Chapter 13 & Obamacare

[sassiekc]

What is the name of your state (only U.S. law)? MO

I lost my job June 30th due to health issues, we filed chapter 13 Oct 7th. Our court date is Nov 7th. Regarding not having health insurance and having to pay a penalty when filing income tax, they due consider bankruptcy a hardship that will exempt you from the fine, providing you submit your BK papers from the court. The exemption papers didn't really say for sure but was wondering if anyone knew if that hardship could be used for the 5 years during our repayment plan..???

thanks!

 

[FlyingRon]

Well we can only talk about what the law is TODAY. Who knows what the morons on Capitol Hill will do for future years.

Yes, currently you are exempt from paying the penalty under a variety of circumstances including you have filed bankruptcy. You are also out if you make below the federal filing threshold or the cheapest coverage available to you is more than 8% of your gross income. There are a handful of other exemptions as well (eviction in the past six months, utility shutoffs, certain family deaths, etc...). The bankruptcy protection ends when the bankruptcy is discharged (typically three to five years unless you either settle your debts earlier or go chapter 7).

 

[sassiekc]

Ha! Morons for sure! Thanks FlingRon!

 

[Taxing Matters]

Well we can only talk about what the law is TODAY. Who knows what the morons on Capitol Hill will do for future years.

It’s worth noting that the bankruptcy exemption is not expressly provided in the Affordable Care Act (ACA). Rather, it is provided by a decision of the Department of Health and Human Services (HHS) under the authority it has in the ACA to exempt persons due to demonstrated hardship. Thus, it is not just Congress (Capitol Hill) that could revoke this provision, the Trump Administration could also kill it by having HHS modify what qualifies for the hardship exception.

The bankruptcy protection ends when the bankruptcy is discharged (typically three to five years unless you either settle your debts earlier or go chapter 7).

That is not what the instructions for the bankruptcy hardship say. Rather, it says that in order to qualify for the bankruptcy exemption, you must have filed for bankruptcy in the last three years. Thus, even if you are still in a Chapter 13 bankruptcy plan you may not qualify for this exemption once it has been longer than three years since you filed the bankruptcy petition. On the other hand, even if you filed Chapter 7 and got a prompt discharge, you may still qualify for the exemption if it has not yet been three years since you filed the petition. I see nothing that ties the exemption to the bankruptcy discharge. See the HHS information on this exemption here:
https://www.healthcare.gov/exemptions-tool/#/results/2017/details/bankruptcy