Hardship Exemption

A hardship exemption is an official Marketplace determination that a personal circumstance qualifies you for relief. Hardship exemptions used to also exempt people from the federal individual mandate penalty, but since 2019 the federal penalty has been $0, so the main practical use of a hardship exemption today is to make people over age 30 eligible to buy a Catastrophic plan.

Catastrophic plans have very low premiums and a very high deductible (in 2026, the federal annual limit on out-of-pocket costs). They are normally only available to people under 30. With a hardship exemption certificate, someone older can buy one. A few states (California, Massachusetts, New Jersey, Rhode Island, Vermont, Washington DC) also have their own state-level mandate penalties, where a hardship exemption still matters for the state penalty.

Qualifying hardships

The list of accepted hardships is set by CMS. Common ones include:

• The cheapest available coverage in your area costs more than 8.27% of your household income (the federal affordability threshold for 2026)
• Homelessness
• Eviction in the past 6 months, or facing eviction or foreclosure
• Domestic violence
• Death of a close family member
• Bankruptcy in the past 6 months
• Substantial medical debt in the past 24 months
• Unexpected increase in essential expenses due to caring for an ill, disabled, or aging family member
• A child requires medical care and a court ordered you to provide it but you can’t afford it
• Utility shut-off notice
• Natural disaster (fire, flood, hurricane) that caused substantial damage to your property
• Appeals process determined you were wrongly found ineligible for Medicaid
• Other circumstance that prevents you from getting health coverage (general category, requires documentation)

How to apply

There are two paths:

Option 1 — Apply through HealthCare.gov. Download the hardship exemption form (form OMB 0938-1190), complete it, attach documentation, and mail it to the address on the form. CMS reviews and mails back a certificate with an Exemption Certificate Number (ECN). You enter that ECN when buying a Catastrophic plan on the Marketplace.

Option 2 — Self-attest at enrollment. For the affordability hardship (cheapest coverage exceeds 8.27% of household income), you can often self-attest on the application without a separate filing.

Documentation needed depends on the hardship: eviction notices, death certificates, bankruptcy filings, FEMA disaster declarations, utility shut-off notices, etc.

What it does and does not do

A hardship exemption:

• Does make you eligible to buy a Catastrophic plan on the Marketplace
• Does exempt you from state-level individual mandate penalties in states that still have them
• Does create a path to enrollment outside of normal Open Enrollment in some cases
• Does not waive the federal penalty (because the federal penalty is already $0)
• Does not give you free coverage. You still pay the Catastrophic plan’s premium.
• Does not automatically grant you subsidies for a Catastrophic plan. APTC does not apply to Catastrophic plans.

Example

A 42-year-old contractor in Florida lost his job, and his unemployment benefits put his MAGI at $24,000. The cheapest Bronze plan in his county would cost him $260 a month after the federal subsidy. That is $3,120 a year, which is more than 8.27% of his household income ($1,985). He qualifies for the affordability hardship exemption. He files form OMB 0938-1190, gets an ECN, and enrolls in a Catastrophic plan with a $98 monthly premium. He accepts the high deductible because he is healthy and just needs protection against a major accident.

Related terms

• Qualified Health Plan
• Metal Tiers
• Special Enrollment Period
• MAGI

Run the calculator first to see your subsidy for regular Bronze plans before assuming a Catastrophic plan is your best option.