According to the Affordable Care Act, most people are required to have health insurance starting in 2014. The health insurance must provide “minimum essential coverage”. This requirement is generally met if you have health insurance through your employer, you have Medicare or other health insurance through a government program, or you obtain health insurance through the Marketplace, which consists of the health exchanges set up under the Affordable Care Act. If you do not have health coverage, you would have to pay a fee.
But there are certain exceptions to the requirement to have health insurance coverage. As pointed out on HealthCare.gov, you would not have to pay a fee if you are uninsured for less than three months of the year. This is considered a short coverage gap. According to the IRS, if you have more than one short coverage gap during the year, the exemption from the penalty only applies to the first gap.
U.S. citizens who live abroad would generally be required to have health coverage. But as pointed out by the IRS, U.S. citizens who live abroad for at least 330 days within a 12-month period would be considered to have minimum essential coverage and would not need to take any action. Bona fide residents of U.S. territories are also considered to have minimum essential coverage and would not need to take any further action to meet the requirements of the Affordable Care Act.
If you are not a U.S. citizen, U.S. national, or lawfully present in the U.S. you would not be subject to the requirements of the Affordable Care Act. Permanent residents or green card holders would be required to have health insurance. As indicated by Alison Siskin in a report for the Congressional Research Service, undocumented residents, since they do not yet have legal status in the U.S., would be exempt from the health insurance mandate and would not be able to obtain insurance through the exchanges.
According to IRS, you would not be required to have health insurance coverage if your income is below the threshold for filing a federal income tax return. If you do not have to file a return you are automatically exempt and do not have to take any further action. If you file a return anyway, you can claim the exemption from the health insurance fee on your tax return.
If you have a very low income and health insurance coverage is not affordable, you can also be exempt from the health insurance requirement without having to pay a fee. And if you would qualify for Medicaid because your household income is not more than 133% of the federal poverty line for your family size, but your state has chosen not to expand Medicaid eligibility, you can be exempt from the health insurance requirement. This is determined by going to the health exchange and applying.
Members of a federally recognized Indian tribe are not subject to fees for not having health insurance. And if you are incarcerated in a jail, prison or correctional facility you are not required to have health insurance coverage under the Affordable Care Act. These exemptions can be claimed by going to a health exchange and applying for an exemption certificate or by claiming the exemption on your tax return.
If you are a member of a health care sharing ministry you are not required to have insurance according to the Affordable Care Act. You are also exempt if you belong to a religious sect that is opposed to accepting insurance benefits. According to the IRS, these religious sects must be recognized by law and the process is administered by the Social Security Administration. To claim this exemption you must go to the health exchange and apply for an exemption certificate.
Alison Siskin, Treatment of Noncitizens Under the Patient Protection and Affordable Care Act, Congressional Research Service
Questions and Answers on the Individual Shared Responsibility Provision, IRS
What if someone doesn’t have health coverage in 2014? HealthCare.gov