The Internal Revenue Service (IRS) announced on Tuesday the results of the first year of the PPACA’s individual responsibility requirements. The preliminary report, analyzing 135 of the estimated 150 million tax returns, denoted that 76% of Americans checked the box indicating that they had qualifying insurance for the year. Roughly 12 million Americans claimed an exemption from the individual mandate, either as a Native American or for hardship such as low income, death of a family member, or a plan cancellation. Another 300,000 taxpayers were eligible for an exemption, but did not claim it and will be eligible to file an amended return over the next three years.

Meanwhile, about 7.5 million Americans opted to pay the penalty rather than purchase coverage. The Administration initially expected that between 3 and 6 million individuals would pay the penalty. The preliminary results found that the average penalty paid was $200, with two in five paying a penalty of less than $100 and 95% paying a fine of less than $500. The law requires a penalty of the greater of $95 or 1% of income. More than $1.5 billion was collected from penalties.

The IRS also released data on the total amount claimed in health insurance subsidies. More than $9 billion was claimed by 2.7 million taxpayers, with an average subsidy of $3,400. One in five taxpayers claimed a subsidy of more than $5,000, while two in five claimed a subsidy less than $2,000. Of the 2.7 million taxpayers who collected a subsidy, 1.6 million (59%) had to pay money back because their annual income was more than what they projected when initially claiming the subsidy. The average amount repaid was $800.

In last week’s What We’re Reading, we mentioned that the Senate Finance Committee held a hearing to review an updated report from the Government Accountability Office (GAO), which found that 11 of 12 phony applications for subsidized exchange-based coverage were automatically renewed. This week, Senate Finance Committee Chairman Orrin Hatch (R-UT) requested an audit by the IRS inspector general on individuals who received subsidized coverage. Hatch’s request is in response to a claim that more than 700,000 individuals who didn’t file taxes were able to claim $2.4 billion in subsidies. NAHU 2015 Spirit of Independence Award winner, Hatch, claimed that the marketplace’s lax integrity controls were to blame for the amount of subsidies issued without documentation, acknowledging that it was still unclear how many of them are fraudulent.