Myth vs. Fact: Health Insurance Marketplace on Track

By Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services
Posted July 9, 2013

Last Friday, we put out final regulations on how the eligibility for the Health Insurance Marketplace will work. These regulations aim to streamline your experience enrolling in the Health Insurance Marketplace and ensure your state can more easily verify your employer-based coverage and income levels for the first year of operations.

Unfortunately, there have been some mischaracterizations of these regulations and confusion about how the Marketplace will work when it opens later this year. Let’s do a reality check on some of the myths that have been circulating.

MYTH: There will be a delay in opening the Marketplace.

FACT: We are on track to open the Marketplace on October 1, when individuals, families, and small businesses will be able to shop for quality, affordable health insurance options.

MYTH: The Marketplace won’t check income information submitted by individuals.

FACT: No matter which type of Marketplace is operating in a state, the Marketplace will always check the income information submitted by individuals against electronic income data sources such as tax filings, Social Security data, and current wage information. In most circumstances, we will request additional documentation from all affected individuals, such as when an individual does not have a tax return on file and attests to an income significantly below current wage data.

We will request additional documentation from a random sampling of individuals only in the specific circumstance when:

  • Current income information is not available;
  • There is a significant discrepancy between the income reported on an available tax return and the income provided by the individual; and
  • The individual cannot provide an acceptable explanation for this discrepancy.

MYTH: There are no safeguards against people fraudulently qualifying for tax credits to assist with insurance premiums.

FACT: There are safeguards to ensure that individuals do not fraudulently access premium tax credits. Individuals seeking to purchase insurance in the Marketplace must attest, under penalty of perjury, that they are not filing false information. In addition to the existing penalties for perjury, the health care law applies penalties when an individual provides false or fraudulent information.

Moreover, the IRS will reconcile advance payments of the premium tax credit when consumers file their annual tax returns at the end of the year, and it will recoup overpayments and provide refunds when they occur. These safeguards all apply no matter which type of Marketplace is operating in a state.

MYTH: There is a delay in verifying offers of employer-based coverage.

FACT: For over a year, we have been clear on how we will approach verifications related to employer-based coverage. Starting as far back as April 2012, we have communicated on at least three occasions – including a white paper, the proposed rule and the final rule – our approach to conduct random samples to verify offers of employer-based coverage. The final rule only differs from the approach in the bulletin and proposed rule in that State-based Marketplaces can decide whether and how to conduct such verifications in the first year of operations.

The Federally-facilitated Marketplace will perform sample-based reviews as planned, which will provide sufficiently representative data to enable HHS to evaluate the verification process and propose changes for subsequent years if necessary.

MYTH: Electronic notices will not be required until 2015, including notices of the level of premium tax credit, for example, an applicant is eligible to receive.

FACT: There is no such delay in any Marketplace. We have offered state Medicaid and CHIP agencies flexibility in implementing electronic notices as they upgrade their eligibility and enrollment systems, but this will not affect the availability of electronic notices issued by the Marketplace.