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Answers to questions on health coverage

By Calvin Woodward
Associated Press

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The new health-care law helps some people, hurts others and confuses almost everyone. The Associated Press asked Twitter, Facebook and Google Plus followers for questions about the program and the problems they’re having in signing up for coverage in new insurance markets.

Here are two questions and answers:

Q: “Is it really true that the IRS can’t do anything to you if you refuse to get insurance and also refuse to pay the penalty?” — David Myer, 46, a consulting geophysicist in Encinitas, Calif.

A: You could say the IRS has one hand tied behind its back here. But that still leaves the other hand. The tax collectors don’t have nearly as many tools to go after insurance avoiders as it has to enforce tax laws. It can, however, dip into people’s tax refunds to collect the penalty for those who don’t get health insurance. Most filers qualify for a tax refund, so they would be exposed to that collection tactic. Beyond that, it can send insistent letters, and who wants to get those?

Elizabeth Maresca, a former IRS trial attorney, told the AP that an unfriendly letter about an outstanding health insurance penalty probably will have much the same effect as one about tax arrears. “Most people pay because they’re scared, and I don’t think that’s going to change,” she said.

That said, the IRS can’t seize bank accounts, dock wages, charge interest on unpaid penalties or apply criminal or civil sanctions to force people to obtain health coverage.

Q: “Why are there limits as to who can sign up? If someone has an employer plan that they don’t like, they can’t switch the plan to one of the new ones.” — Duane E. Maddy, a graphic designer and digital artist in Dunbar, W. Va.

A: It’s true, the new system is set up so people who get health insurance at work stay on it. For better or worse, the law aims to preserve employer-based insurance, not give everyone an easy bailout to the new individual markets.

You can shop for coverage in the new state exchanges even if you have insurance at work. But it depends on whether your work insurance is considered affordable. If it’s not, you may be able to get a subsidized plan on the exchange — and a better deal.

What’s unaffordable? The government defines it this way: If you are paying more than 9.5 percent of your income for your health insurance premiums at work, you’re paying too much.


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