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If you don't buy health insurance and don't pay the penalty, then what?

According to a Kaiser Health News reader, a rumor circulating on Facebook says that if you opt out of buying a health plan for 2014 and then don't pay the penalty for not having it, the Internal Revenue Service can put a lien on your home. Really?

No, says KHN, it's not true.

"Starting next year, most people will have to have health insurance or face a penalty of $95 or 1 percent of family income, whichever is greater. The penalty increases gradually to $695 or 2.5 percent of income in 2016.

"The penalty will be treated like income tax due, says Mark Luscombe, principal federal tax analyst at CCH, a tax and business information publisher. 

"Normally the IRS can garnish wages and file liens and levies to collect unpaid income taxes, but the healthcare law specifically prohibits those activities if people don’t pay the penalty for not having insurance, says Luscombe.

"So if someone doesn't pay the penalty, "all the IRS can do is offset the refund," he says." 


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