Income and Employer Eligibility Verifications

[Dave020]

Friday Covered CA Q&A

No Income Verification?
Posted: 11 Jul 2013 10:27 AM PDT
**Question**: I just read that the exchange will accept the applicant's "word" regarding their household income. Is that true?

**Answer**: The Feds released a new rule Friday that grants state and federal facilitated exchanges the "discretion" to accept an applicant's attestation of projected annual household income "without further verification" during the first year of operation - 2014. The rules also allow only random, rather than comprehensive, checks on income eligibility in 2014. Covered California may continue with its plans for comprehensive income verification regardless. We will probably learn more about this at the August board meeting.

How to Verify Employer-Sponsored Eligibility?
Posted: 11 Jul 2013 10:37 AM PDT
**Question**: If my employer is not required to report which employees are covered under our group plan, how will the Exchange know if I apply for a subsidy?

**Answer**: Until now, Exchanges had to verify whether new applicants receive employer-sponsored insurance benefits through random checks. But in final regulations released on Friday by the HHS Department, 16 states, including California, which are setting up their own exchanges, until 2015 to begin random sampling of enrollees' employer-insurance status. However, California may choose to follow through with random sampling.

 

[AllenChicago]

""**Answer**: The Feds released a new rule Friday that grants state and federal facilitated exchanges the "discretion" to accept an applicant's attestation of projected annual household income "without further verification" during the first year of operation - 2014. The rules also allow only random, rather than comprehensive, checks on income eligibility in 2014. Covered California may continue with its plans for comprehensive income verification regardless. We will probably learn more about this at the August board meeting.""

How can any entity, other than GOD, verify the accuracy of someone's projected income before the year that the income was projected for, has passed? (i.e. A 2014 income projection can't be verified or confirmed until after 2014 has passed.)

 

[RayNY]

From what I understand, they were going to run your stated income against your previous year's income (Via IRS, the "further verification"), anything more than a 10% difference would trigger review. Anything within 10% is "accurate". At the end of the year, it all gets reconciled in tax returns, regardless of how whacked out your actual income may have been.

Now, for 2014, they will sample applications and check the IRS filings for accuracy. One would suppose the only people getting caught are the ones unlucky enough to be "inaccurate" and selected for random sampling.

That being said, there was nothing stopping you from insisting you are due for a raise, or planned on a non-paid vacation, or expected a pay-cut, or a cut holiday bonus, or an increase in MAGI-related deductions. The subsidies are based off of the estimate, not the last years returns. There's myriad reasons why your income could be different.