Obamacare Fine to Be Owed by as Many as 6 Million Taxpayers

Obamacare Fine to Be Owed by as Many as 6 Million Taxpayers (Bloomberg, Jan 28, 2015):

(Bloomberg) — As many as 6 million U.S. taxpayers will have to pay a penalty of as much as 1 percent of income because they went without health insurance in part or all of 2014, the Treasury Department said.

The penalty, part of the Patient Protection and Affordable Care Act, is designed to encourage people to sign up for health insurance using the expanded options and financial assistance available under the law, known as Obamacare. The penalty would apply to about 2 percent to 4 percent of all taxpayers for 2014.

Tax filing for 2014 opened Jan. 20, and the Internal Revenue Service’s Form 1040 — for federal income tax — includes a new Line 61 asking if the taxpayer has health insurance. Three-quarters of taxpayers won’t have to do anything more than check that box, said Mark Mazur, the department’s assistant secretary for tax policy. The remainder will have to to take additional steps, though most won’t pay a penalty, he said on a conference call with reporters.

The IRS has been preparing for additional strain during the tax season as people adjust to the rule, warning that about half the people who call its toll-free phone lines won’t be able to get through.

About 3 percent to 5 percent of taxpayers got tax credits last year to help afford their premiums on Obamacare insurance plans, Mazur said. Ten percent to 20 percent weren’t insured for all or part of the year but will be able to claim an exemption. People who owe a penalty “will pay a fee because they made a choice not to obtain health insurance that they could have afforded, and they’re not eligible for one of the exemptions,” he said.

Four Million Forms

The government will issue about 4 million new tax forms, called a 1095A, to people who received the tax credits, Kevin Counihan, the CEO of healthcare.gov, the federal insurance exchange, said on the call.

The tax penalties start at $95 and can be as much as $12,240 for a wealthy family.

“We’re not here to have a goal to get a certain fee income or to make this difficult for folks,” he said. “We want to get people insured and have the peace of mind of health insurance.”

For 2014, the government is allowing taxpayers to claim a long list of exemptions from the requirement to carry insurance. They include excuses such as a death in the family, domestic violence or if a person’s 2013 coverage was canceled.

Counihan’s agency and the IRS have both established websites to assist people with Obamacare-related tax questions. The Department of Health and Human Services said today that it’s trained tens of thousands of volunteers from organizations including AARP, the interest group for elderly people, to help.

About 8 million people purchased health-care policies through the government-run insurance exchanges in 2014, and of those about 85 percent received subsidies, which went directly to insurance companies. The U.S. gets about 150 million income tax returns a year.

1 thought on “Obamacare Fine to Be Owed by as Many as 6 Million Taxpayers”

  1. The IRS is the collection agent for all private insurance companies. Talk about fascism, the marriage of business and government….it is alive and well in America. America has become a hell hole.

    Reply

Leave a Reply to Marilyn Gjerdrum Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.