ACA Exemption

[Earl]

Client with income around $45,000. Has 41 year old daughter with no income at all for last year.
Client is covered by insurance through work. Daughter was without insurance coverage all year.
Daughter is not eligible to be carried on client's insurance through employer. Daughter not eligible
for medicare as state did not expand medicare coverage, therefore, also not eligible for coverage
through the ACA marketplace.

Is there any exemptions we can use to keep client from paying substantial penaly?

[mactoolsix]

I don't think so.

Who's included in your household - per healthcare.gov

. > Your children who live with you, even if they make enough money to file a tax return themselves.
. > Anyone you include on your tax return as a dependent, even if they don’t live with you.

In light of the penalty, might be better if he skips the personal exemption for her, but I'm not sure if he can do that.

Mike

[TaxGuyBill]

I agree, nothing in your question shows an exemption or hardship.

https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/

https://www.healthcare.gov/fees-exemptions/hardship-exemptions/

Technically, he owes the penalty because he is ABLE to claim her exemption, even if he doesn't actually do it.

[Earl]

Hardship

I agree, nothing in your question shows an exemption or hardship.

https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/

https://www.healthcare.gov/fees-exemptions/hardship-exemptions/

Technically, he owes the penalty because he is ABLE to claim her exemption, even if he doesn't actually do it.

Daughter would be entitled to a hardship exemption if she was not a dependent due to living in a
state that did not change medicaid rules. Does this carry through in any way because she is now a
dependent.

[Earl]

Additional ACA

Daughter would be entitled to a hardship exemption if she was not a dependent due to living in a
state that did not change medicaid rules. Does this carry through in any way because she is now a
dependent.

Form 8965 states in Part III "If you and/or a member of your tax
household are claiming an exemption on your return," Does this mean that
taxpayer can claim an exemption for this person even though they are
being claimed on return as dependent.

[David1980]

therefore, also not eligible for coverage through the ACA marketplace.

Why was daughter not eligible for coverage through ACA marketplace?

[Earl]

Why was daughter not eligible for coverage through ACA marketplace?

Income was below range to qualify for medicaid, however, state did not change medicaid rules. She is out
of luck for marketplace.

[JohnH]

dn it

Doesn' that make her eligible for the "G" exemption from the penalty?

[David1980]

Income was below range to qualify for medicaid, however, state did not change medicaid rules. She is out
of luck for marketplace.

There is a hole some people fall into when household income is below 100% of poverty level and the state didn't expand Medicaid. Because household income is less than 100% they can't get any subsidies on the marketplace but can't get Medicaid because the state didn't expand Medicaid. For that scenario there's an exemption that can be claimed on 8965 - household income below 138% of poverty level and resident of state that didn't expand Medicaid.

That doesn't help here I think because household income at $45k is nearly 300% of poverty level? At 300% of poverty level, why wouldn't they be eligible for coverage through the marketplace? At 300% of poverty level, would they be eligible for Medicaid even if the state did expand Medicaid?

Assuming the answer to the last question is "yes" it might make sense to have them apply for Medicaid even though they will get an ineligible determination. So that they can qualify for this exemption.

Determined ineligible for Medicaid in a state that did not expand Medicaid coverage — You were determined ineligible for Medicaid solely because the state in which you resided did not participate in Medicaid expansion under the Affordable Care Act.

That exemption doesn't seem to have a household income component to it, but must be applied for through Marketplace.

[Earl]

There is a hole some people fall into when household income is below 100% of poverty level and the state didn't expand Medicaid. Because household income is less than 100% they can't get any subsidies on the marketplace but can't get Medicaid because the state didn't expand Medicaid. For that scenario there's an exemption that can be claimed on 8965 - household income below 138% of poverty level and resident of state that didn't expand Medicaid.

That doesn't help here I think because household income at $45k is nearly 300% of poverty level? At 300% of poverty level, why wouldn't they be eligible for coverage through the marketplace? At 300% of poverty level, would they be eligible for Medicaid even if the state did expand Medicaid?

Assuming the answer to the last question is "yes" it might make sense to have them apply for Medicaid even though they will get an ineligible determination. So that they can qualify for this exemption.

Determined ineligible for Medicaid in a state that did not expand Medicaid coverage — You were determined ineligible for Medicaid solely because the state in which you resided did not participate in Medicaid expansion under the Affordable Care Act.

That exemption doesn't seem to have a household income component to it, but must be applied for through Marketplace.

I may be wrong but this exemption does not have to go through marketplace, however, household income must be below 138%. The other marketplace medicaid exception indicates that you would have to have been denied during 2014 in order to be used as a marketplace exemption. I would think that you could apply an exception for this person but it looks like you have to consider that they are a dependent and, as such, household income must be considered. Correct me if I am thinking this out wrong.