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Affordable Care Act MAGI and non-MAGI. Session 2 Presented by Tokie Moriel & John Tvedt. Session Objectives. Define MAGI Discuss Key Points including: Countable income changes Household composition changes Verification procedures

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affordable care act magi and non magi

Affordable Care ActMAGI and non-MAGI

Session 2

Presented by Tokie Moriel & John Tvedt

DHS/DFO/IMTA/2013-07-15

session objectives
Session Objectives
  • Define MAGI
  • Discuss Key Points including:
    • Countable income changes
    • Household composition changes
    • Verification procedures
  • Explain how SSI-related (non-MAGI) coverage is affected under ACA

DHS/DFO/IMTA/2013-07-15

definition of magi
Definition of MAGI
  • Modified Adjusted Gross Income (MAGI)
    • Tax based methodology
      • Earned & Unearned Income
      • Household Composition
    • 5% income disregard
    • No other income deductions, diversions or disregards
  • Effective Dates
    • Applications – January 1, 2014
    • Renewals – March 31, 2014

DHS/DFO/IMTA/2013-07-15

tax definitions of magi
Tax Definitions of MAGI
  • Family - Taxpayer (includes married taxpayers filing jointly) and all claimed tax dependents
  • Family size - Number of individuals in the family
  • Household income - The sum of the taxpayer’s MAGI plus the MAGI of tax dependents in the family if required to file

DHS/DFO/IMTA/2013-07-15

magi based methodologies
MAGI-Based Methodologies
  • Align financial eligibility rules across all insurance affordability programs
  • Seamless and coordinated system of eligibility and enrollment
  • Maintain eligibility of low-income populations, especially children

DHS/DFO/IMTA/2013-07-15

medicaid and chip exempt income under magi
Medicaid and CHIP Exempt Income under MAGI
  • Child support income received is not counted
  • Depreciation of business expenses, including capital losses will also not be counted
  • 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

DHS/DFO/IMTA/2013-07-15

medicaid and chip hh comp changes under magi
Medicaid and CHIPHH Comp Changes under MAGI
  • Taxpayers and tax dependents use tax household with limited exceptions
  • Parents, children and siblings are included in same household
    • Stepparents and parents treated the same
    • Children and siblings with or without income included in same household as rest of family
    • Older children included in family if claimed as tax dependent by parents
    • Child income does not count if child not required to file a tax return

DHS/DFO/IMTA/2013-07-15

rules for non filers
Rules for Non-filers
  • Rules for non-filers parallel those for filers
  • Spouses/parents and children living together in the same household
    • No distinction between biological, adopted or step-children nor between biological or step-parents
  • “Children” include individuals under 19

DHS/DFO/IMTA/2013-07-15

establishing filing requirements and tax dependency relationships
Establishing Filing Requirements and Tax Dependency Relationships
  • Filing requirements and tax dependency based on reasonable expectations at time of determination
  • If taxpayer cannot reasonably establish tax dependency relationship, inclusion of tax dependent in household determined in accordance with non-filer rules

DHS/DFO/IMTA/2013-07-15

how is magi verified
How is MAGI Verified?
  • Electronic data matches
  • Validation of data
  • Reasonable compatibility standard

DHS/DFO/IMTA/2013-07-15

magi budget period point in time
MAGI Budget Period (“Point in Time”)
  • Cost sharing reductions and premium tax credits for coverage through Exchange based on annual income
  • Medicaid and CHIP eligibility is based on current monthly income
    • Iowa will continue calculating income based on known fluctuations if it is indicative of future projected income as in the case of seasonal workers

DHS/DFO/IMTA/2013-07-15

scenario 1 jones family the general rule applied
Scenario 1 – Jones Family The General Rule Applied
  • John and Joan Jones are married. They file jointly and claim Joan’s son by a first marriage, JP, age 17, as a tax dependent
  • John and Joan together currently earn $2,300 per month, with projected annual income of $27,600
  • Joan’s ex-husband pays $500 per month in child support
  • JP works part-time earning roughly $135 per month

DHS/DFO/IMTA/2013-07-15

scenario 1 jones family
Scenario 1 – Jones Family
  • Tax and Medicaid Household is John, Joan and JP
  • Child support income is exempt and not counted
  • JP’s income is not countable because it is below the filing threshold requirement for dependents

DHS/DFO/IMTA/2013-07-15

scenario 1 jones family1
Scenario 1 – Jones Family

The family’s income should fall within the FPL ranges where:

  • John and Joan are potentially eligible for cost sharing reductions and premium tax credits through the marketplace
  • JP is potentially eligible for CHIP

DHS/DFO/IMTA/2013-07-15

scenario 2 john doe differences in treatment of income
Scenario 2 – John Doe Differences in Treatment of Income
  • John is a single parent with 2 children, ages 6 and 10, whom he claims as tax dependents
  • John earns $3,000 per month, with projected annual income of $36,000
  • John also receives $1,800/year ($150/mo) in taxable AI/AN income

DHS/DFO/IMTA/2013-07-15

scenario 2 john doe
Scenario 2 – John Doe
  • Tax and Medicaid household is John and 2 children
  • Household income for:
    • Medicaid/CHIP is $3000/month
    • Marketplace is $37,800/annual

DHS/DFO/IMTA/2013-07-15

scenario 2 john doe1
Scenario 2 – John Doe

The family’s income should fall within the FPL ranges where:

  • John is potentially eligible for cost sharing reductions and premium tax credits through the marketplace
  • Both children are potentially eligible for CHIP

DHS/DFO/IMTA/2013-07-15

scenario 3 lewis family differences in hh composition
Scenario 3 – Lewis Family Differences in HH Composition
  • Mary Lewis is a working grandmother who claims her daughter (Samantha), age 20 and a full-time student, and granddaughter (Joy), age 2, as tax dependents
  • Mary earns $4,500/month ($54,000/year)
  • Samantha earns $300/month ($3,600/year)

DHS/DFO/IMTA/2013-07-15

scenario 3 lewis family
Scenario 3 – Lewis Family
  • Tax household is Mary, Samantha and Joy
  • Medicaid/CHIP households are:
    • Mary’s is the same as tax household of Mary, Samantha and Joy
    • Samantha’s is the same as Mary’s household of Mary, Samantha and Joy
    • Joy’s only includes Joy and her mother Samantha (exception: non-filer rules apply)

DHS/DFO/IMTA/2013-07-15

scenario 3 lewis family1
Scenario 3 – Lewis Family
  • Household income for Mary and Samantha:
    • Medicaid/CHIP is $4800/month
    • Marketplace counts the same income as Medicaid or $57,600/annual
  • Household income for Joy:
    • Medicaid/CHIP is $300/month

ELIAS will automatically apply the 5% disregard when necessary.

DHS/DFO/IMTA/2013-07-15

scenario 3 lewis family2
Scenario 3 – Lewis Family

The family’s income should fall within the FPL ranges where:

  • Mary and Samantha are potentially eligible for premium tax credits through the marketplace
  • Joy is potentially eligible for Medicaid

DHS/DFO/IMTA/2013-07-15

non magi
Non-MAGI
  • Non-MAGI includes the following people:
    • Individuals who are age 65 or older, blind, disabled, or eligible for or enrolled in Medicare
    • Individuals with long-term care needs
    • Eligibility for Medicare cost sharing assistance

DHS/DFO/IMTA/2013-07-15

magi exempt
MAGI-Exempt
  • MAGI exempt includes:
    • Anyone for whom agency not required to make income determination including, but not limited to:
      • IV-E Foster Care and Subsidized Adoption
      • FMAP-related MN
      • BCCT
      • Newborns

DHS/DFO/IMTA/2013-07-15

magi exception for 65
MAGI-Exception for 65+
  • Exception applies when age (65+) is a condition of eligibility
  • Current methods apply when determining eligibility for group covering individuals age 65 and older
  • MAGI methods applied in determining eligibility of a caretaker relative regardless of the age of the caretaker relative

DHS/DFO/IMTA/2013-07-15

eligibility on non magi basis
Eligibility on Non-MAGI Basis
  • Individuals who are eligible for a mandatory coverage group based on MAGI may still choose to have eligibility determined under a non-MAGI coverage group using non-MAGI eligibility standards (e.g., for disabled individuals, LTC needs)

DHS/DFO/IMTA/2013-07-15

magi screen
MAGI Screen
  • If an individual meets criteria for eligibility based on MAGI, they must be promptly enrolled
  • State must pursue eligibility on non-MAGI basis if:
    • Individual indicates potential for eligibility on other basis on single streamlined application
    • Individual submits application designed for non-MAGI eligibility
    • Individual requests such determination
    • Agency otherwise has information indicating such potential eligibility

DHS/DFO/IMTA/2013-07-15

magi screen con t
MAGI-Screen (con’t)
  • If the agency has information indicating potential eligibility on another basis or at the individual’s request, we must request additional information needed to make a determination on a non-MAGI basis. Individual is not required to provide information needed by the agency to complete an eligibility determination on a non-MAGI basis
  • Enrollment based on MAGI proceeds pending completion of the non-MAGI determination

DHS/DFO/IMTA/2013-07-15

magi screen con t1
MAGI-Screen (con’t)
  • If disability is confirmed, the individual must be enrolled in a non-MAGI group if otherwise eligible and MAGI eligibility is discontinued. If not eligible, such as over resources then MAGI eligibility may continue
  • If not eligible on non-MAGI basis individual remains eligible in MAGI-based group

DHS/DFO/IMTA/2013-07-15

john jones scenario
John Jones Scenario
  • John is a single 25-year old living on his own
    • He has some medical conditions, but he is able to hold down a part-time job, and earns $1,000/month
    • He submits the single streamlined application online and indicates his need for supportive services
    • The State has a HCBS waiver program which could potentially meet John’s needs

DHS/DFO/IMTA/2013-07-15

john jones eligibility based on magi
John Jones Eligibility based on MAGI
  • Medicaid MAGI household of one
  • Based on John’s income he is eligible for Medicaid with an FPL of 100%

DHS/DFO/IMTA/2013-07-15

john jones eligibility on non magi basis
John Jones Eligibility on non-MAGI Basis
  • Because John has indicated a need for specialized services which may be covered under the State’s waiver program, agency needs to request additional information from John to determine his eligibility for that program
  • The agency will need to provide John with the information he needs to decide whether to complete the non-MAGI determination
  • Pending completion of the determination of eligibility for the waiver program, John will remain enrolled through the adult group

DHS/DFO/IMTA/2013-07-15

john jones eligibility on non magi basis1
John Jones Eligibility on non-MAGI Basis
  • If John is determined eligible for the waiver program, he must enroll in that program
  • If John does not provide all information needed to determine eligibility for the waiver program or the State determines he is not eligible, he will remain in the adult group

DHS/DFO/IMTA/2013-07-15

conclusion
Conclusion
  • Additional ACA webinars
  • Session review – Income Maintenance Workers ONLY

DHS/DFO/IMTA/2013-07-15