The October 24, 2018, draft of the 2018 Form 8965 shows a change in the penalty exceptions for not having insurance.
Many exceptions to the penalty require an approval number from the Marketplace. There are various codes A-G that do not require Marketplace approval. In the past the category of “General Hardship” required Marketplace approval (Code H). This year “General Hardship” falls into Code G, which means the code G can be shown on the Form 8965 as an exception to the penalty WITHOUT HAVING to have Marketplace approval. However, if questioned, the taxpayer will have to show that one or more of the exceptions listed in the instructions apply and what months it applies to.
The specific items mentioned under the new Code G, General Hardship, include:
– You were homeless,
– You were evicted or facing eviction or foreclosure,
– You received a shut-off notice from a utility company,
– You experienced domestic violence,
– You experienced the death of a close family member,
– You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property,
– You filed for bankruptcy,
– You had medical expenses you could not pay,
– You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member,
– Your child was denied Medicaid and CHIP, and another person is required by court order to provide coverage to the child,
– You were without coverage while awaiting an appeals decision from the Marketplace,
– You were determined ineligible for Medicaid in a state that did not expand Medicaid coverage,
– You lived in a country where there is no qualified health plan offered, there is only on issuer offering coverage, or all affordable plans provide abortion coverage contrary to your beliefs,
– You experienced personal circumstances that create a hardship, such as when no affordable plans provide access to needed specialty care, or
– You experienced a hardship not included in this list that prevented you from getting health insurance.
The directions to Form 8965 states these “General Hardship” exceptions applies to the month before, the months of the hardship, and the month after the hardship.