American Indian/Alaska Native Exemption from the Shared Responsibility Payment

The Affordable Care Act (ACA) says that all Americans must have health coverage that meets minimum essential coverage standards. This is known as the health insurance mandate. If someone doesn’t have this kind of coverage, they may have to pay a tax penalty called, a “shared responsibility payment.” American Indians and Alaska Natives who are qualified to receive services from an Indian Health Service facility, a tribal health clinic, or an urban Indian health organization (I/T/Us) are in a group of people who are exempt from this shared responsibility payment. Anyone who wants to claim an exemption from the shared responsibility payment needs to file Form 8965 (http://www.irs.gov/pub/irs-pdf/f8965.pdf) with his or her tax form.

What health care coverage meets minimum essential coverage standards?

Medicare Part A, Medicaid, the Children’s Health Insurance Program (CHIP), grandfathered private insurance policies, and private insurance available through an employer or the Health Insurance Marketplace all qualify as programs that meet minimum essential coverage standards. Note that healthcare from an I/T/U is not health insurance, so you need one of these other programs to meet minimum essential coverage standards.

If I have coverage that meets minimum essential coverage standards, do I have to pay the penalty or claim an exemption? No, you don’t have to worry about the penalty or claiming an exemption. No Native person who has minimum essential coverage has to file Form 8965 to avoid the penalty.

I don’t have a policy that meets minimum essential coverage standards, but I don’t have to file a tax return, so what do I need to do to avoid the penalty?

If the law does not require a person to file a tax return, that person, whether or not that person is Native, is exempt from the penalty. If you don’t have to file a tax return, you don’t need to file Form 8965. It’s that easy.

I don’t have a policy that meets minimum essential coverage standards, but I do have to file a tax return, so what do I do to avoid the penalty?

Some American Indians or Alaska Natives need to file a tax return but don’t have minimum essential coverage. When they file a tax return, they need to file Form 8965. If they do not file Form 8965, they will have to pay the penalty.

I have an infant and children without coverage. Are they exempt from the minimum essential coverage standards?

There are no age limits. To avoid paying a penalty for your children, you must file Form 8965 on their behalf.

I have an exemption certification number. Do I have to file Form 8965 to avoid the shared responsibility fee?

Yes, everyone who wants an exemption must file Form 8965. Having an exemption certification number means you will file your claim in Part I of the form. If you don’t have an exemption certification number, you file in Part III. But to avoid the penalty, every Native American who does not have minimum essential standards coverage must file Form 8965 whether or not they have an exemption certification number.

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