As the name implies, a short-term health insurance policy offers coverage for a period of less than 12 months. Many offer coverage for just 3 to 6 months. Beyond that term, coverage generally can only be continued if the insurance company agrees. This is sometimes called a non-guaranteed-renewable policy. If you’ve made claims since you bought the short-term policy, the insurer can, and likely will refuse to continue coverage once the policy term ends.
In addition, short-term policies do not offer other protections found in Marketplace plans. For example, short-term policies can exclude coverage of pre-existing conditions. Short-term policies also typically do not cover essential health benefits such as prescription drugs, mental health care, substance abuse treatment, or maternity care.
Grandfathered plans are those that were in existence on March 23, 2010 and have stayed basically the same. If you buy coverage on your own and you first purchased your policy prior to March 23, 2010, it may be a grandfathered plan. If you currently are covered under a non-group policy – whether it is grandfathered or not – you can also explore other qualified plans offered through the Marketplace and, if you prefer, you can switch to a new plan during Open Enrollment. To be eligible for a tax credit to help pay your premium – which will be based on your income – you would have to switch to a plan offered through the Marketplace. Some group plans offered by employers may also be grandfathered plans. A grandfathered group plan also must have been first established prior to March 23, 2010. To retain grandfather status, the group plan cannot be significantly changed (that is, the employer can’t significantly change covered benefits or cost sharing or the share of the plan premium that you are required to contribute.) Because employer plans tend to change from year to year, most have already lost grandfather status or will lose it over time. Meanwhile, however, grandfathered plans are not required to provide all of the benefits and consumer protections required of other health plans. For example, a grandfathered health plan might not cover preventive health services. Employers with grandfathered group health plans are allowed to enroll new employees in the grandfathered plan. So even if you first joined a group health plan after March 23, 2010, you should ask about its grandfathered status. Your employer or your insurer must let you know if your health plan is grandfathered.
All health insurers and employer-sponsored group health plans must provide people with a Summary of Benefits and Coverage, which uses a standard format to outline the benefits, cost-sharing and coverage limits of plans. The Summary of Benefits and Coverage must also say whether the plan meets minimum value and counts as minimum essential coverage.
Most people with health coverage today have a plan that will count as minimum essential coverage. The following types of health coverage count as minimum essential coverage:
Employer-sponsored group health plans
Union plans
COBRA coverage
Retiree health plans
Non-group health insurance that you buy on your own, for example, through the health insurance Marketplace
Student health insurance plans
Grandfathered health plans
Medicare
Medicaid
The Children’s Health Insurance Program (CHIP)
TRICARE (military health coverage)
Veterans’ health care programs
Peace Corps Volunteer plans
Be aware that outside of the Marketplace, other policies be for sale that may look like health insurance (such as short term individual policies, or policies that only cover cancer.) These kinds of products are sometimes referred to as “excepted benefits.” They do not count as Minimum Essential Coverage.
Starting in 2019, there is no tax penalty for people who are not covered by Minimum Essential Coverage.
There is an exemption for people who are incarcerated but it does not apply to people who were in jail awaiting trial.
However, for 2018, you could also claim a hardship exemption because you experienced circumstances that prevented you from obtaining coverage. You can claim this exemption directly on your 2018 tax return, by checking the box on Form 1040, when you file next spring.
No, you can apply to the Marketplace for a hardship exemption at any time during the year. Most hardship exemptions will be granted for the month before the hardship, the months of the hardship, and the month after the hardship. You will need to document the timing of the hardship in your application.
In addition, for the 2018 tax year, you can claim a hardship exemption directly on your tax return, by checking the box on Form 1040, without having to apply to the Marketplace. You won’t be required to submit documentation of the hardship with your tax return, though you should retain any documents for your own records.
For the 2018 tax year, anyone can apply for a hardship exemption if they experienced circumstances that prevented them from having health insurance. You can claim the hardship exemption directly on your 2018 federal income tax return, by checking the box on Form 1040, when you file. You will not be required to submit documentation of the hardship with the return, though you should keep any documentation for your records.
Federal law provides other types of exemptions. For some of these, you must apply through the health insurance Marketplace; for other types, you must apply when you file your taxes; some types of exemptions can be claimed either way.
The religious conscience exemption is available only by going to a health insurance Marketplace and applying for an exemption certificate. In the federal Marketplace, you cannot apply for an exemption online. Instead, you can download a paper application for an exemption from healthcare.gov, fill it out and mail it in. You will receive a response by mail and, if the exemption is approved, it will include an exemption certificate number. Save this document, you will need to include the exemption certificate number on IRS Form 8965, which you will need to submit with your tax return when you file your federal income taxes. If you need help applying for an exemption, you can contact the Marketplace call center or a Navigator or other in-person assister. Your Marketplace website has a list of Navigators and other assisters.
The hardship exemption and other exemptions for unaffordable coverage, members of Indian tribes, members of health care sharing ministries, and individuals who are incarcerated are available either by going to a Marketplace and applying for an exemption certificate or by claiming the exemption as part of filing a federal income tax return.
The exemptions for short coverage gaps, certain hardships and individuals who are not lawfully present in the United States can be claimed only as part of filing a federal income tax return. You will need to file a return and include with it Form 8965. If you already received an exemption from the Marketplace, you will include the Marketplace exemption certificate number on this form. Otherwise, instructions for this form will explain the steps you must take and information you must enter on your federal tax return so that you won’t owe a tax penalty.
The exemption for having income under the federal income tax return filing threshold is available automatically. No special action is needed. However, if you are filing a tax return anyway (for example, to have refunded taxes that were withheld during the year), you should include Form 8965 with your tax return and check the special box indicating that your income is below the tax filing threshold.
If you did not maintain minimum essential coverage every month of this year and you don’t qualify for an exemption you will need to pay a “shared responsibility payment” to the IRS on your federal income tax return . If you are like most people, you will need to file your tax return by April 15 next year.
However, for 2018, the IRS has made it easier for people to claim a hardship exemption directly on your tax return by checking the box on Form 1040. You can claim the hardship exemption if you experienced circumstances that made it hard for you to obtain coverage in 2018. You will not be asked to provide documentation of the hardship when you file, though you should keep any documentation for your records.