Affordable Care Act Penalty Toothless, IRS Can’t Enforce Obamacare

The Obamacare penalty is pretty much toothless since the IRS can’t enforce the Affordable Care Act fine.

In a related report by The Inquisitr, the Affordable Care Act scares 40 percent of American doctors practices. But that’s still not as scary as the Obamacare heroin being produced by drug dealers.

According to the White House, all Americans must be signed up for health insurance by March 31, 2014 in order to avoid the Affordable Care Act penalty. The original Obamacare penalty maxes out at $285, or one percent of the income, for a family of four. In 2016, the Obamacare penalty maxes at $695 per person, $2,085 for the family, or 2.5 percent of taxable income, which amounts to $173.75 per month.

This was done on purpose since the cheapest health insurance plans providing only catastrophic coverage via the Obamacare exchanges are similarly priced. The idea is to make it cheaper to sign up than to pay the fines. In the end, 5.9 million Americans are expected to pay the Obamacare penalty.

Still, there are Obamacare exemptions that cover religious beliefs, the poor, qualifying Native Americans, illegal aliens, criminals, those suffering “hardships,” and many other categories. There’s also a political argument over whether Congress is exempt although that depends on how you define “exemption.”


Regardless, the lack of IRS enforcement of the Affordable Care Act penalty is the ultimate exemption. When Congress passed the ACA in 2010 the IRS was banned from making public liens or doing anything that might scare those who fail to purchase health insurance:

“The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code,” the tax code, “and accounted for as an additional amount of federal tax owed.” So it’s tax. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay in a timely manner.”

At the most, the IRS is limited to a sternly worded letter that makes you feel bad. Unfortunately, this little trick for avoiding the Affordable Care Act penalty won’t work for almost half of all Americans. While the IRS can’t go after your bank accounts and garnish your wages they can still deduct the Obamacare penalty from your income tax return. So if your income is that low it’s probably advisable to look into catastrophic health insurance since that would be cheaper in the long run.