The state agency charged with managing Medicaid, food stamps and other benefit programs for low-income residents will begin providing real-time income verification services for applicants after inking a new contract with a subsidiary of Equifax.

The contract, approved unanimously with no discussion on Tuesday by the state’s Board of Examiners (a body composed of the governor, attorney general and secretary of state that approves major state contracts), is between the state’s Welfare and Supportive Services Division and TALX Corporation, which was acquired by Equifax in 2007.

The $415,000 contract is set to run for 190 days, and is designed to meet federal requirements for income verification for federal assistance programs, including the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Medicaid and the Energy Assistance Program. Funding for the contract is 70 percent from federal funds ($290,500) and 30 percent from state funds ($124,500).

Navigating the often-complex system of eligibility for various public benefit programs is complicated, but most programs are available to individuals who report an income between 100 and 200 percent of the federal poverty level. According to documentation submitted by the agency, the department processes 68,000 applications monthly, typically in the form of a single “universal” application that enrolls individuals in whatever programs they are eligible for.

The division previously contracted with TALX/Equifax for income verification services between 2013 and 2018, but because of “lengthy contract negotiations,” the contract lapsed in April 2018. That lapse led to manual checks of income verification, a change the department said led from real-time acceptance for more than two-thirds of applicants to a wait period of 45 to 52 days. 

The switch to manual checks led to “overdue and error prone case processing,” according to the department, which reported the error rate for applications had risen by 0.68 percent since TALX/Equifax stopped performing income verification services for the state (previously it was below the national average), and that further increases could result in federal sanctions.

“At this rate of increase in active errors, the state could be put in jeopardy of sanctions that would decrease SNAP funding and require the division to complete a corrective action plan,” the agency wrote in documents submitted to the Board of Examiners.

Division spokeswoman Julie Balderson said the contract negotiations were delayed because TALX/Equifax changed their policies to charge “per hit, per employer, per customer,” whereas the department had a fixed rate for unlimited use of the income verification software before.

“It is now cost prohibitive for DWSS to use this system for all customers with all programs,” she said in an email. “This change caused a necessity to enter into negotiations.”

The department also submitted a “solicitation waiver” alongside the contract, which stated that the division had found only two third-party data banks that provided employment verification services in real time and that Equifax/TALX covered 50,000 employers while the other largest provider only offered services for 30,000 employers, none of which are based in Nevada.

It also wrote that when it put the initial contract out to bid in 2013, the department had only received two applications, and that the other vendor used Equifax/TALX to obtain employment verification.

Although income verification checks are used to weed out cases of fraud or over-payments, the department in its documents provided to the state highlighted a different need for income verification — the expiration of the so-called ABAWD waiver.

That waiver, which refers to able-bodied adults between the ages of 18 and 50 without dependents, allows the department to continue offering SNAP benefits to that population without having to check their more stringent work requirements (typically 80 hours a month of work, training or volunteer work). Without the waiver, individuals in that ABAWD category who don’t meet those work requirements are limited to receiving three months of SNAP benefits every three years.

Balderson said in an email that the department has submitted another waiver request to the federal government for the ABAWD category and is awaiting a response. She said a denial of the waiver could affect an estimated 24,500 Nevadans on the program. According to the division, Nevada has more than 649,000 Medicaid recipients, more than 420,000 SNAP recipients and roughly 20,500 TANF recipients as of August 2019.