However, the reality -- at least for now -- is that the agency only has a soft mallet.
The law prohibits the IRS from using its usual tough collection tools -- getting a lien against your property or putting a claim on your wages -- to collect any payment you owe related to the individual responsibility provision.
Still, the IRS may collect your "shared responsibility payment" by snatching part or all of your refund depending on what you owe. Additionally, if you fail to pay the penalty, interest will accrue, the IRS says. The interest charged is the same that is imposed for taxes that are paid late. An estimated 6 million people will pay a penalty tax because they are uninsured in 2016, according to the Congressional Budget Office and the staff of the Joint Committee on Taxation.
Surely the government will be watching to see if people figure out how to game the system by changing the amount they instruct their employers to withhold from their paychecks, which would result in their not getting a refund.
It's through the federal income tax form that you will have to indicate if you have health insurance or are eligible for an exemption. But this doesn't go into effect until you file your 2014 federal return in 2015.
The health insurance marketplace will provide certificates of exemption, the IRS says. There are a number of ways to avoid paying a penalty, including coverage through an employer, a veterans' plan, Medicare or Medicaid. If you don't fall into the various categories to avoid a fee, you can still request an exemption. Some individuals may qualify for an exemption on religious grounds or because they have very low income and coverage is considered unaffordable. You won't face a penalty if you are not required to file a tax return because your income is too low.