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Is Proof of Health Insurance Still a Requirement for the IRS-_1

Does the IRS Still Require Proof of Health Insurance?

The Affordable Care Act (ACA), also known as Obamacare, was signed into law in 2010 with the goal of increasing the number of Americans with health insurance coverage. One of the key components of the ACA was the individual mandate, which required most Americans to have health insurance or pay a penalty. Over the years, there have been numerous changes to the ACA, and many people are left wondering: does the IRS still require proof of health insurance?

The short answer is yes, the IRS still requires proof of health insurance, but the process has become much simpler. Under the ACA, individuals who did not have health insurance for at least part of the year were required to fill out a form with their tax return. This form, known as Form 8965, helped the IRS determine if the individual was eligible for an exemption or if they owed a penalty for not having insurance.

However, starting in 2019, the individual mandate penalty was reduced to zero, which led to a significant decrease in the number of people who were required to file Form 8965. Despite this change, the IRS still needs to collect information about health insurance coverage to ensure compliance with the law.

Here’s what you need to know about the IRS’s requirement for proof of health insurance:

1. Exemptions: The IRS recognizes several exemptions from the individual mandate, including hardship exemptions, religious exemptions, and exemptions for individuals who live in areas with no affordable coverage options. If you qualify for an exemption, you do not need to provide proof of health insurance when filing your taxes.

2. Minimum Essential Coverage: If you are not exempt from the individual mandate, you must have minimum essential coverage, which includes plans offered through government exchanges, employer-provided coverage, and certain other types of insurance. You do not need to provide proof of coverage for these types of plans, but you must be able to demonstrate that you had coverage for the required period.

3. Self-Reporting: If you had health insurance throughout the year, you can simply self-report your coverage on your tax return. The IRS does not require you to submit any documentation with your return, although you may be requested to provide proof if you are selected for an audit.

4. Reporting Changes: If you had health insurance at the beginning of the year but lost coverage later on, you must report this change to the IRS. You can do this by updating your information on your tax return or by contacting the IRS directly.

5. Penalties: While the penalty for not having health insurance has been reduced to zero, the IRS still requires proof of coverage to ensure compliance with the law. If you are found to be non-compliant, you may still be subject to penalties in the future, depending on the status of the ACA and any potential changes to the individual mandate.

In conclusion, while the process for proving health insurance to the IRS has become less onerous, it is still a requirement for most Americans. By understanding the exemptions, self-reporting requirements, and potential penalties, you can ensure that you are in compliance with the law and avoid any unnecessary tax complications.

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