The good news is that the IRS has issued Notice 2019-5 stating that certain hardship exemptions can be claimed for 2018 without having to obtain a hardship exemption certificate from the health insurance Marketplace
What is Hardship Exemption Certificate ?
Section § 5000A of the Internal Revenue Code requires taxpayers to have minimum essential coverage for themselves and any nonexempt family dependent member, to qualify for an exemption, or to include an individual shared responsibility payment with their Federal income tax return.
Section 11081 of the Tax Cuts and Jobs Act, repealed the individual mandate penalty for contravening section 5000A of IRC as of January 1, 2019. However , the requirement for individuals and their dependents to have minimum essential health coverage unless exempt or pay a penalty still applies for 2018 returns. The notice 2019-5 would help certain types of eligible persons to claim health coverage exemptions i.e application of provision of section 5000A of IRC during the year 2018 .
Who is Eligible for Hardship Exemption ?
A person is eligible for a hardship exemption for at least the month before, the month(s) during, and the month after the specific event or circumstance that creates the hardship if:
- He or she experienced financial distress or extraordinary circumstances, including an unexpected natural or human-caused event, that prevented him from obtaining coverage under a qualified health plan;
- He or she is so poor that he/she can not afford purchase a qualified health plan or
- He or she has experienced other circumstances that prevented him or her from obtaining coverage under a qualified health plan