ACA Financial Hardship Exemption Requirements

Ryan Kh
Octocs Technologies
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The Patient Protection and Affordable Care Act was more than a healthcare reform bill. The law also made sweeping changes to tax law. The biggest change was the individual mandate, which imposed a tax on all citizens that failed to purchase healthcare through the exchange.

While the individual mandate has been discussed in detail since the law was signed, many elements are still unknown to most Americans. The average American isn’t aware that there are financial hardship exemptions.

Financial Hardship Exemptions Under the Affordable Care Act

The individual mandate was a strong provision that was passed to ensure the sustainability of the healthcare law. At the same time, lawmakers recognized that citizens suffered from financial and emotional hardships that would make it difficult to pay their monthly premium, even with financial assistance. Lawmakers introduced a number of hardship exemptions to prevent the healthcare law from imposing an undue burden on these citizens.

 The hardship exemptions include:

  • Suffering from homelessness for part of the year
  • Facing eviction from their residence or a foreclosure of their home
  • Experiencing domestic violence
  • Experiencing the death of a close family member within the past three years
  • Being forced to pay high medical bills for yourself or a close family member
  • Filing for bankruptcy
  • Filing for Medicaid for a dependent child and being denied coverage
  • Suffering from another reasonable hardship not covered under the list

These exemptions may apply to many people suffering from financial difficulties. Here are some things you need to know if you want to apply for them. You will need to provide a hardship exemption form and any necessary supporting documents for the exemptions listed below.


Homelessness is a major problem that affects over half a million people on any given night. Throughout the course of the year, the number is believed to be much higher.

You can receive an emption for homelessness without needing to provide proof. You should also be aware of the legal definition of homelessness, because you may meet the exemption requirements without realizing it. If you needed to live with friends or extended family during the year, then you were considered homeless and may apply for an exemption.

Eviction or Foreclosure

Evictions and foreclosures are a painful reality for many families every year. Regardless of the reason for the eviction, you will qualify for an exemption. However, you will need to provide a foreclosure or eviction notice with your tax return to claim the exemption.

Medical Debt or Rising Family Medical Bills

Medical bills are the biggest cause of bankruptcy in the United States. They are also a major problem that many people must deal with every year.

If you have unpaid medical bills, you will qualify for an exemption. You need to provide proof of the debt while filing for taxes. doesn’t state that there is a mandatory minimum that you must owe to qualify for this exemption. However, the expenses must have been incurred within the past 24 months.

The same exemption applies if you are responsible for a family member’s medical bills and the costs are rising more than you can afford.


Bankruptcy is the worst financial hardship any American can face. It is a very common problem, because the average household has $5,700 in credit card debt and only about a quarter of households have a bank account with at least a month’s worth of income.

You can qualify for an exemption, but will need to provide a notice from the court. You must have filed for bankruptcy within the past three years. The process can still be pending, provided that you filed before December 31 of the tax year in question.

Be Aware of All Financial Hardship Exemptions

While the Patient Protection and Affordable Care law was passed to guarantee healthcare to all Americans, lawmakers recognize that financial security is the top priority for most Americans. You may qualify for one or more exemptions, so be aware of your options if you didn’t have health insurance for two or months of the year.

About Ryan Kh

Ryan Kh

Ryan Kh is an experienced blogger, digital content & social marketer. Founder of Catalyst For Business and contributor to search giants like Yahoo Finance, MSN. He is passionate about covering topics like big data, business intelligence, startups & entrepreneurship. Follow his latest posts on Clear World Finance & Forumsmix


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