If there is one goal to highlight from the Affordable Care Act, it’s providing affordable healthcare to Americans. Last year, the IRS assisted in that cause with an interim process that helped retirees and displaced workers with their healthcare premiums. The effects of that process have proven beneficial through the latest results of an audit but noting room for improvement.
The process provided interim assistance to the aforementioned individuals by way of Health Coverage Tax Credits (HCTC) used to fund monthly premiums from healthcare providers. The IRS continued with an extensive campaign to promote this new process for those in need. Payments began at the close of June 2016 and ran through to the end of the year. The HCTCs cover roughly 72.5% of premium costs for those eligible.
An audit conducted by the Treasury Inspector General for Tax Administration (TIGTA) demonstrated positive results, for the most part. The IRS issued $5.8 million in HCTCs during that 6-month time frame. While that amount is significant, the TIGTA audit also shows that there is still work to be done. The IRS noted that a better process for HCTCs would be implemented in 2017, as deadlines and procedures affected the efficiency of the interim process. The TIGTA audit also found that the IRS had begun establishing more permanency within the HCTC process, with letters to enrollees informing them of package statuses.
The biggest flaw within the IRS’s process arises from eligibility qualifications. Many individuals who fell under the Pension Benefit Guaranty Corporation (PBGC) were denied eligibility, despite potentially meeting said criteria in 2015. The PBGC program includes 896,213 individuals, and 506,396 were denied HCTCs.
The solution? At the recommendation of the TIGTA, prior to adding indicators for eligibility to tax accounts, the IRS should confirm individual eligibility—with a process implemented that would efficiently review qualifications. The IRS agreed, and a better process will be in place for the next round of HCTCs.
