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7.5 million Americans paid Obamacare fine for not buying health insurance

In 2014, 7.5 million Americans paid fines for not buying health insurance, the IRS reported Tuesday.

Obamacare's individual mandate requires nearly all Americans to purchase health coverage or pay a fee to the government. In 2014, the fee was set at $95 per person or 1 percent of income — whichever is greater. The government collects the fee by deducting the penalty from a taxpayer's refund.

The IRS reported that in 2014, the average individual mandate penalty hovered around $200. But 85 percent of the people who paid the penalty still got a tax refund — meaning that the amount they owed the government for not buying health coverage was smaller than the tax refund the government owed them.

The cost of paying the mandate will rise in the coming years. In 2015, the penalty is $395 per person or 2 percent of income, whichever is greater. It will jump to $695 per person, or 2.5 percent of income, in 2016. You can calculate your projected penalty here.

Another 12 million Americans claimed Obamacare exemptions

Federal regulations exempt some groups of people from the individual mandate. Some are people who can't afford health insurance; the idea here is that it's unfair to penalize Americans who want to purchase a plan but don't have the money to do so. Others have ethical objections to the mandate. You can read more about the exemptions here.

In 2014, 12 million people applied for — and received — those exemptions. These people didn't carry health insurance, but didn't pay a penalty for going uncovered.

Why the individual mandate matters