This Is Who Will Pay Fines Under the Obamacare Mandate

Fewer Americans will pay a fine in two years for failing to buy insurance as mandated by Obamacare, according to revised numbers this week from the Congressional Budget Office. That’s because about 2 million more uninsured Americans than previously estimated will be exempt from the requirement, CBO said.

Even so, what of the estimated 4 million Americans who likely will pay a fine in 2016 for noncompliance with the individual mandate?

They make up about 13 percent of the 30 million uninsured Americans projected for 2016, according to CBO and the Joint Committee on Taxation. They don’t get a break from the penalty under the Affordable Care Act, or Obamacare, because they:

• Live in the United States as legal citizens.
• Are law-abiding and not incarcerated.
• Are not members of an Indian tribe.
• Make enough money to file an income tax return.
• Make enough money to not be eligible for Medicaid.
• Make enough money so that potential health insurance premiums would not take up 8 percent of their entire salary.

The penalty becomes more severe each year, starting at $95 per U.S. adult (or 1 percent of taxable income, whichever is greater) this year, progressing to $325 (2 percent of taxable income) in 2015, and reaching $695 (2.5 percent of taxable income) by 2016.

Many critics of Obamacare argue that no one should have to pay a fine, based on income or not, for declining to buy insurance as specified by the government.

Fewer uninsured Americans will be subject to Obamacare’s mandate to buy insurance, and the penalty for noncompliance, in part because of regulations issued by the Obama administration since September 2012. Other factors are technical updates and changes in the economic outlook, CBO said.

One of the administration’s most recent exemptions was the “hardship exemption” for Americans who had previous health insurance policies canceled because of Obamacare. They do not face the risk of a penalty under the individual mandate until October 2016.

Although the government expects most Americans who face the penalty to pay voluntarily, the CBO report acknowledges that an unspecified number would avoid payments.

The Internal Revenue Service, which administers and collects the individual mandate payments, is expected to bring in $4 billion in 2016. That’s about $3 billion less than earlier estimates.