The IRS did not issue the required notification letters by June 30, 2015, to taxpayers without Minimum Essential Coverage under the Patient Protection and Affordable Care Act (ACA) for tax year 2014, the Treasury Inspector General for Tax Administration (TIGTA) reported. In March 2016, the IRS’s ACA Program Management Office had coordinated with the Department of the Treasury and the Centers for Medicare and Medicaid Services to develop the notification letters and identify taxpayers to whom the letter would be mailed.
TIGTA’s review found that the IRS did not send notifications to approximately 3.3 million taxpayers who did not report full-year Minimum Essential Coverage, an exemption from Minimum Essential Coverage or a Shared Responsibility Payment, and were not claimed as an exemption on someone else’s tax return. In addition, the IRS did not send letters to 1.9 million individuals who reported an exemption from Minimum Essential Coverage or a Shared Responsibility Payment because they were selected to be part of a control group used to measure the effectiveness of the letters.
Further, TIGTA’s analysis of 5.4 million taxpayers who enrolled in health coverage through a health exchange in 2015 identified that the cost, after financial assistance, for 3.4 million (63 percent) taxpayers exceeded the $75 a month cited in the letters mailed to taxpayers. The average cost to taxpayers was $168 a month after financial assistance. TIGTA did not make any recommendations in the report.