IRS faces barriers in implementing health reform

The IRS’s structure and funding will make it difficult to carry out its assigned obligations under health reform, according to IRS ombudsman, Nina E. Olson. In a recent report to Congress, Olson indicates that she has “no doubt the IRS is capable of administering social programs, including health care. However, Olson adds that the IRS itself “must recognize that the skills and training required to administer social benefit programs are very different from the skills and training that employees of an enforcement agency typically possess. While some enforcement measures are required to prevent inappropriate claims, the overriding objective of agencies that administer social benefit programs is to help as many eligible persons qualify for the benefits as possible.”

The IRS has been assigned a number of new tasks under health reform, such as verifying income for those applying for premium assistance credits and verifying that individuals are complying with the health insurance mandate.

In her report, Olson suggests that the IRS’s mission statement should be revised to explicitly acknowledge the agency’s dual role as part tax collector and part benefits administrator. “Such a revision would require the IRS to develop a strategic plan that gives sufficient attention to both roles and would underscore that the IRS requires sufficient funding to perform both functions effectively,” she says.

“If the IRS continues to ramp up enforcement while reducing taxpayer service programs, I would be concerned about its ability to administer the new health care credits and penalty taxes in a fair and compassionate way,” Olson concludes.

For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.