Most of the people who used the Affordable Care Act advance premium tax credit to pay for exchange plan coverage in 2014 filed tax returns, but California was much worse than other states at verifying the nonfilers’ identities.
Covered California started out letting applicants verify their own identities, by swearing, under penalty of perjury, that they were who they said they were.
A HealthCare.gov identity-proofing system, which used personal financial information to verify applicants’ identities, was much more effective at verifying identities than the warnings about perjury.
The office of the Treasury Inspector General for Tax Administration, a federal watchdog agency, has published those findings in a new report on the Affordable Care Act .
TIGTA keeps tabs on the Internal Revenue Service.
Consumers get APTC subsidy help by giving income forecasts to an ACA exchange. Consumers are supposed to report on the APTC help they get, using Form 8962, when they file their tax returns, to see if the IRS owes them extra subsidy help, or if they need to pay excess subsidy help back to the IRS.
The Senate Finance Committee asked TIGTA to look at APTC users who had failed to go through the APTC reconciliation process.
TIGTA analysts started by getting APTC user date from the HealthCare.gov states, and from the managers of the state-based exchanges in California, New York and Vermont.
Those exchanges served about 2.9 million of the households that used APTC help in 2014.
TIGTA has estimated, in earlier reports, that 2.9 million households reported $9.8 billion in APTC help on tax returns for 2014.
About 14 percent of all 2014 APTCusers failed to file tax returns.
In the states TIGTA studied for the new report, only about 1 percent of the APTC users were nonfilers with unverified identities.