No doubt, you’ve heard about the Employer Mandate and the Individual Mandate that are a part of Obamacare. Both relate to a requirement for Americans to have health insurance and resulting fines for failure to comply. The Supreme Court, in a case that could have ended Obamacare, ruled that the fines are constitutional. In 2013, President Obama declared that the Employer Mandate would be delayed, but left the Individual Mandate intact (at least for now).
But here’s the dirty little secret: the Individual Mandate lacks the teeth to collect the fines. The law defines how the fine is to be collected: and it turns out that the means to collect is through income tax refunds. Therefore, if an individual owes a fine for not complying with the Individual Mandate, he or she can only be forced to pay the fine through deductions from income tax refunds. If the person who owes the fine has adequate deductions or pays in sufficient taxes throughout the year so as to not create a refund situation after filing their taxes, they cannot be made to pay the fine for failure to purchase health insurance.
Here is a recent article that appeared on Marketwatch.com with more detail.