Hardship Exemption


DEFINITION of 'Hardship Exemption'

An approved excuse from paying a penalty fee for not having health insurance. A hardship exemption can be granted if an individual is in a situation that affects his or her ability to purchase health coverage. Hardship exemptions are a provision in the Patient Protection and Affordable Care Act (ACA), signed into law on March 23, 2010 by President Barack Obama. Starting in 2014, most individuals are required to have an acceptable health-coverage level known as minimum essential coverage, or pay a fee (called the “individual shared responsibility payment”). In certain cases, people can qualify for exemptions, including hardship exemptions, whereby no penalty is assessed for having no insurance.

BREAKING DOWN 'Hardship Exemption'

A hardship exemption may be granted for 12 accepted circumstances:

  • You are homeless.
  • You have been evicted in the last six months or are facing foreclosure.
  • You received a shut-off notice from a utility company.
  • You were the victim of recent domestic violence.
  • You experienced the recent death of a close family member.
  • You experienced a fire, flood or other disaster (either natural or human-caused) that resulted in substantial damage to your property.
  • You filed for bankruptcy during the previous six-month period.
  • You had medical expenses you were unable to pay in the last 24 months.
  • You had unexpected increases in necessary expenses related to caring for an ill, disabled or aging family member.
  • You expect to claim a child as a tax dependent who has been denied coverage in Medicaid and CHIP, and another person is under a court order to provide medical support for the child (in this case, you do not owe the penalty for the child).
  • As a result of an eligibility appeals decision, you can enroll in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you were not enrolled in the QHP.
  • You are ineligible for Medicaid because your state did not expand its eligibility under the ACA.

Eligible individuals can apply for a hardship exemption through the Health Insurance Marketplace.

  1. Children’s Health Insurance Program ...

    A medical coverage source for individuals under age 19 whose ...
  2. Uniform Policy Provisions, Health ...

    A provision that states that insurance companies must use standard ...
  3. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits ...
  4. Commercial Health Insurance

    A type of health insurance that covers medical expenses and disability ...
  5. National Organization Of Life And ...

    NOLHGA is a voluntary organization of U.S. life- and health-insurance ...
  6. Health Maintenance Organization ...

    An organization that provides health coverage with providers ...
Related Articles
  1. Insurance

    Affordable Care Plans: Bronze, Silver, Gold, Platinum?

    How to choose among the different coverage levels in the Health Insurance Marketplace. Which metal makes the most sense for you?
  2. Insurance

    Cutting Your Cost for Marketplace Health Insurance

    Here's how you may be able to lower your costs for health insurance coverage in 2016 though the Health Insurance Markerplace.
  3. Insurance

    Learn About the Health Insurance Marketplace

    2016 Open Enrollment is Nov. 1 to Jan. 31. Here are five things you should know about the Health Insurance Marketplace (AKA Health Insurance Exchange).
  4. Insurance

    What You Need To Know About COBRA Health Insurance

    We go through everything you need to know about COBRA so that you can decide if it's right for you.
  5. Home & Auto

    Concierge Healthcare: The Pros and Cons Of Having A Doctor On Call

    Concierge healthcare can mean extra attention from your doctor when you need it, but it isn't the best substitute for health insurance.
  6. Insurance

    How To Get Around The Health Insurance Marketplace Glitches

    When concussive maintenance fails you, we have the solution for working around the technical problems plaguing the Obamacare sign-up website.
  7. Fundamental Analysis

    Investing In Healthcare Facilities

    Read on to learn about how to value heathcare sector stocks.
  8. Investing Basics

    What Dividends Say About Stock Health

    Dividend payments may reveal information about the future prospects of a company.
  9. Personal Finance

    Comparing Health Savings And Flexible Spending Accounts

    When it comes to medical expenses, there are many accounts that provide tax advantages. We look at two commonly seen among employees.
  10. Insurance

    What You Need To Know About Student Health Insurance

    Before heading off to college, read up on health insurance plans.
  1. Is dental insurance tax deductible?

    Dental insurance premiums may be tax deductible. To be deductible as a qualifying medical expense, the dental insurance must ... Read Full Answer >>
  2. Does a Flexible Spending Account (FSA) cover massages?

    Flexible Spending Accounts (FSAs) cover massages for certain medical treatments. These treatments must be approved and prescribed ... Read Full Answer >>
  3. Does a Flexible Spending Account (FSA) cover Lasik?

    Flexible spending accounts (FSA) can be used to pay for qualifying LASIK procedures. LASIK is not the only laser eye surgery ... Read Full Answer >>
  4. Are Flexible Spending Account (FSA) expenses tax deductible?

    Flexible Spending Account (FSA) expenses are not tax deductible. The U.S. Internal Revenue Service (IRS) states you cannot ... Read Full Answer >>
  5. Does a Flexible Spending Account (FSA) cover acupuncture?

    A Flexible Spending Account (FSA) covers acupuncture. The Internal Revenue Service (IRS) has defined acupuncture as a qualifying ... Read Full Answer >>
  6. Do flexible spending accounts (FSA) funds roll over?

    An individual can utilize an employer’s cafeteria plan of employee benefits to establish a flexible spending account (FSA). ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center