(HHS form)

Consumers who can’t afford to buy major medical coverage, or simply don’t want to, can apply for individual mandate exemptions.

Officials at the Centers for Medicare & Medicaid Services explain the Patient Protection and Affordable Care Act individual mandate exemption process in a guide aimed at “in person assisters” – people who help consumers sign up for public exchange plan coverage and use it.

PPACA requires most with incomes over a certain level to have “minimum essential coverage” or else pay a penalty for each month they don’t.

In practice, for 2014, most of those affected who earn enough to be subject to the penalty will pay an amount equal to 1 percent of income, ranging from a minimum of $95 per adult and $47.50 per child for the full year, according to the Tax Policy Center. 

The 2014 annual maximum penalty will be $3,600 (the national average cost of bronze-level exchange coverage) per affected adult and $1,900 per affected child.

PPACA caps the penalty for large families.

PPACA also indexes the penalty amounts for inflation.

In 2016, the annual minimum will rise to $695 per adult and $347.50 per child. The maximum will rise to $4,045 per adult and $2,135 per child.

In 2014, a single, uninsured, childless adult with an income of $60,000 might owe a penalty of $499. A single, childless adult with an income of $375,000 might owe the $3,600 maximum.

In the guide, CMS officials list the many types of exemptions, such as for members of federally recognized Indian tribes; people who have short gaps in coverage; and those who can’t find coverage that meets federal affordability standards.

Officials also describe a more flexible kind of penalty exemption: A “hardship exemption.”

The officials describe 14 types of circumstances that could qualify a taxpayer for a hardship exemption. These include some relatively rare circumstances, such as filing for bankruptcy within the last six months, or recently suffered domestic violence.

The circumstances also include recently experiencing the death of a close family member, receiving a shut-off notice from a utility company, being unable to pay medical expenses in the last 24 months, or experiencing increased expenses as the result of a need to care for an ill, disabled or aging family member.

Consumers in states with exchanges run by the feds fill out one kind of affordability exemption application, while those in other states fill out applications from their state-based exchanges.

Consumers who want to apply for other types of exemptions have to use other types of forms. In some cases – in situations, for example, involving consumers applying for exemptions because their states did not expand eligibility for Medicaid – consumers can apply for exemptions without filling out any extra forms.

At the federal exchanges, “there are no online or telephone exemption applications at this time,” CMS officials say in the guide.

Federal exchange consumers are supposed to mail exemption applications to an office in London, Kentucky.

“Missing information may delay processing, because applications can’t be processed until documentation is received,” officials say.

Consumers should copy the original versions of any documents sent and also keep proof of mailing, officials say.

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