Under the Obamacare Mandatory Health Insurance Requirement, Are There Penalties for Most Individuals Who Do Not Obtain Health Insurance? – YES
General Reference (not clearly pro or con)
[Editor’s Note: Beginning in 2019 the mandate to purchase health insurance or pay a tax fine will officially end. The Tax Cuts and Jobs Act, signed into law by President Trump on Dec. 22, 2017, contained a provision repealing the individual mandate to purchase health insurance under Obamacare. The mandate will remain in effect for 2018.]
The Patient Protection and Affordable Care Act, Section 5000A, “Refundable Credit for Coverage under a Qualified Health Plan,” page 126, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“(a) Requirement To Maintain Minimum Essential Coverage- An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.
(b) Shared Responsibility Payment-
(1) IN GENERAL- If an applicable individual fails to meet the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as provided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under subsection (c).
(2) INCLUSION WITH RETURN- Any penalty imposed by this section with respect to any month shall be included with a taxpayer’s return under chapter 1 for the taxable year which includes such month.
(3) PAYMENT OF PENALTY- If an individual with respect to whom a penalty is imposed by this section for any month—
(A) is a dependent (as defined in section 152) of another taxpayer for the other taxpayer’s taxable year including such month, such other taxpayer shall be liable for such penalty, or
(B) files a joint return for the taxable year including such month, such individual and the spouse of such individual shall be jointly liable for such penalty.”
[Editor’s Note: Additional details on the penalty continue from page 126 to page 132. Penalties are also discussed in section 1002 of the Health Care Reconciliation Act of 2010, signed into law on Mar. 30, 2010.]Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
[Editor’s Note: On Aug. 27, 2013, the Obama administration released the final regulations (198 KB) for Obamacare’s individual mandate including how the fines for people who chose not to purchase will be assessed, who it applies to, who is exempt, and the types of insurance that are necessary to meet Obamacare’s health insurance mandate.]
Diane Suchetka, staff writer for the Plain Dealer, wrote in her June 29, 2012 article “Affordable Care Act’s Mandate Does Not Require Everyone to Buy Insurance,” available at the Cleveland, Ohio website:
“Those who aren’t exempt or who don’t have employer- or government-provided insurance and refuse to buy their own will begin to pay fines in 2014. Those fines will be due with income taxes the following April…
• In 2014, the penalty is either $95 [annually] for every adult and $47.50 for every child under the age of 18 in the household (up to $285 for a family), or 1 percent of taxable income for the household, whichever is larger.
• In 2015, it’s $325 for every adult and $162.50 for every child (up to $975 for a family), or 2 percent of taxable income, whichever is larger.
• In 2016, it’s $695 for every adult and $347.50 for every child (up to $2,085 for a family), or 2.5 percent of income, whichever is higher.
• After 2016, the penalty increases annually by the cost-of-living adjustment.”
Brooks Jackson, Director of the FactCheck organization, wrote in his June 28, 2012 article “How Much Is the Obamacare ‘Tax?,'” available at the FactCheck website:
“The minimum penalty per person will start at $95 in 2014, the first year that the law will require individuals to obtain coverage. And it will rise to $325 the following year.
Starting in 2017, the minimum tax per person will rise each year with inflation. And for children 18 and under, the minimum per-person tax is half of that for adults.
However, the minimum amount per family is capped at triple the per-person tax, no matter how many individuals are in the taxpayer’s household…
The tax would be more for persons with higher taxable incomes…
But the penalty can never exceed the cost of the national average premiums for the lowest-cost ‘bronze’ plans being offered through the new insurance exchanges called for under the law.”
Avik Roy, Senior Fellow at the Manhattan Institute for Policy Research, stated the following in his Aug. 28, 2013 article “White House Publishes Final Regulations for Obamacare’s Individual Mandate – Seven Things You Need to Know,” available at forbes.com:
“On Tuesday [Aug. 27, 2013], the Obama administration released the final regulations for Obamacare’s notorious individual mandate – the provision in the health care law that requires most Americans to purchase health insurance, or pay a fine…
If you claim dependents on your tax return, you’re responsible for paying the mandate fines if your dependents don’t have health insurance…
In 2014, the fine for not carrying insurance is the higher of $95 per person or 1.0 percent of taxable income. In 2015, the fine is the higher of $325 per person, or 2.0 percent of taxable income. In 2016, it’s $695 per person or 2.5 percent of taxable income. You’re liable for up to 2 additional dependents, fine-wise…
Section 1501(g)(2) of the Affordable Care Act specifies that the IRS cannot subject taxpayers to ‘any criminal prosecution or penalty’ for refusing to pay the mandate fine. Also, in contrast to normal tax levies, the IRS cannot ‘file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.’
Basically, the only thing the IRS can do to make you pay the mandate fine is to take it out of your withholding, or withhold it from your tax refund, if you’re due one.”
[Editor’s Note: Based upon a neutral reading of the Patient Protection and Affordable Care Act and bi-partisan third party analysis, this question seems to have a clear and obvious Pro (yes) answer, and ProCon.org has therefore presented the responses in a single column with no opposing perspective.]