How Will Health Insurance Marketplaces Verify Income for Premium Subsidies?

Many individuals and small businesses will be eligible for premium subsidies for health insurance purchased through Obamacare's online Marketplaces, starting October 1.  As part of the eligibility process, Marketplaces must verify the income of consumers by using tax filing and Social Security data  to verify household income.

Here's how it will work. When an individual applies for health insurance through an online Marketplace, she will be asked to verify her projected household income.  That inputted data will then be verified with information available through the Internal Revenue Service (IRS) and Social Security Administration (SSA).  If the data submitted by the individual cannot be verified through these avenues, additional wage information will be compared from employers via Equifax, if available.  

State-based Marketplaces, meaning states that have set up and will independently administer their own health insurance Marketplace, “may choose to request additional documentation from a statistically-significant sample of the group of individuals in only one specific situation: when the Marketplace has IRS data, the application filer inputs projected annual household income that is more than ten percent below IRS and SSA data, Equifax data is unavailable, and the individual does not provide a reasonable explanation for the inconsistency between the attestation and IRS and SSA data.” (CMS FAQs.)  

Federally-facilitated Marketplaces however, (that is, Marketplaces that will be run by the federal government because the state either refused to do it themselves, or elected to have a federally-run Marketplace) will require 100% of applicants applying for premium subsidies to provide additional documentation "with no exceptions."