Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Unemployed persons can buy health insurance at healthcare.gov and the state exchanges
  • The federal and state health insurance agencies provide assistance for insurance and referrals for other coverage
  • The Marketplace and exchange serve eligible residents whether employed or unemployed with low-cost insurance and financial assistance
  • Obamacare uses the annual family income to determine eligibility

Buying health insurance is a difficult task; one must consider the policies carefully to find the best fit for an individual or family’s needs. While there is a minimum income level required for Obamacare policies, an unemployed individual can buy on the Obamacare portals.

The income required for Obamacare is the annual family income; the totals include income from any source unless excluded from taxation. When selecting policies, unemployed persons can benefit from comparison shopping. They can focus on costs or any other feature of great importance to them.

The income required for Obamacare is the annual family income; the totals include income from any source unless excluded from taxation.

When selecting policies, unemployed persons can benefit from comparison shopping. They can focus on costs or any other feature of great importance to them.

When selecting policies, unemployed persons can benefit from comparison shopping. They can focus on costs or any other feature of great importance to them. Compare health insurance rates now by entering your zip code in our FREE tool above!

Buying Health Insurance when Unemployed

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Unemployed applicants can qualify for Obamacare policies on the basis of their individual or combined family income. As income increases, they can report gains. Getting a job is not a qualifying event.

Moving above the range allowed for financial assistance can expose a policyholder to repayment of benefits.

Those at or near the lower limit for Obamacare financial assistance can get the maximum levels of costs assistance. The options for unemployed applicants include the below-listed items.

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Taxable Income

The key to determining eligibility for health insurance is the family income figure. The minimum for Obamacare is above the poverty line. Applicants should have income above 138 percent of the poverty line to qualify for marketplace policies; those below it can get coverage in Medicaid expansion.

The minimum figure for tax credits is the federal poverty line. In determining this figure, the federal rules include everything except a few categories of non-taxable income. For example, Supplemental Security Income is not taxable. These are payment to support severely physically challenged and elderly people; by law, these funds are not taxable.

Taxable income includes social security retirement funds, unemployment compensation, alimony, rental income, investment income, and money from an IRA.

The Individual Mandate

The individual mandate requires every citizen and legal resident to have qualified health insurance. Those that fail or refuse to buy insurance may have to pay the individual healthcare insurance penalty.

There is no exemption for unemployment, however, the rules accept many types of personal and financial hardships.

The individual mandate requires that unemployed persons get insurance coverage and for those without the income needed for Obamacare, there are effective alternatives in the CHIP and Medicaid.

The Penalty for No Insurance

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The Affordable Care Act has penalty provisions for those who fail or refuse to buy qualified health insurance. The rules establish penalties called the individual shared responsibility payment.

Unemployed persons must meet the requirements of the mandate by getting and keeping qualified health insurance for twelve consecutive months. Coverage by Medicaid, Medicare, or the CHIP meets the individual mandate. The IRS applies the total divided by twelve for each month without insurance.

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Determining the Penalty

The below-described rates show the 2016 tax penalty for no insurance coverage for children, adults, and family units. The Individual shared responsibility payment consists of the greater of the family total or family income percentage. The 2016 individual mandate penalty is the greater of the below-listed sums.

  • 2.5 percent of annual family income or the sum of items (1) and (2) not to exceed the amount of item (3).
  • (1) The 2016 individual penalty per adult is $695.00; added to
  • (2) The 2016 individual penalty per child or minor is $347.50;
  • (3) Up to the 2016 maximum for a family of $2.085.00.

Exemptions and Hardship

Unemployed persons with no taxable income do not have to file a return. They do not meet the tax filing threshold and can apply for an exemption. The family income total is the amount that Obamacare uses to determine eligibility for Marketplace policies. The exemptions include reinstatement after missing one or two months of coverage.

The lack of an affordable policy is another basis for an exemption. A family with qualifying income can claim exemption if there are no policies available that cost less than 8 percent of the annual family income.

Shopping Outside of Obamacare

Unemployed persons can buy qualified health insurance from a state exchange or the federal marketplace. They can also shop outside of Obamacare with private sellers and insurance agents.

After open enrollment, they will not find qualified policies with Obamacare financial benefits.

During open enrollment, policies purchased outside of the exchange or marketplace provide cost assistance or premium subsidies when purchased through authorized agents.

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Obamacare Counts Annual Family Income

When determining eligibility for Marketplace insurance, Obamacare counts the modified adjusted annual income of the head of household and spouse. It uses the adjusted annual income of any dependents. Further, income includes unemployment compensation, social security retirement payments, and most other forms of income including interest, and capital gains.

Open Enrollment

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Consumers can purchase Obamacare plans and all qualified health insurance during the open enrollment period. The open enrollment for 2017 runs from November 1, 2016, through January 31, 2017. After the open enrollment closes, applicants must find an exception to the rule against sign ups until the next enrollment. The accepted list of life events include the below-listed items.

  • Divorce
  • Marriage
  • Adopting a child
  • Taking in a foster child
  • Giving birth
  • Losing coverage as a dependent at age 26

Loss of Employer-Sponsored Coverage

Unemployment by itself does not help get enrollment after the sign-up period has passed. After the healthcare enrollment period, one must have an exception to the rule that bars sign ups until the next November. The cause of unemployment is the key; loss of employer-sponsored coverage does support a special enrollment. Loss of coverage from job loss as employee or dependent qualifies for a special enrollment period.

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Medicaid and the CHIP

Unemployed applicants that fail to meet the income requirements for Obamacare policies may more easily qualify for Medicaid and the Children’s Health Insurance Program.

Obamacare counts a wide range of types and sources as income. Those that do not meet the minimum may get coverage under Medicaid. This is qualified coverage with the health essentials required by the individual mandate.

Open on a year-round basis, both the CHIP and Medicaid provide medical care at low or no costs to the subscriber.

Unemployed applicants could lose coverage if they resume work and have more income than allowed for the programs.

Unemployed to Marketplace

Getting a new job is not a qualifying event for a new special enrollment period. Losing Medicaid or CHIP coverage are qualifying events. The event of losing Medicaid or CHIP is a qualifying event.

Rejection from Medicaid or CHIP is also a qualifying event. One can get a marketplace plan during the special sixty-day sign-up period. Comparison shopping can help a consumer find the best policies to meet their financial and medical needs.

Medicaid Expansion

Medicaid expansion is important to the unemployed, and particularly when they have too much income to qualify for Medicaid. Medicaid expansion was intended to fill the gap between the minimum Obamacare income level and the maximum income limit for Medicaid.

By increasing or expanding Medicaid to 138 percent of the poverty line, those in between Obamacare and Medicaid could get coverage under the Medicaid expansion.

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Obamacare Works for the Unemployed

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The unemployed can get health insurance coverage through Obamacare; Medicaid, Medicaid expansion, and the CHIP. The minimum income required for Obamacare marketplace policies is based on the annual family income.

Unemployed applicants can get insurance and financial assistance during the sign-up period beginning in November.

After the open enrollment period, an employment-related status change may get a special enrollment period. One standard qualifying event loss of job-sponsored insurance as an employee or dependent. Comparison shopping will help get the best value when selecting during or after the open enrollment period.

Comparison shopping can focus the search on the features that are most important to the consumer’s individual or family circumstances. Compare health insurance rates now by using our FREE tool below!