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Child Support Division

Affordable Care Act Frequently Asked Questions

The Affordable Care Act (ACA) and the Tax Penalty

A tax penalty under the ACA may apply if your child does not have health coverage.

Visit www.healthcare.gov for more information on the ACA. The website contains the health insurance Marketplace where you can apply for public and private health coverage.

Q1. Will I be required to pay a penalty under the ACA if my child does not have health coverage?

A. It depends on factors that are discussed in the following questions and answers.

Q2. If my child is covered by Medicaid or the Children's Health Insurance Program (CHIP or, in North Dakota, Healthy Steps), will there be a penalty?

A. No. Medicaid and CHIP are considered acceptable coverage under the ACA.

Q3. If my child has health coverage other than Medicaid and CHIP, how do I know if the coverage will be acceptable for purposes of not paying the penalty?

A. Many coverages are considered to be acceptable under the ACA. These include any plan you already have in place, a plan purchased through the Marketplace, any employer plan, TRICARE, and veterans' health care programs. Other plans may also qualify. If you are unsure, ask the health plan provider.

Q4. If my child is eligible to receive services through Indian Health Services (IHS), will there be a penalty?

A. No. There is an exemption from the penalty if your child is eligible for services through IHS.

Q5. Which parent will be required to pay the penalty if the child does not have acceptable health coverage?

A. The parent who claims the child as a dependent on his or her federal tax return is responsible for demonstrating that the child has acceptable health coverage or paying a penalty. That is also the parent who may be able to get tax credits to help pay for coverage purchased through the Marketplace.

Q6. If I am the parent who claims the child as a dependent on my federal tax return, could I be charged the penalty even though the other parent is court ordered to provide health coverage for the child?

A. Yes. You could be charged the penalty unless you are granted an exemption. There is an exemption as long as your child was found ineligible for Medicaid and CHIP. To apply for this exemption, you must complete an Application for Exemption from the Shared Responsibility Payment for Individuals who Experience Hardships and provide, along with the application:

  • a copy of the child support order, and
  • copies of notices from Medicaid and CHIP showing that the child has been denied coverage under those programs

Q7. Are other exemptions from the penalty available in addition to the exemption in Q/A #6?

A. Yes. A number of exemptions exist. Some exemptions must be requested by completing and submitting one of the exemption applications. Others may be requested when filing your federal income tax return. You do not need to request an exemption if you are not going to file a federal income tax return because your income is below the filing threshold. See www.healthcare.gov for more information on exemptions.

Q8. What is the penalty and how is it collected?

A. The amount of the penalty is based on your income and how many months the child did not have health coverage. Generally, the higher your income and the more months there was not coverage, the higher the penalty. The penalty will increase every year until 2016. After that it is adjusted for inflation.

The penalty is collected by the IRS. If you are assessed the penalty, you will pay it through the federal income tax return you file for the year the child was not covered.

Q9. Can I apply for Medicaid and CHIP at any time?

A. Yes. You can apply for Medicaid and CHIP any time during the year. See your application options through the North Dakota Department of Human Services or through the Marketplace at www.healthcare.gov.

Q10. Can I apply for private health insurance coverage at any time through the Marketplace?

A. No. There are specific open enrollment periods. The open enrollment period for coverage in 2015 has passed and the open enrollment period for coverage in 2016 is November 1, 2015 January 31, 2016. You may enroll at other times based on certain life events, loss of coverage, or if you become court-ordered to provide health coverage for a child. Generally, enrollment must occur within 60 days of the qualifying event. 

Q11. Where can I get more information or help applying for an exemption?

 

 

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