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In Mass., number facing health care penalty falls

June 18, 2012
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BOSTON—The number of uninsured Massachusetts residents assessed a tax penalty under the state's landmark health care law continues to fall.

In 2010, 44,000 Massachusetts tax filers were assessed the penalty for failing to obtain health care under the so-called "individual mandate" portion of the 2006 law, even though they were deemed able to afford coverage.

That's a drop from the 48,000 tax filers who were assessed the penalty in 2009, according to a new report from the Massachusetts Health Connector, an independent state agency that helps residents obtain insurance, and the state Department of Revenue.

In 2007, about 67,000 people were required to pay the penalty. That declined to 53,000 in 2008.

The penalties vary depending on how much an individual makes.

In 2010, those who made more than three times the poverty level paid the highest penalty of $93 per month, or $1,116 per year. In 2012, the highest penalty increased to $105 per month, or $1,260 per year. The federal poverty level for a family of four was about $22,000 in 2010.

The penalty is lower for those earning less than three times the poverty level, while those making 1 1/2 times the poverty level or less are not penalized. Penalties for married couples who don't comply with the mandate equal the sum of individual penalties for each spouse.

The report said the analysis of the individual mandate demonstrates "near universal compliance with the requirement to report health insurance information on tax filings, and a continued high rate of insurance coverage in the state."

As part of the state law, Massachusetts residents must include in their state tax returns a form known as a 1099-HC confirming they've been enrolled in a health care plan with "minimum creditable coverage" -- the level of coverage deemed mandatory by the state to meet the law's goals -- during each month of the prior year.

In 2010, according to the report, 99 percent of tax filers required to file a Schedule HC complied.

The mandate doesn't apply to everyone. Those who can show they earn too much to qualify for the state's subsidized health care plan -- Commonwealth Care -- but not enough to afford even the least expensive nonsubsidized plan, are exempt from the mandate.

The Massachusetts law provided a blueprint for President Barack Obama's 2010 federal health care law.

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