You know how the government is supposed to kick people while they're down?  It has done a great job with Shared Responsibility Payments.

The Affordable Care Act, also known as "Obamacare," requires that all Americans possess health insurance.  That's called the "individual mandate."  If you don't have health insurance, you are subject to a penalty.  The penalty amount can range from hundreds to thousands of dollars.  The IRS refers to this penalty as a Shared Responsibility Payment.

There are only two ways to avoid the penalty:

  1. Having health insurance
  2. Qualifying for a specific hardship exemption

Millions of Americans in recent years haven't had health insurance, but also didn't qualify for one of the exemptions.   Over 4.9 million were subject to the penalty in 2016.

The IRS sends notice letters to those who owe the penalty, saying:

You owe a shared responsibility payment (SRP) because one or more members of your tax household didn't have minimum essential health coverage

For many of these millions of Americans, that reads: "You owe a penalty because of your financial hardship."

It doesn't matter if you paid your FICA taxes to fund others' Medicare and Medicaid health insurance.  It doesn't matter if you paid for your healthcare directly.  "It doesn't matter how responsible you've been.  You haven't fulfilled your shared responsibility."

If you believe this is "unfair" or "inequitable," you're allowed to submit an offer to pay less than the full amount.  But you must file a special form inside a 32-page booklet and pay a $186 application fee.  "Want to explain why our penalty is unreasonable?  Jump though hoops and give us money, then maybe we'll listen to you."

Who is truly failing their responsibility here?  Down-and-out Americans, or the leaders of their government?

Congress has changed the penalty to $0 starting in 2019.  That is good news, but it comes with a cynical twist.  The individual mandate remains.  Americans are still legally required to own health insurance, and considered in default of their "shared responsibility" if they don't.  In other words, the government has stopped kicking people while they're down, but remains poised over them with its foot raised behind it.