Investments glossary

Hardship Exemption

A hardship exemption is an event that prevents an individual from obtaining health insurance. This approved exception prevents the person from paying a penalty for not having health insurance during the hardship period. A hardship exemption can be granted if an individual is in a situation that affects his or her ability to purchase health coverage. Hardship exemptions are a provision in the Patient Protection and Affordable Care Act (ACA), signed into law on March 23, 2010. Starting in 2014, most individuals were required to have an acceptable health-coverage level – known as minimum essential coverage – or pay a fee (individual shared responsibility payment). In certain cases, people can qualify for exemptions, including hardship exemptions, whereby no penalty is assessed9. As of 2019, the penalty for not having health insurance is eliminated; the exemptions below apply to the 2015-2018 tax years.

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