Obamacare 101: What to know if you opt out of buying health insurance

The Affordable Care Act, also known as Obamacare, requires that individuals buy health insurance. If you don’t want to buy insurance, you will have to pay a penalty – unless you qualify for an exemption from the mandate.image


How does someone apply for an exemption from health insurance so that they don’t have to pay the penalty?

You can claim exemptions on your 2014 federal tax return, or you can apply for exemptions on the Health Insurance Marketplace exchanges. (The application is not currently available). Healthcare.gov will provide up-to-date information about how to apply for an exemption

Who is eligible for such exemptions?

You can be exempted from the requirement to buy health insurance – and hence, from the penalty – if you meet one of the following requirements:

•You are uninsured for less than three months of the year.

•You live illegally in the United States.image

•You’re incarcerated, and not awaiting disposition.

•You’re a member of a recognized Indian tribe.

•Your income is officially deemed too low.

•The lowest-priced converge would cost more than 8 percent of your household income.

•You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare. (Muslim)

•You’re a member of a recognized health-sharing ministry. (Note: Christian Scientists do not currently qualify for the exemption.) 

Healthcare.gov also provides a list of hardship exemptions that qualify an individual for exemption.