The Tax Cuts and Jobs Act of 2017 will reduce the penalty associated with the Affordable Care Act’s (ACA’s) individual mandate to zero beginning in 2019. In the meantime, the individual mandate penalty remains in effect for 2017 and 2018. So, through the end of this year, if an individual or the individual’s spouse or dependent does not have minimum essential coverage for any given month, a penalty (the the shared responsibility payment) is assessed against that individual.

The ACA does have specific exemptions for certain individuals from the individual mandate (subject to the shared responsibility penalty), those exemptions include:

  1. Members of a religion with established tenets or teachings barring the acceptance of the benefits of any private or public insurance (ex., the Amish).
  2. Members of certain Indian tribes (those which are federally recognized and covered by the Indian Health Service).
  3. Members of a health care-sharing ministry.
  4. Individuals who fall below the federal household income threshold and are exempt from filing federal income taxes.
  5. Individuals who are incarcerated in jail, prison, or other penal institution.
  6. Individuals who are not U.S. citizens or U.S. nationals (ex. not lawfully present in the United States).
  7. Individuals who have a gap in coverage for less than a continuous three-month period. This exemption may only be used for one period without coverage in a year.
  8. Individuals who are extended a hardship exemption as determined by the Secretary of Health and Human Services.

A person is eligible for a hardship exemption “for at least the month before, the month or months during which, and the month after a specific event or circumstance, if the Exchange determines that:

  1. He or she experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan;
  2. The expense of purchasing a qualified health plan would have caused him or her to experience serious deprivation of food, shelter, clothing or other necessities; or
  3. He or she has experienced other circumstances that prevented him or her from obtaining coverage under a qualified health plan.”

On April 9, 2018, the Department of Health and Human Services (HHS) published a memo providing guidance on additional examples of circumstances of the hardship exemption referenced above for Federally-facilitated Exchanges (FFEs) and State Based Exchanges (SBEs) that choose to have exemptions processed through the FFE (currently all SBEs other than Connecticut). Individuals should provide documentation to support the claim of hardship and to show that the hardship occurred within the current calendar year or up to two calendar years prior. The hardship exemption form is available online at

This new guidance describes additional circumstances that will support a hardship exemption for individuals who:

  1. Live in a county in which no qualified health plan (QHP) is offered through the FFE. This is known as a ‘bare county,’ presently, there are no bare counties but the hardship exemption is available in the event that one develops;
  2. Live in a county in which there is only one issuer offering coverage through the FFE and can show that the resulting lack of choice has precluded them from obtaining coverage under a QHP;
  3. Have a hardship obtaining coverage because all affordable plans offered through the FFE in the person’s county provide coverage of abortion, contrary to one’s beliefs, and the absence of any affordable plan without such coverage causes a hardship in obtaining health insurance; or
  4. Experience personal circumstances that create a hardship in obtaining health insurance coverage under a QHP, such as when a person needs specialty care by a specialist physician but the affordable plans offered through the FFE in the person’s county do not provide access to necessary specialty care.

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Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.