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  • February_Accounting_150x150.jpg

    By Leon Grove, Full-Time Faculty, School of Business 
    Published February 2014

    Health care reform in the United States created the enactment of the Affordable Care Act for America Act (or H.R. 3962). With this enactment, several new legislations were created, including the Patient Protection and Affordable Care Act (or H.R. 3590) and the Health Care and Education Reconciliation Act of 2010 (or H.R. 4872). The changes have evolved over the years and changes to H.R. 3962 continue; however, the original mandates for 2014 were:


    • All Americans will have access to affordable health insurance options;
    • The Marketplace will allow individuals and small businesses to compare health plans on a level playing field;
    • Middle and low-income families will get tax credits that cover a significant portion of the cost of coverage;
    •  Medicaid programs will be expanded to cover more low-income Americans;
    • All together, these reforms mean that millions of people who were previously uninsured will gain coverage;
    • Large employer health care mandate excise tax (delayed until 2015);
    • Premium assistance credit for mid to low income individuals and families; and
    • Individual penalty for not being insured.

    As a result, there are new tools to fight fraud to strengthen the Federal and Private Health Programs, and to protect consumer and taxpayer dollars. The Obama Administration has made important strides in reducing fraud, waste, and abuse across the government. Over the last 2 years, the Centers for Medicare and Medicaid Services (CMS) has implemented powerful new anti-fraud tools and designed and implemented large-scale, innovative improvements to the Medicare program integrity to shift beyond a “pay and chase” approach to preventing fraud before it happens. CMS is also collaborating more with the private sector, law enforcement, and state partners to harness best practices in the fight against health care fraud.

    Therefore, individual taxpayers can be penalized up to $25,000 for failure to provide correct information when applying for health insurance coverage or financial assistance for health coverage including the premium assistance credit or cost-sharing reduction subsidy. The Internal Revenue Code § 7216, which are found at Treasury Regulations §§ 301.7216-1 to 301.7216-3, were substantially revised in 2008. On January 4, 2010, proposed and temporary regulations were published that described three circumstances when tax return information may be disclosed or used without taxpayer consent. These regulations were issued as final regulations effective on December 28, 2012.

    In addition to criminal penalties, a civil penalty of $250 for each unauthorized disclosure or use of tax return information by a tax return preparer is imposed by § 6713. The total amount imposed on any person under § 6713 shall not exceed $10,000 in any calendar year. For purposes of these questions and answers, which relate to the Affordable Care Act, the requirements and restrictions under § 7216 also apply under § 6713.

    References 

    H.R. 3962

    H.R. 3590

    H.R. 4872

    Treasury.gov; on the Internet at  http://www.treas.gov/tigta

    Leon Grove  is a full-time faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

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