IRS providing correct subsidies for exchange shoppers

The Internal Revenue Service correctly calculated subsidies for consumers shopping on the health insurance exchanges, according to a new audit report released to the public this week from the Treasury Inspector General for Tax Administration.

The TIGTA report also found that the IRS received 101,018 requests for income and family size verification from exchange officials between Oct. 1 and Oct. 14. The agency provided accurate responses in 100,985 of the cases.

Essentially, the report determined that overall, the IRS is providing accurate income and related information to exchanges so they can determine whether consumers are eligible for subsidies.

"In nearly all instances, the IRS correctly provided accurate information to the health exchanges on income and family sizes," TIGTA Inspector General J. Russell George said in a statement. "Accurate information is essential for an exchange to determine if an applicant is eligible to obtain insurance coverage through the exchange."

Given the new findings, it's possible insurers won't lose members who received higher than deserved subsidies. That's particularly good news for insurers after a separate Government Accountability Office report found that undercover investigators were able to purchase health plans and obtain subsidies using fake applications, which would reduce insurers' enrollment count.

Although the report analyzed only two weeks in October, it contradicts earlier findings that the U.S. Department of Health and Human Services struggled to verify whether consumers who bought plans through were actually eligible for the subsidies they received, FierceHealthPayer previously reported.

In response to the TIGTA findings, the IRS chief technology officer said the agency is working to improve any problems with identifying subsidies. "I am committed to continuously improving IRS IT systems and processes, and the Affordable Care Act Program Management Office has already taken steps to correct the few discrepancies identified in your report," IRS CTO Terence Milholland said, according to Accounting Web.

To learn more:
- here's the TIGTA statement and report
- read the Accounting Web article