HHS Awards Major Contract to Help Sort Obamacare Applications

Days before the White House emboldened critics by announcing a delay in a key provision of the Affordable Care Act, the Health and Human Services Department finalized a one-year contract for help in sorting the coming applications for the new state health insurance exchanges.

Serco, a British-owned company based in Reston, Va., with 8,000 U.S.-based workers in 45 states, signed a contract on June 28 with the Centers for Medicare and Medicaid Services. It will help the agency meet its approaching deadline for enrolling uninsured Americans in state insurance exchanges being called Federally Facilitated Marketplaces, a CMS spokesperson confirmed.

"Serco is a highly-skilled company that has a proven track record in providing cost-effective services to numerous other federal agencies,” the spokesperson said. “The company has provided exceptional records management and processing support to other federal agencies, similar to work they will do for the marketplace. The selection met all of the requirements for a full and open competition, and the timing enables us to be ready for Marketplace open enrollment starting on Oct. 1."

Serco, as reported Friday by The New York Times, considers the Affordable Care Act work one of its largest projects, but “a huge undertaking,” according to spokesman Alan Hill. “We have some tight deadlines to meet.”

The work will involve running a mailroom to process millions of applications -- a third of them on paper, the rest electronic -- and related documentation, notifying consumers of any issues or missing information and helping CMS resolve eligibility questions. Those tasks will be performed by workers in Arkansas, Alabama and Kentucky, according to CMS.

Serco’s previous work has included contracts with the Defense Department and the Federal Aviation Administration for air traffic control. A sophisticated cyberattack against the contractor in 2011 exposed personal information of 123,000 Thrift Savings Plan participants. The company recently signed two traffic management and safety contracts with the Virginia Transportation Department.

CMS said the contract was executed as quickly as possible and that Serco will comply with all applicable privacy statutes and regulations on handling personal information. The award is worth $114.3 million in the first year, with options to increase the value by an additional $158 million. Its potential worth over five years is estimated at $1.2 billion.

The company will add 1,500 new jobs to complete the contract, the Serco spokesman told The Times..

HHS has contracts with at least 10 other companies to implement the exchanges under Obamacare, despite a refusal by Republicans in Congress to appropriate as much money as the administration requests. HHS Secretary Kathleen Sebelius has hired public relations firm to join with private nonprofits in promoting awareness of the law. She has also encouraged private corporate donations to the effort, an act some Republicans suggested was illegal.

On July 2, the White House announced it was delaying by one year the requirement that employers with 50 or more employees provide health insurance. Some in the business community welcomed the delay to better prepare and understand the law’s requirements. On Monday, Republicans on the House Ways and Means Committee announced a hearing to explore the reason for the delay, which they portrayed as a sign the law is unworkable.

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