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September 02, 2016 at 05:51 AM
The Internal Revenue Service has started publishing the same kinds of detailed, consistent statistics for Affordable Care Act tax provisions that it publishes for the health savings account contributions and interest income.
The ACA premium tax credit program first came to life 2014. So did the individual health care “shared responsibility” system — the provision that requires many people to have what the federal government classifies as “minimum essential coverage,” or solid health coverage, or else pay a penalty.
The IRS released national 2014 summary data for the ACA tax programs Wednesday.
Related: IRS posts 2014 individual return ACA tax data
The IRS also posted county-level and ZIP code versions of the data.
The national summary numbers showed that 8.1 million taxpayers who filed individual returns, or about 5.9 percent of the 149 million filers, paid the penalty now imposed on many taxpayers who fail to show that they own minimum essential coverage for enough of the year. The penalty payments averaged about $210 per 2014 return.
We looked at the ZIP code-level data for clues about why so many people paid the penalty. The IRS filters out data for about 15,000 zones with few filers. But, in more than 4,000 of the 27,781 zones that are in the data files, no taxpayers reported owing the shared responsibility penalty for 2014. At the high end, in 198 ZIP codes, 15 percent or more of the filers said they owed responsibility penalty payments. The median is about 5.6 percent.
The ACA and federal regulations created many exemptions from the individual penalty requirement, and special, broad exemptions that applied only for 2014. Consumers could have avoided paying the penalty legally, by, for example, joining health care sharing ministries, or illegally, by promising that they qualified for some types of exemptions that required no substantiation.
Related: Feds explain individual mandate exemptions
Some of the taxpayers who paid the penalties may have been unaware of the penalty system, or unaware of the many exemptions available. Some may have been so angry about the ACA that they went without health coverage simply to spite the Obama administration.
Some taxpayers may have paid the penalty because they had financial problems or personal characteristics that made scraping up enough cash to pay for coverage hard.
Still another driver could have been immigration issues. Consumers need to be able to show that they’re in the United States legally to qualify for ACA premium tax credit subsidies. Some immigrants who do have a legal right to be in the country may have trouble documenting that. Others may be afraid of drawing attention to relatives who lack documentation of legal status.
A look at the ZIP code data suggests that lack of legal status and problems with documenting legal status are probably the main drivers: Nine of the 10 ZIP codes with the highest penalty rates are on the border with Mexico.
For a look at those 10 ZIP codes, along with YouTube videos showing a little of what those ZIP codes are like, read on:
Tecate, California, is right on the border with Mexico. Some residents may have immigration issues that interfere with their ability to get covered. (Video: Sandicor Virtual Tours/YouTube)
10. 91980
Tecate, California
Number of individual returns: 960.
Number of returns with responsibility penalty due: 230.
Percentage of returns with responsibility penalty due: 24%.
Average penalty amount: $209.
Related: California senate votes to let undocumented immigrants use PPACA exchange
Mission, Texas, is in Hidalgo County. Like Tecate, California, is across the border from Mexico. (Video: Century 21-TX/YouTube)
9. 78574
Mission, Texas
Number of individual returns: 19,390.
Number of returns with responsibility penalty due: 4,650.
Percentage of returns with responsibility penalty due: 24%.
Average penalty amount: $217.
Related: Obama finds an ally in Wal-Mart, whose stores he once shunned
San Elizario, Texas, is in El Paso County along the Rio Grande. (Video: Gepar Virtual Tours/YouTube)
8. 79849
San Elizario, Texas
Number of individual returns: 5,340.
Number of returns with responsibility penalty due: 1,300.
Percentage of returns with responsibility penalty due: 24%.
Average penalty amount: $192.
Related: 10 towns where people should exercise more
La Joya, Texas, in Hidalgo County. (Video: Century 21-TX/YouTube)
7. 78560
La Joya, Texas
Number of individual returns: 1.960.
Number of returns with responsibility penalty due: 490.
Percentage of returns with responsibility penalty due: 25%.
Average penalty amount: $252.
Related: ACA exchange issuers head South
Many of the year-round residents in Lake Powell, Utah, work in businesses that cater to tourists. (Video: Norbert982/YouTube)
6. 84533
Lake Powell, Utah
