Medicaid Policy
Medicaid Policy
A. All Programs
Some earned income is not counted to determine eligibility for Medicaid. The following policy explains how to treat certain types of income.
1. Earned Income Tax Credit (EITC) payments. Do not count EITC received as part of the individual's income tax refund (521-32).
2. Workforce Innovation and Opportunity Act (WIOA). Do not count income paid by programs funded under WIOA if it is not paid as wages. Anything paid as wages is counted as earned income.
a. Payments for day care or social services are not countable income.
b. If the payments are paid as wages for work performed by a disabled individual, the income is treated as earned income and the individual may qualify for the Medicaid Work Incentive program (314).
3. Hostile Fire Pay.
a. For MAGI-based coverage groups, exclude the full amount of the person's military pay from taxable income an individual earns while on active military duty serving in a combat zone. This amount should not be shown in box 1 on the person's W-2 form. Do not count this type of income in the MAGI income calculation.
b. For non-MAGI-based groups, do not count the income called "hostile fire" or "imminent danger" pay that a person receives while actively serving in the military. This amount should be identified separately from regular pay. Such income does not count for the individual receiving the income.
i. Do not deem from a spouse or parent, the amount of income that can be identified as additional pay due to serving in a combat zone when the following criteria are met:
· The spouse or parent from whom we deem income is a uniformed member of the armed forces; and
· The additional pay is, or was, being received by the spouse or parent as a result of deployment to or while serving in a combat zone; and
· The spouse or parent serving in the military was not receiving the additional pay immediately before serving in a combat zone; and
· The additional pay is received after September 2002.
ii. This exclusion does not include increases in basic pay, cost-of-living increases, or promotions. The leave and earnings statement should identify basic pay and additional pay.
iii. This exclusion includes periods when a member of the military is absent from duty because of sickness, wounds, or leave. If the person becomes a prisoner of war or is missing in action, the person is still considered serving in a combat zone as long as he or she maintains status for military pay.
4. Individual Development Accounts. Deduct any earnings an individual deposits into an Individual Development Account (IDA) from countable income. Matching funds contributed to an IDA do not count as income. Exclude interest earned on the individual’s own contributions or matching funds from countable income (521-37).
5. Earned Income Exclusion for Temporary Census Takers.
Every ten years (i.e. 2020, 2030) the Census Bureau hires temporary employees to conduct the National Census. In many cases, persons hired as temporary census workers begin their employment in the preceding year.
a. This income is exempt for all non-MAGI-based Medicaid coverage groups as well as QMB, SLMB and QI.
b. It does not matter whether the income is received by the eligible person, the person’s spouse or an eligible child’s parent.
c. For MAGI-based coverage groups, these earnings would be reported as taxable earnings and therefore are counted as income. Such employment is temporary so do a best estimate based on the estimated number of weeks a person will work.
6. Sale of Native American or Alaska Native Significant Items. Exclude payments resulting from the sale of items that have unique religious, spiritual, traditional or cultural significance to Native Americans or Alaska Natives. This exclusion applies to:
a. Individuals who make and sell the above mentioned items as a means of self-employment.
b. Individuals who own and sell the items but do not make them.
c. The exclusion does not apply to the wages of employees of retail establishments who sell significant Native American items.
B. Community ABD and Long-term Care ABD
1. Earned Income Exclusion for Children
a. Exclude the monthly, earned income of a child who is a student up to the monthly limit shown on Table II. Count monthly, earned income that exceeds the monthly exclusion limit. Apply the earned income deduction in 409-2 for a disabled child to this excess earned income.
b. Continue to exclude monthly, earned income up to the monthly limit until you have excluded the annual limit shown on Table II.
i. Count the monthly amounts excluded toward the annual limit only from months in which the disabled person receives Disability Medicaid.
ii. After excluding the annual limit, count all earned income, and apply the earned income deduction shown in 409-2 for the disabled child.
c. This exclusion applies to a disabled child. It also applies to non-disabled children in the household when determining the amount of the allocation for dependent children for deeming purposes (410-3)
d. To be eligible for this exclusion, the child must meet the following guidelines:
i. Be under 22 years old, and
ii. Be a student regularly attending a school, college, or university. Home school meets the school requirement when the child is in grades 7-12, is home-schooled at least 12 hours a week and the arrangement meets the home school law of the state or other jurisdiction in which the student resides.
· If the student is married to another student under age 22, apply this deduction to the combined earned income of the couple.
· A disabled child with earnings may qualify for the Medicaid Work Incentive program. Even in months where all of the child's earned income is excluded under this policy, if other countable income exceeds 100% of poverty, determine eligibility under the Medicaid Work Incentive program.
2. Earned Income Used to Compute a Grant
a. Do not count any earned income used to compute an FEP, RCA, or General Assistance grant.
There is only one exception to this rule. This exemption does not apply to the sponsors of individuals who are sponsored non-citizens.
3. Infrequent Earned Income. Exclude the first $30 of earned income received in a quarter that is received too infrequently or irregularly to be counted as regular earned income. (415-7).
C. Family Medically Needy
Do not count the following types of earned income for Family, Child or Pregnant Woman medically needy Medicaid programs.
1. Incentive and training expenses paid by the Department of Workforce Services as part of the employment plan.
2. Reimbursements from an employer for any bona fide work expense. A bona fide work expense is an expense that has been verified by the employer as being necessary for employment.
3. Advanced payment or reimbursement for transportation for training. To be excluded, such an allowance must meet two rules:
a. It must be directly related to training, and
b. You must be able to identify and separate it from other countable income.
4. Earned Income of a Dependent Child. Do not count the earned income of dependent children if they are:
a. In school or training full time or
b. In school or training part-time, if they are employed less than 100 hours per month.
5. Earned income of an SSI Recipient. Do not count any income, earned or unearned, of a parent, spouse, or child receiving SSI.