(A) This rule describes household composition and income calculations under 42 C.F.R. 435.603 (as in effect October 1, 2020) when determining an individual's eligibility for modified adjusted gross income (MAGI) based medical assistance. This rule does not apply to determinations for categories of medical assistance on the basis of age, blindness, or disability, or which only cover an individual's medicare premium or cost-sharing.
(B) Definition. "Person" for the purpose of this rule, means someone in the family or household of an individual applying for or receiving medical assistance.
(C) Determining household composition and family size.
(1) For the tax year in which the eligibility determination is being made, household composition and family size are determined for each individual as follows:
(a) If an individual expects to file a federal income tax return and does not expect to be claimed as a tax dependent, the household composition is the individual, the individual's spouse if they live together, and all persons whom the individual expects to claim as a tax dependent as determined under 42 C.F.R. 435.603(f)(1) (as in effect October 1, 2020).
(b) If an individual expects to be claimed as a tax dependent, the household composition is the taxpayer, the taxpayer's spouse if they live together, the individual, and all other persons whom the taxpayer expects to claim as a tax dependent as determined under 42 C.F.R. 435.603(f)(2) (as in effect October 1, 2020), unless the individual meets one of the following exceptions:
(i) The individual is a tax dependent of someone other than a spouse or parent.
(ii) The individual is a child under the age of nineteen living with both parents who do not expect to file taxes jointly.
(iii) The individual is a child under the age of nineteen who expects to be claimed as a tax dependent by a non-custodial parent.
(c) If an individual does not expect to file a federal income tax return or to be claimed as a tax dependent, or it is unclear if the individual will be claimed as a tax dependent, the household composition is determined under 42 C.F.R. 435.603(f)(3)(as in effect October 1, 2020) as follows:
(i) If the non-filer is an adult, the household includes the individual, the individual's spouse if living together, and the individual's children under the age of nineteen.
(ii) If the non-filer is a child under the age of nineteen, the household includes the individual, the individual's parents if living with the individual, and the individual's siblings under the age of nineteen if living with the individual.
(a) If the individual (non-filer child) is married, the spouse of the individual is also included in the household.
(b) If the individual (non-filer child) has children, the individual's children are also included in the household.
(2) When determining the family size of a household containing at least one pregnant woman, each pregnant woman is counted as herself plus:
(a) One; or
(b) The number of indicated fetuses. The pregnant woman is to provide a statement from a doctor or nurse verifying the pregnancy, including the expected date of confinement and the number of unborn fetuses (if greater than one), if the increase in family size makes her income-eligible for medical assistance.
(3) When determining the household of a married couple who live together, each spouse will always be included in the other spouse's household, regardless of tax filing status and regardless of whether either spouse is claimed as a tax dependent.
(4) When determining the household of a natural, adoptive, or step-parent and a child who live together, the parent will always be included in the child's household, regardless of tax filing status and regardless of whether the child is claimed as a tax dependent.
(D) Determining household income.
(1) MAGI-based income is determined in accordance with 42 C.F.R. 435.603 (as in effect October 1, 2020) for:
(a) The individual; and
(b) Each person in the individual's household.
(2) The individual's household income is the sum of the individual's MAGI-based income plus the MAGI-based income of each person in the individual's household, excluding only the income from the following individuals who are not expected to be required to file a tax return under section 6012(a)(1) of the Internal Revenue Code (as in effect October 1, 2020) for the taxable year in which eligibility is being determined for medical assistance, whether or not the individual files a tax return:
(a) A child included in the household of his or her natural, adoptive, or step-parent; or
(b) A tax dependent who meets the definition of a qualifying child or qualifying relative under 26 U.S.C. 152 (as in effect October 1, 2020).
(3) Reasonably predictable changes (RPC) methodology. To account for a reasonably predictable increase or decrease in future income, such as recurring seasonal or temporary employment, the projected income is to be prorated equally over a twelve-month period, in accordance with 42 C.F.R. 435.603(h)(3) (as in effect October 1, 2020). A reasonably predictable increase or decrease in income is to be verified by a signed employment contract, a history of predictable fluctuations in income, or other clear indication of the future income change. If verification of the future change is not available, the individual's self-attestation may be used.
(4) Qualified lottery winnings and qualified lump-sum income, in the amount of eighty thousand dollars or more, which are received in a single payment on or after January 1, 2018, are counted as income in the month received and over a period up to one hundred twenty months under the Bipartisan Budget Act (BBA) of 2018 (Pub. L. No. 115-97). The total winnings are divided into equal installments over each month as described:
(a) Lottery winnings up to the amount of seventy-nine thousand nine hundred ninety-nine dollars and ninety-nine cents are only counted in the month received.
(b) Lottery winnings between the amounts of eighty thousand dollars and eighty-nine thousand nine hundred ninety-nine dollars and ninety-nine cents are counted equally over a two-month period.
(c) Lottery winnings between the amounts of ninety thousand dollars and ninety-nine thousand nine hundred ninety-nine dollars and ninety-nine cents are counted equally over a three-month period.
(d) For each additional ten thousand dollars received in lottery winnings, above the amount of ninety-nine thousand nine hundred ninety-nine dollars and ninety-nine cents, add one month to the countable time period, up to a maximum of one hundred twenty months, and equally count the winnings in each month.
(5) Nominal payments to a parent mentor who is trained to assist families with children who do not have health insurance coverage and who is working with a grantee organization under section 2113 of the Social Security Act (as in effect October 1, 2020), are excluded as income under the Helping Ensure Access for Little ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable (HEALTHY KIDS) Act (Pub. L. No. 115-120).
(6) Alimony payments.
(a) Alimony payments received as a result of a new divorce or separation agreement finalized after December 31, 2018, are not considered income to the recipient for MAGI budgeting under the Tax Cuts and Jobs Act (Pub. L. No. 115-97).
(b) Alimony payments received as a result of a divorce or separation agreement modified after December 31, 2018, are not considered income to the recipient for MAGI budgeting only if the modification was for the purpose of the Tax Cuts and Jobs Act (Pub. L. No. 115-97).
(7) Student loan debt discharged due to the death or permanent and total disability of the student is not included as income for MAGI budgeting for tax years 2018 through 2025 under the Tax Cuts and Jobs Act (Pub. L. No. 115-97).
(8) The following deductions are not allowable for MAGI budgeting under the Tax Cuts and Jobs Act (Pub. L. No. 115-97):
(a) Moving expenses for tax years 2018 to 2025, except for specified active duty military.
(b) Alimony paid under a new divorce or separation agreement finalized after December 31, 2018.
(c) Alimony paid under a divorce or separation agreement modified after December 31, 2018, if the modification was for the purpose of the Tax Cuts and Jobs Act.
(d) Tuition and fees for qualified education expenses for postsecondary education. Scholarships, awards, or fellowship grants used for education purposes and not for living expenses are still excluded as income as described in 42 C.F.R. 435.603(e)(2) (as in effect October 1, 2020).
(9) Before comparing an individual's household income to the highest income standard under which the individual may be determined eligible using MAGI-based methodologies, deduct a dollar amount equal to five per cent of the federal poverty level (FPL) for the individual's family size.
Last updated July 1, 2021 at 9:51 AM