prepared by families usa for use in the district of columbia about these materials families usa...

Prepared by Families USA for use in the District of Columbia

About These Materials

Families USA developed these materials under contract with DC Health Link, the District of Columbia's Health Benefits Exchange, for a training program for DC eligibility workers. These workers determine eligibility for Medicaid and other benefit programs (including SNAP and TANF). They will help consumers apply for coverage and financial assistance, report changes, renew coverage, and verify the information that is needed to determine eligibility. These workers will not be responsible for helping consumers select health plans.

These training materials are posted here as an example that can be adapted for other training programs. They contain information that is specific to the District of Columbia, which would have to be changed if used in another state. Contact Families USA at stateinfo@familiesusa.org for assistance with adapting these materials.

ESA Policy Training Day 3

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Household Composition

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Why are the rules changing?

• Some people who earn too much to qualify for Medicaid can get new tax credits through DC Health Link

• New rules make Medicaid and IRS tax rules work together

• These changes are only for the MAGI populations

• DC will start using new rules on October 1

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How are the rules changing?

Old Rules New RulesHousehold based on who lives together

Household based on who will be on the same tax return

Everyone has the same household

Household must be determined for each person individually

One way of defining household Two ways of defining household: Tax household and fallback Medicaid household

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Two Ways to Define Household

1. Eligibility for premium tax credits determined using tax household• Based on who will be in the same tax household for

the year in which the family will be getting coverage• Expected household and expected annual income

2. Eligibility for Medicaid determined using Medicaid household• Medicaid household rules are based on tax household,

but with some exceptions• Current household and monthly income

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What Applicants Need to Know

Applicants need to tell DC Health Link about:

• Everyone who will be on the same tax return AND

• Everyone who they live with

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Example 1: Amber and Scott’s Family

Amber and Scott live together and are not married. They have one child together, Janelle, who lives with them. Amber and Scott must file separate tax returns because they are not married. Amber claims Janelle on her tax return.

When Amber fills out the DC Health Link application, she should list:

• Amber• Scott• Janelle

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Tax Household

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Members of the Tax Household

• The taxpayer

• The taxpayer’s spouse if they are married and filing jointly

• Anyone the taxpayer intends to claim as a dependent

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Can the taxpayer claim this dependent?

• There are two types of dependents:1. Qualifying child2. Qualifying relative

• When determining if someone can claim a dependent:1. Check if the person is the taxpayer’s qualifying

child2. Check if the person is the taxpayer’s qualifying

relative

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Qualifying Child

A qualifying child must be the taxpayer’s:• Son, daughter, brother, sister, or a descendant

of any of them (includes step, foster, and half siblings)

Must be one of the following:• Under age 19 at the end of the year OR• Under age 24 and a full-time student OR• Any age if permanently and totally disabled

Must be expected to:• Live with the taxpayer for at least half the year• Not provide more than half of his or her own financial support

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Example 1: Leroy’s Family

Leroy is 28. He supports three people: his 35-year-old brother who is disabled and lives with Leroy, his 16-year-old nephew who lives with him, and his 19-year-old niece who is in college full-time in Ohio. He provides more than half of the support for all three.

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Who Leroy Can Claim

Leroy can claim the following dependents as his qualifying children:• His brother• His nephew• His niece

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Qualifying Relative

• A qualifying relative cannot be anyone’s qualifying child• Must be either:

• Related to the taxpayer (taxpayer’s child or a descendent of a child, taxpayer’s father, mother, ancestor, sibling – includes step, in-laws, half siblings) OR

• Expected to live with the taxpayer for the entire year

• Must expect to have less than $3,700 in taxable income for the year

• Taxpayer must expect to provide more than half of the person’s total financial support for the year

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Example 2: Amber, Lynn, and Joan

Amber is 45 and works as a manager at a department store making about $44,000 this year. She expects to make about the same amount next year. She supports her mother, Lynn, who lives in Baltimore. Lynn has no income other than what Amber sends her.

Amber’s 40-year-old friend Joan has also lived with Amber for the last few years. Joan makes about $2,000 per year babysitting, but she does not have any other income.

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Who Amber Can Claim

Amber can claim the following dependents as her qualifying relatives:• Lynn• Joan

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Example 3: Linda’s Family

Linda is a single mom with one child, Jordan, who lives with her and who she claims on her taxes. Linda also supports her elderly mother, Renee, who lives in Baltimore and who she claims on her taxes.

Who is in Linda’s tax household?

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Linda’s Tax Household

Linda’s tax household includes:• Linda• Jordan • Renee

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Medicaid Household

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Three Ways to Determine Medicaid Household

Method used depends on your tax filing situation for the current year:

1. Tax filer who does not expect to be claimed as a dependent

2. Someone who expects to be claimed on someone else’s taxes

3. Someone who does not expect to file taxes or be claimed on anyone else’s taxes

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Medicaid Household 1

Medicaid household = tax household, except that married couples who live together are in the same Medicaid household even if they file taxes separately

Tax filer who does not expect to be claimed as a dependent:

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Medicaid Household 2Someone who expects to be claimed on someone else’s taxes:

Medicaid household = tax household of person claiming them, with three exceptions

In these three cases, use non-filer rules (Medicaid Household 3) to determine eligibility for the person being claimed

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Medicaid Household 2: Exception 1

Exception 1: The person is being claimed on a tax return by someone who is not the person’s spouse or parent

Example: A grandmother claims her granddaughter.

The granddaughter’s household is determined using Medicaid Household 3.

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Medicaid Household 2: Exception 2

Exception 2: A child is under age 19 and the taxpayer who is claiming the child is a non-custodial parent

Example: A child claimed by her father who does not live with her.

The child’s household is determined using Medicaid Household 3.

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How do you determine who has custody?

Custodial parent is the parent who:• Has physical custody based on a court

order or binding separation, divorce, or custody agreement

• If there is no such agreement or shared custody, custodial parent is the parent with whom the child spends most nights

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Medicaid Household 2: Exception 3

Exception 3: A child is under age 19 and lives with both parents who do not file taxes jointly.

Example: A child lives with her unmarried parents.

The child’s household is determined using Medicaid Household 3.

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Medicaid Household 3Someone who does not expect to file taxes or be claimed as a dependent:

For those who are age 19 and older, Medicaid household includes the person and, if living with the person, his/her:

• Spouse• Children under age 19

For those who are under age 19, Medicaid household includes the person and, if living with the person, his/her:

• Parents• Spouse• Children under age 19• Siblings under age 19

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Example: Lisa and Rhoda

Lisa’s 14-year-old niece Rhoda lives with her, and Lisa claims Rhoda on her taxes every year. Lisa’s income is $54,000 per year (about 350% of poverty for a household of two). The DC Health Link application tells Lisa that she is eligible for premium tax credits, and Rhoda is eligible for Medicaid. Lisa calls your service center to find out why Rhoda qualifies for Medicaid but she does not.

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Explaining Lisa and Rhoda’s Eligibility

• Lisa’s Medicaid household is Lisa and Rhoda. With a household size of two and an income of $54,000, her income is 350% of poverty and she is eligible for premium tax credits.

• Rhoda’s Medicaid household is just Rhoda because the person claiming her (Lisa) is not her parent or her spouse. Rhoda has a Medicaid household size of one and no income, so she qualifies for Medicaid.

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Special Rules for Pregnant Women

• Tax household remains the same

• Medicaid household size changes: pregnant woman is counted as herself + the number of children she expects to deliver in her own household and in the household of others

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Example: Crystal’s Family

Crystal and James are married and live together with their five-year-old daughter, Maria. Crystal and James file their taxes together and claim Maria as a dependent. Their income is about $45,000 per year, which is about 230% of poverty.

Crystal and James get premium tax credits and cost-sharing reductions, while Maria gets Medicaid.

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Example: Crystal’s Family (cont’d)

Crystal finds out she is pregnant with twins and reports this to DC Health Link. DC Health Link responds by saying Crystal and James are now eligible for Medicaid.

How would you explain why this happened?

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Explaining Crystal’s Family’s Eligibility

Since Crystal told DC Health Link she is pregnant and expects to deliver two children, DC Health Link has reassessed the family’s eligibility.

With a household size of five, Crystal, James, and Maria are now at 163% of poverty, so Crystal and James now qualify for Medicaid too.

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Things to Remember

• Applicants will need to provide information about everyone who lives with them AND everyone who is on the same tax return

• New household rules are only for MAGI populations, but non-MAGI individuals are still included in the households of MAGI people

• Household members who are incarcerated or undocumented are included as long as they fit the rules for determining household

• Each person has his or her household determined separately

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Review: Question #1

TRUE or FALSE: Because the new rules for household composition are based on IRS tax rules, applicants need to include information about only people who are on the same tax return as they are.

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Answer: Question #1

FALSETax household will be used in most cases, but there are some situations where we need to know who lives with a person as well. Applicants should always include those in their tax household and people who live with them on the application.

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Review: Question #2

Amber and Scott live together and are not married. They have one child together, Janelle, who lives with them. Amber and Scott must file separate tax returns because they are not married. Amber claims Janelle on her tax return.

Who is in Janelle’s tax household when determining eligibility for premium tax credits?

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Answer: Question #2

ANSWER:Amber and JanelleEligibility for premium tax credits is based on tax household. Amber claims Janelle on her taxes, so Janelle’s tax household is Amber and Janelle.

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Review: Question #3

Amber and Scott live together and are not married. They have one child together, Janelle, who lives with them. Amber and Scott must file separate tax returns because they are not married. Amber claims Janelle on her tax return.

Who is in Janelle’s Medicaid household?

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Answer: Question #3

ANSWER:Amber, Scott, and Janelle

Janelle is claimed as a tax dependent, so we use Medicaid Household 2. However, since she lives with parents who do not file taxes jointly, her Medicaid household is actually Medicaid Household 3. She lives with both her parents, so they are part of her Medicaid household.

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Recap of Household Composition

• What you will do:• Fill out application questions• After application is finished, enter any

changes that occur

• What the system will do for you:• Determine household composition for each

family member• Give you the right questions to ask for each

family member

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Income

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Review: What is MAGI?

• Stands for “Modified Adjusted Gross Income”

• New way of calculating income to determine eligibility for:• MAGI Medicaid • Premium tax credits and cost-sharing

reductions

• Non-MAGI Medicaid will still use existing income counting rules through the ACEDS system

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How the DC Health Link ApplicationWill Determine Income

• Income section of application will not be the same for every applicant• Some will need to estimate only next year’s

income• Others will need to provide more detail on

different types of income

• Information about some income will be pre-populated• Always be sure to check that this pre-

populated information is correct

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Whose income is included?

• Calculated separately for each person’s household

• Includes applicants and non-applicants

• DC Health Link application will automatically subtract income from tax dependents who are not required to file taxes• For example, a college student whose parents claim

her as a tax dependent and who made less than $5,950 in 2012 did not have to file her own taxes

• Step-parent income now included

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How is MAGI calculated?

Three steps:1. Add up all types of income for each

household member2. Subtract adjustments to income3. If potentially Medicaid eligible, apply

special treatment to three types of income

DC Health Link application will do all of this for you.

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Step 1: Add Up All Types of Income

DC Health Link Application asks about different types of income, such as:

• Wages and tips from a job• Earnings from self-employment• Unemployment• Rental income• Social Security benefits

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Income from Self Employment

• Important to subtract business expenses

• Applicants can report expenses, such as:• Rent or lease of business property• Car and truck expenses• Employee wages and benefits• Advertising

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Less Common Forms of Income that Are Included

DC Health Link application will ask about some less familiar forms of income, such as:

• Capital gains or losses• Investment income like interest and

dividends• Rental or royalty income• Farming or fishing income

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Common Forms of Income that Are Not Included

Income does not include:• SSI• Child support• Workers’ compensation• Veterans’ benefits• TANF and SNAP benefits

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Step 2: Subtract Adjustments to Income

• Adjustments are certain expenses that you can take out of taxable income

• Common adjustments:• Alimony paid• Student loan interest• Contributions to an IRA

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Step 3: If a Person Is Potentially Eligible for Medicaid…

DC Health Link application will ask additional questions about three types of income for those who might be eligible for Medicaid:

• Lump sum payments (e.g., back pay)• Taxable educational awards• Certain American Indian/Alaskan Native

income

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American Indian/Alaskan Native Income

• Income excluded:• Per capita payments from a tribe from natural

resources, usage rights, leases, or royalties• Payments from natural resources, farming, ranching,

fishing, leases, or royalties from designated Indian trust land

• Money from selling things that have cultural significance

• DC Health Link will give you the questions to ask

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Changes to Income Disregards

• Affordable Care Act ends current income disregards and replaces with a single, 5% disregard • For example, no more Dependent Care

Deduction• Parents and Caretaker Relatives now eligible

up to 221% of poverty (216% +5% disregard)

• Non-MAGI applicants still have income disregards

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No Asset Questions in DC Health Link Application

• Like today, eligibility for MAGI groups does not depend on assets

• No asset questions in DC Health Link application

• Asset tests still used for non-MAGI populations

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Verifying Income

• DC Health Link application will make verifying income much easier

• Some applicants will not need to provide proof because DC Health Link has their information from:• IRS tax data• Work Number• Department of Employment Services• Quarterly wage data• Other electronic data sources

• Others will still need to show proof, like paystubs

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Things to Remember

• Important to help applicants check and update pre-populated information

• Income information is needed for both applicants and non-applicants

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Review: Question #1

TRUE or FALSE: Chris’s application includes two non-applicants, Mandy and Will. Even though Mandy and Will are not applying for coverage, we still need to know about their income.

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Answer: Question #1

TRUEIncome information is needed for applicants and non-applicants.

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Review: Question #1

TRUE or FALSE: The application only needs information about applicants, not non-applicants.

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Answer: Question #1

FalseIncome information is needed for applicants and non-applicants.

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Review: Question #2

TRUE or FALSE: Child support is an important source of income to include in the DC Health Link application.

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Answer: Question #2

FALSEChild support is not taxable income, so it is not included in calculation of income under the new rules.

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Recap of Income

• What you will do:• Fill out application questions• After application is finished, enter any

changes that occur

• What the system will do for you:• Determine what income is included• Calculate household income separately for

each family member

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Consumer Notices

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When are notices provided?DC Health Link automatically sends a notice whenever:• An action is taken that could affect eligibility

• Note dates for termination, changes and appeals

• Information is needed • Different timeframes to provide documentation

for Medicaid and DC Health Link plans

• New information is received• Notice will request confirmation• Note Medicaid and DC Health Link timeframes to

respond if disagreement

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Combined Notices

• One combined notice for information about coverage through DC Health Link and Medicaid

• Makes it easier for families with mixed eligibility• Example: A parent is eligible to enroll in a

health plan though DC Health Link and receive a premium tax credit, while the children are eligible for Medicaid. They get one notice.

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How will notices be sent?

• Consumers can choose to receive:• Paper notices (default, except for

applicants without fixed address)• Electronic notices

• Posted to “My Account” • Email alert sent

• Both paper and electronic notices

• Authorized representatives will receive all notices as well

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Content of Notices• Written in language that is easy to understand

• Available in other languages

• Notices will explain: • The person’s eligibility for coverage, help with costs• What the decision is based on• Any action DC Health Link will take and when• Any action the consumer needs to take and by when• How to continue getting benefits and/or enroll in a

plan while waiting for a final eligibility determination• Information on the right to appeal• How to get assistance and access “My Account”

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Notice Example #1

A notice on eligibility might explain to an applicant:

You are ineligible for Medicaid. However, you are eligible to enroll in a health plan and receive a premium tax credit through DC Health Link, but additional documentation is needed to verify income. Here is a list of documentation you must provide. You can select a DC Health Link plan and receive benefits while we verify your eligibility.

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Notice Example #2

A renewal notice might explain to an enrollee:

You will be re-enrolled in your current DC Health Link plan unless you select a new plan.

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Things to Remember

• DC Health Link automatically generates notices whenever any new information is received or a change is made to a consumer’s coverage

• Consumers should choose the method of receiving notices that is best for them

• Make sure consumers understand the importance of responding to notices

• Tell consumers how to get help with anything they do not understand

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Appeals

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Building on the Current Appeals System

• DC Health Link appeals will follow the same appeals process that is used for Medicaid now

• As in current process, starting an appeal will trigger both:1. Informal review by Office of Administrative

Review and Appeals (OARA) 2. Formal hearing through Office of

Administrative Hearings (OAH)

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Assistance with Appeals

• Service center staff will need to provide assistance only with starting appeals

• If consumers need additional help, they should contact the DC Health Link customer service call center or the Office of Administrative Hearings

• Notices will include contact information for sources of help with appeals (for example, legal services programs)

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Options to Start an Appeal

• ESA or OAH worker helps consumer start an appeal by entering it into DC Health Link

• Consumer starts an appeal using his or her DC Health Link “My Account”

• Customer service call center helps consumer start an appeal by entering it into DC Health Link

• Consumer mails an appeal form to ESA or OAH

• In-person assisters, agents, and brokers can also help consumers start appeals through any of the methods above

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Reasons to Appeal

Consumers should appeal if they disagree with any decision made by DC Health Link or Medicaid

• Determination of eligibility or ineligibility for Medicaid, DC Health Link plans, or premium tax credits

• Amount of premium tax credit• Termination, suspension, or reduction of

benefits• Delayed processing of an application or failure

to take timely action on new information

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Appeal Timeline

• Consumers must receive notice at least 10 days before an action is taken

• Consumers have 90 days after getting a notice to start an appeal• For DC Health Link plans and premium tax credits,

current coverage will continue or be reinstated retroactively when the appeal request is processed

• For Medicaid, coverage will continue if a person requests an appeal before his or her coverage is terminated

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If consumers want to appeal a health plan’s denial of services or failure to pay a medical bill, they should contact the Office of the Health Care Ombudsman and Bill of Rights for help.

Appealing a Denial of Services

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Things to Remember

• The role of ESA in the appeals process is to help the consumer start an appeal

• Any time a consumer disagrees with a decision or thinks a mistake has been made, they should appeal

• DC Health Link appeals will use the same process Medicaid uses now

• Provide referrals for additional help