May 14, 2012
Background. Beginning in 2014, eligible individuals may receive a premium tax credit to help them purchase health insurance coverage through an Insurance Exchange (“Exchange”). The premium tax credit can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. As a result, the Exchange will need to determine if an individual is eligible for the premium tax credit at the time that he or she applies for health insurance.
Determination Methodology. In order for the Exchange to determine if an individual is eligible to receive the premium tax credit, the Exchange must determine if the individual is eligible for coverage from an employer that qualifies as “minimum essential coverage”. Thus, the Exchanges will need to verify with the individual’s employer if the individual is covered by the employer’s health plan.
Request for Comments. On April 26, 2012, the Department of Health and Human Services (HHS) requested comments on how the Exchanges should verify whether an individual has access to employer provided coverage that qualifies as “minimum essential coverage”. The Comments may be submitted electronically to HHS at EmployerCoverageBulletin@cms.hhs.gov.
Proposed Temporary Guidance. HHS also proposed guidance to assist the Exchanges in verifying an individual’s coverage during 2014 and 2015, the first two years that the Exchanges will operate. It includes both pre-enrollment and post-enrollment verification procedures (with pre-enrollment verification being the preferred approach) and requests comments on the following:
- Use of a standardized way for employees and employers to voluntarily collect and communicate coverage information. Under this option, employers could provide information directly to the individual employees rather than the Exchange. HHS suggests that employers could prepare a standardized method for collecting and communicating the required information to employees.
- Comparing an individual’s coverage attestation to existing data sources and records available to the Exchange (for example, state quarterly wage or unemployment databases or Form 5500s).
- Post-enrollment verification that would involve gathering information directly from employers. Verifications would be conducted on a sampled basis.
- Long-term verification strategies and the identification of existing sources of data that Exchanges can use to verify eligibility for the premium tax credit.
For more information from Mazursky Constantine, please call Amy Heppner (404.888.8825) or Kelly Meyers (404.888.8838). For more information from VCG consultants, please call Leslie Schneider (770.863.3617).
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