What Are the Penalties for Failing to Buy Health Insurance?

EDITORIAL NOTE: In the March 25 issue of THE COURIER, we reported that the health care reform signed into law by President Obama last week includes an unprecedented mandate that individuals purchase health insurance. We also noted that Americans could “possibly go to jail if they fail to do so” (“Hall Sides with Sweeping Health Care Legislation”).

This line elicited a gratuitous response from the reelection campaign of Rep. John Hall (D, NY-19). In an email titled “Attacked by Fox” and sent to supporters, the congressman said, “Today I was attacked by a local mouthpiece of Fox News for my vote in favor of health care insurance reform.”

Hall’s campaign continued: “This is not an editorial, and it has no source. It is a right wing lie masquerading as a news article.”

Initially, after we received a cordial call from the congressman’s office, and before this fund-raising email was sent, we agreed that corrections would be in order.

In the portion of the bill forcing all Americans to buy health insurance whether they like it or not, there is indeed a “waiver of criminal penalties.” It says:

“In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure” [emphasis added].

Notably, the waiver does not say that there shall be no criminal penalties for outright refusal to pay the fine; it only says that individuals shall not be jailed for failing to pay on time. Without the threat of jail for refusing to heed the mandate, could such a provision be enforced?

It thus seems that Americans could possibly go to jail if they fail to pay fines for not purchasing health insurance. The language is foggy, but the history is that foggy language works to the advantage of the government. As Alexander Hamilton said, “It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.”

According to Doug MacPherson, Rep. Hall’s communications director, “the legislation passed by the House explicitly prohibits the IRS from confiscating taxpayer assets, from using liens or levies, or imposing criminal penalties of any kind— including jail time — because of a lack of health care coverage.”

Readers must decide for themselves which interpretation they believe.

The President signed the bill into law on Tuesday, March 23, not Monday, March 24.

Also, we said the bill would impose “taxes on businesses with payrolls that exceed $250,000 but do not provide insurance to their employees.” This is not accurate. Instead, we should have quoted the following from the Reconciliation:

“Sec. 1003. Improves the transition to the employer responsibility policy for employers with 50 or more full-time equivalent workers (FTE) by subtracting the first 30 full time employees from the payment calculation (e.g., a firm with 51 workers that does not offer coverage will pay an amount equal to 51 minus 30, or 21 times the applicable per employee payment amount). The provision also changes the applicable payment amount for firms with more than 50 FTEs that do not offer coverage to $2,000 per full-time employee. It also eliminates the assessment for workers in a waiting period, while maintaining the 90 day limit on the length of any waiting period beginning in 2014.”

We regret the errors.

Last, for the record, although this newspaper is owned by an employee of Fox News, that employee has no involvement on a day-to-day basis, and he had no knowledge of this article and no part in writing it, despite the erroneous claims made in the email sent from the campaign of Rep. Hall.