The Affordable Care Act mandates that Americans have health insurance coverage in place this year or pay a fine of up to 1 percent of their income, but the vast majority of those flouting the law will be off the hook because of a range of exemptions granted by the Obama administration.
An estimated 87 percent of the 30 million people without insurance will be able to avoid the individual mandate tax, according to Roll Call
, because the Congressional Budget Office estimates that just 4 million people will be forced to pay as a result of exemptions.
The individual mandate was considered to be the heart of the new healthcare law in order to motivate people to sign up for coverage, particularly those who might otherwise wait until they are sick. The alternative scenario would drive up premiums and undermine Obamacare's mission of achieving affordable healthcare.
The CBO initially projected that 6 million people would pay the penalty, but reduced that figure after taking into account the exemptions.
The government is therefore expected to generate $4 billion in revenue in 2016, according to the CBO.
The exemptions apply to people whose plans were canceled, illegal immigrants, and people with incomes below the minimum threshold for filing a tax return.
There is also a lengthy list of "hardship" exemptions, including home foreclosure, bankruptcy, homelessness, death of a close family member, those who have received a cut-off notice from a utility company, people who have had a fire or other serious disaster, those who have suffered domestic abuse, and a number of other situations, according to Roll Call.
Other people who are exempt from the tax penalty clause include members of religious groups recognized for conscientiously opposing insurance benefits; members of a federally recognized health-sharing ministry, members of a federally recognized Indian tribe or people eligible to get services from an Indian care provider; and those without coverage for fewer than three consecutive months in a year, Roll Call reported.
The list also includes people who can't afford coverage because the lowest insurance premium is more than 8 percent of their household income, and people in jail, prison, or a correctional facility.
Meanwhile, an earlier report by Roll Call
indicated that the IRS is unlikely to do much to enforce the fines and pursue collections.
Aside from the complications of accounting for the various exemptions, the IRS would also be relying on self-reporting, since it does not have a database in place to track which taxpayers have coverage. If confused or dishonest taxpayers do not notify the agency of their coverage status, it will have little way of knowing otherwise, according to Roll Call.
"I'd be very surprised if there's much in the way of enforcement. It just doesn't seem plausible," Federal Policy Group Managing Director Ken Kies, a former top congressional aide, told Roll Call.
"The IRS is in a tough spot. They don't have the resources to do this. This is a whole different responsibility for them they never had before."
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