Randall Posted March 19, 2016 Report Share Posted March 19, 2016 A penalty exemption Code B is for lack of health coverage for less than 3 months. If a person changed jobs and was not eligible for health insurance with new employer the first 3 months and did not have coverage for a month in between jobs, total 4 months, can the exemption be used for two of those months? I don't think so because there was 4 consecutive months without coverage. But I wanted to ask thinking maybe he could be eligible for the first two months of the total 4 months. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 19, 2016 Report Share Posted March 19, 2016 Consecutive is not part of the equation. Unless he can go to the Marketplace and qualify for an exemption, he is subject to penalty. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 19, 2016 Report Share Posted March 19, 2016 I had posted a similar question, but someone mention that employers are now required to start insurance on the start date not 90 days (trial date). Quote Link to comment Share on other sites More sharing options...
Randall Posted March 19, 2016 Author Report Share Posted March 19, 2016 3 hours ago, ILLMAS said: I had posted a similar question, but someone mention that employers are now required to start insurance on the start date not 90 days (trail date). I suppose this company was not aware of this. This was mid year last year. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted March 20, 2016 Report Share Posted March 20, 2016 Or you go to marketplace and get insurance for 3 months.... Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 21, 2016 Report Share Posted March 21, 2016 Good read on the 90-day waiting http://www.willis.com/documents/publications/industries/healthcare/20140716_50391_BULLETIN_HCP_ALERT.FINAL.pdf Quote Link to comment Share on other sites More sharing options...
Randall Posted March 22, 2016 Author Report Share Posted March 22, 2016 On 3/19/2016 at 10:24 AM, Jack from Ohio said: Consecutive is not part of the equation. Unless he can go to the Marketplace and qualify for an exemption, he is subject to penalty. Jack, Part III of Form 8965 seems to indicate a person can get an exemption without going to the Marketplace. Part I seems to be for Marketplace granted exemptions. My original post doesn't apply for my client but it seems an exemption could apply to some without going to the Marketplace. 2 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 22, 2016 Report Share Posted March 22, 2016 2 hours ago, Randall said: Jack, Part III of Form 8965 seems to indicate a person can get an exemption without going to the Marketplace. Part I seems to be for Marketplace granted exemptions. My original post doesn't apply for my client but it seems an exemption could apply to some without going to the Marketplace. Let me know how that works... Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2016 Report Share Posted March 22, 2016 On 3/19/2016 at 8:27 AM, Randall said: A penalty exemption Code B is for lack of health coverage for less than 3 months. If a person changed jobs and was not eligible for health insurance with new employer the first 3 months and did not have coverage for a month in between jobs, total 4 months, can the exemption be used for two of those months? I don't think so because there was 4 consecutive months without coverage. But I wanted to ask thinking maybe he could be eligible for the first two months of the total 4 months. You are correct. He's outta luck in this instance. On 3/19/2016 at 9:24 AM, Jack from Ohio said: Consecutive is not part of the equation. Unless he can go to the Marketplace and qualify for an exemption, he is subject to penalty. Consecutive is too part of the equation. If the person had a two month gap, then was covered, then had another two month gap he would escape the penalty for one of the two month gaps. If he has a four month gap in a calendar year, he's outta luck. If the only four month gap is two months at the end of one year and two months at the beginning of the next year, he'd skate on the earlier year. 2 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 22, 2016 Report Share Posted March 22, 2016 2 hours ago, RitaB said: Consecutive is too part of the equation. If the person had a two month gap, then was covered, then had another two month gap he would escape the penalty for one of the two month gaps. If he has a four month gap in a calendar year, he's outta luck. If the only four month gap is two months at the end of one year and two months at the beginning of the next year, he'd skate on the earlier year. Cite please? Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2016 Report Share Posted March 22, 2016 12 minutes ago, Jack from Ohio said: Cite please? https://www.irs.gov/instructions/i8965/ch02.html Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 22, 2016 Report Share Posted March 22, 2016 Here is a beautify chart I recommend to avoid the confusion: https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 22, 2016 Report Share Posted March 22, 2016 Looking for the cite that is NOT about Marketplace exemptions. We are talking about Shared Responsibility Payments. I want to see where it says that the time to exceed the two month safe harbor in a calendar year, must be continuous. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 22, 2016 Report Share Posted March 22, 2016 49 minutes ago, Jack from Ohio said: Looking for the cite that is NOT about Marketplace exemptions. We are talking about Shared Responsibility Payments. I want to see where it says that the time to exceed the two month safe harbor in a calendar year, must be continuous. Cite: 26 U.S. Code Sec 5000A (e)(4) #22 on this page: https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision 22. What qualifies as a short coverage gap? In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first gap.If you have a coverage gap of 3 months or more, you are not exempt for any of those months. If you do not have coverage for a continuous period that begins in one taxable year and ends in the next, for purposes of applying the short coverage gap rules to the first taxable year, the months in the second taxable year included in the continuous period are not counted. For purposes of applying the short coverage gap rules to the second year, the months in the first taxable year are counted. For example, if you lacked coverage from November 1, 2015 until February 1, 2016, November and December of 2015 are treated as a short coverage gap on your 2015 tax return. On your 2016 return, however, November and December of 2015 are included in the continuous period that includes January 2016. That continuous period is not less than 3 months so, on your 2016 return, January of 2016 is not an exempt month under the short coverage gap exemption. 1 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2016 Report Share Posted March 22, 2016 1 hour ago, Jack from Ohio said: Looking for the cite that is NOT about Marketplace exemptions. We are talking about Shared Responsibility Payments. I want to see where it says that the time to exceed the two month safe harbor in a calendar year, must be continuous. From my cite (instructions to Form 8965), pages 9 and 10, how you can avoid SRP by entering Code B in Part III, has nothing to do with marketplace: Short coverage gap (code “B”). You generally can claim a coverage exemption for yourself or another member of your tax household for each month of a gap in coverage of less than 3 consecutive months. If an individual had more than one short coverage gap during the year, the individual is exempt only for the month(s) in the first gap. If an individual had a gap of 3 months or more, the individual isn't exempt for any of those months. For example, if an individual had coverage for every month in the year except February and March, the individual is exempt for those 2 months. However, if an individual had coverage for every month in the year except February, March, and April, the individual isn't exempt for any of those months. Example—multiple gaps in coverage. Colton had coverage for every month except February, March, October, and November. Colton is eligible for the short coverage gap exemption only for February and March. Example—gaps in coverage for partial months. Fred has minimum essential coverage except for the period April 5 through July 25. An individual is treated as having coverage for any month in which he or she has coverage for at least 1 day of the month. As a result, Fred has minimum essential coverage in April and July and is eligible for the short coverage gap exemption for May and June. Continuous coverage gap straddles more than one taxable year. If you do not have minimum essential coverage for a continuous period that begins in one taxable year and ends in the next, for purposes of applying the short coverage gap rules to the first taxable year, the months in the second taxable year included in the continuous period are not counted. For purposes of applying the short coverage gap rules to the second year, the months in the first taxable year are counted. Example—Continuous coverage gap straddles more than one taxable year. Fran, an unmarried taxpayer with no dependents, has minimum essential coverage from January 1 through October 31, 2015. Fran is without coverage until February 1, 2016. On her tax return for 2015, November and December of 2015 are treated as a short coverage gap. On her 2016 tax return, November and December of 2015 are included in the continuous period that includes January 2016. The continuous period for 2016 is not less than 3 months, and therefore January is not part of a short coverage gap. To claim this coverage exemption, enter code “B” in Part III, column (c), and identify the months to which the exemption applies as described under Columns (d) - (p)—Calendar Months, later. 1 Quote Link to comment Share on other sites More sharing options...
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