Okay I figured out that the bottom of NJ-HCC is where you check the months they DID have coverage.  I was checking off the months to apply the exemption. 

This time I checked the months they had insurance and put in the exemption code for the other 2 months.  It is correct in saying the coverage was 10 months but it is still giving the penalty for the 2 months even though I entered an exemption code.