Explaining the Connection Between Obama's Health Care Law and the IRS

National Journal

Even before news organizations confirmed that Sarah Hall Ingram, who headed the tax-exempt division of the IRS, would lead agency's implementation of the ACA, Republicans wasted no time trying to link the scandal to the law.

As the investigation into the IRS' targeting of conservative groups begins, here's an explainer to answer the role that the tax-collecting agency plays in the health care law's implementation.

Q: What role will the IRS play in implementing the Affordable Care Act?

A: The short answer is: a substantial one. In his ruling on the constitutionality of Obama's health care law, Chief Justice John Roberts that Congress can regulate health care under its ability to tax. That set up the agency to take a lead in implementing the law, along with the Health and Human Services Department. (The Labor Department will also play a role.) There are 47 tax provisions -- including the small business health care credit and the medical device tax -- that will go into effect. The agency will have to administer those provisions and collect taxes where they're due.

The agency will also have to determine whether people qualify for a health insurance premium tax credit as part of the minimum coverage requirement. Americans will also have to report their insurance status on their taxes each year, and the agency will have to review that and collect a $95 penalty on those not carrying insurance.  Businesses will be required to provide health care to their employees or face a penalty if they do not. The agency will set these rules and collect the penalties when businesses aren't in compliance.

Q: How many people will the agency have to hire? How much will this cost?

The agency said it would need nearly 2,000 people to administer health care reform by the end of the year. The Government Accountability Office estimated in a June report that the government would spend $881 million to implement the first four years of the law, and the administration requested $440 million as part of its 2014 budget request. 

Q: Who is Sarah Hall Ingram and why does she matter?

A: Ingram directs the IRS's Affordable Care Act office and was in charge of the tax-exempt division from 2009 to 2012, overlapping with the time when the targeting first began. She began to oversee implementation of the health law in December of 2010, which was six months before her subordinate found out about the profiling, according to the AP. Her successor in the tax-exempt division, Joseph Grant, said this week he would retire on June 3 as hearings on the scandal got under way in Congress.

Q: How are Republicans using that revelation politically?

A: Republicans rushed to connect Obama's health care law to the IRS scandal, especially after the news that Ingram would oversee the health law's implementation at the IRS. "The recent deplorable actions at the IRS have shattered our trust that they can responsibly handle the people's sensitive medical information," said Rep. Phil Gingrey of Georgia. Rep. Michele Bachmann of Minnesota asked: "Does this means that some government plutocrat can look at my personal healthcare data? Could I be denied healthcare? Could it be delayed?" she asked. The law does not require the IRS to collect or view information about individuals' health.

Democrats pushed back quickly against the GOP's assertions. A Democratic staffer for the Ways and Means committee emailed a reporter pointing out that Ingram was assigned to oversee the health care law six months before the inspector general's report said her subordinate was notified of the targeting. The point of the email was to try to de-couple the IRS and the ACA. Democratic lawmakers, meanwhile, criticized the agency but also tacitly acknowledged the political liability inherent in the scandal. "It's also important to not allow the hearings to become politicized," said Rep. Sander Levin of Michigan, the ranking Democrat on the Ways and Means Committee.

 

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