The new Government Accountability Office (GAO) audit refers to ObamaCare – the Patient Protection and Affordable Care Act, which became law in March 2010 – as a “significant effort for IRS.”
The IRS’ “implementation costs” are expected to total $881 million from fiscal years 2010 to 2013, it says.
Of the $881 million, $521 million will come from the HHS’ Health Insurance Reform Implementation Fund (HIRIF) – called a “slush fund” by Republican critics. The remaining $360 million will come from the IRS’s 2013 budget request, expected to be awarded through the congressional appropriations process.
Congress awarded the HIRIF $1 billion to implement the health care overhaul. The GAO has said that the transfer of $521 million of those funds to the IRS is legal.
As of the end of FY2011, IRS had received $187 million of the HHS money, according to the audit. The agency is expected to get the remaining $332 million by the end of this fiscal year, and as of April 27 had been awarded $135 million of that amount.
The $881 million price tag only covers work through 2013. However, the IRS has implementation work planned through 2018 so the total cost could be higher.
“To implement PPACA, IRS must work closely with partner agencies to develop information technology systems that can share data with other agencies,” the audit stated. “Additionally, IRS is responsible for providing guidance to taxpayers, employers, insurers, and others to ensure compliance with new tax aspects of the law.”
“IRS is one of several agencies accountable for implementing the legislation and has responsibilities pertaining to 47 PPACA provisions,” it added. “According to IRS officials, the most challenging of these provisions relate to the health care exchanges to be established by states by 2014.”
The report described the exchanges as “marketplaces for individuals and certain types of employers to purchase health insurance.”
“To support the exchanges, IRS must modify existing or design new IT systems that are capable of transmitting data to and from HHS, help HHS craft eligibility determinations and related definitions, and engage in new interagency coordination, such as with HHS and the Department of Labor.”
The IRS is charged with implementing key provisions of Obamacare including the controversial individual mandate, which requires that the American public buy health insurance or pay a fine.
Enforcing the mandate will require the IRS to provide subsidies to low-income people to pay for insurance through the newly created state exchanges. The subsidies will be set up as tax credits. A slew of taxes and fees are expected to be levied under the law.
This month, the U.S. Supreme Court is expected to rule on whether the provisions of the health care law are constitutional.