The Affordable Care Act, often referred to as ACA or Obamacare, became law on March 23, 2010. It seems like not a day has passed since then without some discussion of or fight about the health care law.
Many of the questions that have been raised about ACA involve the Internal Revenue Service. With individuals now enrolling for health insurance on their own, the spotlight on the IRS’ role is more intense.
Among those taking a closer look is the Treasury Inspector General for Tax Administration, the government watchdog of the tax agency’s action.
TIGTA recently evaluated the IRS’ ability to help folks who are buying their own insurance and expecting to get a tax credit for their efforts. The focus of the TIGTA review, which was released Feb. 3, was the Premium Tax Credit, the tax break that will help some buyers of ACA-required health insurance offset that insurance’s costs, and the tax that will be applied if individuals don’t obtain minimal essential coverage.
TIGTA’s analysis? The IRS currently is up to these tasks, but any changes in the health care law’s implementation will create challenges.
Not new, but notable
It would be easy to dismiss the TIGTA report as an investigation into the obvious.
The health care law is huge, relies on many federal and state agencies working together and faces almost constant scrutiny and political attacks. Plus the insurance marketplaces, particularly the federal exchange, are still dealing with the massive public relations failure from HealthCare.gov’s botched beginning last October.
But sometimes the obvious is important.
Right now, notes TIGTA, IRS’ health care customer service strategy is part of a larger government education campaign that also involves the Labor Department and the Department of Health and Human Services.
As that public outreach and education effort is ongoing, the IRS is also developing and updating tax forms, instructions and publications that will be affected by ACA, as well as training its employees to help folks understand their insurance requirements and whether they will owe a penalty or get a tax credit.
IRS’ increasing role
The public face of ACA right now is Health and Human Services. But when 2015 arrives, the IRS will be taking the lead since that’s the year that people will be claiming the Premium Tax Credit or facing a larger tax bill for not having adequate insurance.
If the system is allowed to continue as it is now structured, the IRS should be OK, says TIGTA. But, and here’s the important and obvious observation from the tax oversight office, every time changes are made to ACA, either the law itself or rules on its administration, that puts a hurdle in the IRS’ path.
Let’s be real. Despite TIGTA’s positive analysis, the IRS is going to have enough trouble dealing with ACA tax provisions as they now are set up. This is a new law that will be showing up on 2014 tax returns and even the most simple tax changes always produce unforeseen problems.
TIGTA made no recommendations in its report, but I’ll offer one.
The inspector general’s report should be a warning to those who want to continue to tinker with the health care law. You do so at your own and everyone else’s peril since changes are likely to make things much worse before they get better.
I realize that disruption of the ACA is the goal of its opponents. Many of them also are avidly anti-IRS. So fiddling with Obamacare is a win-win if they can mess up the law’s coverage goals and make life harder for the tax collector.
If that’s your goal, please find another one that won’t disrupt the lives of millions who need health care and who will rely on the IRS to help them pay for it.
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”