(Daniel Acker/Bloomberg)

Monday morning, The Hill’s Sam Baker reported that the White House has found a home for half that fund — $500 million — at the Internal Revenue Service.

“HHS plans to drain the entire fund by September, before the presidential election and more than a year before most of the health law takes effect,” Baker reports. “HHS has transferred almost $200 million to the IRS over the past two years and plans to transfer more than $300 million this year.”

Sending a big chunk of money to one of America’s least liked federal agencies is unlikely to score many political points. That might be especially true with the health reform law, where the IRS is responsible for administering half the much-maligned mandated purchase of insurance.

But, policy wise, it probably makes a lot of sense. Even though it's a health insurance expansion, Treasury is probably on equal footing with Health and Human Services in making the Affordable Care Act work. It will be the agency that administers one of the most important parts of the health care overhaul: The requirement to purchase health insurance.

It will not, as some have suggested, hire an army of gun-toting IRS agents, who will show up at your door and demand proof of insurance. The agency’s role will be much less dramatic. The agency has already started administering tax credits for small businesses, as an incentive to provide health insurance to their workers.

It’s role will expand significantly when the coverage expansion starts in 2014. It will, for example, add new lines to annual tax filing forms where individuals will write down their source of health insurance coverage. Those who do not include coverage will face a tax penalty, as part of the individual mandate.

The IRS will also administer subsidies to low and middle-income Americans, to assist with the purchase of health insurance. Since those subsidies are tethered to income — the lowest-income Americans get the most assistance purchasing coverage — the IRS will play a crucial role figuring out who gets what.

Treasury isn’t usually the most public agency when it comes to the health reform law. Much of the rollout has happened at Health and Human Services, which has helped states lay the groundwork for setting up health insurance exchanges and regulating their insurance markets. But as the health reform law’s bigger provision kicks in, the department will play a key role in achieving one of the law’s biggest goals: Expanding access to affordable health coverage.