Those who did not retreat to their post-apocalypse bomb shelters have, by now, heard about the bargain struck in the Senate, approved by the House, and signed by the President, to reopen the federal government and raise the debt ceiling. The headlines have focused on funding through January 15, lifting the debt ceiling through February 7, and forming a conference committee to hammer out a long-term budget for the nation.
However, there are many other provisions in the bill, and two have a significant impact on state government and technology.
1) Health Care Exchanges Must Verify Income
The final legislation to end the government shut down and raise the debt ceiling included the requirement that income verification of applicants be added to the Healthcare Exchanges. More specifically, it requires the government to "certify to the Congress that the Exchanges verify such eligibility.” While adding it to the ultimate agreement was as simple as adding a few paragraphs (see page 23), tacking it on to health exchanges that are already being patched and repaired will require a good deal more thought.
Insurance is purchased and locked in before you receive your yearly earnings, so in some cases it is hard to determine exactly what the tax credit or cost share should be. Those who have unstable work (multiple part-time or seasonal jobs), work as an independent contractor, or are paid on commission all fall in this category. Prospective income verification for insurance is fairly unreliable in these cases, and looking at their previous year’s earnings may not be fair--particularly for those who have fallen on hard times.
A retrospective approach, where those with an account are automatically provided a form to confirm their end of the year income, is perhaps a more feasible method. However, beyond an electronic system for matching it with a tax return--no small task--a retrospective check might be equally difficult to “verify.”
The Secretary of Health and Human Services is required to provide Congress with a report detailing the procedures to verify the approval of these credits and cost-share reductions by January 1, 2014--a short period for a tall order. Following that, the Investigator General of the Department of Health and Human Services must provide Congress with a report on the “effectiveness of the procedures and safeguards” by July 1, 2014.
2) State Reimbursement for Federal Services
If a State used State funds to “continue carrying out a Federal program” or paid State employees whose “compensation is advanced or reimbursed in whole or in part by the Federal Government,” the state will be reimbursed for those expenses, with any interest that may have been lost. With anywhere from a quarter to one-third of state funds coming from federal coffers, ensuring the federal government reimbursed states for expenses they incurred due to the federal shutdown was a priority for the National Governors Association.
As discussed last week, some States may encounter problems with automated systems in making retroactive payments, or reimbursement of accounts. The same reimbursement deal for states goes for other grantees, such as local governments. We’ll be keeping an eye on this moving forward.
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