How to Avoid the Individual Health Insurance Mandate "Tax"

Posted by Rick Lindquist on Mon, Jul 02, 2012 @ 12:19 PM

The below content should not be taken as legal or tax advice. It is meant to be taken as humor.

The Individual Mandate requires most individuals to purchase health insurance, or else pay a penalty on their tax return each year. Last week, the Supreme Court found Health Care Reform's "Individual Mandate" to be constitutional because the PENALTY is really a TAX. The intention of the individual penalty is to reduce the "Free Riding" effect in the health insurance market (a free rider is someone who is healthy and does not purchase health insurance until they need it). If you are looking for a way out of the mandate, here are 5 ways to avoid the tax... avoid individual health mandate tax

Background on the Insurance Mandate's Tax Penalty

Effective January 1st, 2014, certain individuals (referred to as "applicable individuals") will be required to maintain health insurance that meets a minimum standard (referred to as "minimum essential coverage") for themselves and their dependents. "Applicable individuals" who fail to maintain "minimum essential coverage" will be required to pay a tax "penalty" on their tax return.

According to the bill, here are 5 ways to avoid paying the tax (without actually purchasing "minimum essential coverage"):

1. Apply for a religious exemption to avoid the health insurance tax

Claim that your religion (whether that be Christianity, Judaism, Islam, etc.), does not allow you to purchase health insurance.

2. Join an Indian Tribe to avoid the health insurance tax

Members of Indian tribes are not subject to the penalty. Here's a WikiAnswers thread about how to join an Indian Tribe.

3. Join a Health Care Sharing Ministry to avoid the health insurance tax

Some associations cost $99-$135 per member per month.

4. Renounce your U.S. citizenship to avoid the health insurance tax

If you are not a U.S. citizen, you don't have to pay the penalty. Here's an article about renouncing your U.S. Citizenship.

5. Go to Jail to avoid the health insurance tax

If you do something to incarcerate yourself, you can avoid paying the penalty while your in jail.

Of course, the easiest way to avoid the tax is to simply purchase health insurance that meets the minimum coverage requirements.

Note: This should not be taken as legal or tax advice.

Tags: health reform, individual mandate, affordable care act, ACA, individual health, tax penalties, ppaca

Comments

Sixth way to avoid the tax - get elected to Congress. They are exempt from the bill.

Posted @ Monday, July 02, 2012 1:32 PM by Bob Grizzle

Pay the tax....it is cheaper than all the options mentioned including paying premiums. Congress is mistaken if they think that tax is going to persuade anyone to buy insurance. It is the ultimate "rate decrease".

Posted @ Monday, July 02, 2012 6:30 PM by Pamela Fugitt-Hetrick

The easiest way to avoid the penalty tax is to have health insurance. That is also the way to best protect your right to the health care of your choice if you are sick or injured. Contrary to Bob Grizzle's comment, Congresspeople are NOT exempted -- they will have to get their policies through the Exchanges.

Posted @ Tuesday, July 03, 2012 11:30 AM by Roberta Watson

This is the first and only article/blog to come from Zane that wasn't of high caliber. Why would I want to show anybody how to get away with NOT buying health insurance?

I agree with Roberta Watson's comments.

Posted @ Wednesday, July 04, 2012 4:01 PM by Robert Lehrer

I think the intention of this post is to point out special exemptions for the individual insurance mandate... I had know I idea and found it to be pretty interesting.

Robert - why do think this post is low caliber?

I think it is one of the better posts

Posted @ Thursday, July 05, 2012 9:12 AM by Bob

This makes me really sad...People are sooo misinformed on this bill.

1) @Bob Grizzle. Congress and the president are absolutely NOT exempt from the bill. That stupid chain email going around telling you that they are is a lie. The language is non-existent.

http://www.politifact.com/truth-o-meter/statements/2009/sep/11/chain-email/64000-question-e-mail-says-congress-exempt-health-/

2) The bill clearly states that if you do not pay the individual mandate penalty, there will be no consequences. Yes, absolutely no consequences:

"The penalty will be paid as a federal tax liability on income tax returns and is enforced by the
Treasury. Individuals that fail to pay the penalty will not be subject to criminal penalties, liens
or levies."

https://www.bcbsri.com/BCBSRIWeb/pdf/Individual_Mandate_Fact_Sheet.pdf

Posted @ Sunday, July 08, 2012 1:58 PM by jake

No consequences? SO the additional 16,000 IRS jerks will come to my door and say, "thank you for not buying our product?"
Criminal penalties are one thing. Civil penalties might not be so civil.

Posted @ Saturday, July 14, 2012 1:36 PM by John

These penalties are frustrating, wish there was another way around it.

Posted @ Thursday, July 19, 2012 1:12 PM by individual health insurance

Why not just buy the insurance. If your income is below the applicable thresholds, you will get subsidies and/or tax credits to help with the cost. Then, if you get sick, your care will not have to be paid by other people's insurance policies but by your own. We make people have liability insurance to drive a car so that if you injure someone there will be some protection. What's wrong with making individuals be in the health insurance system so that they'll get health care under their own plans when they become sick or injured?

Posted @ Thursday, July 19, 2012 2:05 PM by Roberta Watson

Why not just join BHO's Communist party? You want this crap then you can be forced to do or buy anything.

Posted @ Thursday, July 19, 2012 2:12 PM by John

It's not communist -- it's civilization. We used to have earthen roads and they didn't cost so much. Now we have superhighways, and someone has to pay for them. We also have complicated hospitals and many new medical cures, which I have appreciated when I needed them and wouldn't still be here without them. If we want the more modern system, we have to bring everybody together to make it work. If we don't want any group roll, we can stop improving hospitals and doing medical research.

Posted @ Saturday, July 21, 2012 3:30 AM by Roberta Watson

The only problem with this Healthcare solution is the cost! It is going to raise the cost considerably and already has accross the board last year. It will happen again next year at a higher rate increase than ever seen previously. This bill didn't reduce any burdens, it only added them. We do need a Healthcare overhall but it needs to start within the industry guided by government...not run by it!!!

Posted @ Monday, August 13, 2012 2:27 PM by Sean Rekemeyer

Yes, whether you call it Communism or just state control, it is not what America is about. Forcing people to buy a product or service is tyrannical and could cause another civil war. Democraps, just goto Cuba or Russia if you like BHO's mafia style.

Posted @ Saturday, September 15, 2012 5:44 PM by John

How about forcing people to pay for a fired department, in case their houses are the ones that catch fire? Is that unamerican?

Posted @ Saturday, September 15, 2012 11:46 PM by Roberta Watson

My greatest complaint is that this so called "healthcare reform" is an address to a response, instead of the problem. The problem is the huge mark up fees by doctors, hospitols, and drug companies. All of this came about back when the unions were strong and could force the corporations to pay up, when all of them could well afford to do it. But all of that was 30yrs ago, and the unions are nearly dead in the US and the corporations can just toss the bill into the laps of the citizens, and the citizens into the laps of the Government when they cannot pay. Point is that every one else has been forced to lose over half of his salary, so why not the doctors, hospitols, and drug companies? Their profit margins need to be reduced down so that the monthly premiums can fall down in line with the reduced wage base! Sorry, but the gravy train ride has to end. Our constitution does not support a Facist government that extorts funds out of the people, no matter what the pigs in power think or say!

Posted @ Tuesday, December 25, 2012 2:15 PM by Sam Hedges

Fire depts are local. There is no authorization in the Constitution to force us to buy a product.
There are alternatives so stop saying we're not a good citizen if we don't follow the brown shirts from Chicago. If you want to pay more go ahead!

Posted @ Thursday, December 27, 2012 8:14 AM by John d

Everybody says "just buy the health insurance and avoid the penalty", but has anyone priced the insurance. I work for Medicaid providing health benefits coverage to low income individuals but I can't afford to put MY OWN family on my own insurance policy. Working people, who pay the taxes that fund all these government programs like Medicaid, welfare, foodstamps, etc., make too much to receive government assistance, but not enough to afford health insurance. Working people have to pay for FOOD, clothing, shelter, gas-everything. There's nothing left. Everyday I see my clients who are "not working", drive to my office in a new Cadillac with $3000 rims, hair and nails done, expensive clothes, selling their foodstamp cards and letting others fraudulently claim their children on someone else's income taxes so they can split the refund. Their rent, utilities and food is paid by government-which means YOU and I are financing their good life while WE drive old cars, pay our own bills and buy our own food. A friend told me once that the government is always going to take care of the poor people and not let them starve. But the government needs to open their eyes and see that some of these people have been raised to think there is no other way to live. They think the government owes them all these welfare benefits, and deliberately have half-a-dozen or more children in order to stay on the programs, they will tell you that it's okay to lie, and they'll tell you how they lie to continue to get foodstamps or other assistance. We need reform-starting at the very top with Obama and going all the way down to every government agency in this country. Sorry about the rant but when you have a salaried government job but can barely scrape up a dollar for a loaf of bread and then stand in line behind someone who just used foodstamp card to buy $535 worth of food then watch her load it into a brand new Escalade, you tend to get pissed off!

Posted @ Monday, January 14, 2013 10:19 AM by Robin

Hi Robin,

Have you reviewed the individual tax credits? See http://www.zanebenefits.com/blog/bid/229713/Individual-Health-Insurance-Premium-Subsidies-in-State-Exchanges

Posted @ Thursday, January 17, 2013 9:43 AM by Rick Lindquist

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