As states rush to implement complex new work reporting requirement provisions before January 2027, the new Interim Final Rule (IFR) released by the Centers for Medicare and Medicaid Services (CMS) has caused massive confusion. However, the IFR made important clarifications about which adults are not subject to work reporting requirements (WRRs), are excluded from WRRs, and those who must demonstrate compliance with WRRs by showing a household income of at least $580 per month or reporting at least 80 hours per month of work or other qualifying activities.
From this complex web of rules, we believe there is a crucial takeaway for parents: in 28 states (including D.C.), all or almost all custodial parents and caretaker relatives1should not be impacted by work reporting requirements. Why is this? Because if their income is at or below 33% of the poverty line2 they are covered in the state’s mandatory Section 1931 parent coverage group (work reporting requirements do not apply to parents in the 1931 group and all of these 28 states cover 1931 parents to at least 33% of the poverty line), and if their income is above 33% of the poverty line, they are over the household income3 minimum of $580 per month so deemed compliant with work reporting requirements.
These 28 states are: AK, AZ, CA, CO, CT, DC, DE, HI, IL, IA, MA, ME, MD, MI, MN, NE, NH, NM, NY, ND, OH, PA, RI, SD, VT, VA, WA, WI.
In April, we blogged about how H.R. 1’s new WRRs for certain adults in Medicaid would affect low-income parents with children noting that the overwhelming majority of parents with a dependent child should not lose their Medicaid coverage due to WRRs. We have a longer issue brief in the works that will get into the complexities of the WRRs as they pertain to parents and caretaker relatives.
If you live in one of these 28 states (including D.C.) it’s important to check with state officials to confirm that they agree with this analysis. Time is short as eligibility systems are being reprogrammed, tech vendors are selling their wares and, most importantly, state outreach materials that explicitly communicate this fact must be developed now. For custodial parents and caretaker relatives covered by Medicaid in these 28 states (including DC), the message is fairly simple and states should start getting that message out now (including clear messaging on outreach notices) before implementation is in full swing.
- Caretaker relative is defined at 42 CFR § 435.4 to include a relative related by blood, adoption, or marriage who lives with the child and assumes primary responsibility for the child’s care. Some states have added adults to the definition of caretaker relative for purposes of Section 1931 coverage, such as adding half-blood relatives or a domestic partner of the parent or other caretaker relative. ↩︎
- To satisfy WRRs, adults must show a monthly household income of at least $580, which translates to roughly 32 percentof federal poverty level for a family of two (25% FPL for a family of three, 21% of FPL for a family of 4, etc.). Therefore, in states where the Section 1931 income limit is at or above 33% FPL, parents should be largely protected either because they are in Section 1931 coverage group or because their income is at least $580 per month. ↩︎
- The IFR clarifies that states must use Modified Adjusted Gross Income (MAGI) household income to determine compliance with WRRs for all applicable adults in the family. If two adults in a family have a combined household income of $580 or above, then all adults in the household will be determined compliant with WRRs. MAGI income includes only taxable income sources, plus a few adjustments. MAGI excludes non-taxable income sources, such as supplemental Social Security Income (SSI), child support, TANF and other cash assistance, tax refunds or refundable tax credits, worker’s compensation payments, veteran’s benefits, gifts and loans, and proceeds from life insurance or inheritances. ↩︎