One Year Exemption for Direct Care Recipients

Along with the confusion about having to tick a box to indicate that you have “minimum essential coverage” because you have Tricare health insurance coverage, there is a very small sub-group that is in a unique situation.  I wasn’t going to write about it, because it seems like a teensy group, but the emails that Amy and I have received have convinced me otherwise.

If you are eligible to receive medical care at a military facility because you are:

  • Dependent-parents and parents-in-law, or
  • Guard/Reserve members getting Line of Duty care, or
  • Service Secretarial Designees,

then you are not covered by Tricare (unless you are purchasing Tricare Reserve Select).  The care you are eligible to receive is called “direct care” and does not meet the Affordable Care Act (ACA) requirements for minimum essential coverage.

The way the law is written, you are required to purchase health care coverage through the health care exchanges, or pay a “shared responsibility payment.”  However, there is a one year exemption.  For the 2014 tax year only, you may tick the box indicating that you had appropriate health care coverage, even though you technically did not have the required coverage.

More importantly, there is no such exemption for the 2015 tax year.  It is already the end of January.  If you have not obtained coverage through another source, such as an employer, then you need to join a program through your state’s health care exchange or be subject to penalties when you file your 2015 tax return.

This is a slightly complicated issue, and a little outside of my zone of expertise.  If you have questions, I will try to answer them, but I strongly recommend that you speak with a qualified tax preparer to ensure that you are meeting the requirements this year.

More information can be found at the Tricare and Affordable Care Act webpage, or at the (terribly complicated and confusing) IRS Instructions for Form 8965, Health Coverage Exemptions.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.