Learn the truth about the Chapter 58 Massachusetts insurance mandate law

False health reform hurts residents

Help reject Chapter 58

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• What the Law Says - Enrollment is reported and punished through taxes

All taxpayers had to fill out a "Schedule HC ” when they filed their 2007 and 2008 income taxes. This new form requested personal details including the name of each taxpayer’s health insurance provider and policy number. Uninsured residents had to show the number of months they were uninsured by checking off each month in the appropriate boxes. For 2008, all uninsured taxpayers were required to figure out their penalties using charts in the Schedule HC instruction booklet.

The mandate is enforced through the Department of Revenue (state tax department) and non-payment is treated the same as income tax evasion (non-payment of income taxes) and subject to the usual collection methods for this crime including interest and late fees on the unpaid balance and eventual wage garnishment, seizure of bank accounts and property liens. It is uncertain if imprisonment is an optional punishment. 

What this means

The Massachusetts Department of Revenue is the collection agency for the mandate. 

They say that the penalty is not a tax yet it is reported, collected and punished through the tax system. In fact, two postcards were mailed to all residents during 2007 with a warning: Act Now to Avoid Tax Penalties. 
See one of the postcards here. 
See the health insurance penalty law here. 
See the law for liens upon property for nonpayment of taxes.
Punishment for not being insured by December 31, 2007 was the loss of all personal tax exemptions allowed per tax return and was due when the 2007 tax return was filed but no later than April 15, 2008 in order to avoid interest and late fees. Thus, $219 per individual was owed to the state, $438 per couple. If dependents were listed or if an adoption, blindness or medical expense exemption was claimed, the penalty was more because the amount of the personal exemption is greater.

Massachusetts-style health insurance 
is NOT what 
the doctor 
ordered!

Health Care is a right for all


Penalties for "individual-mandate violators" were quite severe for the 2008 tax year - as high as $912 per person depending on the cost of the premium that the state decided you could afford to pay. The amount of the penalty increases as the premium increases. The penalty could also change if a resident moves to another part of the state because premiums are more costly in certain counties. The 2009 penalty for being uninsured has increased to $1,068 maximum per person (double that for a couple), but the insurance is still unaffordable for many as is upgrading policies to meet the state’s MCC requirement. Thus, many had to opt for the penalty. We know people who had to use their stimulus checks to pay the penalty. Yes, the check to stimulate the economy went right into the coffers of the Connector to pay for those who get the insurance for free. So, actually, these stimulus checks are now part of insurance companies’ profit margins.

If the Schedule HC is not completed, you will be notified by the D.O.R that your tax return was incomplete and could not be processed. You will be considered to be in violation of the insurance law until the completed form has been supplied. If you report that you have the required insurance, it will be investigated by the D.O.R. (see DATA GATHERING) and if found to be false, you will automatically be penalized. 

This money will either be taken from any tax refund owed to you or an overpayment you made when filing quarterly estimates. If the refund or overpayment is not enough to cover the penalty, you will owe it right out of your pocket and must pay the balance by the tax filing deadline for that year. Otherwise, you will accrue interest and late fees on the balance due and be subject to all enforcement methods available to the D.O.R. for income tax evasion as described above. 

If you are uninsured for several months during the year and then take a job with health insurance and a higher income than you previously had, the amount of the penalty you owe for the months you were uninsured will be higher because the penalty is based on your gross income for the year, not for the months that you were uninsured. Thus, residents are penalized not only for being uninsured but also for taking a job that offers insurance and a higher income. Month-to-month changes in residents’ circumstances during a given year with regard to penalties are not recognized, however, the Connector requires that all income changes be reported within 10 days to make sure you are still eligible for the insurance premium you are currently paying. What’s good for the goose isn’t good for the gander! 

Even though the penalty is advertised as a tax and enforced as such, it is not considered to be a tax by the state, and, therefore, is not deductible on your Federal tax return or elsewhere. Despite what the state says, the penalty is a back-door tax, so, essentially, your taxes have been raised although the tax code wasn’t changed. Massachusetts is a flat-tax state.

• What the Law Says - Criminalization of honest, hard-working citizens

The "Mandate" calls for unfairly harsh punishment of the uninsured.

What this means

The state penalty for being uninsured ("individual-mandate violators") in 2008 was as high as $912 per person (that's $1,824 per couple) if paid on time.** This is more than fines for virtually all criminal violations including: driving with a suspended license = $50, violation of child labor laws = $50, assault with intent to murder or maim = $500 minimum, domestic assault = $1,000 maximum, cruelty to or malicious killing of animals = $1,000 maximum.

The penalty for 2009 is $1,068 per person, $2,130 for a couple.

**from the law: “. . . including assessment of interest on the unpaid liability at a rate not to exceed an annual rate of 18% and late fees or penalties at a rate not to exceed 5% per month and will be deposited into the Commonwealth Care Trust Fund to subsidize non-paying individuals.”

If you die without insurance, your estate will be still liable for the penalty.

» Read the next "What the Law Says" topic
  » See the Law Topic Index 

The Individual Mandate explained  /  The Connector Authority  /  Affordability  /  The Appeals Process 

Religious Exemption  /  Income estimation  /  Tax enforcement and Criminal penalties  /  Data Gathering

Estate Recovery  /  Insurance plan "lock-in"  /  State as health insurance  /  Primary Care Shortage