As late as December 2014, the HealthCare.gov exchange system still lacked a standard process for catching premium tax credit applicants who gave information about access to employer-sponsored coverage that was different from the story told by other data sources, according to officials at the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG).
The Patient Protection and Affordable Care Act of 2010 (PPACA) makes exchange plan premium tax credits available only to consumers who lack access to affordable employer-sponsored health coverage with a minimum value.
PPACA originally required employers and health insurers to send workers coverage verification notices, or 1095-B and 1095-C notices, starting with the 2014 plan year. When the Obama administration put off requiring employers and insurers to send the notices, administration officials said the exchange system would set up an alternative process to keep tax credit applicants from lying about lack of access to employer coverage.
The Centers for Medicare & Medicaid Services (CMS), the part of the U.S. Department of Health and Human Services (HHS) in charge of the exchange program, was supposed to come up with a manual system for handling conflicts between what applicants said about access to employer coverage and what other government data sources, such as income tax filings, implied about the applicants’ access to employer coverage. CMS officials told the HHS OIG investigators that they were starting by emphasizing inconsistencies that affected a larger number of applicants, that they had a temporary manual process in place, and that applicants who lied on the applications are subject to possible prosecution for perjury.
When HHS OIG investigators visited the offices of Serco Inc., the company in charge of processing HealthCare.gov exchange plan applications, in December 2014, they found that, even at that point, the company was not routinely comparing what applicants had said about access to employer coverage to information from other data sources.
“We confirmed that CMS had not implemented the interim manual process,” HHS OIG officials say in a new report on HealthCare.gov exchange program internal controls. ”Serco officials stated that they were still waiting for procedural guidance from CMS to implement a process for resolving the inconsistencies.”