September 13, 2013

 

 

In This Issue
Hot off the Presses: Agencies Issue Clarifying Guidance About HRAs, FSAs and Other Employer Healthcare Arrangements
DOL Issues Clarification about Exchange Notice Penalties
Welcome Back Congress
Subsidy Verification Bill Passes House
HHS Releases Study on Rate Review
Compliance Corner Webinar
What We’re Reading
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Subsidy Verification Bill Passes House

One thing the House did do this week was pass Representative Diane Black’s (R-TN) bill on subsidy verification. The bill, H.R. 2775,  would mandate a verification program to make sure Americans don’t collect more exchange-based health insurance premium tax subsidies than they’re qualified for. It passed by a 235-191 vote on Thursday. All House Republicans and a group of five Democrats, including Representatives John Barrow of Georgia, Daniel Lipinski of Illinois, Jim Matheson of Utah, Mike McIntyre of North Carolina and Collin Peterson of Minnesota voted for the bill. Black’s bill would require the HHS Inspector General to certify to Congress that there is a comprehensive program to verify the incomes of those qualifying for subsidies before they go out.

HHS already has a subsidy income verification process in place for January 1 when subsidies will begin to be handed out as stipulated by the original law, but the concern is that it is not comprehensive enough. Representative Black’s bill originally put the HHS Secretary in charge of this program but eventually amended the bill to shift that responsibility to the Inspector General when the CBO said the secretary was already putting a verification program in place.

The bill came in response to the July 5th rule released by the Obama Administration that gave states implementing their own exchanges some flexibility in checking whether people are eligible for insurance subsidies. The rule states that if people attest to having an income more than 10% lower than what government documents seem to indicate, states have the flexibility of not asking each and every one of those people for more data to verify their income level. This obviously left some space for individuals who do not meet the income threshold for a subsidy to wrongfully obtain an insurance subsidy, which would ultimately drive up health costs under the new law.

In the unlikely event the Senate takes up and actually passes a companion bill, the White House will veto it. Earlier this week the White House put out a statement formally opposing H.R. 2775. The White House and House Democrats all agree the plan HHS already has in place to verify the income of subsidy applications, as required by PPACA, is sufficient. The Congressional Budget Office, in a report published this week, confirmed that the HHS program is on track and ready to open by January 1.

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