Affordable Care Act: How will IRS find out I was uninsured?

I’m a struggling art student, and barely noticed the whole hullabaloo over Obamacare earlier this year.  I’m too late to get a plan now and I doubt I could have afforded it anyway.  How will the IRS ever know that I had no insurance?

Creative Spirit

Dear Creative Spirit,

You ask a very good question, and there are questions inside your question too.  First things first: the IRS will find out about your insurance (or lack of insurance) when you file your 2014 tax return.  Right now, they have not published any forms for this reporting.  If you had your health plan from an employer, proof would show up on your year-end W-2 form.  Employers report the cost of health insurance on everyone’s W-2.

If you earn less than $9,750, you are not required to file taxes and, obviously, you are not required to have health insurance either.  There are lots of other escapes from the “individual mandate” — the requirement that most everyone have health insurance.  A struggling art student would probably qualify under more than one of these.  For example, if the cheapest plan costs more than 8 percent of your income, you are off the hook.

All of that aside, you should look at health insurance at the next open enrollment.  There are lots of good reasons to have health insurance, such as you can avoid having big medical bills if you did get sick.  Even great artists might need a broken bone set or an appendix removed.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.