One, they're stealing from the company. Stealing time like that is the exact same thing as stealing money from the company.
Two, it's not your responsibility to worry over whether or not they keep their jobs if they're found out no matter how it's found out by the boss.
Three, I doubt that this is the only way they're pulling one over on the boss.
It's a tough situation, definitely. The way you tell your boss would depend heavily on your relationship with him and whether or not you feel you can be completely honest or if you have to address the situation in a roundabout way. Perhaps the way to go about it is to somehow address the security (or lack of it) regarding those ID cards.
I have the kind of boss who wants to know if/when people are taking advantage of her and the agency. She's very kind and very generous, so it really upsets her when people take advantage of that kindness AND of her disability (she's deaf). She has to rely on everyone, and default to trusting everyone to know if and when other people are being kind to her face but possibly not to her ears, even right in front of her. It's not a tattling situation, but the way our agency works is that we can't run properly without complete honesty and transparency. She can't do her job if any of us are being dishonest. Plus we have multiple checks and balances for nearly every function so defrauding the agency is nearly impossible.
So in my current work situation we're encouraged to be truthful. She can tell when we're not. She can tell when we know something and are struggling with saying something. She's great at reading body language. We also have a great relationship.
If you have a good to great relationship, then I would say something. If he trusts you and respects you, say something. I wouldn't go in being accusatory.
If it's not a good relationship... then I'd let your coworkers hang themselves. They'll slip up big enough at some point that it can't be missed. I don't advise this.
Edit: My bosses in the past and my boss now would want to know. When I was a manager I NEEDED to know. Stealing from the company like this deserves being fired. If you stay quiet you deserve it too.