Individual Mandate: Hardship Exemption

On June 26, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a final rule to allow American Indians and Alaska Natives (AI/AN) to receive an exemption from the shared responsibility under the Affordable Care Act (ACA).

What are the Exemptions?

Instead of maintaining minimum health care coverage or pay the penalty, AI/An are exempted through two possibilities:

Two types:

  1. Statutory exemption is for members of federally recognized Tribes who can go onto the marketplace and apply for an exemption, in which they will receive an exemption certificate number that can be used on tax forms. IRS will have that number as well for confirmation or acknowledge on the tax forms
  2. Hardship exemption is for those eligible to receive services from Indian health service


These exemptions are retroactive and prospective. This exemption continues indefinitely. Therefore there are no penalties.


Exemption Applications:

The Exemption application will be released soon and available for a 30 day public comment period.  The application will be a separate form from health care coverage application.  The approach is to collect as minimal information as possible:

  1. Considering a separate application for each exemption or using a single application for both Indian exemptions. Looking for input on these.
  2. State based marketplace can use the federal form or developed their own and have it approved.
  3. Core unit for each exemption is the tax filer.

The application will be available online to download


Verification Process:

  • There is a verification process in each exemption category.
  • Final regulation lays out the process – first electronic verification, then paper documentation, and finally case-by-case verification.
  1. Electronic application – CMS is committed to an electronic verification process and have been in engaged in a number of conversations with HIS. However, not ready to go because there are still data sharing agreements needed. So planning we are committed to electronic verification. We have engage in number of the conversations for IHS. We will not have ready to go – there are data sharing agreements needed, we will not have in the interim so we will be implementing a paper process.
  2. Paper application