Health insurance for non-citizen over age 65

[Kea]

My client's dad lives with him. Dad is from Asia and his only income is pension of approx $300 per year (depending on conversion rate).

Dad is in US legally and therefore must have health insurance by 3/31/14. Household income is well over poverty. But since Dad is over 65 he can't get insurance through the healthcare.gov website & since he has not been here for 5 years, he is not eligible to buy into Medicare.

I have read that TX insurance companies do not sell policies to anyone over 65. (I'm not sure if that website was current or not.) I have given my client the name of the navigator that I used to see if he can find anything.

Client is hearing advice that he shouldn't claim his dad as a dependent & Dad should file his own return showing lack of income. I advised that that won't help since it goes by household income (and, well, that whole fraud thing...)

Is anyone familiar with how to avoid the Catch-22 of having to pay a penalty for not having insurance when he cannot get insurance?

Thanks

[jklcpa]

From the IRS site (same info is on healthcare.gov too): http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision

If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision?

No. If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. If you are not required to file a tax return for a year but file one anyway, you will be able to claim the exemption on your tax return.

[Kea]

Thanks Judy. Per # 2 on that page, my client is responsible for anyone he can claim as a dependent, unless there is an exemption:

2. Who is subject to the individual shared responsibility provision?

The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.

Since Dad would have an exemption due to his low income, that means my client would not be subject to the penalty? In that case, a taxpayer wouldn't be responsible for penalty for their kids, either -- their income is also $0.

[jklcpa]

Yes, I see what you mean, hopefully a nagivator will be able to help.