Health | National

IHS and IRS simplify tax exemption issue for Indian descendants

The Keams Canyon Hospital in Arizona. Photo from IHS

The Obama administration is making it easier for Indian descendants to claim a tax exemption under the Affordable Care Act.

The law requires all Americans to carry health coverage or face a penalty otherwise known as the shared responsibility payment. Members of federally recognized tribes and shareholders of Alaska Native corporations, however, are exempt from the requirement and can claim the exemption through the tax filing process.

But the administration also recognized that Indian descendants who are eligible for services under the Indian Health Care Improvement Act were excluded. So the Department of Health and Human Service finalized a regulation that allows these patients to seek an exemption by submitting an application.

After hearing from tribes, however, the Indian Health Service and the Internal Revenue Service are simplifying the process. Guidance will be published later this year to allow Indian descendants to claim the exemption through the tax filing process.

"The IHS worked closely with the Centers for Medicare and Medicaid Services and the IRS to extend these options to individuals eligible to receive services from an Indian health care provider," the agency said in a press release.

The issue stems from the definition of "Indian" under the ACA. It is narrower than the one under the IHCIA so it leaves out Indians who are otherwise eligible for care from the IHS, urban Indian organizations or tribal providers.

Federal Register Notice:
Patient Protection and Affordable Care Act; Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage Provisions (July 1, 2013)

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