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Regulation and Compliance > Federal Regulation > IRS

GAO: Many PPACA exchanges missed a tax credit reporting deadline

By Allison Bell

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The public health insurance exchanges and federal agencies have had a hard time starting a major exchange user data reporting program.

Many of the Patient Protection and Affordable Care Act (PPACA) exchange managers missed the January deadline for filing full-year 2014 exchange periodic data (EPD) reports with the Internal Revenue Services (IRS), and system glitches slowed IRS data processing of the 2014 EPD reports that did come in, according to investigators at the U.S. Government Accountability Office (GAO).

The IRS says it now has the complete 2014 EPD information for all but one state, but GAO officials say the filing and processing delays forced the IRS to start using backup procedures to enforce PPACA premium subsidy tax credit rules.

See also: What agents have to know about IRS PPACA problems

Exchange managers say some of the delays were the result of the exchanges’ need for more guidance from the Centers for Medicare & Medicaid Services (CMS) and the IRS about what to put in the EPD reports.

See also: Meet the 2015 PPACA tax forms

One step the IRS should take is “evaluating its efforts to collaborate and communicate with key external stakeholders, such as CMS, the [exchanges], tax software companies, and employers,” James McTigue Jr., a GAO director, writes in a report summarizing the GAO findings.

Better communication could “help IRS assess whether changes to its collaboration and communication practices could help it avoid the kinds of challenges it faces in the 2014 tax year as it implements the new PPACA provisions in the 2015 tax year,” McTigue says.

Otherwise, McTigue says, the IRS might run into similar problems as it rolls out the new PPACA employer reporting programs that are supposed to take effect for the 2015 tax year.

See also: PPACA critics pounce upon employer mandate delay

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