Credit Reporting Agency Hired to Verify Incomes for Insurance Subsidies
Published: July 16, 2013 - New York Times
WASHINGTON — The Obama administration has hired a
credit reporting agency to help verify the incomes of people who apply for
federal subsidies to buy insurance under the new health
care law.
The company, Equifax Workforce Solutions, a unit
of Equifax Inc., will provide information that is more current than what is
available on federal income tax returns.
The use of a commercial information vendor comes as
Congressional Republicans are expressing concern about the administrationfs
ability to verify data in subsidy applications. Subsidies, in the form of tax
credits, will be available to millions of low- and moderate-income people who
are not eligible for Medicaid
and have not been offered affordable coverage by employers.
The White House announced on July 2 that it was
delaying until 2015 a major provision of the health care law that requires
larger employers to offer health coverage to employees and to report such
coverage to the Internal Revenue Service. The subsidies, averaging more than
$5,000 a year per person, will be available through marketplaces, or exchanges,
where consumers in every state can shop for insurance, starting Oct. 1.
Under rules
published Monday in the Federal Register, an exchange may, in some cases,
rely on what consumers say about their income and employer-sponsored coverage if
such information cannot be obtained from employers or other sources.
Senator Orrin G. Hatch of Utah, the senior Republican
on the Finance Committee, said it was glittle more than an honor system for
billions of dollars of premium subsidies.h
Federal officials said they would rely on Equifax — a
company widely used by mortgage lenders, social service agencies and others — to
verify income and employment and could extend the initial 12-month contract,
bringing its potential value to $329.4 million over five years.
Contract documents show that Equifax must provide
income information gin real time,h usually within a second of receiving a query
from the federal government. Equifax says much of its information comes from
data that is provided by employers and updated each payroll period.
Under the contract, Equifax can use sources like
credit card applications but must develop a plan to indicate the accuracy of
data and to reduce the risk of fraud.
Meredith Griffanti, a spokeswoman for Equifax, said
the company was working with federal officials to ghelp ensure that consumers
get the health care and tax credits they are entitled to.h
gBeginning in October,h she said, gthe government will
activate a Web exchange that will allow consumers to enter their employment and
income information, have it verified and receive alerts if they are qualified
for Medicaid or health care tax credits.h
Equifax is also supposed to find a way to provide
information about whether people have employer-sponsored coverage and how much
they pay for it.
Ms. Griffanti said that Equifax Workforce Solutions,
formerly known as the TALX Corporation, did not maintain information on employee
benefits, like health benefits.
Federal officials moved Tuesday to tamp down concern
about another company playing a major role in President
Obamafs health care overhaul. The company, Serco, will help officials sift
applications for health insurance and tax credits under the health care law.
The American unit of the Serco Group won a contract
worth as much as $1.2 billion on June 27 to provide geligibility support
servicesh to health insurance exchanges around the country.
On July 11, the British government announced that it
was reviewing all contracts with Serco, one of its biggest and most important
suppliers, after auditors found that the company had overcharged taxpayers for
the electronic monitoring of prisoners who had been released. The justice
secretary, Chris Grayling, told Parliament that the overcharging had begun at
least eight years ago.
Brian T. Cook, a spokesman for the Centers for Medicare and Medicaid Services, which
awarded the federal contract, expressed confidence in the company. Operations of
Sercofs American subsidiary are separate from those of the parent company, based
in Britain, administration officials said.
Alan Hill, a spokesman for Sercofs American unit, in
Reston, Va., said, gThere is no reason that this issue will have any impact on
the capabilities or operations of Sercofs U.S. business.h