131219 Exemptions Application Supporting Statement Master_(CMS-9958-F) c...

SUPPORTING STATEMENT FOR THE INFORMATION COLLECTION
REQUIREMENTS CONTAINED IN THE EXEMPTIONS ELIGIBILITY
INFORMATION COLLECTION REQUEST
A. Background
The Patient Protection and Affordable Care Act, Public Law 111-148, enacted on March
23, 2010, and the Health Care and Education Reconciliation Act, Public Law 111-152, enacted
on March 30, 2010 (collectively, “Affordable Care Act”), expand access to health insurance for
individuals and employees of small businesses through the establishment of new Affordable
Insurance Exchanges (Exchanges), including the Small Business Health Options Program
(SHOP). The Exchanges, which will become operational by January 1, 2014, will enhance
competition in the health insurance market, expand access to affordable health insurance for
millions of Americans, and provide consumers with a place to easily compare and shop for
health insurance coverage.
The data collection and reporting requirements in “Patient Protection and Affordable
Care Act; Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential
Coverage Provisions” (CMS-9958-F, 78 FR 39518), address federal requirements that states
must meet with regard to the Exchange minimum function of performing eligibility
determinations and issuing certificates of exemption from the shared responsibility payment. In
the final regulation, CMS addresses standards related to eligibility, including the verification and
eligibility determination process, eligibility redeterminations, options for states to rely on HHS to
make eligibility determinations for certificates of exemption, and reporting.
We have included seven appendices of application materials to illustrate the process
applicants will use to apply for exemptions from the shared responsibility payment.

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

Appendix A- Religious Conscience: This application is for applicants who wish to
be exempt from the shared responsibility payment if the applicant is a member of a
recognized religious sect with religious objections to insurance, including Social
Security and Medicare.



Appendix B- Health Care Sharing Ministry: This application is for applicants who
wish to be exempt from the shared responsibility payment if the applicant is a
member of a recognized health care sharing ministry.



Appendix C- Incarceration: This application is for applicants who wish to be
exempt from the shared responsibility payment if the applicant is incarcerated, and
not awaiting the disposition of charges against you.



Appendix D-American Indian/Alaskan Native: This application is for applicants
who wish to be exempt from the shared responsibility payment if the applicant is a
member of an Indian tribe under section 45A(c)(6) of the Code or eligible for
services through an Indian health care provider.



Appendix E-Hardship: This paper application is for applicants who wish to be
exempt from the shared responsibility payment based on one of the following
circumstances:
1. You were homeless.
2. You were evicted in the past 6 months or were facing eviction or foreclosure.
3. You received a shut-off notice from a utility company.
4. You recently experienced domestic violence.
5. You recently experienced the death of a close family member.

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6. You experienced a fire, flood, or other natural or human-caused disaster that
caused substantial damage to your property.
7. You filed for bankruptcy in the last 6 months.
8. You had medical expenses you couldn’t pay in the last 24 months.
9. You experienced unexpected increases in necessary expenses due to caring for
an ill, disabled, or aging family member.
10. You expect to claim a child as a tax dependent who’s been denied coverage in
Medicaid and CHIP, and another person is required by court order to give
medical support to the child. In this case, you do not have the pay the penalty
for the child.
11. As a result of an eligibility appeals decision, you’re eligible for enrollment in a
qualified health plan (QHP) through the Exchange, lower costs on your
monthly premiums, or cost-sharing reductions for a time period when you
weren’t enrolled in a QHP through the Exchange.
12. You were determined ineligible for Medicaid because your state didn’t expand
eligibility for Medicaid under the Affordable Care Act.
13. You received a notice saying that your current individual health insurance plan
is being cancelled, and you consider the other plans available unaffordable.
14. You experienced another hardship in obtaining health insurance.


Appendix F- Lack of Affordable Coverage Based on Projected Income (Federallyfacilitated Marketplace): This paper application is for applicants who wish to be
exempt from the shared responsibility payment based on a lack of affordable
coverage calculated using projected annual household income.

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

Appendix G- Lack of Affordable Coverage Based on Projected Income (Certain
State-based Marketplaces): This paper application is for applicants in certain states
where there is a State-based Marketplace who wish to be exempt from the Shared
Responsibility payment based on a lack of affordable coverage calculated using
projected annual household income.

The submission seeks OMB approval of the information collection requirements associated with
45 CFR parts 155.
B. Justification
1.

Need and Legal Basis
Section 1501(b) of the Affordable Care Act added section 5000A of the Internal Revenue

Code (the Code) to a new chapter 48 of subtitle D (Miscellaneous Excise Taxes) of the Code
effective for months beginning after December 31, 2013. Section 5000A of the Code, which was
subsequently amended by the TRICARE Affirmation Act of 2010, Public Law 111-159 (124
Stat. 1123) and Public Law 111-173 (124 Stat. 1215), requires that nonexempt individuals either
maintain minimum essential coverage or make a shared responsibility payment, includes
standards for the calculation of the shared responsibility payment, describes categories of
individuals who may qualify for an exemption from the shared responsibility payment, and
provides the definition of minimum essential coverage.
Section 1311(d)(4)(H) of the Affordable Care Act specifies that the Exchange will,
subject to section 1411 of the Affordable Care Act, grant certifications of exemption from the
shared responsibility payment specified in section 5000A of the Code. Section 1311(d)(4)(I)(i)
of the Affordable Care Act specifies that the Exchange will transfer to the Secretary of the
Treasury a list of the individuals to whom the Exchange provided such a certification. Section

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1411(a)(4) of the Affordable Care Act provides that the Secretary of Health and Human Services
(the Secretary) will establish a program for determining whether a certification of exemption
from the shared responsibility requirement and penalty will be issued by an Exchange under
section 1311(d)(4)(H). We interpret this provision as authorizing the Secretary to determine
“whether,” with respect to the nine exemptions provided for under section 5000A, Exchanges
would perform the role of issuing certifications of exemption under section 1311(d)(4)(H),
whether eligibility for the exemption would be determined solely through tax filing, or whether
both processes would be available. Under this interpretation, the responsibility under section
1311(d)(4)(H) to issue certifications of exemption would be “subject to” these determinations by
the Secretary under section 1411(a)(4), and Exchanges would thus only be required to issue
certifications of exemption with respect to exemptions not exclusively assigned to IRS.
Section 1321 of the Affordable Care Act discusses state flexibility in the operation and
enforcement of Exchanges and related requirements. Section 1321(a) provides broad authority
for the Secretary to establish standards and regulations to implement the statutory requirements
related to Exchanges and other components of title I of the Affordable Care Act as amended by
the Health Care and Education Reconciliation Act of 2010. Section 1311(k) of the Affordable
Care Act specifies that Exchanges may not establish rules that conflict with or prevent the
application of regulations promulgated by the Secretary under Subtitle D of Title I of the
Affordable Care Act.
In accordance with our interpretation of these sections of the Affordable Care Act, and
the authority provided by, inter alia, section 1321(a) of the Affordable Care Act, we specify that
under the program established under section 1411(a)(4) of the Affordable Care Act, the
Exchange would determine eligibility for and grant certificates of exemption as described below.

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These information collection requirements are set forth in 45 CFR Parts 155.
2.

Information Users
The data collection and reporting requirements described below are critical to the basic

ability of Exchanges to determine eligibility for and issue certificates of exemption, and will also
assist Exchanges, HHS, and IRS in ensuring program integrity and quality improvement.
3.

Use of Information Technology
HHS anticipates that a majority of the activities described below in this rule will be

automated. Exchanges are expected to develop automated notice templates for many of the
specified notices, and distribute the majority of these notices through secure electronic accounts.
The entities issuing notices or collecting information will develop the initial template after which
the templates will be automatically populated with the appropriate information for the receiving
party. A majority of the information that is collected in accordance with this rule will be
submitted electronically. Staff, or systems, will analyze, review, or process the data through
largely electronic means and communicate with individuals, states, and HHS using e-mail,
telephone, or other electronic means whenever possible.
4.

Duplication of Efforts
These information collections do not duplicate any current information collections. They

contain information needed for a new program.
5.

Small Businesses
We estimate minimal burden on small business as they are not required to issue

certificates of exemption.
6.

Less Frequent Collection
In general, the associated final regulations specify that exemptions are provided on a

6

yearly basis. Some exemptions are provided for an indefinite future time period, unless the
individual notifies the Exchange that his or her situation has changed such that he or she is no
longer eligible for the exemption. Reducing the frequency of the collection for those individuals
who are not eligible for exemptions of indefinite length would result in providing exemptions for
periods of time during which an individual might not remain eligible. Accordingly, in order to
promote program integrity, the regulations provide a limited approval period, with re-application
for an individual who wishes to maintain his or her exemption after the approval period ends.
7.

Special Circumstances that may cause respondents to submit information in fewer than 30
days
In §155.620(b), we provide that with the exception of §155.620(b)(2), an individual who

has a certificate of exemption from the Exchange must report any change with respect to the
eligibility standards for the exemption as specified in §155.605, with the exception of §
155.605(g)(2), within 30 days of such change. The Exchange will conduct a redetermination of
eligibility for the exemption based on the reported change.
8.

Federal Register/Outside Consultation
As part of Exchange implementation to date, we have consulted with contractors,

academia, states, and industry of the feasibility of this information collection. CMS has sought
input from states and other federal agencies, such as IRS. We have based several of the
requirements in this information collection from the consultations with these outside entities.
9.

Payments/Gifts to Respondents
No payments and/or gifts will be provided to respondents.

10. Confidentiality
To the extent of the applicable law and HHS policies, we will maintain respondent

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privacy with respect to the information collected.
11. Sensitive Questions
As it relates to the exemption application, a social security number will be collected for
purposes of verifying incarceration status, citizenship, and household income and family size
depending on the exemption category, as well as for purposes of tax administration.
12. Burden Estimates (Hours & Wages)
For purposes of presenting an estimate of paperwork burden, we recognize that not all
states will elect to operate their own Exchanges and that territories may participate in operating
an Exchange, and thus have provided greater specificity related to the number of conditionally
approved state-based Exchange where relevant. We also note that these estimates generally
reflect burden for the first year, and that the associated burden in subsequent years will be
significantly lower because many of the standards in the regulation will be fulfilled through the
development of automated processes that will involve only maintenance in future years.
Therefore, these estimates should be considered an upper bound of burden for non-federal
entities. These estimates may be adjusted in future PRA packages as Exchange development
moves forward.
We utilize data from the Bureau of Labor Statistics to derive average costs for all
estimates of salary in establishing the information collection requirements. Salary estimates
include the cost of fringe benefits, calculated at 30.4 percent of total labor costs, which is based
on the June 2012 Employer Costs for Employee Compensation report by the U.S. Bureau of
Labor Statistics. Additionally, we utilize estimates from the Congressional Budget Office for
estimates related to the number of exemption applications we anticipate receiving, and the
number of exemption eligibility determination notifications we anticipate Exchanges to generate.

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It is important to note that these regulations involve several information collections that
will occur through the application for exemptions, as described in §155.610(a), and the
notification of eligibility determination, as described in §155.610(i). We have accounted for the
burden associated with these collections in this information collection requirement. We include
data elements associated with the application and relevant notice requirements in Appendices A
and B.
PART 155- EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
Subpart G— Exchange Functions in the Individual Market: Eligibility Determinations for
Exemptions
A. Eligibility process for exemptions (§155.610)
Throughout the subpart G, we specify that the Exchange collect
attestations from applicants for a certificate of exemption. These attestations will be collected
using the application described in §155.610(a). In §155.610(a), we provide that the Exchange use
an application created by HHS to determine eligibility for and to collect information necessary
for issuing certificates of exemption. §155.610(b) allows the Exchange to use an alternative
application to collect the information necessary for issuing certificates of exemption. However,
the alternative application must be HHS approved and it must collect the minimum information
necessary for determining eligibility for and issuing certificates of exemption. The burden
associated with this requirement is the time and effort associated with an applicant completing an
application.

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While the Congressional Budget Office1 estimates that 24 million individuals would be
exempt from the individual shared responsibility payment in 2016, it is unclear how many
individuals will seek these exemptions from an Exchange. Some of these individuals will claim
an exemption through the tax filing process, others will be exempt but not need to file for an
exemption (for example those below the filing threshold), while others will apply for and receive
an exemption through the Exchange. Therefore, of the 24 million individuals, we anticipate that
up to half will apply for an exemption through the Exchange. We specifically sought comment
on this assumption.
The exemption application may be available in both paper and electronic formats. The
electronic application process will vary depending on each applicant’s circumstances and which
exemption an applicant is applying, such that an applicant is only presented with questions
relevant to the exemption for which he or she is applying. The goal is to solicit sufficient
information so that in most cases no further inquiry will be needed. We estimate that on average
the application will take approximately .27 hours (16 minutes) for an application filer to
complete an application, which is based on the estimates created for the single, streamlined
application for enrollment in a QHP2, with a 90 percent electronic / 10 percent paper mix (noting
that no specific application channel is specified in this final rule). We anticipate up to 12 million
applications for exemptions will be submitted to the Exchange, for a total of approximately 3.2
million burden hours. We note, however, that the Commonwealth of Massachusetts saw a very

1

Congressional Budget Office, “Payments of Penalties for Being Uninsured Under the Affordable Care Act,”
September 2012, http://cbo.gov/sites/default/files/cbofiles/attachments/09-19-12-Indiv_Mandate_Penalty.pdf
2
The estimates may be found in the information collection request entitled, “Data Collection to Support Eligibility
Determinations for Insurance Affordability Programs and Enrollment through Affordable Insurance Exchanges,
Medicaid and Children’s Health Insurance Program Agencies (CMS-10440/OCN-0938-1191).”

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small number of individuals apply for exemptions from a similar individual shared responsibility
payment3.
We also note that some individuals will apply for an exemption but be determined
ineligible for an exemption, but it is difficult for us to estimate this number, and that in an
unknown number of cases, multiple individuals in a single household may submit a single
application.
Table 1 - Estimated Annualized Burden for Exemptions Application
Labor Category

Number of
Respondents

Individual

12 million

Total

12 million

Number of
Responses
Per
Respondent
1

Average
Burden
Hours per
Response
0.27

Total
Burden
Hours
3,200,000
3,200,000

We estimate that the cost to develop the exemption application will be significantly less
than the estimated cost of developing the coverage application because the coverage application
takes into account additional factors necessary in order to perform eligibility determinations for
insurance affordability programs. In total, we estimate that this will take a developer
approximately 1,059 hours to develop the exemption application at an average labor cost of
$98.50 per hour, for a total cost of $104,312 per Exchange and a total cost of $1,877,607 for 18
state-based Exchanges. While we have estimated this on a per-Exchange basis, we note that
HHS will be releasing a model application, which should significantly decrease the burden for
any state that uses it. The figures given in Table 1 represent the average burden for all the
exemptions applications.
3

Massachusetts Health Connector and Department of Revenue, “Data on the Individual Mandate, Tax Year 2010”,
June, 2012. Retrieved from http://www.mahealthconnector.org

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Table 2 – Estimated Burden for Development of Exemptions Application

Labor Category
Application
Development

Hourly
Number of Labor
Employees Costs

1

$98.50

Burden
Hours

1,059

Burden Costs
(per Exchange)

$104,312

Total Burden
Costs
(18Exchanges)

$1,877,607

Section 155.610(f) specifies that the Exchange determine an applicant’s eligibility for an
exemption and issue a certificate of exemption to any applicant deemed eligible. §155.610(i)
provides that the Exchange notify exemption applicants of any eligibility determination made as
a result of the application. If an individual is eligible for an exemption, the notification provided
to the applicant will satisfy the requirement that the Exchange provide a certificate of exemption,
provided that all relevant noticing standards for exemptions are met. Accordingly, we do not
provide a separate burden estimate for the standard described under §155.610(f) because the
burden estimate for §155.610(i) encompasses the burden for both requirements. The figures
given in Table 2 represent the average burden for all the exemptions applications.
The notification of eligibility determination, or certificate of exemption, provides
information to an applicant about his or her eligibility for an exemption, including information
about the time frame for which the exemption is effective, and appeal rights. When possible, we
anticipate that the Exchange will consolidate this notice when multiple members of a household
are applying for an exemption together and receive an eligibility determination at approximately
the same time. Consistent with 45 CFR 155.230(d), the notice may be in paper or electronic
format, based on the election of an individual, will be in writing, and will be sent after an
eligibility determination has been made by the Exchange; these are the same standards that are
used for eligibility notices for enrollment in a QHP through the Exchange and for insurance

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affordability programs, as described in 45 CFR 155.310(g). It is difficult to estimate the number
of applicants that will opt for electronic versus paper notices, although we anticipate that a large
volume of enrollees will request electronic notification while others will opt to receive the notice
by mail. We estimated the associated mailing costs for the time and effort needed to mail notices
in bulk to applicants who request paper notices.
We expect that the exemption eligibility determination notice will be dynamic and
include information tailored to all possible outcomes of an application. To develop the notice,
Exchange staff would need to learn exemption eligibility rules related to exemptions and draft
notice text for various decision points, follow up, referrals, and appeals procedures. A health
policy analyst, senior manager, and an attorney would review the notice. The Exchange would
then engage in review and editing to incorporate changes from the consultation and user testing
including review to ensure compliance with plain writing, language access, and readability
standards. Finally, a computer programmer would program the template notice into the eligibility
system so that the notice may be populated and generated in the correct format.
HHS is currently developing model notices, which will decrease the burden on
Exchanges associated with providing such notices. If a state opts to use the model notices
provided by HHS, we estimate that the Exchange effort related to the development and
implementation of the exemption eligibility determination notice will necessitate 44 hours from a
health policy analyst (occupation no. 13-2031) at an hourly cost of $49.35 to learn exemptions
rules and draft notice text; 20 hours from an attorney (occupation no. 23-1011) at an hourly cost
of $90.14, and four hours from a senior manager (occupation no. 11-1021) at an hourly cost of
$79.08 to review the notice; and 32 hours from a computer programmer (occupation no. 151131) at an hourly cost of $52.50 to conduct the necessary development. In total, we estimate

13

that this will take a total of 100 hours for each Exchange, at a cost of approximately $5,971 per
Exchange and a total cost of $107,469 for 18 state-based Exchanges. We expect that the burden
on the Exchange to maintain this notice will be significantly lower than to develop it. We
estimate that it will take each professional approximately a quarter of the time to maintain the
notice as compared to developing the notice. Accordingly, we estimate the maintenance of the
eligibility determination notice in subsequent years will necessitate 11 hours from a health policy
analyst at an hourly cost of $49.35; 5 hours from an attorney at an hourly cost of $90.14; one
hour from a senior manager at an hourly cost of $79.08 and eight hours from a computer
programmer at an hourly cost of $52.50. In total, we estimate that this will take a total of 25
hours for each Exchange, at a cost of approximately $1,492 per Exchange and a total cost of
$26,856 for 18 state-based Exchanges.
Table 3- Estimated Burden for Development and Maintenance of Exemption Eligibility Notice

Labor Category
Health Policy
Analyst
Attorney
Senior Manager
Computer
Programmer
Total

Hourly
Number of Labor
Employees Costs

Burden
Hours

Total Burden
Costs (per
Exchange)

2
1
1

$49.35
$90.14
$79.08

55
25
5

$2,171
$1,802.87
$316.32

1

$52.50

40
125

$1,680
$7,463

Total Burden
Costs (18
Exchanges)

$26,856

We also include an estimate for the total printing and mailing costs related to sending eligibility
determination notices for all 50 states and the District of Columbia. This includes the cost of a
mail clerk (occupation no. 43-9051) spending two hours to coordinate the mailing of paper
notices as necessary. As noted previously, we estimated 12 million total applications for 2016.
While each of these applications will receive an eligibility determination notice, we estimate that
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approximately 1.2 million notices will need to be printed and mailed, while the remainder will be
sent electronically (based on the user’s preferences). We note that it is difficult to estimate how
many individuals will elect to receive electronic versus paper notices. We use these assumptions
to determine the number of eligibility notices that we expect to be printed and distributed as
described in §155.610(i).
Table 4- Estimated Mailing Costs for Eligibility Determination Notices
Total Burden
Number of
Printing/Mailing Costs
Cost (all
Notices
per notice
Exchanges)
Printing/Mailing
1.2 million
$.50 $600,000

Pursuant to section 5000A of the Code, the IRS must collect the necessary data from
QHP issuers to determine the national average bronze monthly premiums in order to assist in the
computation of the shared responsibility payment. To assist the IRS, HHS must request the
monthly premium for all bronze level QHP’s through all 51 Exchanges from QHP issuers. The
burden associated on states and QHP issuers is already included in the information collection
request entitled, “Initial Plan Data Collection to Support QHP Certification and other Financial
Management and Exchange Operations,” and as such, we do not include a separate burden
estimate here. As this information is already being collected for another purpose, there will be
no additional burden on QHP issuers or states.
B. Verification process related to eligibility for exemptions (§155.615)
§155.615 outlines the standards for Exchanges to verify applicant information as it
pertains to exemption requests.
In §155.615(g), we outline the process for resolving inconsistencies identified through
the verification process. We anticipate that the Exchange eligibility system will be able to

15

process most applications in an automated fashion and that only the more complex cases will
necessitate the resolution of inconsistencies or adjudication of documentation through an offline
process. For example, the Affordable Care Act designates authority to the Secretary of HHS to
establish the criteria by which an individual will qualify for a hardship exemption, and we
believe that for in several cases, individuals may have to submit documentation to the Exchange
to substantiate the hardship he or she experienced. Given the fact that the Exchange eligibility
process for exemptions is entirely new and involves the use of new electronic data sources in
combination with a new application, it is not possible at this time to provide estimates for the
number of applicants for whom additional information will be required to complete an eligibility
determination, but we anticipate that this number will decrease as applicants become more
familiar with the eligibility process for exemptions and as more data become available
electronically.
In §155.615(g)(2)(i), we specify that the Exchange will provide notice to an applicant
regarding any inconsistencies identified through the verification process. This notice of
inconsistency is a part of the notice in §155.610(i), and so we do not include a separate burden
estimate here.
Section §155.615(g)(2)(ii) provides that in the case of an inconsistency that cannot be
resolved through the action taken by the Exchange under §155.615(g)(1), the Exchange must
request that the individual provide satisfactory documentation or otherwise resolve the
inconsistency. Our estimates below reflect the time and effort required for an individual to
collect information and provide it to the Exchange, as well as time needed for eligibility support
staff (occupation no. 43-4061) to review the documentation, since we are unable to estimate the
number of individuals who will receive such a notice. We expect that it will take an individual

16

one hour to gather the relevant documentation, five minutes to upload or mail the relevant
documentation, and 12 minutes for eligibility support staff to review the documentation, which
reflects our expectation that each individual who is required to submit documentation will submit
2.2 documents for review. We estimate that it will take an individual one hour to collect and
submit the relevant documentation, and 12 minutes for eligibility support staff at an hourly cost
of $28.66 to review the documentation, for a total cost of $6 per document submission.
Table 5- Estimated Burden for Inconsistencies

Individual
Eligibility Support Staff
Total

Number of
Total Burden
Individuals Hourly Labor
Burden
Costs (per
/Employees Costs
Hours
individual)
1
-1
-1
$28.66
.20
$6
2
1.2
$6

Section 155.615(g)(4) provides that if after that the period described in paragraph
(g)(2)(ii) of this section, the Exchange remains unable to verify the applicant’s attestation, the
Exchange must determine the applicant’s eligibility for an exemption based on any information
available from the data sources used in accordance with this subpart, if applicable, unless such
applicant qualified for the exception for special circumstances under paragraph (g)(3) of this
section, and notify the applicant of such determination in accordance with the notice
requirements specified in §155.610(f) and §155.610(i), including notice that the Exchange is
unable to verify the attestation. We do not include a separate burden estimate for this notice
because the burden for this notice is described under §155.610(i).
C. Eligibility redeterminations for exemptions during a calendar year (§155.620)
Section 155.620(b)(1) specifies that the Exchange require an individual who has a
certificate of exemption from the Exchange to report any change with respect to the eligibility
17

standards for the exemption within 30 days of such change. Upon receipt of changes reported by
an individual, §155.620(c)(1) provides the Exchange will verify the information in accordance
with the rules described in §155.615. Our estimates reflect the time that it would take for an
individual to collect information related to a change that impacts their eligibility, as well as the
time it would take to report these changes to the Exchange. We expect that a large volume of
changes would be reported electronically by enrollees. We expect that it will take an enrollee
approximately ten minutes to report a change to the Exchange.
Table 6- Estimated Burden for Reporting Changes

Individual
Total

Number of
Individuals
1

Hourly Labor
Costs
--

Burden
Hours
.16
.16

Total Burden
Costs (per
change)
---

The Exchange will use the same verification processes for new applications and for
changes that are reported during the year. In §155.620(c)(1), we provide that the Exchange will
verify any information reported by an enrollee in accordance with the processes specified in
§155.615 prior to using such information in an eligibility redetermination. It is not possible at
this time to provide estimates for the number of applicants for whom additional information will
be required to complete an eligibility determination, but we anticipate that this number will
decrease as applicants become more familiar with the eligibility process and as more data
become available. As such, for now, we note that the burden is one hour for an individual to
collect and submit documentation, and 12 minutes for eligibility support staff at an hourly cost of
$28.66 to review the documentation, for a total cost of $6 per document submission. We solicit
comment on the number of applicants for whom a change report with necessitate the adjudication
of documentation.
18

Table 7- Estimated Burden for Verifying Information

Individual
Eligibility
Support Staff
Total

Total Burden
Number of Hourly Labor
Burden
Costs (per
Employees Costs
Hours
inconsistency)
1
-1
-1
1

$28.66

.2
1.2

$6
$6

In §155.620(c)(2), we specify that the Exchange will provide periodic electronic
notifications regarding the requirements for reporting changes and an individual’s opportunity to
report any changes as described in paragraph (b)(3) of this section, to an individual who has
elected to receive electronic notifications, unless he or she has declined to receive notifications
under this paragraph. For each Exchange, we expect that this will take 21 hours total, 20 hours
for an operations analyst to integrate this electronic notification into the Exchange eligibility
system, and one hour for a computer programmer to program the electronic notifications into the
eligibility system. We estimate a cost burden of $1,040 per Exchange and a total cost of
$18,720for 18 state-based Exchanges.
Table 8- Estimated Burden for Periodic Electronic Notifications

Labor Category
Health Policy
Analyst
Computer
Programmer
Total

Number of
Employees

Hourly Labor
Costs

Total
Burden
Costs (per
Exchange)

Burden
Hours

1

$49.35

20

$987

1
2

$52.50

1
21

$52
$1,040

Total
Burden
Costs (18
Exchanges)

$18,720

In §155.620, we describe the redetermination and notification procedures when an
individual reports a change to the Exchange. As described above, 155.620(a) provides that if the
19

Exchange verifies updated information reported by an enrollee, the Exchange must redetermine
the enrollee’s eligibility in accordance with the standards specified in §155.605. Section
155.620(c)(2) specifies that the Exchange notify the individual regarding the redetermination in
accordance with the requirements specified in §155.610(f) and §155.610(i). The burden for this
notice is identical to the burden associated with the eligibility notice described in §155.610(i).
D. Options for conducting eligibility determinations (§155.625)
Section §155.625 of the regulation provides options for conducting eligibility
determinations. These provisions specify that an Exchange that decides to utilize the HHS
service for making eligibility determinations for exemptions for application submitted on or after
October 15, 2014, will enter into a written agreement with HHS. These agreements are necessary
to ensure that the use of the service will minimize burden on individuals, ensure prompt
determinations of eligibility without undue delay, and provide for secure, timely transfers of
application information.
The burden associated with these provisions is the time and effort necessary for the
Exchange to establish an agreement with HHS. We estimate that the creation of the necessary
agreement will necessitate 35 hours from a health policy analyst at an hourly cost of $49.35, and
35 hours from an operations analyst at an hourly cost of $54.45 to develop the agreement; and 30
hours from an attorney at an hourly cost of $90.14 and five hours from a senior manager at an
hourly cost of $79.14 to review the agreement. For the purpose of this estimate, we assume that
the 18 state-based Exchanges will utilize the HHS service for exemptions. Accordingly, the total
burden on the Exchange associated with the creation of the necessary agreement will be
approximately 105 hours and $6,733 per Exchange, for a total cost of $121,194 for 18
Exchanges.

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Table 9- Estimated Burden for Agreements

Number of
Labor Category Employees

Hourly Labor
Costs

Burden Hours

$49.35

35

Total Burden Costs (per

Total Burde

Exchange)

Costs (per
year)

Health Policy
Analyst

1

Operations

$1,727

$31,086

$1,906

Analyst

1

$54.45

35

Attorney

1

$90.14

30

$2,704

$48,672

Senior Manager 1

$79.08

5

$395

$7,110

105

$6,733

$121, 194

Total

$34,308

E. Reporting (§155.630)
In §155.630, we specify that when the Exchange issues certificates of exemption to
individuals in accordance with the requirement contained in §155.610(i), the Exchange promptly
transmit to IRS the individual’s names, Social Security numbers, and any other information
required in guidance published by the Secretary of the Treasury in accordance with 26 CFR
601.601(d)(2). As these reporting functions will all be electronic, we do not expect for there to
be any additional burden than that which is required to design the overall eligibility and
enrollment system.
13. Capital Costs
We anticipate that the majority of capital costs associated with these information
collections, as well as the burden and costs associated with the transactions described in
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§155.615 related to verification, will be related to the implementing regulations found in
Subparts D and E that provide for a streamlined eligibility and enrollment system. We anticipate
that States that have elected to operate an Exchange will perform eligibility determinations and
issuing certificates of exemptions by using the information technology system that the State has
already built or modified in order to meet the other minimum functions of an Exchange related to
eligibility and enrollment under subparts D and E of the Exchange final rule. Any administrative
costs incurred in the development of information technology infrastructure to support the
Exchange may be funded wholly through State Exchange Planning and Establishment
Grants. The Federal government expects that these grants will fund the development of IT
systems that can be used by many States who either develop their own Exchanges or who partner
with the Federal government to provide a subset of Exchange services.
Table 10 includes estimates of grants from 2013 to 2017. It does not include costs related
to reduced Federal revenues from refundable premium tax credits, which are administered by the
Department of the Treasury and subject to IRS rulemaking. It does not include the Medicaid
effects, or the policies whose offsets led CBO to estimate that the Affordable Care Act would
reduce the Federal budget deficit by over $100 billion over the next 10 years. Table 1 also
includes the estimates for outlays for grants to States for Exchange start up.
Table 10. Estimated Outlays for the Affordable Insurance Exchanges FY 2013 - FY2017, in
billions of dollars
Year
2013
2014
2015
2016
2017
20132017
Grant Authority
for Exchange
Start upb
1.5
2.1
1.7
0.8
0.2
6.2
b
FY 2014 President’s Budget
Other administrative costs to support the streamlined and coordinated eligibility and
enrollment process and the associated information collections will also vary for each State
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depending on the specific approaches taken, including how the state chooses to support the
review of paper documentation and the resolution of eligibility and enrollment issues, or whether
the state chooses to utilize the federally managed service for issuing exemptions. We also believe
that overall administrative costs may increase in the short term as States build information
technology systems; however, in the long-term States will see savings through the use of more
efficient systems and consolidation across programs.
14. Cost to Federal Government
We anticipate that the costs to the Federal government include costs related to 1)
implementation of the federally-facilitated Exchange and the associated requirement to issue
exemptions, and 2) providing the federally managed service for exemptions. As the FFE, costs
related to implementation would be the same as the costs described in the burden estimates for
each Exchange above and would vary depending on the number of states that opt to participate as
an FFE. Costs related to providing the federally-managed service for exemptions relate primarily
to the number of state-based Exchanges that decide to utilize the federally managed service for
exemptions. Additionally, costs related to the federally-managed service would be similar to the
costs described in the burden estimates for each Exchange above, with the exception that it
would not include burden related to the application and notification of eligibility determination,
since we specify that the state-based Exchange handle the responsibilities of accepting the
application and generating the notice if it is utilizing the service for applications submitted after
October 15, 2014.
Accordingly, we note that HHS will be responsible for developing an exemptions
application and exemptions notices that will be utilized across all FFEs. As such, we estimate
that it will take the federal government a total of 1,059 hours to develop the application, at a cost

23

of $104,312. We also estimate that it will take the federal government 125 hours to develop
exemptions notices, at a cost of $7,463.
15. Changes to Burden
This is a new data collection.
16. Publication/Tabulation Dates
Not applicable
17. Expiration Date
Not applicable

24