Senior Policy Analyst
The IRS is launching a new initiative to inform millions of people who didn’t have health insurance in 2015 about the affordable coverage options they may have for 2017. While the IRS’s efforts have come under fire from some in Congress, federal law clearly requires it to share this information. Section 1502(c) of the Affordable Care Act directs the Treasury Secretary to notify uninsured people about the services available through their state’s health insurance marketplace.
The IRS hasn’t released the plan’s final details, but it’s expected to send letters to tax filers who paid the penalty for not having coverage — or claimed an exemption from the requirement to have coverage — and appear eligible for help paying for marketplace insurance.
The IRS has strict standards guarding the privacy of taxpayer information, an area of concern for critics of the new initiative. For example, IRS rules bar the agency from sharing information about who didn’t have coverage with the Department of Health and Human Services or the marketplaces. Instead, the IRS will contact filers directly.
This isn’t the first time the IRS has reached out to taxpayers to explain potential tax benefits. It routinely sends information to people who appear eligible for the Earned Income Tax Credit but didn’t claim it. It also reaches out when a new benefit becomes available. In 2008, the IRS sent a ten-page information packet to 20 million Social Security and Veterans Affairs beneficiaries to alert them to an economic stimulus payment they might qualify for.
This type of outreach is sorely needed. Some 29 million people remain uninsured, the latest Census data show. Many are eligible for financial assistance but don’t know it’s available. (More than half of the roughly 8 million families that paid a penalty in 2014 had adjusted gross incomes below $30,000; many of them would have been eligible for help paying insurance premiums.) And many people don’t know they may have to pay a penalty for not having coverage.
Reaching young adults aged 18-24 is especially critical. They’re likelier to be uninsured than other adults, and young adults were 45 percent of the filers who paid the penalty or claimed an exemption in 2014, though they make up only 30 percent of all filers. Today’s White House Millennial Outreach and Engagement Summit is reaching out to young people to ensure that they can get the preventive and other care they need and aren’t burdened by avoidable medical debt. The IRS’s letters will build on today’s event.
With penalties much higher than in 2014, it’s more important than ever that taxpayers have full and fair information about their coverage obligations and opportunities. By getting the word out, the IRS can help more Americans get comprehensive, affordable insurance.