About These Materials

1. 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.

2. ESA Policy Training Day 3

3. Household Composition

4. 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

5. How are the rules changing?

6. Two Ways to Define Household • 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 • Eligibility for Medicaid determined using Medicaid household • Medicaid household rules are based on tax household, but with some exceptions • Current household and monthly income

7. 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

8. 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 Example 1: Amber and Scott’s Family

9. Tax Household

10. 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

11. Can the taxpayer claim this dependent? • There are two types of dependents: • Qualifying child • Qualifying relative • When determining if someone can claim a dependent: • Check if the person is the taxpayer’s qualifying child • Check if the person is the taxpayer’s qualifying relative

12. 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 Qualifying Child

13. 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. Example 1: Leroy’s Family

14. Leroy can claim the following dependents as his qualifying children: His brother His nephew His niece Who Leroy Can Claim

15. 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

16. 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. Example 2: Amber, Lynn, and Joan

17. Amber can claim the following dependents as her qualifying relatives: Lynn Joan Who Amber Can Claim

18. 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? Example 3: Linda’s Family

19. Linda’s tax household includes: Linda Jordan Renee Linda’s Tax Household

20. Medicaid Household

21. Three Ways to Determine Medicaid Household Method used depends on your tax filing situation for the current year: • Tax filer who does not expect to be claimed as a dependent • Someone who expects to be claimed on someone else’s taxes • Someone who does not expect to file taxes or be claimed on anyone else’s taxes

22. Medicaid household = tax household, except that married couples who live together are in the same Medicaid household even if they file taxes separately Medicaid Household 1 Tax filer who does not expect to be claimed as a dependent:

23. Medicaid Household 2 Someone 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

24. 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. Medicaid Household 2: Exception 1

25. 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. Medicaid Household 2: Exception 2

26. 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

27. 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. Medicaid Household 2: Exception 3

28. Medicaid Household 3 Someone 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

29. 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. Example: Lisa and Rhoda

30. 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.

31. 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

32. 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. Example: Crystal’s Family

33. 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? Example: Crystal’s Family (cont’d)

34. 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. Explaining Crystal’s Family’s Eligibility

35. 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

36. Review: Question #1 TRUEor 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.

37. Answer: Question #1 FALSE Tax 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.

38. 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?

39. Answer: Question #2 ANSWER:Amber and Janelle Eligibility for premium tax credits is based on tax household. Amber claims Janelle on her taxes, so Janelle’s tax household is Amber and Janelle.

40. 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?

41. 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.

42. 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

43. Income

44. 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

45. 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

46. 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

47. How is MAGI calculated? Three steps: • Add up all types of income for each household member • Subtract adjustments to income • If potentially Medicaid eligible, apply special treatment to three types of income DC Health Link application will do all of this for you.

48. 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

49. 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

50. 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