A story making the rounds on the internet details the claim made by Will Sheehan, a diabetic who shopped for health insurance in the Affordable Care Act’s insurance marketplace. According to Sheehan’s claim, after opting out of the government subsidized insurance, he was given a warning that fines could result in a tax lien on his home and suspension of his driver’s license. Sheehan also claims that the government also requested his bank account information so that his “penalty” could be withdrawn on regular basis.
Examiner traced the story to InfoWars, an Alex Jones conspiracy website that is known for making outlandish claims. The InfoWars article, published on Oct. 2, is based on a Facebook post that a user named Will Sheehan made on the government’s HealthCare.gov Facebook page. Sheehan’s post, which has apparently been deleted, is copied on the InfoWars article. A more complete copy of the Facebook exchange is posted on Red Flag News.
Sheehan posted the following comment:
I actually made it through this morning at 8:00 A.M. I have a preexisting condition (Type 1 Diabetes) and my income base was 45K-55K annually I chose tier 2 “Silver Plan” and my monthly premiums came out to $597.00 with $13,988 yearly deductible!!! There is NO POSSIBLE way that I can afford this so I “opt-out” and chose to continue along with no insurance.
I received an email tonight at 5:00 P.M. informing me that my fine would be $4,037 and could be attached to my yearly income tax return. Then you make it to the “REPERCUSSIONS PORTION” for “non-payment” of yearly fine. First, your drivers [sic] license will be suspended until paid, and if you go 24 consecutive months with “Non-Payment” and you happen to be a home owner, you will have a federal tax lien placed on your home. You can agree to give your bank information so that they can easy [sic] “Automatically withdraw” your “penalties” weekly, bi-weekly or monthly! This by no means is “Free” or even “Affordable.”
Examiner attempted to locate the Will Sheehan who posted the comment, but was unsuccessful.
Mr. Sheehan’s comment is at odds with the Affordable Care Act in several respects. Without knowing his location, age, or the size of his family, it is impossible to confirm his reported premium exactly. The national average premium for a silver plan estimate for two 30-year-olds with one child is estimated at $7,365 annually ($614 monthly) according to Kaiser’s premium and subsidy estimator. With a $50,000 income, the government would subsidize 44 percent of the premium which would leave an unsubsidized cost of $4,112 ($343 monthly). Additionally, the plan would include a maximum annual out-of-pocket cost of $12,700 not including premiums.
In contrast to Sheehan’s claim, the fine for not carrying insurance in 2014 would be capped at $285 per family as previously noted in Examiner. Fines increase through 2016 to a maximum of $2,085. This is far less than the $4,037 reported by Mr. Sheehan.
It is also unlikely that failure to buy health insurance would result in the suspension of Mr. Sheehan’s driver’s license. Driver’s licenses are issued by the states, not the federal government, so it is unlikely that a suspension would result unless the state government has a law requiring health insurance as a condition for holding a driver’s license. Many states allow the suspension of a driver’s license if a car owner does not carry auto insurance, but not health insurance.
As noted in the InfoWars article, section 1501(g)(2) of the Affordable Care Act states that the IRS cannot “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.” This means that the IRS is not allowed to file a tax lien against someone’s house because they did not have insurance.
Former IRS commissioner Douglas Shulman also denied that the IRS has the ability seize bank accounts or property. In an April 2010 speech on C-SPAN, Shulman said, “There's no criminal sanctions for not paying this, and there's no ability to levy a bank account or do seizures, some of the other tools.”
Shulman said that the fines would be debited from tax refunds or that the IRS might initiate collection proceedings against uninsured taxpayers. People will get letters from us,” he said. “We can actually do collection if need be. People can get offsets of their tax returns in future years….”
The threat of collection proceedings may explain Sheehan’s claim that he was asked to “agree to give” his bank account information so that the fines could be deducted. The Fair Debt Collection Practices Act allows creditors, such as the IRS, to obtain a court order allowing them to garnish funds from a bank account. Similarly, collection agencies often ask debtors for their bank account information so that they can withdraw funds directly. If the debtor voluntarily gives the collection agency or the IRS access to their bank account, seizure or garnishment is not necessary.
Although there seem to be no other reports of such warnings, it is not impossible that some form of the warning was real. Widespread problems with the health exchange websites have prevented many consumers from accessing the sites and completing quotes. When Examiner attempted to access the Georgia health insurance marketplace on HealthCare.gov on Oct. 3 and Oct. 4, the now infamous delay page (pictured above) popped up. After an hour of waiting, the screen changed to read that the site was down. On the second attempt, error messages were received when we tried to create an account.
There are reports that the health exchanges ask for a great deal of personal information before providing a quote. It is possible that this information will be passed along to the IRS to aid in the agency’s enforcement of the “shared responsibility payments,” its euphemism for the individual mandate.
In recent months, the IRS has admitted to targeting President Obama’s political opponents. The ongoing congressional investigation of the IRS revealed that the agency had improper contract with the Federal Election Commission in which the two agencies collaborated regarding conservative groups according to CNN. It is possible that the IRS and Dept. of Health and Human Services are similarly collaborating regarding the health insurance purchases. Similarly, the Obama Administration has a history of disregarding the privacy of Americans with its NSA surveillance program.
Protection of consumer information on the health care exchanges is already a concern. National Review notes that 13 state attorneys-general have written HHS Secretary Sebelius to voice concern about consumer privacy. In September, Minnesota’s health exchange inadvertently sent 2,400 names, addresses and social security numbers to an insurance agent. The information was on an unencrypted, unsecured spreadsheet.
At this point there are many unknowns about the Affordable Care Act and the IRS enforcement of its individual mandate. Consumers who apply for insurance on the exchanges run the risk that their personal information will not only not be protected, but that it might be used against them by the government.