TIGTA report warns of tax credit fraud and security
Posted by Nikki Hurt on December 3, 2013
A report released this morning by the Treasury Inspector General for Tax Administration (TIGTA) found that the Internal Revenue Service (IRS) should “strengthen systems development controls” for the issuance of tax credits under the Affordable Care Act (ACA). Subsidies to help qualifying Americans purchase health insurance will be issued and monitored by the IRS. In the report, Affordable Care Act: Improvements Are Needed to Strengthen Systems Development Controls for the Premium Tax Credit Project, TIGTA stated that the agency needs to improve the software and update the systems used to detect fraud and ensure security of consumer information.
IRS issues two ACA rules
Posted by Nikki Hurt on November 29, 2013
The Internal Revenue Service (IRS) published two final rules concerning the implementation of the Affordable Care Act (ACA). The first rule outlines the health insurance provider fees firms in the insurance industry are expected to provide annually, beginning in 2014. These fees are anticipated to raise nearly $60 billion in revenue over the next several years, most of which will be used as subsidies for qualifying individuals to purchase insurance through health insurance marketplaces. The fee applies to insurance companies with annual revenues exceeding $25 million. Nonprofit insurers receiving more than 80% of their funds from the government, self-insured corporations, and government entities are all excluded from the fee.
The second rule addresses the Additional Medicare Tax provision of the ACA, which requires an additional hospital insurance tax on individuals with incomes above the specified threshold. The rule concerns the implementation and integration of the Additional Medicare Tax, specifically highlighting certain wages and compensation to which the tax does not apply, filing a tax return, and employer processes for adjusting payments and filing claims under the Additional Medicare Tax.
Notice of Proposed Rulemaking: Small Employer Tax Credit
Posted by Nikki Hurt on October 16, 2013
This Implementation Brief examines a Notice of Proposed Rulemaking (NPRM) issued by the Internal Revenue Service (IRS) on August 26, 2013 concerning the tax credit available to small employers that offer health insurance coverage to their employees…
TIGTA report says IRS needs to improve tracking of ACA implementation costs
Posted by Nikki Hurt on September 27, 2013
A report issued this week by the Treasury Inspector General for Tax Administration (TIGTA) said the Internal Revenue Service (IRS) could improve their accounting of costs associated with implementing the Affordable Care Act (ACA). The IRS used the Health Insurance Reform Implementation Fund for ACA spending during fiscal years 2010-2012. Now, the agency’s costs associated with implementing the ACA will be directly from the IRS operating budget. As a result, TIGTA recommended that IRS take steps to address potential errors in direct labor costs associated with ACA implementation, document direct labor costs, and update the methodology used to report ACA costs.
IRS releases guidance on various healthcare arrangements
Posted by Nikki Hurt on September 16, 2013
New guidance released by the Internal Revenue Service (IRS) explains Affordable Care Act (ACA) market interactions on health reimbursement arrangements (HRA), flexible savings accounts (FSA), and other employer-related options. The guidance states that group health plans used to purchase coverage on the Marketplaces, such as HRA and FSA, will not be considered as integrated for the purposes of determining annual dollar limits or preventive service requirements. Moreover, the IRS guidance states that employers not offering insurance coverage may try to use “excepted only benefits” HRA plans to count toward employee compensation.
CMS issues fact sheet concerning hub security
Posted by Nikki Hurt on September 11, 2013
The Centers for Medicare and Medicaid Services (CMS) released a fact sheet concerning the security of the federal data services hub, more commonly referred to as the Hub. To aid in implementing the Affordable Care Act (ACA), CMS created the Hub to help in eligibility determination and enrollment for all health insurance Exchanges. The Hub will act as a conduit for information transfer between several administrative agencies, such as CMS, the Internal Revenue Service (IRS), and Social Security Administration (SSA), and the state Exchanges. The fact sheet purports that the Hub is secure and will be ready by October 1st, 2013 when open enrollment commences. Specifically, the fact sheet addresses areas of security concern including the Hub design itself, the security system used, rigorous testing standards, and compliance with privacy laws.
IRS issues proposed rules regarding employer coverage
Posted by Nikki Hurt on September 5, 2013
The Internal Revenue Service (IRS) released two proposed rules concerning employer coverage requirements under the Affordable Care Act (ACA). The first rule addresses reporting requirements employers must satisfy in order to be deemed compliant with the ACA. Businesses with more than 50 full-time equivalent employees must offer affordable insurance, statutorily defined as less than 9.5% of the employee’s income. This provision of the ACA was delayed until 2015, but the IRS is encouraging employers to comply in the interim.
The second proposed rule described the method by which employers offering minimum essential coverage will report the type and period of coverage they offer to their employees. The IRS will use this provided information to determine if the employer has satisfied the coverage requirements under the law.
Update: The IRS’ Final Shared Responsibility Regulations: When Does Medicaid Eligibility Amount to “Minimum Essential Coverage”?
Posted by Nikki Hurt on September 4, 2013
On August 30, 2013, the IRS published final regulations implementing the shared responsibility provisions of the Affordable Care Act (78 Fed. Reg. 53646-53664). The regulations address, among other matters, the complex question of when Medicaid eligibility amounts to minimum essential coverage (MEC) for purposes of the Act’s tax penalties. Because people with MEC are barred from receiving premium and cost sharing assistance for Marketplace plans, the final rules also have important implications in the area of health policy for children and adults with disabilities, who may need both basic insurance and supplemental Medicaid coverage for their more extensive health care needs. Many of Medicaid’s most important disability-related eligibility categories are optional with states and, therefore, monitoring whether and how agency policy on when Medicaid counts as MEC will be an important issue to watch over time.
IRS posts final rule on minimum essential coverage penalty
Posted by Nikki Hurt on August 27, 2013
A final rule released by the Internal Revenue Service (IRS) explains the individual shared responsibility payment for not obtaining basic insurance coverage, or minimum essential coverage, under the Affordable Care Act (ACA). By 2014, most Americans are expected to possess minimum essential coverage or face a tax penalty under Section 5000A of the Internal Revenue Code. Individuals without minimum essential coverage will pay an annual fine of $95 in 2014, $325 or 2% of their income in 2015, and $695 or 2.5% of their income in 2016 and beyond. Since many Americans will be exempt from this provision for a multitude of reasons (hardship, unaffordability, religious beliefs, etc.), the Congressional Budget Office (CBO) estimates that only 2% of Americans will face the penalty.
In addition to the final rule, the IRS released a fact sheet that highlights several of the key points addressed in the rule. The fact sheet discusses how the rule clarifies hardship exemptions and partial month coverage (i.e. an individual has maintained minimum essential coverage as long as he or she has coverage for at least one day of the month). Specific coverage categories to which minimum essential coverage provisions apply are enumerated, and the processes for obtaining an exemption are also described.
IRS released proposed ruleson small business tax credits
Posted by Nikki Hurt on August 23, 2013
In a new proposed rule released today, the Internal Revenue Service (IRS) outlined stipulations for small businesses to receive tax credits under the Affordable Care Act (ACA). The rule states that small businesses will only be eligible for a tax credit if they have 25 or fewer full-time employees receiving health insurance through the small business health options program (SHOP) Exchanges. Under the ACA, SHOP Exchanges comprise the small group market in which small businesses are able to enroll their employees to receive health benefits coverage.