Lynn Spellecy – Equifax Workforce Solutions Healthcare.gov TestimonyEmbed
Good morning Chairman Upton, Ranking Member Waxman, and distinguished Members of the Committee.
My name is Lynn Spellecy and I serve as Senior Director and Corporate Counsel for Equifax Workforce
Solutions. I appreciate the opportunity to appear before you today to provide an update. Specifically, I will
discuss the income verification services that Equifax Workforce Solutions is providing under contract to the
Centers for Medicare & Medicaid Services (CMS) to assist in their administration of the benefit programs
defined by the Affordable Care Act. Let me begin by stating that our solution has been successfully
implemented and has met or exceeded all agreed upon operating specifications in our service agreement with
CMS. Please consider this testimony as a supplement to the written testimony submitted to the
Subcommittee on Health for the September 10, 2013 hearing, although some of its content is restated here to
clarify the role of Equifax Workforce Solutions.
EQUIFAX WORKFORCE SOLUTIONS AND THE WORK NUMBER®
Equifax Workforce Solutions is a subsidiary of Equifax, a nationwide credit reporting agency, but is separate
from the credit reporting business. The Equifax Workforce Solutions business unit is employed by over
8,200 human resources departments and is the leading income verification service in the country. We
provide human resource data, analytic services, and verifications of income and employment to both the
public and private sector. Equifax Workforce Solutions manages unemployment claims, tax matters, and
employment and income verification services to over 75% of the Fortune 500 companies. We also provide
other outsourced human resources functions, such as I-9 compliance and management, W-2 and payroll
processing, workforce analytics, and employee onboarding.
Our automated employment and income verification service is provided through our proprietary database
known as The Work Number®. The Work Number delivers a streamlined, secure, and timely transfer of 2
information between employers and verifiers that ultimately benefits the consumer by accelerating the
decision process on their loan or government benefit, while freeing the employer from the disruption of
verification requests. Over 3,000 employers, including the majority of Fortune 500 businesses and most of
the federal civilian government agencies, contribute their payroll information to the database at each pay
period, entrusting Equifax Workforce Solutions to provide critical human resources functions on their behalf.
The Work Number database has close to 54 million current employee payroll records and is projected to
grow to 78 million records by the year 2017. When a consumer seeks a loan for housing or an automobile,
or fills out a credit card application, the lender often requests verification of the applicant’s employment and
income. Without The Work Number database, the lender would typically call the Human Resource
department of the consumer’s employer for that information – often suspending the consumer’s financial
transaction until the necessary data was confirmed.
State and federal government agencies also utilize The Work Number to verify the income and employment
of consumers to help determine their eligibility for government benefit programs. In 2011, the United States
Census Bureau estimated that one in three Americans lived in households that received some kind of
income-based government benefit. Equifax Workforce Solutions provides over ten million verifications
annually to government entities including agencies in all fifty states. We help them review applications and
verify income for various programs such as Supplemental Nutrition Assistance Program (SNAP), Temporary
Assistance for Needy Families (TANF), Medicaid, and child support enforcement, as well as for state and
local housing subsidies. Government organizations that administer public assistance to low-income
individuals and families use The Work Number to check applicant-provided information, identify missing or
incomplete data, and reduce program fraud. Like the service provided to a financial service lender, The 3
Work Number allows government agencies to help determine an applicant’s eligibility for a government
benefit without directly contacting the applicant’s employer, speeding up the verification process for the
consumer, and reducing the burden on the employer.
Federal agencies such as the Social Security Administration (SSA) and the Department of Treasury utilize
The Work Number for verification services. The SSA contracts with Equifax Workforce Solutions to verify
past and current wages of individuals applying for, or currently receiving Social Security Retirement,
Survivors and Disability Insurance benefits or Supplemental Security Income benefits. The Department of
Treasury recently contracted with Equifax Workforce Solutions to help the agency enforce H.R. 4053, the
“Improper Payments Elimination and Recovery Improvement Act of 2012.” Equifax Workforce Solutions
provides access to The Work Number database for employment and income verifications in order for the
Department of Treasury to facilitate the identification of improper payments by the agency.
As an example of our state services, the Commonwealth of Pennsylvania has worked with Equifax
Workforce Solutions since 2010. Pennsylvania’s Department of Public Welfare relies on Equifax Workforce
Solutions to provide income verifications of applicants for the state’s public welfare programs (SNAP,
TANF, and Medicaid) through the Office of Income Maintenance. These agencies access The Work Number
through a secure web-based platform for real time information regarding an applicant’s current employment
status and payroll income. The Work Number also provides an “Alert” product to the state’s Bureau of
Child Support Enforcement (BCSE). This Alert service monitors over 725,000 social security numbers of
liable parents on a weekly basis and informs BCSE of any significant changes in income that would impact
an active case.
The Affordable Care Act charged CMS to assist Americans with the purchase of health insurance through
their employers and exchanges. After a competitive bidding process that included a Request for Information
and a Request for Proposal, CMS awarded a contract to Equifax Workforce Solutions in March of this year
to provide real time verification of income and employment to the CMS Data Hub to facilitate the
verification of eligibility for Medicaid and Children’s Health Insurance Program (CHIP), as well as for
eligibility for premium tax credits and reduced cost sharing.
As previously stated, we have almost 54 million active employee payroll records and over 3,000 public and
private sector employers that contribute their payroll data to The Work Number every pay period. The Work
Number database includes payroll data on approximately one-third of the working population in the United
States and reflects employees at all wage levels.
The Equifax Workforce Solutions contract with CMS has the potential to cover five years of service, but it is
an annual contract renewable each year. Equifax Workforce Solutions is qualified to provide income and
employment verifications to CMS because we maintain the largest database of its kind in the country and we
have been providing similar income verification services to government agencies and businesses since 1995.
Under the Equifax Workforce Solutions contract with CMS, CMS will obtain consent to verify the income
from each applicant prior to sending the request to Equifax Workforce Solutions. CMS will also certify its
FCRA permissible purpose for each request. Once an application is submitted and consent is obtained from
the applicant filer, CMS will provide the applicant’s name, date of birth, and social security number to the
hub which in turn will send a request to The Work Number. If there is a match in The Work Number 5
database, we will validate that the information matched is that of the applicant. If we are confident in the
match, we will then evaluate the data in The Work Number database to determine if we have sufficient
information to satisfy the CMS match requirements specified in our contract. If so, we will return to CMS
the employer’s name, federal Employment Identification Number and address, as well as the employee’s
employment status and pay data, such as gross earnings or net earnings.
SOLUTION DELIVERY UPDATE
The Equifax Workforce Solutions income verification solution is working as designed. Since the exchanges
first went live on October 1, 2013, we have not experienced any significant problems or interruptions in the
income verification solution that we are providing to CMS. We have successfully received and responded to
verification requests regarding individual applicants from the federally facilitated marketplace as well as
from state-based agencies.
Prior to October 1, 2013, Equifax Workforce Solutions tested our verification solution to ensure that we
could transmit data between our servers and the CMS Data Hub. We performed end-to-end testing with the
hub and considerable internal stress and volume testing to guarantee that we would be prepared for current
and future applicant volumes. Now that the federally facilitated marketplace is open, we are monitoring the
flow of verification requests from the hub to our servers and back. We have not experienced any issues,
downtimes, or anomalies since the start date. In fact, Equifax Workforce Solutions has exceeded several
specifications defined by our service level agreement with CMS. Our service availability has been at 100%
to date and our average system response time to requests is under one second.
In August and September 2013, Equifax Workforce Solutions conducted multiple load and stress tests
followed by system optimization activities. During four simulated tests, we were able to process volumes of
over 120,000 verification requests per hour and were able to simulate processing as high as 132,000 per hour
which equates to over 3 million per day, which we estimate would exceed any peak periods the marketplace
may experience in the future. As the flow of individuals who submit applications increases, Equifax
Workforce Solutions expects to see an increase in verification requests and will process these requests in an
Let me more precisely describe Equifax Workforce Solutions’ limited engagement in the application
process. Equifax Workforce Solutions receives an income verification request only after an applicant
successfully gains access to the federal healthcare.gov or a state-based marketplace website, creates a user
name and establishes a security authentication profile, and then enters the online application process.
Equifax does not play a role in any of these steps or the identity proofing and authentication that
Equifax Workforce Solutions’ verification service makes no distinction regarding the original transmission
method of the application – be it a paper application, online, by phone, or in person. We are neither involved
in nor do we have visibility into the eligibility decision process or the display and processing of benefit
elections. We understand that CMS employs a variety of resources from federal agencies, potentially
including the SSA and the Internal Revenue Service, as well as other contractors, to make decisions
regarding a household’s eligibility for Affordable Care Act benefits.
Although the majority of the verification requests to date have come through the federally facilitated
marketplace, Equifax Workforce Solutions is also verifying income for several state-based marketplaces and
state Medicaid agencies. Like our engagement with the federally facilitated marketplace, Equifax Workforce
Solutions has experienced no issues to date at the state level.
NEW INCOME VERIFICATION REQUIREMENTS
The Continuing Appropriations Act for 2014 included new requirements for the Department of Health and
Human Services to ensure that the federally facilitated and state-based marketplaces verify that individuals
applying for coverage and seeking premium tax credits and cost-sharing reductions are in fact eligible for
these subsidies. Equifax Workforce Solutions looks forward to sharing our expertise in income verification
services with CMS and HHS as they develop guidance regarding the verification solutions for the federal and
Since the October 1, 2013 start date, Equifax Workforce Solutions has successfully provided income
verification services to CMS for applicants seeking financial assistance under the Affordable Care Act. The
extensive experience we’ve gained from providing income verifications to states and other federal agencies
for their eligibility reviews for government subsidies has prepared Equifax Workforce Solutions to
successfully serve CMS in this new capacity. Be assured that we will continue to monitor and test our
interface with the CMS Data Hub and various state agencies to ensure maximum efficacy. Thank you for the
opportunity to testify and I welcome your questions.
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