Affordable Care Act Income/Resources

Affordable Care ActIncome/Resources

Session 3

Presented by Tokie Moriel & John Tvedt

1DHS/DFO/IMTA/2013-07-15

Objective

• Present a high level overview of changes affecting types of income and resources under ACA

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MAGI in Medicaid and CHIPMyth or Reality

• Myth

– MAGI is a number on a tax return which DHS can get and know what someone’s income is for purposes of Medicaid or CHIP

• Reality

– MAGI is a methodology which identifies whose income is counted in determining somebody else’s eligibility and what kind of income is counted

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Myth or Reality

• Myth

– Financial eligibility rules are affected for EVERYONE

• Reality

– MAGI will be used to determine the financial eligibility for:

• Iowa Health and Wellness Plan• Children• Pregnant women• Parents and caretaker relatives

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Myth or Reality

• Myth

– Coverage through the Marketplace

• Reality

– Coverage through the Marketplace

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MAGI-Based MethodologiesTypes of Income

• Today

– All income/money received, unless excluded, minus any deductions, disregards or diversions

• MAGI-based income

– Tax rules apply with exceptions

– No income disregards, except 5%

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MAGI-Based MethodologiesWhose Income Is Counted

• Today

– Consider all income of the members in the eligible group unless the income is exempted, disregarded, deducted or diverted

• MAGI-based income

– Income of adults, parents and spouses always counted (stepparents will be treated like parents)

– Income of children in parents’ household counted if required to file a tax return

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MAGI-Based MethodologiesHousehold Composition & Size

• Today

– Based on legal responsibility; parents and children living together, but prohibited deeming rules apply

• MAGI-based households

– Medicaid and tax households the same for most families

– Certain exceptions apply

– Rules for non-filers mirror rules for filers

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MAGI-Based Methodologies

• Household Composition and Size

• Key changes for Medicaid:

– Stepparents and stepchildren

– Children/siblings with income

– Children ages 21+ claimed as tax dependent

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MAGI-Based Methodologies

• Exceptions to adoption of tax household

– Individuals other than biological, adopted or step children claimed as tax dependent

– Children claimed by non-custodial parent

– Married couples and children of parents not filing jointly

– Pregnant women

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Budget Periods (Point-In-Time)

• Today

– Current monthly income

• Budget period under MAGI

– New applicants/enrollees –current monthly income

– State flexibility to account for predictable fluctuations in income

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Income Standard Conversion

• Today

– Net income standard after deductions, diversions and disregards

• Under MAGI

– States to convert current net income standards to new equivalent “gross income” standards such that individuals do not lose coverage

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MAGI Screen

• First step: Eligibility based on MAGI

– Everyone is first evaluated for eligibility based on MAGI-based income

– Determination based on other factors for those not eligible based on MAGI

• Same process regardless of application door

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Income Exempted under ACA

– Child support income

– Depreciation of business expenses, including capital losses

– 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

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Asset Test for MAGI Households

• There is no asset test for MAGI households

• There are no changes to the asset limits for non-MAGI households

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Conclusion

• Additional ACA webinars

• Session review – Income Maintenance Workers ONLY

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