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How Long Can You Go Without Health Insurance Without Paying the ACA Penalty?

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How Long Can You Go Without Health Insurance Without Paying the ACA Penalty?

According to Healthcare.gov, if you can afford health insurance, but choose not to buy it, you'll be required to pay a fee for each month you, your spouse, or your tax dependents don't have health insurance that qualifies as minimum essential coverage.

This fee—also known as the individual shared responsibility payment, fine, individual mandate, or Affordable Care Act (ACA) penalty—will be collected when you file your federal tax return for the year you don't have coverage.

The fee in 2016 is determined based on whichever is the higher amount: either 2.5 percent of your household income (maximum is the total yearly premium for the national average price of a Bronze plan sold through the marketplace) or $695 per adult and $347.50 per child under 18 (maximum is $2,085).

Exemptions that may allow you to avoid the fee

But if you can't afford health insurance, you are between plans as you transition from one job to another, or you experience what is known as a life transition (such as the death or divorce of a spouse), you may be able to avoid paying the fee.

affordable care act health insurance

For example, if you can show that you went without ACA-compliant coverage for no more than 2 consecutive months, you can avoid paying the penalty entirely by claiming a "short gap in coverage" exemption and noting “code B" on your income tax return when you note any exemptions that apply to you.

There are other exemptions that may apply to you that can make buying health insurance out of reach.

According to Healthcare.gov, the list of hardship exemptions includes:

  • being homeless
  • evidence that you were going to be or were evicted from your home or your home was being foreclosed
  • utilities being shut off due to non-payment
  • domestic violence
  • death of a family member
  • a fire, flood, or other disaster that significantly damaged your home
  • bankruptcy
  • unpaid medical bills that caused significant debt
  • excessive care-giving expenses based on caring for a family member
  • claiming a child as a tax dependent who did not qualify for Medicaid and CHIP last year, and a court orders another person to pay for medical coverage
  • being able to enroll in a plan because of an eligibility appeals decision after the prior year of being un-enrolled
  • certain Medicaid eligibility expansions in the past year
  • losing your health insurance after June 2013 and you could not afford other plans

You can see other hardships here.

Short-term insurance options

Having health insurance is vitally important. Going without insurance-even for a short period of time- is taking an unnecessary financial risk, as you never know when a medical issue will arise unexpectedly.

short-term health insurance options

If you are outside the open enrollment period and cannot currently purchase an ACA-compliant plan, or if you're facing a gap in coverage, short-term medical (STM) can provide you with temporary medical coverage.

An STM plan is not ACA-compliant, so you will still owe the fee if you have this coverage (or go without an ACA-compliant plan) for more than 2 consecutive months, but STM can provide you with affordable interim coverage.

STM doesn't cover pre-existing conditions, but it can provide coverage for unexpected illnesses and injuries.

You should also consider short-term medical if:

  • You're a retiree (younger than 65) in need of coverage before enrolling in Medicare,
  • You're transitioning off your parents' healthcare plan,
  • You're a U.S. citizen returning from living abroad, or
  • You're waiting for your own health insurance to begin (after beginning a new job, for example).


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