What Happens if You Refuse to Get Insurance?

With new insurance laws in place, people are beginning to wonder how it's going to affect them. While many welcome the mandatory coverage, and see it as a universal right for everyone, there are others who are balking at it, and considering refusing to accept the coverage or pay the penalties. A New York Times reader recently posted this question to their blog:

"Despite being an Obama supporter and a strong proponent of health care reform, I think this plan is awful and I want to demonstrate my displeasure by boycotting it. My attitude is that you can tax me all you want for a single-payer system, but I will be damned if I pay a penny to a private company that I don’t wish to pay.

Given that attitude, it seems likely that I will be subject to the nonpayment penalties, which I also do not plan on paying. Other than seizing my tax refund (something I will avoid, since I underpay to the extent that I owe a small amount each year), what other enforcement means does the government have at its disposal? Will this be treated like tax evasion, or will it be treated in some other fashion?"


In short, it's not yet entirely clear how the government is going to try and enforce penalties and fees for those who refuse the mandatory coverage. The penalty will be $695 for an individual (up to $2,085 per family) or 2.5 percent of household income, whichever is greater. The bill is very clear in stating that there will not be any criminal charges for failing to pay the penalty. In all likelihood, they'll just take it out of your tax refund when the time comes. If you don't receive a refund, it's not clear what options they'll have left. In that circumstance, it's possible you'll get off the hook - although we don't recommend taking the chance.

All of this remains to be seen, as these penalties will not be enforced until 2014.