by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The Obama administration may give a little wiggle room on some new Obamacare requirements this year — but not when it comes to the law’s mandate to get insured or otherwise be penalized.
The IRS is just starting to learn how many Americans will have to pay a penalty for lacking health insurance in 2014, the first year of the law’s individual mandate. Top health and tax officials said Wednesday they expect 2 to 4 percent of all tax filers — which could equate to as many as 6 million Americans — to pay a fine.
While there was some speculation that the agency would turn a blind eye to violations in the mandate’s first year, the officials didn’t indicate there would be any special leniency for those who fail to buy coverage.
Nor is that the expectation of tax preparation companies, who are playing a major role in helping people enroll.
“I think that’s what we called a tax community hopeful aspiration,” said Mark Steber, chief tax officer for Jackson Hewitt. “The simple fact of the matter is there is nothing official that says the IRS is not going to enforce the law as it’s written.”
This year the penalties will equal $95 or 1 percent of income above the filing threshold, which would equal about $400 for a person earning $50,000. The fee rises next year and again in 2016. …
… On a normal year, the IRS has a big job with processing around 150 million tax returns. The job’s even bigger this year as it enforces some of the healthcare law’s biggest requirements. Sources close to the agency say things are going better than expected. The agency has received about 10 million electronic tax returns so far, and of those, several hundred thousand are from filers who collected insurance subsidies, they say.
Still, it’s early in the tax-filing season, and officials say they just don’t have enough information yet to know exactly how many people will face major complications due to the law. For the vast majority of people with employer-sponsored coverage, the only part of the Affordable Care Act they’ll encounter is checking a box saying they had coverage.
But people with exchange coverage could face more complications if they went through any major life changes — like getting a pay raise or adding a dependent — and didn’t report it to the marketplace for a subsidy adjustment.