So how do you feel about turning over access to sensitive healthcare information to the Internal Revenue Service?
In the wake of running disclosures of the agency’s nefarious snooping and political targeting, its new role as chief health insurance enforcer should give us heartburn.
Under Obamacare, responsibility for verifying eligibility for the healthcare program, and monitoring whether you carry “qualifying” health coverage (and are exempt from the law’s penalties) falls principally to the IRS.
The IRS was given expansive, new powers to execute these goals. That includes more authority to share your personal information — not only about your income, but also your healthcare.
And the agency’s reach only grows: Former IRS Commissioner Douglas Shulman told Congress last year that the agency would need another $13.1 billion to implement Obamacare in 2014, on top of the billion it has already spent.
Officials at the U.S. Treasury, the parent of the IRS, have estimated that the IRS now has about 700 full-time staffers working on Obamacare implementation.
Estimates say that eventually, the IRS will need a minimum of 5,000 and perhaps as many of 16,000 additional employees to carry out the new law’s many mandates.
The IRS is under fire this week, after its Director of Exempt Organizations Lois Lerner admitted on Friday that the agency targeted conservatives for special tax-exempt scrutiny during the 2012 election season. IRS targeted tea party types and groups that specifically opposed the Obama Administration.
This abuse should give everyone pause heading into the fall, when the IRS assumes the lead roll in monitoring what kind of health insurance we carry, whether we are eligible for Obamacare, or subject to the legislation’s myriad list of financial penalties.
A link to more than 75 regulations, notices, guidance documents, and other public directives on how the IRS will implement various provisions of the Affordable Care Act can be found HERE
These are just some of the ways that the IRS will regulate your healthcare.
1. The IRS is responsible for implementing 47 new healthcare tax provisions under Obamacare. These include the right to levy a penalty against businesses and individuals who don’t provide or acquire insurance, determining how to distribute annual subsidies to those qualifying for subsidies to buy the Obamacare coverage, and deciding how to deliver tax credits to small businesses that buy coverage for workers.
2. The IRS will also include new paperwork with everyone’s’ tax returns starting next year, to monitor the decisions all of us make with respect to our health insurance. This tax document must contain sufficient information for taxpayers to prove that they purchased qualifying health insurance under Obamacare.
According to American’s for Tax Reform, at a minimum, the form will need to contain: the name and health insurance identification number of the taxpayer; the name and tax identification number of the health insurance company; the number of months the taxpayer was covered by this insurance plan; and whether or not the plan was purchased in one of Obamacare’s “exchanges.”
You can view the projected IRS form at www.ObamacareTaxForm.com. On the form, lines 3-4 show where taxpayers will disclose their personal health ID information.
3. The IRS will also have to actively share with other agencies, state exchanges, and maybe even individual health plans; the financial information of folks purchasing coverage on the Obamacare exchanges (and qualifying for subsidies). Right now, there’s no other way to make sure people qualify for the federal money.
The new enrollment form unveiled two weeks ago – for people to use in applying for the Obamacare subsidies — failed to ask the relevant and probing questions that the government will need to know in order to verify financial eligibility.
The Obama White House probably wanted to stoke a perception that the application will be simple. They had been criticized for the form’s first iteration, which ran dozens of pages.
But the shorter that form is, the more burden the government assumes on itself to cross reference the application with income information maintained by the IRS. It’s now clear that the IRS will be heavily involved in vetting eligibility for the subsidies and the new exchanges.
4. Among other things, the IRS is now requiring employers to report the cost of the healthcare coverage you get at work under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12. The IRS says that this reporting is for informational purposes only, to show employees the value of their health care benefits. But it could be a first step to taxing those benefits.
5. Obamacare also creates a new definition of income – “household income” — that could be used to change tax liability down the road. Household income is meant to include not only the income of the family principals such as a husband and wife, but also the income of all other members of the “household” who live with the family.
You can follow Dr. Scott Gottlieb on Twitter @ScottGottliebMD
This is not limited to children. According to the Tax Freedom Institute, any person who qualifies as a dependent under code section 151 is included in household income. This might be a grandparent, for example, or a grandchild. Measuring household income is a way to determine eligibility for Obamacare’s subsidies.
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