Harry, thanks for the additional clarification. It is very helpful to understand better why this is happening. From the above, I would suspect this delay will lead to a modification or rewriting of some of the regulation.
Right--well, maybe. This "outreach" (what we used to call "listening") might also have been done at an earlier point, which might have resulted in a better law. Politically, it may be difficult to find legislators of any stripe wanting to associate their name with anything linked to the ACA before the 2014 elections.From the above, I would suspect this delay will lead to a modification or rewriting of some of the regulation.
So, it will be trust, crosscheck some, audit and sample others.As a result of the delay, the Exchange will have no comprehensive database or official records reporting if an individual has access to affordable coverage, and thereby determine subsidy eligibility. The Exchange will therefore rely upon applicant self-reported information, verification against other information sources such as tax reforms, and sampling of a group of applicants in which the Exchange will manually call the applicant’s employer.
So, it will be trust, crosscheck some, audit and sample others.
CMS just published a new set of final rules (see here), one clarifies how the exchanges will verify healthcare for employed individuals. From Health reform GPS Health Reform GPS: Navigating the Implementation Process
So, it will be trust, crosscheck some, audit and sample others.
What will be the penalty if you're caught getting a subsidy that you don't qualify for? Just return of the subsidy? Will there be any additional penalty?
The following are potential alternative solutions to help employers deal with ACA’s impact:
- Continue offering current coverage “as is”
- Decrease employer contributions to coverage
- Switch to a cheaper plan (a plan that has a lower actuarial value)
- Drop coverage and pay the penalty under the “play or pay” tax
- Drop coverage, pay the penalty amount, and increase employee salaries
- Drop coverage, pay the penalty amount, increase employee salaries, and offer voluntary benefits
- Offer coverage through an exchange (if eligible)
- Self-fund a plan to avoid essential health benefits mandate
- Switch to a defined contribution plan
Based on recent statements from officials, it appears there will be no attempts to verify what folks claim regarding their access to "affordable" insurance through their employer. From this piece:What will be the penalty if you're caught getting a subsidy that you don't qualify for? Just return of the subsidy? Will there be any additional penalty?
The government is going with what Kliff and Somashekhar call “the honor system.” “We have concluded that the…proposed rule is not feasible for implementation for the first year of operations,” say the Centers for Medicare and Medicaid Services. “The exchange may accept the applicant’s attestation regarding enrollment in an eligible employer-sponsored plan…without further verification, instead of following the procedure in §155.320(d)(3)(iii).” And it’s not just there. The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means. “For income verification, for the first year of operations, we are providing Exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.”
As the article points out, this federal flow of "free" money will only work for states that didn't set up their own exchanges. States that did what the government wanted them to do (set up an exchange) will have to find another loophole.Effectively, states no longer need to expand Medicaid, because this newly Medicaid-eligible population can now sign up for the exchanges, at no cost to the state, and know that their incomes won’t be verified by the IRS (because their incomes are too low to file tax returns). That is to say, if your income is at 90 percent of the federal poverty level, and you live in Texas, where the state isn’t expanding Medicaid, all you have to do is write on the form that your income is actually 105 percent of FPL, and magically, you qualify for the exchange. I could easily envision certain activist groups signing people up for coverage this way.
Premium assistance will be provided based on estimated income, then verified after the fact by the IRS, as before. This is not new. What has changed is the exchange is not required to verify estimated income, it is now discretionary, with audits. This is how the IRS works today.“The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan . . . without further verification,” according to the final rule.
The federal government will, however, conduct an audit for the states where it is managing the new insurance Web portal.
They didn't call this "the honor system". They (Kliff and Somashekhar) used those words for a different purpose and Roy re-purposed them. The last time I read such an effort to misportray something related to PPACA was also by Avik Roy, so this comes as no surprise. [-]He is a fountain of confusion, misrepresentation and misdirection.[/-] He doesn't like the PPACA and misses no opportunity to show that, even when he has to resort to flawed reasoning to do so. His point about this being used as a backdoor to get more benefits to the low income population in states that didn't expand Medicaid is entirely bereft of fact or reasoning.While initial regulations had proposed an audit of each consumer who reported an income significantly lower than what federal records indicated, the final rule scaled that back to an audit of a statistically significant sample of such cases.
The whole thing is "new" (as in, "never yet tried"). And it looks like we won't get a chance to see how the envisioned system will really work until 2015.Premium assistance will be provided based on estimated income, then verified after the fact by the IRS, as before. This is not new.
Of course the main thing that has changed is that large employers don't have to provide health insurance that meets ACA standards for an additional year. That's a biggee.What has changed is the exchange is not required to verify estimated income, it is now discretionary, with audits. This is how the IRS works today.
No disagreement there.The whole thing is "new" (as in, "never yet tried"). And it looks like we won't get a chance to see how the envisioned system will really work until 2015.
Of course the main thing that has changed is that large employers don't have to provide health insurance that meets ACA standards for an additional year. That's a biggee.
The last two paragraphs of the Treasury announcement make it pretty clear: Employers don't have to provide insurance until 2015 (though it will be "encouraged") and there will be no penalty (the euphemistically named "shared responsibility payments") for failing to provide coverage.Seems like this is getting misstated. The mandate wasn't delayed, it was the reporting requirements ( per the treasury release ). Maybe that is a defacto delay of the mandate.
Since 96% of employers in this category already provide insurance, it seems there would be a simpler reporting method to get to those few that don't.
Statement: Administration Delays Employer Health-Care Mandate - Washington Wire - WSJ
If/how that access to "premium tax credits" will occur for those who are covered by employers is not fully explained. Such people shouldn't get any "premium tax credits" but since employers don't have to provide any reporting--it will be up to people to self report. And now we need to see an estimate of the increased federal outlays for premium subsidy payments that will occur because the administration is letting employers off the hook. That will probably be contained in the additional Treasury info that was promised.Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015. During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).
I agree. No foot-dragging or excuses. No "Oops, this is hard." Implement exactly what Congress passed on the timeline they specified so we can all see how this works.No do-overs, time to implement.
Congress has voted several times since the passage of ACA.
They've also filed cases to courts around the country.
No do-overs, time to implement.
Very minimal impact, overall.Given that final subsidies are based on actuals anyway (as opposed to projected income), it really should not have an impact.