Q&A with iCan Counsel - Michael Bertrand

Q: I have health insurance, but if my family or friends don't get any by January 1st, could they go to jail or be fined? Stacey K. – Nashville, TN

A: "No Stacey, your friends or family won't go to jail if they don't have health insurance by January 1st. Additionally, the IRS can't put a lien on their house, garnish their wages, or kick them out of the country if they don't have health insurance either. What the IRS CAN do, however, is impose a small tax on them if they don't have health insurance that provides "minimum essential coverage," as defined by the government.

For example: if you have health insurance coverage through your work, or through a government program like Medicare, Medicaid or TRICARE, you have "minimum essential coverage" and don't need to worry about this new tax. For those that purchase insurance themselves, if you have what is called "major medical" insurance, then you won't have to pay this new tax either.

Who might be hit with this new tax then? People that don't have any health insurance at all - and don't qualify for one of the 8 exemptions - could be on the hook. So could those that purchase their own coverage, but for a variety of reasons (including cost), opt for coverage that provides less than "minimum essential coverage." The tax will be $95 or 1% of your adjusted gross income (whichever is larger), and the only way the IRS can "collect" this tax is by deducting any amount due from your tax refund.

Keep in mind this new tax is only one factor that your friends or family should consider when making their 2014 coverage decisions. What's most important is to find the coverage you need, at a price you can afford."