What are the odds of Feds finding out employer offers HC while employee uses ACA instead?

[LizBeth]

Has anyone heard of a person using ACA healthcare when the employer offers hc and what happened?

I know IRS is pretty well on top of verifying the amount a person makes to the amount they declare but I have not read anything on people using ACA when employer provides hc and how easily they are caught.

[Freddie]

1. Employers file a form called a 1095

Which lists if “affordable” (based on % of income) coverage is available, if the employee takes such coverage, and if so, the names and SS#s of any dependents enrolled. It also notes if the employee declines coverage or is ineligible due to not working enough hours or termination.

[LizBeth]

2. But are they really crossed checked? I know with amount it is easy enough to do

comparing pay to what is declared. But my mind is not wrapping around how this can be easily check by IRS. The employer sends in SS# and that information automatically hooks onto my acct? Are you saying it is as easy to identify as it is with income?

[Freddie]

3. Very good question

I’m a payroll admin and file the 1095s but what happens after that is anyone’s guess. It’s such a complicated PITA that we now pay our insurance carrier to file it for us. I think the real concern is to catch people getting ACA coverage *with a subsidy* when they have employer coverage available. But if I recall correctly it’s the employer who would be penalized. Especially since the TFG administration pretty much de-fanged the ACA by ending the mandate, who knows if any of this is cross-checked.

[dalton99a]

4. IRS signals it is cross-checking employer information

https://taxnews.ey.com/news/2021-1193-irs-signals-it-is-cross-checking-employer-information-when-assessing-employer-shared-responsibility-payments

[walkingman]

5. Some things to keep in mind....

I base this on my limited knowledge after working on IRS computer systems for a long time - However it has been almost 20 years since I retired.

There are two primary components to our IRS system. An "input" entity and a "compliance" entity. At any of the various IRS offices around the country they have a very large physical presence usually at two separate distinct locations.

Any forms that are submitted to the IRS... are loaded into their databases, usually digitally, and basic math checks are performed. About a year later the work of the compliance center begins....there is an automated match done comparing forms received and forms submitted, if you get my drift.

For "flags" that come up then there is human intervention. In most cases an automated letter is generated and mailed for discrepancies. For egregious differences then it is possible to go into the audit cycle which has various levels of intervention.

Bottom line - computers do most of the verification.