Facebook Twitter Tumblr Close Skip to main content
A Project of The Annenberg Public Policy Center

Enforcing the Individual Mandate

Q: How does health care legislation propose to enforce the individual mandate?

A: The Internal Revenue Service would verify whether individuals meet the requirement to have health insurance, and collect a tax if they don’t.


How is it stated in the different bills how the mandated insurance will be handled and checked to see if people have it or not? I have heard different versions, so I am wondering which is correct.


One of the most controversial features of the health care overhaul legislation is the requirement that most individuals obtain acceptable health insurance coverage. Those who don’t would have to pay a penalty (unless they are exempt). It would fall to the Internal Revenue Service to police the requirement.

Both the House and Senate bills contain a mandate and impose a penalty in the form of a tax on those who fail to comply, but the Senate bill’s tax would be lower in most cases. The House-passed bill (H.R. 3962) imposes a 2.5 percent tax, while the penalty in the Senate-passed bill (H.R. 3590) would phase up to a maximum of 2 percent. Furthermore, the Senate bill’s tax would be calculated based on taxable income, while the House bill’s tax would fall on modified adjusted gross income, which is higher. Taxable income excludes deductible expenses such as home mortgage interest and charitable donations. Both bills say that the tax penalty can’t exceed the cost of the average national premium.

Both bills provide "hardship" exemptions from the mandate for individuals and families for whom health insurance would be unaffordable, and exemptions for those with religious objections.

It would be up to the IRS to verify that individuals are complying with the health insurance mandate, and to collect the tax penalty from them if they aren’t. Both the House and Senate bills contain sections that would amend the Internal Revenue Code and require either health insurance companies or employers to provide individuals with documents containing the specifics of their insurance coverage (e.g., name(s) on the insurance policy, period of insurance coverage, etc.). Individuals would then submit that information with their federal tax returns as proof of coverage. The IRS would be responsible for verifying that health insurance is acceptable.

Some believe that the health care bills put too much on the IRS’ plate. Republican Sens. Chuck Grassley of Iowa and John Cornyn of Texas issued a press release in December questioning whether the IRS, on top of its current responsibilities, will be able to handle its newly proposed ones, which include collecting an assortment of fees that employers and companies would have to pay under the legislation, distributing federal subsidies to small businesses and low-income individuals, and enforcing the insurance mandate.

The nonpartisan Congressional Budget Office estimated that the IRS, under the House and Senate bills, may need an additional $5 billion to $10 billion in funding over 10 years to implement the bill’s provisions. The IRS now receives about $12 billion per year in federal money for operating expenses.

–D’Angelo Gore


U.S. House. "H.R. 3962, Affordable Health Care for America Act." (as passed by the House on 7 Nov 2009.)

U.S. Senate. "H.R. 3590, Patient Protection and Affordable Care Act." (as passed by the Senate on 24 Dec 2009.)

U.S. Congress. House Committee on Energy and Commerce. House-Senate Comparison of Key Provisions. 29 Dec 2009, accessed 14 Jan 2010.

Kaiser Family Foundation. Side-by-Side Comparison of Major Health Care Reform Proposals. Accessed 14 Jan 2010.

Galewitz, Phil and Christopher Weaver. "IRS Faces Tough New Duties Under Health Overhaul." Kaiser Health News. 6 Jan 2010.

Office of Senator Chuck Grassley of Iowa. "Grassley, Cornyn Express “Extreme Disappointment” With IRS Oversight Board Response to Huge Challenge of IRS’ Administering of Health Care Reform." Press Release. 16 Dec 2009.

Albright, Aaron. House Committee on Education and Labor. E-mail sent to FactCheck.org. 21 Jan 2009.