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Am I required to have health insurance?

Congress eliminated the federal tax penalty for not having health insurance, effective January 1, 2019.

For 2018, most people are required to have health insurance or else pay a tax penalty, unless they qualify for an exemption.  This is called the individual responsibility requirement, or the individual mandate.

While the federal tax penalty continues to apply for 2018, recent changes will make it easier for people to claim a hardship exemption, and so owe no penalty, when they file their 2018 federal income tax return.  If you experienced a hardship that prevented you from getting coverage in 2018, just check the box on the front of Form 1040, indicating that you qualify for a hardship exemption.  You will not be required to submit proof of the hardship with your tax return, though you should retain any documentation for your own records.

Several states have adopted individual mandates with state tax penalties for not having health insurance.  These include Massachusetts, New Jersey, and the District of Columbia, effective for the 2019 calendar year.  Vermont will impose a tax penalty for not having health insurance starting in 2020.  Other states are considering state individual mandates.  Check with your tax adviser for more information.

Regardless of the penalty, it is important to have health coverage if you can.  Health insurance continues to be offered during annual Open Enrollment periods.  If you don’t sign up during Open Enrollment you might have to wait up to one year until your next opportunity to enroll.

I’m a young adult and I need health insurance. What are my coverage options?

A number of options may be available to you:

  • If your income is below 138% of the federal poverty level ($16,753 for a single person in 2019), you may qualify for Medicaid coverage. Not all states have elected to expand Medicaid eligibility to this income level. Check with your state Marketplace to find out more about Medicaid eligibility in your state.
  • If your parents have health insurance that offers dependent coverage, you can join (or stay on) their policy as a dependent and remain covered until your 26th birthday. See below for more information about dependent coverage for young adults.
  • You can buy a policy on your own through your state health insurance Marketplace. All plans sold through the Marketplace must meet requirements for covered benefits and cost sharing. Depending on your income, you may be eligible for help to reduce the cost of plan premiums and/or cost sharing.
  • Special, catastrophic policies with very high cost sharing must be offered to young adults under the age of 30. Premium and cost sharing subsidies are not available for catastrophic plans.
  • If you are a student, you may be able to enroll in student health offered through your college or university.

What kinds of coverage count as Minimum Essential Coverage to satisfy the requirement to have health insurance?

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.

How do I prove that I had coverage and satisfied the mandate?

Health insurance companies, employer-sponsored health plans, and public health programs such as Medicaid are required to provide you with documentation of coverage.  In January, you should receive a form 1095-B from your health plan or insurance company indicating the months during the prior year when you were covered under the plan.  If you were enrolled in family coverage, Form 1095-B will indicate the names of all family members who were covered with you under the plan. (If you worked for a large employer, with more than 50 employees, you might receive a Form 1095-C instead of Form 1095-B.  Form 1095-C documents an offer of coverage by a large employer in addition to documenting months of coverage under the plan.) A copy of this form will also be reported to the Internal Revenue Service.

If you were covered by more than one plan during the year, you should receive a Form 1095-B (or 1095-C) from each plan.  When you file your tax return for this calendar year (most people will do this by April 15 next year) you will have to enter information about your coverage (or your exemption) on the return.

I live in different states during the year. My summer home is in a northern state; my winter home is in a southern state. Where do I sign up for health coverage? And if I sign up for a plan in one state, how do I find in-network health providers in the other state?

You should buy coverage in the state where you officially reside. Most states consider you a resident if you intend to make that state your permanent home. So-called “snowbirds” may own a second home and live part of the year in another state, but their official state of residence is where they spend most of the year, where they pay taxes, where they register their cars, or are registered to vote.

If you are buying coverage in your state of residency but spend a significant amount of time in a different state, you may want to explore plans offered by insurers that use a national provider network so that you could find participating providers in more than one state. You could also explore insurers that arrange to cover as in-network other insurers’ network providers. (For example, some, though not all “multi-state” plans, and some, though not all “multi-state” plans have such agreements.) You could also evaluate what out-of-network coverage, if any, your plan offers.

Can I pay my health insurance premium with a credit card, debit card, money order, or cash?

At least within the individual-market Marketplace, insurers are required to accept money orders and pre-paid debit cards. They do not have to accept credit card or debit card payments unless states make that a requirement, although many insurers currently accept all of these forms of payment. Therefore, it may vary from state to state and between insurers.

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