your federal income tax return.
Many people already have minimum essential coverage and do not need to do anything more than maintain that coverage and report their coverage when they file their tax returns. Most taxpayers will simply check a box to indicate that each member of their family had qualifying health coverage for the whole year.
Here are some examples of coverage that qualify as minimum essential coverage:
Employer-sponsored coverage
Individual health coverage:
Coverage under government-sponsored programs:
U.S. citizens, who are residents of a foreign country for an entire year, and residents of U.S. territories, are considered to have minimum essential coverage for the year.
For more information on the types of coverage that qualify as minimum essential coverage and those that do not, as well as information on certain coverage that may provide limited benefits, visit the MEC page on IRS.gov/aca.
Many people already have minimum essential coverage and do not need to do anything more than maintain that coverage and report their coverage when they file their tax returns. Most taxpayers will simply check a box to indicate that each member of their family had qualifying health coverage for the whole year.
Here are some examples of coverage that qualify as minimum essential coverage:
Employer-sponsored coverage
- Group health insurance coverage for employees under
- a governmental plan such as the Federal Employees Health Benefit program
- a plan or coverage offered in the small or large group market within a state
- a grandfathered health plan offered in a group market
- Self-insured group health plan for employees
- COBRA coverage
- Retiree coverage
Individual health coverage:
- Health insurance purchased directly from an insurance company
- Health insurance purchased through the Health Insurance Marketplace
- Health insurance provided through a student health plan
Coverage under government-sponsored programs:
- Medicare Part A coverage
- Medicare Advantage plans
- Most Medicaid coverage
- Children’s Health Insurance Program or CHIP
- Most types of TRICARE coverage
- Comprehensive health care programs offered by the Department of Veterans Affairs
- Department of Defense Non-appropriated Fund Health Benefits Program
- Refugee Medical Assistance
U.S. citizens, who are residents of a foreign country for an entire year, and residents of U.S. territories, are considered to have minimum essential coverage for the year.
For more information on the types of coverage that qualify as minimum essential coverage and those that do not, as well as information on certain coverage that may provide limited benefits, visit the MEC page on IRS.gov/aca.
The Individual Shared Responsibility Provision – The Basics
The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your tax return.
Here are some basic facts about the individual shared responsibility provision.
What is the individual shared responsibility provision?
Starting in 2014 the individual shared responsibility provision calls for each individual to have qualifying health care coverage – known as minimum essential coverage – for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.
Who is subject to the individual shared responsibility provision?
The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.
When does the individual shared responsibility provision go into effect?
The provision went into effect on Jan. 1, 2014. It applies to each month in the calendar year.
What do I need to do if I am required to make a payment with my tax return?
If you have to make an individual shared responsibility payment, you will use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. The amount due is reported on line 61 of Form 1040 in the Other Taxes section, and on the corresponding lines on Form 1040A and 1040EZ. You only make a payment for the months you did not have coverage or qualify for a coverage exemption.
What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return?
The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.
Here are some basic facts about the individual shared responsibility provision.
What is the individual shared responsibility provision?
Starting in 2014 the individual shared responsibility provision calls for each individual to have qualifying health care coverage – known as minimum essential coverage – for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.
Who is subject to the individual shared responsibility provision?
The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.
When does the individual shared responsibility provision go into effect?
The provision went into effect on Jan. 1, 2014. It applies to each month in the calendar year.
What do I need to do if I am required to make a payment with my tax return?
If you have to make an individual shared responsibility payment, you will use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. The amount due is reported on line 61 of Form 1040 in the Other Taxes section, and on the corresponding lines on Form 1040A and 1040EZ. You only make a payment for the months you did not have coverage or qualify for a coverage exemption.
What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return?
The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.