Great Question!

Here’s the answer: If you qualify for an exemption, you do not have to have health insurance coverage under the Affordable Care Act (ACA). An exemption gives you leeway on the law and means you won’t have to pay a penalty for not having coverage.

There are many exemptions to the health insurance requirement.


Here are a few…

  • Uninsured for no more than 2 consecutive months
  • Insurance is unaffordable (>8.05% of household income)
  • No filing requirement – income too low


And a few more…

If you have experienced a hardship, you may also be eligible.

  • You were evicted in the past 6 months
  • You were homeless
  • You recently experienced domestic violence 
  • You experienced a fire, flood, or other natural or human-caused disaster that left substantial damage to your property    
  • You filed for bankruptcy in the last 6 months

Here is a complete list of ACA exemptions.

For some health coverage exemptions, you can apply right on your tax return. For others, you will have to mail a paper application to the Health Insurance Marketplace. If you need to send a paper Marketplace application, apply as soon as possible - the approval process can be a lengthy one.


What is an Exemption Certificate Number or ECN?

The ECN is a number that the Marketplace provides when you qualify for a health coverage exemption. The certificate will include your unique identifier, called the ECN. If you are denied an ECN by the Marketplace, you will have to pay a penalty for not having health care coverage for those months.


So, the penalty is just a fee of $95, right?

Unfortunately not. The health insurance penalty for 2015 is the higher amount of 2% of your household income or a fee of $325 per person, whichever is greater. For 2016, it is 2.5% of your household income or a fee of $695 per person, whichever is greater.


What if I’m still not sure if I’m exempt?

If you don’t understand the details of the ACA exemptions, reach out to a professional who understands the law and its requirements. Liberty Tax Service® has made investments to prepare for the ACA and its impact on taxpayers. Liberty ACA Advisors are available to assist you with understanding what you need to be in compliance with IRS ACA regulations. Now, more than 1,000 Liberty Tax Service® offices are staffed with licensed insurance agents to assist customers with enrollment.

To find a Liberty Tax® ACA Advisor at your local Liberty Tax® office, call 800-673-8600 or visit


Subscribe to our free newsletter to receive important ACA updates. For more information about healthcare issues, please visit our ACA resource page.