Officials at the Center for Consumer Information & Insurance Oversight, the agency running the Patient Protection and Affordable Care Act exchanges (ACA), discuss exchange applicant income verification in a new answer to frequently asked questions.
When HHS delayed the large employer mandate, they also stated that the delay would mean that some exchanges would need to use the honor system when determining whether consumers could qualify for the new insurance premium tax subsidy. The Internal Revenue Service pays the premium tax subsidy in advance, to help consumers buy coverage, so the honor system presented concerns about rampant fraud.
Congress expressed concerns, so HHS officials are now telling Congress the exchanges will have ways to check consumers' income information in 2014 including a contract with Equifax to verify income. Public exchange managers will now have more than one way to verify income next year.
CCIIO - pronounced "See-sigh-Oh" - now has come up with a formal description of how exchanges will verify applicants' income.
Officials said the exchanges will initially use:
- IRS tax filing data.
- Social Security household income data.
- Wage information employers report to Equifax.
If the IRS, the Social Security Administration and Equifax cannot provide real time data to substantiate the income information a consumer has supplied, the consumer will have to provide an explanation, or additional documentation of income, officials said.
If consumers cannot supply the requested documentation, an exchange will base eligibility decisions on IRS and Social Security data. If IRS data is unavailable, the exchange will cut off access to the tax credits, officials said.
An exchange will have some flexibility when it comes to asking for extra documentation from individuals not in the Equifax wage database and who report income more than 10 percent below the income levels suggested by IRS and Social Security data.
At the exchanges run by CCIIO, which include Texas, managers will ask for documentation whenever the income applicants report seems to conflict with information from the IRS, the Social Security Administration or Equifax, officials said.
