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qualifying coverage

What is qualifying coverage?

Qualifying coverage refers to any health insurance plan that is considered minimum essential coverage under the Affordable Care Act. This includes individual or employer-sponsored comprehensive group health coverage (and such coverage continued via COBRA), as well as Medicare, Medicaid/CHIP, and Veterans Administration coverage.

Qualifying coverage does not necessarily have to be compliant with the ACA. Grandmothered and grandfathered plans in the individual and small group market do not have to comply with most of the ACA’s provisions, but they’re still considered minimum essential coverage, or qualifying coverage.

Qualifying coverage does NOT include health benefits for a specific illness, such as cancer, or limited need such as no-fault automobile, disability coverage, dental coverage or other limited-coverage plans. It also does not include short-term health insurance plans. If your only form of coverage is not qualifying coverage, you may be assessed the ACA’s individual mandate penalty when you file your tax return.

Indian Health Services is not considered qualifying coverage on its own, but Native Americans have access to year-round enrollment in the exchange, and depending on income, many Native Americans also have access to exchange plans with no cost-sharing. However, there is also an exemption from the ACA penalty that is available to Native Americans if they choose to rely solely on IHS instead of obtaining qualifying coverage.