Budget agreement sets new income verification rules for health exchanges

Washington — The budget and debt ceiling agreement Congress is expected to approve late Wednesday would subject the new health exchanges established under the Affordable Care Act to new procedures aimed at ensuring that people receiving federal subsidies to purchase coverage aren’t cheating.

The agreement, which would fund the federal government until Jan. 15, ending a 16-day shutdown and lifting the nation’s debt ceiling until Feb. 7, requires that the head of the Department of Health and Human Services verify to Congress in a report before Jan. 1 that everyone who receives a subsidy is eligible for that help.

Under the ACA, individuals and families whose income is up to 400 percent of the federal poverty level — about $45,000 for an individual this year– qualify for subsidies. The law also provides federal help to low-income people to cover deductibles and copays.

The agreement also requires the HHS inspector general to issue a report no later than July 1 on the effectiveness of the safeguards the exchanges have established to prevent fraud.

The income verification language was included in the deal as a nod to House Republicans who for weeks refused to approve a bill that would continue to fund the federal government unless it would defund or roll back the Affordable Care Act.

“We’re fine with it,” White House spokesman Jay Carney said Wednesday. “The income verification provision…was negotiated by Senate Democrats and Senate Republicans and is a modest adjustment to the existing Affordable Care Act.”

The ACA requires income verification. But in July, the Obama administration announced that some rules relating to verification would be delayed until 2015. That left states to rely on reported earning figures to determine applicants’ eligibility for subsidies, checked against IRS and Social Security data.

In 2014, the HHS planned to audit only a small percentage of individuals who reported incomes at least 10 percent below what federal records indicated.

Kevin Counihan, the CEO of Connecticut’s health care exchange, Access Health CT, said Wednesday evening that the new verification requirement “does not impact us, but it may impact other states.”

Connecticut’s health insurance exchange currently checks applicants’ income using 2012 tax records.

Connecticut’s exchange system accepts the income a person enters if it’s more than what the person earned in 2012, or up to 10 percent less. Those who report a 2014 income that’s projected to be more than 10 percent below their 2012 incomes are given 90 days to submit documentation to explain the difference.

The tax credits are reconciled when people submit their 2014 tax returns.