PM 02-07-05
IES determines reasonable compatibility of reported income at application and at REDE when electronic sources of income are available through clearances. To view the reasonable compatibility calculation in IES, run eligibility then click on the reasonable compatibility tab in the EDG summary. In situations where clearance data is not available, reasonable compatibility can be calculated manually comparing reported income and the hard copy proof of income.
Perform a reasonable compatibility calculation when an income tax return is used as proof of income.
A reasonable compatibility calculator (pdf) is also available.
| Reported Income |
Income Obtained from Other Sources |
Reasonable Compatibility of Reported Income to Verified Income |
Worker Action |
| Below the standard |
Below the standard |
Not needed |
Use the reported income. No further proof is needed. |
| Below the standard |
Above the standard |
Reasonably compatible (within 5%) |
Use the reported income. No further proof is needed. |
| Below the standard |
Above the standard |
Not reasonably compatible (greater than 5%) |
Contact the customer for an explanation and additional verification if appropriate. |
| Above the standard |
Below or above the standard |
Not needed |
Use the reported income. No further proof is needed. |
Other sources of verification include electronic sources such as The Work Number (TWN), AWVS, the Federal Data Services Hub or hard copies of wage verification or notices of eligibility such as check stubs or approval notices for unearned income.
To determine if the difference between the reported income and the income from another source is within 5%, follow the steps below. For the income reported on the application, use the income averaged amount (PM 15-04-02 for Family Health Plans and PM 15-04-03 for AABD). Use common rounding to determine each percentage amount.
- Determine the percentage of the FPL of the reported income.
- Determine the percentage of the FPL of the income from another source.
- Subtract the lower result from the higher result from steps 1 & 2 to determine if they are within 5% of each other.
The FPL is the same as the income standard for AABD (100% of the FPL). To determine the percentage of FPL of the reported income or the income from another source, divide the income by 100% of the FPL for the household size.
Example: Mr. November lives by himself and requests ACA Adult coverage. He reports his monthly earned income is $315 per week. The income averaged amount is $1,354. An electronic data match shows his income is $1,375 per month. The income standard is $1,366. 100% of the FPL for a household size of 1 is $990 (hint- use the AABD income standard to determine the monthly amount for 100% of the FPL).
$1,354 divided by $990= 1.367 or 137%
$1,375 divided by $990= 1.388 or 139%
139% minus 137%= 2%
Since the difference between the reported income and income verified from another source is 5% or less, the amount reported is reasonably compatible and no further verification is needed.
Example: Ms. Oscar and her husband applied for ACA Adult coverage. She reports her monthly earned income is $315 per week and her husband's earned income is $75 per week. The total income averaged amount is $1,676. Electronic sources show the combined income is $1,870. The income standard is $1,842. 100% of the FPL for a household size of 2 is $1,335 (hint- use the AABD income standard to determine the monthly amount for 100% of the FPL).
$1,676 divided by $1,335= 1.255 or 126%
$1,870 divided by $1,335= 1.400 or 140%
140% minus 126%= 14%
The reported income is not reasonably compatible with the electronic income because the difference between the two is more than 5%. Contact Ms. Oscar to get an explanation of the discrepancy and verification of her and her husband's income.
