CMS Could Not Effectively Ensure That Advance Premium Tax Credit Payments Made Under the Affordable Care Act Were Only for Enrollees Who Paid Their Premiums

CMS could not ensure that advance premium tax credit (APTC) payments made to qualified health plan (QHP) issuers were only for enrollees who had paid their premiums. Specifically, we found that CMS (1) did not have a process in place to ensure that APTC payments were made only for enrollees who had paid their monthly premiums; instead, CMS relied on each QHP issuer to verify that enrollees paid their monthly premiums and to attest that APTC payment information that the issuer reported to CMS was accurate; and (2) had sole responsibility for ensuring that APTC payments were made only for enrollees who had paid their premiums and did not share these data for enrollees with the IRS when making payments.

We determined that CMS's processes limited its ability to ensure that APTC payments made to QHP issuers were only for enrollees who had made their premium payments. Without processes for ensuring that APTC payments are made on behalf of enrollees who had paid their premiums, Federal funds may be at risk (e.g., there is a risk that funds were authorized for payment to QHP issuers in the incorrect amounts).

We recommended that CMS (1) establish policies and procedures to calculate APTC payments without relying solely on QHP issuers' attestations, including QHP issuer assurances, that enrollees have paid their premiums, and (2) once it implements an automated policy-based payment process to maintain individual enrollee data, consult with the IRS to explore sharing APTC payment data when these payments are made throughout the year in order to allow the IRS to verify the data reported on each individual's Form 1095-A at tax filing time. CMS concurred with our first recommendation and did not indicate concurrence or nonconcurrence with our second recommendation.