4M Paid Penalties For Not Having Health Insurance In 2016

Four million people paid Affordable Care Act penalties averaging $708 for not having insurance in 2016, according to preliminary figures released by the Internal Revenue Service.

The average is just over the base penalty of $695 imposed for a whole year without coverage; those with higher incomes paid more. Overall, that's about $2.8 billion. The agency noted that those numbers are subject to change as processing continues.

The penalty started in 2014 with a base penalty of $95. The IRS reported that 7.9 million people paid an average of $210 that year, for a total of $1.6 billion.

In 2015 the base penalty rose to $325, and the IRS reported that 6.5 million people paid an average of $470, for a total of $3 billion.

The penalty is known as the individual mandate, and multiple exemptions are available including ones for people with incomes under certain levels or who cannot obtain coverage at a cost the government deems affordable. IRS records show millions obtaining those exemptions each year.

A perennial target for those who want repeal of the law also known as Obamacare, the individual mandate has also come under criticism from supporters of the law who say the penalties are not steep enough to push enough people into the marketplace.

This spring, under orders from President Donald Trump, the Internal Revenue Service stepped back from plans to reject tax returns that didn't indicate whether or not people had health insurance.

The impact of that action remains unclear, as it was not apparent how the IRS will determine a person’s coverage status or charge a penalty in the absence of voluntary disclosure, although it said the penalty remains in effect and taxpayers are still legally obligated to comply with the mandate.

Credit: HEATHER STAUFFER | Staff Writer