article: SECTION 1. SHORT TITLE. This Act may be cited as the ``No Subsidies Without Verification Act of 2014''. SEC. 2. FINDINGS. Congress finds the following: (1) On July 5, 2013, the Department of Health and Human Services released more than 600 pages of a final rule to implement the provisions of the Patient Protection and Affordable Care Act and the health care provisions of the Health Care and Education Reconciliation Act of 2010 (commonly referred to as ``Obamacare'' or the ``ACA''). (2) Such final rule included an announcement that the Federal Government would no longer verify that each applicant for premium tax credits or cost-sharing reductions for coverage offered through an Exchange established under the Patient Protection and Affordable Care Act are actually qualified for such credits or reductions. Instead, the Administration would rely on self-attestation and sample audits of a sample population to ``protect'' the integrity of this new $1 trillion entitlement program. (3) The Department of Health and Human Services later announced a change in such policy and stated it would extend the sample population to 100 percent. This change, though announced, was never made to the final rule, meaning there was no guarantee to the American people that applicants would be verified. (4) It is estimated that not verifying eligibility for such credits and reductions could likely equate to approximately $250 billion in fraudulent payments through payments of such Obamacare premium tax credits and cost-sharing reductions. (5) The final rule provides that the Department of Health and Human Services will offer to perform this verification procedure for States that are establishing a State-based Exchange, but will be unable to do so until 2015. As a result, such States will not be required to randomly verify employer- sponsored coverage until 2015. (6) In order to protect taxpayers after the Department of Health and Human Services failed to implement a new rule that it would ensure Congress and taxpayers that verification of eligibility would be performed, the House of Representatives advanced legislation, H.R. 2775, the No Subsidies Without Verification Act. This legislation would have provided the force of law to ensure that verification would occur prior to the issuance of any Obamacare premium tax credit or cost- sharing reduction. (7) On September 12, 2013, this legislation was passed in the House of Representatives with bipartisan support by a 235 to 191 vote margin. (8) On September 10, 2013, the Obama Administration issued a Statement of Administration Policy to H.R. 2775 that stated ``the Administration strongly opposes House passage of H.R. 2775 because the goal of the bill is already being accomplished while the text of the bill would create delays that could cost millions of hard-working middle-class families the security of affordable health coverage and care they deserve''. (9) The Statement of Administration Policy also stated that ``H.R. 2775 is unnecessary because the Secretary of Health and Human Services has already put in place an effective and efficient system for verification of eligibility for premium tax credits and cost sharing reductions.''. (10) On October 16, 2013, the Senate removed the verification mechanism of H.R. 2775 and replaced it with language that required a report to Congress by the Secretary of Health and Human Services no later than January 1, 2014. (11) On January 1, 2014, the Department of Health and Human Services submitted a mandated report to Congress entitled, ``Verification of Household Income and Other Qualifications for the Provision of Affordable Care At Premium Tax Credits and Cost-Sharing Reductions''. (12) This report to Congress states, ``In accordance with statute and applicable implementing regulations, when a consumer submits an application for insurance affordability programs (which include APTCs, CSRs, Medicaid, the Children's Health Insurance Program (CHIP), and the Basic Health Program (BHP)), the Exchange verifies information provided by the consumer on the application as a component of making an eligibility determination. The processes for verifying information in order to determine eligibility for enrollment in a qualified health plan (QHP) through the Exchange and for APTC under section 36B of the Internal Revenue Code (the Code) and CSRs under section 1402 of the ACA are specified in the ACA and its implementing regulations. Pursuant to both statute and applicable regulations, the Exchanges have implemented numerous processes to carry out the verification of information provided by applicants.''. (13) Beginning in 2014, Federal subsidies have been made available to help individuals purchase health insurance through an Exchange through premium tax credits and cost-sharing reductions. On April 2014, the Department of Health and Human Services delayed implementation of income verification systems in order to increase sign-ups for health care plans through the healthcare.gov website. (14) Various reports indicate that the internal portions of the healthcare.gov website are yet to be finalized, thus leaving the Department of Health and Human Services unable to perform the verification it stated it was performing. The Obama Administration is operating a new Federal entitlement program that fails to prevent fraudulent subsidy claims before administered. In doing so, the Department of Health and Human Services has created a new ``pay and chase'' program that places taxpayers at financial risk of fraudulent claims. SEC. 3. DELAYING PROVISION OF ACA PREMIUM AND COST-SHARING SUBSIDIES UNTIL ELIGIBILITY VERIFICATION PROCESS FOR SUCH SUBSIDIES IS COMPLETE. (a) In General.--Notwithstanding any other provision of law, in the case of an individual with respect to whom a premium tax credit under section 36B of the Internal Revenue Code of 1986 or reduced cost- sharing under section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071) is being claimed, no such credit or reduction shall be allowed before the first date of the first coverage month beginning on or after the date on which the process to verify, in accordance with section 1411 of the Patient Protection and Affordable Care Act (42 U.S.C. 18081), the household income and coverage requirements of such individual for purposes of determining eligibility for, and the accurate amount of, such credit or reduction, respectively, has been completed. For purposes of the previous sentence, the verification process described in such sentence with respect to an individual shall not be treated as complete unless a manual or electronic review has been completed of applicable information required to be submitted by such individual under section 1411(b) of such Act (42 U.S.C. 18081(b)) and any inconsistency of such information with records of the Secretary of the Treasury, Secretary of Homeland Security, or the Commissioner of Social Security has been resolved. (b) Treatment of Individual Mandate.--Notwithstanding any other provision of law, no penalty shall be imposed under section 5000A of the Internal Revenue Code of 1986 with respect to an individual for any month-- (1) with respect to which a premium tax credit under section 36B of the Internal Revenue Code of 1986 is being claimed for such individual; and (2) that begins before the date on which the verification process described in subsection (a) has been completed, in accordance with such subsection, with respect to such claim for such individual. (c) Application Provisions.-- (1) Effective date.--Subject to paragraph (2), the provisions of this section shall apply to coverage months beginning on or after the date of the enactment of this Act. (2) Treatment of individuals currently receiving subsidies.-- (A) Suspension of certain subsidies.--In the case of an individual with respect to whom a premium tax credit under section 36B of the Internal Revenue Code of 1986 or reduced cost-sharing under section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071) has been claimed before the date of the enactment of this Act and for whom such a credit or reduction has been allowed before such date, such allowance shall be suspended until the coverage month described in subsection (a) with respect to such claim for such individual. (B) Special enrollment period.-- (i) In general.--The Secretary of Health and Human Services shall take such steps as are necessary to establish a special enrollment period of 45 days, beginning on the date of completion of the verification process described in subsection (a), with respect to an individual described in clause (ii), for such individual to enroll in qualified health plans offered through Exchanges established under title I of the Patient Protection and Affordable Care Act. (ii) Individual described.--For purposes of clause (i), an individual described in this clause is an individual-- (I) who is enrolled in a qualified health plan described in clause (i) before the date of the enactment of this Act; (II) to whom the suspension under subparagraph (A) applies; (III) who terminated enrollment in the qualified health plan during such period of suspension; and (IV) who, after the completion of the verification process described in subsection (a) with respect to such individual, seeks to enroll in such a qualified health plan.
summary: No Subsidies Without Verification Act of 2014 - Disallows the health plan premium assistance tax credit or cost-sharing reduction under the Patient Protection and Affordable Care Act before the first date of the first coverage month beginning on or after the date on which the process to verify an individual's household income and coverage requirements of such individual for purposes of determining eligibility for, and the accurate amount of, the credit or reduction, respectively, has been completed. Requires for such verification: (1) completion of a manual or electronic review of the information required of an applicant for enrollment in a plan, and (2) resolution of any inconsistency of such information with records of the Departments of the Treasury or Homeland Security (DHS) or the Social Security Administration. Exempts individuals from the penalty for not maintaining minimum essential coverage for any month with respect to which a premium tax credit is being claimed and that begins before the date on which the verification process has been completed. Suspends, until the coverage month beginning after eligibility verification has been completed, the premium tax credit and reduced cost-sharing in the case of individuals for whom the subsidy was allowed before enactment of this Act. Provides a special enrollment period for an individual who terminated enrollment in a qualified plan during the period of suspension.