Dear Friends & Colleagues, 

Individual Mandate (Penalty and Exemptions) Toolkit

Penalty myths abound!
  We continue to discuss the individual mandate in the Affordable Care Act (ACA) – and the associated tax penalty with our tax customers.  Many uninsured taxpayers are shocked to learn that their penalty for lacking minimum essential coverage could be a LOT more than $95 in 2014.  In fact, an taxpayers uninsured for the year would typically be about 1% of their income in penalties.  That fact runs counter to the most common perceptions about the ACA’s penalty provision.

Okay, so the penalty is complex and often misunderstood – but what about the exemptions? 
Unfortunately, HHS created about eight exemption categories– one of which could apply to individuals based on thirteen criteria with different application instructions for each – and a total of about eight different forms to consider.  To its credit, HHS drafted an explanation at, which reads at the 9.5-grade reading level.  While substantially higher than the Department’s sixth-grade target, it is a vast improvement over former drafts.  Even so, the exemptions remain frightfully difficult to explain, and HHS has created a cumbersome that taxpayers must use to apply.

Now there is a much easier way to explain the penalty and the exemptions!
  To help with this educational effort, we created the attached toolkit.  Our toolkit includes the previously-released penalty explanation, worksheet, and example – and we have added two new infographics to help explain the exemptions.  These materials are now also available at  Please feel free to use, reproduce, and/or distribute these documents as much as you like; we just ask that you do so without modifying the content or format. Of course, we also  encourage all users to discuss the results with a trained tax preparer before drawing conclusions.

The ACA is tightly linked to taxes – and we at Jackson Hewitt are focused on helping American families with this and all aspects of the tax code.  Please feel free to contact me at or 615-761-6929 if I can be helpful in any way.  



* For reference, HHS published the proposed NBPP at 78 Fed Reg. 72322, 72388 (Dec. 2, 2013), which is available at  Please note that HHS does not necessarily need to clarify the open enrollment period in the NBPP; it simply chose to announce this proposed policy change in this vehicle.  HHS could presumably change open enrollment dates even after publishing the final NBPP.


** To learn more about the penalty, please visit