Affordable Care Act MAGI and non-MAGI Session 2 Presented by Tokie Moriel & John Tvedt 1DHS/DFO/IMTA/

Session Objectives Define MAGI Discuss Key Points including: –Countable income changes –Household composition changes –Verification procedures Explain how SSI-related (non-MAGI) coverage is affected under ACA DHS/DFO/IMTA/

Definition of MAGI Modified Adjusted Gross Income (MAGI) –Tax based methodology Earned & Unearned Income Household Composition –5% income disregard –No other income deductions, diversions or disregards Effective Dates –Applications – January 1, 2014 –Renewals – March 31, 2014 DHS/DFO/IMTA/

Tax Definitions of MAGI Family - Taxpayer (includes married taxpayers filing jointly) and all claimed tax dependents Family size - Number of individuals in the family Household income - The sum of the taxpayer’s MAGI plus the MAGI of tax dependents in the family if required to file DHS/DFO/IMTA/

MAGI-Based Methodologies Align financial eligibility rules across all insurance affordability programs Seamless and coordinated system of eligibility and enrollment Maintain eligibility of low-income populations, especially children DHS/DFO/IMTA/

Whose Eligibility is Based on MAGI? MAGINON- MAGI Parents and CaretakersIndividuals eligible on the basis of being aged, blind or disabled Pregnant WomenIndividuals with long-term care needs Children < 19Individuals eligible as medically needy Adults under Iowa’s Medicaid expansion group Eligibility for Medicare cost sharing assistance MAGI-EXEMPT Anyone for whom the agency is not required to make an income determination such as Newborn, BCCT, TM, Extended Med, IV-E Foster Care and subsidized Adoption and FMAP-related MN. 6DHS/DFO/IMTA/

Medicaid and CHIP Exempt Income under MAGI –Child support income received is not counted –Depreciation of business expenses, including capital losses will also not be counted –Scholarships, fellowship grants and awards used for education purposes –Worker’s compensation –Veteran’s benefits –American Indian and Alaska Native (AI/AN) income derived from distributions, payments, ownership interests, and real property usage rights –Non-recurring lump sum DHS/DFO/IMTA/

Medicaid and CHIP HH Comp Changes under MAGI Taxpayers and tax dependents use tax household with limited exceptions Parents, children and siblings are included in same household –Stepparents and parents treated the same –Children and siblings with or without income included in same household as rest of family –Older children included in family if claimed as tax dependent by parents –Child income does not count if child not required to file a tax return DHS/DFO/IMTA/

Rules for Non-filers Rules for non-filers parallel those for filers Spouses/parents and children living together in the same household –No distinction between biological, adopted or step-children nor between biological or step-parents “Children” include individuals under 19 DHS/DFO/IMTA/

Establishing Filing Requirements and Tax Dependency Relationships Filing requirements and tax dependency based on reasonable expectations at time of determination If taxpayer cannot reasonably establish tax dependency relationship, inclusion of tax dependent in household determined in accordance with non-filer rules DHS/DFO/IMTA/

How is MAGI Verified? Electronic data matches Validation of data Reasonable compatibility standard DHS/DFO/IMTA/

MAGI Budget Period (“Point in Time”) Cost sharing reductions and premium tax credits for coverage through Exchange based on annual income Medicaid and CHIP eligibility is based on current monthly income –Iowa will continue calculating income based on known fluctuations if it is indicative of future projected income as in the case of seasonal workers DHS/DFO/IMTA/

Scenario 1 – Jones Family The General Rule Applied John and Joan Jones are married. They file jointly and claim Joan’s son by a first marriage, JP, age 17, as a tax dependent John and Joan together currently earn $2,300 per month, with projected annual income of $27,600 Joan’s ex-husband pays $500 per month in child support JP works part-time earning roughly $135 per month DHS/DFO/IMTA/

Scenario 1 – Jones Family Tax and Medicaid Household is John, Joan and JP Child support income is exempt and not counted JP’s income is not countable because it is below the filing threshold requirement for dependents DHS/DFO/IMTA/

Scenario 1 – Jones Family The family’s income should fall within the FPL ranges where: John and Joan are potentially eligible for cost sharing reductions and premium tax credits through the marketplace JP is potentially eligible for CHIP DHS/DFO/IMTA/

Scenario 2 – John Doe Differences in Treatment of Income John is a single parent with 2 children, ages 6 and 10, whom he claims as tax dependents John earns $3,000 per month, with projected annual income of $36,000 John also receives $1,800/year ($150/mo) in taxable AI/AN income DHS/DFO/IMTA/

Scenario 2 – John Doe Tax and Medicaid household is John and 2 children Household income for: –Medicaid/CHIP is $3000/month –Marketplace is $37,800/annual DHS/DFO/IMTA/

Scenario 2 – John Doe The family’s income should fall within the FPL ranges where: John is potentially eligible for cost sharing reductions and premium tax credits through the marketplace Both children are potentially eligible for CHIP DHS/DFO/IMTA/

Scenario 3 – Lewis Family Differences in HH Composition Mary Lewis is a working grandmother who claims her daughter (Samantha), age 20 and a full-time student, and granddaughter (Joy), age 2, as tax dependents Mary earns $4,500/month ($54,000/year) Samantha earns $300/month ($3,600/year) DHS/DFO/IMTA/

Scenario 3 – Lewis Family Tax household is Mary, Samantha and Joy Medicaid/CHIP households are: –Mary’s is the same as tax household of Mary, Samantha and Joy –Samantha’s is the same as Mary’s household of Mary, Samantha and Joy –Joy’s only includes Joy and her mother Samantha (exception: non-filer rules apply) DHS/DFO/IMTA/

Scenario 3 – Lewis Family Household income for Mary and Samantha: –Medicaid/CHIP is $4800/month –Marketplace counts the same income as Medicaid or $57,600/annual Household income for Joy: –Medicaid/CHIP is $300/month ELIAS will automatically apply the 5% disregard when necessary. DHS/DFO/IMTA/

Scenario 3 – Lewis Family The family’s income should fall within the FPL ranges where: Mary and Samantha are potentially eligible for premium tax credits through the marketplace Joy is potentially eligible for Medicaid DHS/DFO/IMTA/

Non-MAGI Non-MAGI includes the following people: –Individuals who are age 65 or older, blind, disabled, or eligible for or enrolled in Medicare –Individuals with long-term care needs –Eligibility for Medicare cost sharing assistance DHS/DFO/IMTA/

MAGI-Exempt MAGI exempt includes: –Anyone for whom agency not required to make income determination including, but not limited to: IV-E Foster Care and Subsidized Adoption FMAP-related MN BCCT Newborns DHS/DFO/IMTA/

MAGI-Exception for 65+ Exception applies when age (65+) is a condition of eligibility Current methods apply when determining eligibility for group covering individuals age 65 and older MAGI methods applied in determining eligibility of a caretaker relative regardless of the age of the caretaker relative DHS/DFO/IMTA/

Eligibility on Non-MAGI Basis Individuals who are eligible for a mandatory coverage group based on MAGI may still choose to have eligibility determined under a non-MAGI coverage group using non-MAGI eligibility standards (e.g., for disabled individuals, LTC needs) DHS/DFO/IMTA/

MAGI Screen If an individual meets criteria for eligibility based on MAGI, they must be promptly enrolled State must pursue eligibility on non-MAGI basis if: –Individual indicates potential for eligibility on other basis on single streamlined application –Individual submits application designed for non-MAGI eligibility –Individual requests such determination –Agency otherwise has information indicating such potential eligibility DHS/DFO/IMTA/

MAGI-Screen (con’t) If the agency has information indicating potential eligibility on another basis or at the individual’s request, we must request additional information needed to make a determination on a non-MAGI basis. Individual is not required to provide information needed by the agency to complete an eligibility determination on a non-MAGI basis Enrollment based on MAGI proceeds pending completion of the non-MAGI determination DHS/DFO/IMTA/

MAGI-Screen (con’t) If disability is confirmed, the individual must be enrolled in a non-MAGI group if otherwise eligible and MAGI eligibility is discontinued. If not eligible, such as over resources then MAGI eligibility may continue If not eligible on non-MAGI basis individual remains eligible in MAGI-based group DHS/DFO/IMTA/

John Jones Scenario John is a single 25-year old living on his own –He has some medical conditions, but he is able to hold down a part-time job, and earns $1,000/month –He submits the single streamlined application online and indicates his need for supportive services –The State has a HCBS waiver program which could potentially meet John’s needs DHS/DFO/IMTA/

John Jones Eligibility based on MAGI Medicaid MAGI household of one Based on John’s income he is eligible for Medicaid with an FPL of 100% DHS/DFO/IMTA/

John Jones Eligibility on non-MAGI Basis Because John has indicated a need for specialized services which may be covered under the State’s waiver program, agency needs to request additional information from John to determine his eligibility for that program The agency will need to provide John with the information he needs to decide whether to complete the non-MAGI determination Pending completion of the determination of eligibility for the waiver program, John will remain enrolled through the adult group DHS/DFO/IMTA/

John Jones Eligibility on non-MAGI Basis If John is determined eligible for the waiver program, he must enroll in that program If John does not provide all information needed to determine eligibility for the waiver program or the State determines he is not eligible, he will remain in the adult group DHS/DFO/IMTA/

Conclusion Additional ACA webinars Session review – Income Maintenance Workers ONLY DHS/DFO/IMTA/