July 2013


PPACA Update:
Health and Human Services (HHS) admits - "No Verification In Place for Government Subsidies"
You are not going to believe what you are about to read....
After a monumental decision to delay the "Employer Tax Mandate" until 2015, we have recently determined that the Department of Health and Human Services (HHS), the governing body of the Patient Protection and Affordable Care Act (PPACA), has no mechanism in place to actually verify the income of Americans who apply for government subsidies on the individual health insurance exchange.
Let me say that again - The Obama Administration will have no way to verify the income of Americans who apply for government subsidies on the individual health insurance exchange
In an articles released by Forbes (07/06/2013) and The Washington Post (07/05/2013), we have been told by the Obama Administration that HHS will simply "accept the applicant's attestation of income (regarding eligibility for a government subsidy) without further verification" until at least 2015
What does this mean for "Large Employer Groups" (i.e. 51+ enrolled)?
According to the law, an employee would not be eligible for a subsidy on the Health Insurance Exchange if they are offered "affordable" coverage by their employer.  However, if employers are not required to report whether they have offered "affordable" coverage or not how will HHS determine whether an individual is eligible for a government subsidy?
The answer - they are simply going to take your word for it...
What does this mean for individual health insurance consumers?
The answer to this question could be fiscally catastrophic with respect to what this legislation will end up costing the American tax-payers.  With no verification in place, applications may enter in any income they wish which will open up the gates for potential fraud, waste, and abuse of the tax dollars reserved for those who really need it.  In addition, and in conjunction with the delay of the employer mandate, applicants may choose to withhold the fact that they are offered "affordable" coverage from their employer to qualify for a government subsidy.
What does this mean for the American taxpayer?
It does not take a Phd in economics to determine, quite clearly, that the cost of this legislation will continue to increase based on the following factors:
  • The Congressional Budget Office (CBO) has already increased the cost of this legislation 4 times before this recent announcement.  The cost is currently estimated at $1.4 Trillion
  • We all know that there are people in this country that will exploit this loophole for their own benefit, taking valuable tax dollars they may not qualify for based on the original intentions of the law
  • With the delay of tax penalties for large employers until 2015 there may be an influx of employed individuals entering the individual health insurance market to procure health insurance
  • More individual health insurance consumers = more tax subsidies needed to support

We at Altruis Benefit Consulting have always had concerns about this ambitious legislation and the aggressive timeline of its implementation.  With the release of the employer mandate delay and the lack of income verification for government subsidy payments we are now finding out what we should have been told quite some time ago - the implementation of this law is being forced.  We will continue to keep you updated on the developments of this legislation as we learn more.





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