Department of the Treasury - Internal Revenue Service Health Care Tax Credit Administration Recovery Plan
Update systems and products to implement Recovery Act changes and expand capacity to provide easy access and reduce burden for eligible taxpayers claiming the Health Coverage Tax Credit (HCTC) and ensure compliance with the law.
The credit was created to help displaced workers and retirees who have lost their jobs due to trade with countries who participate in free trade agreements (e.g., the North America Free Trade Agreement).
The Trade Adjustment Assistance (TAA) Reform Act of 2002 created the HCTC to assist certain recipients of trade adjustment assistance and Pension Benefit Guaranty Corporation pension beneficiaries who are aged 55-64 to receive affordable health care. The program provides a monthly advance, refundable tax credit for 65 percent of the cost of qualified insurance. The credit can also be provided when the individual's tax return is filed. The IRS administers the enrollment, payment and compliance of the credit. The Department of Labor (DOL), state workforce agencies and the Pension Benefits Guaranty Corporation (PBGC) have responsibility for determining potentially eligible HCTC individuals.
The Recovery Act changed the HCTC in several ways including:
-Increasing the portion of health premiums paid by the government from 65% to 80% (beginning April 2009)
-Reimbursing premiums paid while enrolling in the monthly HCTC Program (beginning August 2009)
-Allowing family members to continue receiving the HCTC after certain life events (beginning January 2010)
-Expanding eligibility to more people (beginning May 2009)
Prior to the Recovery Act, the IRS estimated that the number of potentially eligible individuals in any given month was increasing to approximately 300,000 due to the overall economic downturn. Given the Recovery Act changes, that estimate is now approximately 570,000 individuals.
The measures have been revised to enrich the performance metrics for Recovery targets. In some instances, targets will not be available until additional baseline data has been collected.
Cost per Taxpayer Served ($)
|Frequency : Annual|
|Direction : Decreasing|
|Type : Efficiency|
|Explanation : Costs associated with serving the taxpayers including program kit correspondence, registration and program participation.|
|Unit : Dollars|
|Frequency : Annual|
|Direction : Decreasing|
|Type : Output|
|Explanation : The median number of days between the day the IRS sends program kits to potential recipients and the day recipients enroll and remit their first payments to the IRS.|
|Unit : Days|
Schedule and Milestones
Implementation of the changes related to HCTC will be done via Education and Outreach, issuance of Guidance and Instructions, IRS Processing, and ensuring Compliance. Implementration began in March 2009 and continues.
|Implement the change to the credit percentage covered by the government from 65% to 80%
|Update initial functionality (Release 9.0) to allow reimbursement of health plan premiums paid while waiting to enroll in HCTC
|Update subsequent functionality (Release 10.0) to allow HCTC to extend benefits to family members after certain life events, expand capacity to handle increased volumes, extend length of time credit is offered, and extend consumer protections under COBRA
Projects and Activities
The activity to be performed is the implementation of Recovery Act changes to the HCTC. $80 million in funding is for expansion of the existing program to add the new functionality required by the Recovery Act, plus other administrative expenses needed for implementation.
All activity of the IRS relating to implementation of the HITCA portion of the Recovery Act is overseen by an Executive Steering Committee consisting of the highest-level executives in IRS, representing every major function and business. This committee met weekly through the end of March and now meets monthly. Risk assessments and analyses are performed and documented along with mitigating actions. All Recovery Act expenditures are tracked via a unique code and reported weekly.
All risk management activities as outlined below were completed timely (by April 15, 2009) for ARRA provisions related to the Health Care Tax Credit Administration.
5.1 RISK MANAGEMENT/INTERNAL CONTROL PLAN
• For each Recovery Act program involving implementation of provisions or obligations of Recovery Act funds in FY 2009, the bureaus will perform actions 5.1.1 through 5.1.4 by April 15, 2009, with completion of 5.1.6 shortly thereafter
• Step 5.1.5 will be ongoing
• Supporting documentation will be maintained by each bureau so that it is readily accessible in the event of an audit or other needs
5.1.1 Identify and Document Program-Specific Risks
• Review pertinent existing risk assessments
• Review pertinent OMB Circular A-123/Appendix A test results, Improper Payments Information Act assessments, etc.
• Review pertinent GAO/OIG/TIGTA audit reports and related corrective action plans
5.1.2 Identify and Document Applicable Current Process Internal Controls
5.1.3 Assess Program-Specific Risks in View of Existing Controls
• Take the Risk/Impact Questionnaire to rate risks and impacts, taking into consideration the findings identified in 5.1.1 and all OMB-prescribed Recovery Act transparency and accountability objectives
• Use the “Consequence-Probability Table” (Risk/Impact Matrix) to determine the overall (combined) Risk/Impact rating
• Document assessments
5.1.4 Mitigate Risks and Impacts
• For each Program with an overall Risk/Impact rating of “High” or “Medium”:
• Identify and update existing risk mitigation plans to implement Recovery Act-related controls; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls
• Develop and execute new risk mitigation plans as needed; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls
5.1.5 Monitor Risk Mitigation Plans
• As outlined in each risk mitigation plan (per 5.1.4), each risk mitigation plan must be monitored regularly for timely and effective implementation of corrective actions and testing of controls
• Bureaus with responsibility for Recovery Act programs will leverage existing organizations and entities (e.g., A-123/Appendix A Senior Assessment Team, Senior Management Council, et al) to review, assess, and manage Recovery Act risk
• Bureaus will provide monthly progress reports on risk management to the Treasury DCFO for each program
5.1.6 Certify Completion of Risk Assessment/Development of Mitigation Plan
• Bureau Recovery Act Senior Accountable Official will sign/date a certification for each program
• Submit signed certification to Treasury DCFO
Cost and Performance Plan
IRS will be open and transparent in all expenditures of Recovery Act funding consistent with statutory and OMB guidance. Program costs and outlays are tracked via Chief Financial Officer reports and will be submitted as required by the Act.
To ensure that managers are held accountable for achieving Recovery Act goals in implementing the tax provisions, IRS is using a two-pronged approach – executive oversight and the IRS Legislative Analysis, Tracking and Implementation System. Senior IRS executives met weekly through March, and continue to meet monthly, to review progress on all activity. In-depth briefings to the Commissioner and Deputies are provided as needed. Executives within the operating division that oversees HCTC are responsible for reviewing and approving Recovery Act plans, ensuring activities in those plans are completed timely, assessing and mitigating risks. The IRS Legislative Analysis, Tracking and Implementation System is an internal control infrastructure used to identify all actions necessary (beginning at the lowest level) to timely implement tax changes required by enacted legislation, plus, it tracks and monitors the progress and completion of these actions. This system is overseen by the Deputy Commissioners of IRS and has proven successful over several years in ensuring enacted legislation impacting tax administration is fully and timely implemented.
Energy Efficiency Spending Plans
Implementation of the HCTC is categorically excluded from the National Environmental Policy Act, the National Historic Preservation Act, and related statutes.
All Recovery Act funds for implementation of the tax provisions are for administrative expenses only.
Program Plan Award Types
No Data Available