How to Avoid the ACA Penalty if You Have a Short Coverage Gap

The Affordable Care Act (ACA) requires most Americans to have health insurance. If you go without health insurance for more than three months, you may have to pay a penalty. However, there are some exceptions to this rule. One exception is if you have a “short coverage gap.”

What is a short coverage gap?

A short coverage gap is a period of time when you do not have health insurance for less than three months. You can have more than one short coverage gap in a year.

How do I know if I have a short coverage gap?

You have a short coverage gap if you do not have health insurance for more than three months, but less than six months, in a row.

What if I have a short coverage gap?

If you have a short coverage gap, you do not have to pay the ACA penalty. If you have multiple short coverage gaps, you can combine them and use the long coverage gap exemption.

Here are some examples of short coverage gaps:
– You lose your job and are without health insurance for two months.
– You start a new job and your health insurance does not start for 60 days.
– You are between health insurance plans and are without health insurance for one month.

How do I avoid the ACA penalty if I have a short coverage gap?

There are two ways to avoid the ACA penalty if you have a short coverage gap.

1. Get health insurance as soon as possible.
2. File Form 8965 with your tax return.

If you get health insurance as soon as possible, you will not have to pay the ACA penalty. If you cannot get health insurance right away, you can file Form 8965 with your tax return. Form 8965 is a form that allows you to claim an exemption from the ACA penalty.

How do I file Form 8965?

You can file Form 8965 online or by mail. If you file online, you will need to create an account on the IRS website. If you file by mail, you can download the form from the IRS website.

What information do I need to file Form 8965?

You will need to provide the following information on Form 8965:

– Your name and address
– Your Social Security number
– The dates of your short coverage gap(s)
– The reason for your short coverage gap(s)

When do I need to file Form 8965?

You need to file Form 8965 with your tax return. The deadline to file your tax return is April 15th.

Can I get help filing Form 8965?

Yes, you can get help filing Form 8965 from a tax preparer or from the IRS.

What if I am not eligible for a short coverage gap exemption?

If you are not eligible for a short coverage gap exemption, you will have to pay the ACA penalty. The penalty is a percentage of your income. The percentage depends on your income and the number of months you are without health insurance.

If you cannot afford to pay the ACA penalty, you can apply for a hardship exemption. A hardship exemption is a form that allows you to request a waiver of the ACA penalty.

If you have any questions about the ACA penalty or short coverage gaps, you can contact the IRS at 1-800-829-1040.