Debt Deal Contains Verification Requirement for Affordable Care Act Exchange Subsidies

The budget deal that reopened the partially shutdown United States government contains a directive to the Secretary of Health and Human Services (HHS) to “verify” that individuals applying for subsidies in the public health insurance Exchanges meet the income requirements set forth in the Patient Protection and Affordable Care Act (Affordable Care Act). The law, however, contains no details on the verification procedures that must be adopted or their impact, if any, on employers and group health plans.

The law orders the HHS Secretary to “ensure” that the public Exchanges “verify” that individuals applying for premium tax credits and cost-sharing reductions meet the eligibility requirements of the Affordable Care Act. By January 1, 2014, the HHS Secretary must submit a report to Congress that details the procedures employed by the public Exchanges to verify eligibility for the subsidies.

By July 1, 2014, the HHS Inspector General must report to Congress on the effectiveness of the procedures and safeguards in preventing the submission of inaccurate or fraudulent information by applicants for coverage in the public Exchanges.