Sharing unemployment data with health insurance exchanges

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 Unemployment Insurance
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OUI/DL
             Washington, D.C. 20210                       DATE
                                                           November 18, 2014

ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 4-15

TO:             STATE WORKFORCE AGENCIES

FROM:           PORTIA WU /s/
                Assistant Secretary

SUBJECT:        Disclosure of Confidential Unemployment Compensation Information to State
                Health Insurance Exchanges

1. Purpose. To provide guidance to state unemployment insurance (UI) agencies on disclosure
   of confidential unemployment compensation (UC) information to health insurance exchanges
   for purposes of implementing the Affordable Care Act (ACA).

2. References.
   • Section 303(a) of the Social Security Act (SSA; 42 USC 503(a));
   • Section 303(f), SSA (42 USC 503(f));
   • Section 1137, SSA (42 USC 1320b-7);
   • Section 6103(l), Internal Revenue Code (IRC) (26 USC 6103(l));
   • Affordable Care Act, Pub. L. 111-148; and
   • 20 CFR Part 603, Federal-State Unemployment Program (UC): Confidentiality and
      Disclosure of State UC Information; Final Rule.

3. Background. In 1984, Congress enacted section 1137, SSA, which requires that certain
   Federal or federally-funded programs exchange data through an Income and Eligibility
   Verification System (IEVS) for purposes of determining eligibility for benefits provided by
   those programs. Among the programs and agencies required to participate in IEVS are: UC;
   Medicaid; the Supplemental Nutrition Assistance Program; Temporary Assistance for Needy
   Families; other SSA programs such as Supplemental Security Income; and the Department of
   Housing and Urban Development’s (HUD) public housing programs. Section 303(f), SSA,
   requires, as a condition of states receiving UC administrative grants, that “state law provide
   that information shall be requested and exchanged for purposes of income and eligibility
   verification. . . .”

   More recently, Congress enacted the ACA to provide for health insurance exchanges to
   permit certain individuals to obtain health insurance, including some at a reduced cost by way
   of Federal tax credits. Under section 1413(c)(2), ACA, health insurance exchanges are
   required to “participate in a data matching arrangement for determining eligibility for
   participation in the program.” To determine eligibility, the health subsidy program, under

 RESCISSIONS                                              EXPIRATION DATE
 None                                                     Continuing

   section 1413(c)(3)(A)(ii), ACA, must “determine such eligibility on the basis of reliable,
   third party data, including information described in sections 1137 . . . of the Social Security
   Act, obtained through such an arrangement.” For this reason, health insurance exchanges
   seek to obtain confidential UC information through IEVS to determine individuals’ eligibility
   for Medicaid and health insurance exchange subsidies.

   Department of Labor (Department) regulations at 20 CFR part 603, issued in September
   2006, address the requirement, as a method of administration to insure full payment of UC
   when due under section 303(a), SSA, that states maintain the confidentiality of UC
   information. These regulations specify to whom, and under what circumstances, confidential
   UC information may, or must, be disclosed. Subpart C of part 603 governs the required
   disclosure of confidential UC information to participants in IEVS; the IEVS regulations
   predated the 2006 final rule and were not amended by that rule except for renumbering.
   Under section 1137, SSA, the Medicaid program is a required participant in IEVS and is
   therefore covered under the mandatory disclosure requirements of 20 CFR part 603, subpart
   C. As described below, the health insurance exchange is treated as a Medicaid program for
   IEVS purposes and, thus, is also covered by the mandatory disclosure requirements.

4. Applicability of section 1413, ACA, to state UC programs. The Department of Health and
   Human Services (HHS) has responsibility for administering both IEVS and the ACA
   provisions applicable to health insurance exchanges. HHS requires that IEVS be used to
   determine eligibility for Medicaid (as required for that program under section 1137(b)(2),
   SSA, and 20 CFR 603.21(b)), each state’s Children’s Health Insurance Program (CHIP), and
   advance payments of the premium tax credit, where the state Medicaid agency will request
   information from the state UC agency as it currently does to determine eligibility for
   Medicaid. HHS has determined that, based on section 1413(c), ACA, and section 1137,
   SSA, participants in IEVS are required to share wage information identified in section
   1137(a)(2), SSA, subject to the safeguards requirement in section 1137(a)(5). HHS
   determined that, in each state, participants in IEVS are required to share with the health
   insurance exchange, which is the entity making Medicaid eligibility assessments and
   determinations.

   With respect to protecting confidential UC information, the safeguards in section
   1137(a)(5)(A), SSA, apply to data exchanges for, or with, the health insurance exchanges.
   This includes the requirement that information released under section 6103(l) of the Internal
   Revenue Code be exchanged only as needed to assist in the valid administrative needs of
   authorized programs.

   Thus, whatever information a state UI agency has been sending to an IEVS required
   participant for Medicaid eligibility purposes must, under section 1137, SSA, be sent to the
   health insurance exchange for purposes of determining eligibility under the ACA for both
   participation in the exchanges to obtain private health insurance, and for Federal subsidies for
   such insurance. This applies both to wage information and to claims information, if that
   information is requested.




5. Action Requested. State administrators should forward this information to the appropriate
   UI agency personnel.

6. Inquiries. Please contact your Regional Office with questions or concerns.