affordable care act household composition

Affordable Care ActHousehold Composition

Session 4

Presented by Tokie Moriel & John Tvedt

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

Session Objectives

• Present a high level overview of changes to household composition under ACA.

• Demonstrate how hh comp and income determinations are made.

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How MAGI Rules Affect Household Composition

• Unless otherwise exempted or included, the tax household will contain:

– The primary tax payer, and

– Married spouses if filing jointly

– All tax dependents, including children under age 19 of the primary tax payer.

– Stepparents will be treated like parents (i.e., stepparents will be counted in the family size and their income will be counted in the same way a parent’s income is counted)

• Individuals cannot choose who is to be included or excluded from their household such as excluding a child to make a parent eligible.


MAGI in Medicaid and CHIP: Household Composition

• For the vast majority of cases, Medicaid households will use the tax household which is determined by the principles of tax dependency.

• 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 is only counted if child is required to file a tax return


MAGI in Medicaid and CHIP: Differences in HH Composition

• Extended family

• Children of non-custodial parents

• Children of unmarried parents

• Joint Custody


Rules for Non-Filers

• Mirror rules for tax filers to maximum extent

• Spouses, parents, stepparents and children living together included in same household.

• “Child” defined as under age 19.

• Rules for non-filers also apply to tax dependents excepted from general rule to use tax definition of household.


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.


MAC Infant

• Deemed newborns are automatically eligible for Medicaid and MAGI rules apply to them.

• Deemed newborns would be counted as part of the HH size/composition.

• Eligibility for deemed newborns will remain for 12-months unless a change affects eligibility, for example, moving out of state.



MAGI Household Composition Scenarios

Single Parent and Child

• Pat is the mother of Eli, age 6.

• Pat works and files taxes. She claims Eli as a dependent.

DHS/DFO/IMTA/2013-07-15 10

Medicaid Eligibility

For

ApplyTax Rules?

Tax HHSize

Medicaid HH Size

Pat Eli

Pat Y 2 2

Eli Y 2 2

Single Parent and Child

• Pat works and earn 2,500/month (30,000/year)

• Pat files taxes and claims Eli as a dependent.

DHS/DFO/IMTA/2013-07-15 11

Whose Income Is Counted

For

Medicaid HH Size

Pat EliTotal

Income Used

Pat 2 2,500Eli 2 2,500

Married with Common Child Filing Jointly

• Art and Bea are married and have a common child, Cam.

• Art and Bea both work.

• Art and Bea file joint taxes and claim Cam as a dependent.

DHS/DFO/IMTA/2013-07-15 12


For

ApplyTax

Rules?

Tax HHSize

Medicaid HH Size

Art Bea Cam

Art Y 3 3

Bea Y 3 3

Cam Y 3 3

Married with Common Child Filing Jointly

• Art works and earns 2,500/month (30,000/year)

• Bea works and earns 2,000/month (24,000/year)

• Cam has no income

DHS/DFO/IMTA/2013-07-15 13


For

Medicaid HH Size

Art Bea CamTotal

Income Used

Art 3 4,500

Bea 3 4,500Cam 3 4,500

Unmarried Parents with Common Child Filing Separately

• Lee and Nia are unmarried and have a common child, Bev. Nia is pregnant and Lee is the father of the unborn child

• Lee and Nia file taxes separately

• Lee claims Bev as a dependent

DHS/DFO/IMTA/2013-07-15 14


For

ApplyTax

Rules?

Tax HHSize

Medicaid HH Size

Lee Nia Bev

Lee Y 2 2

Nia Y 1 2

Bev N 2 4

Unmarried Parents with Common Child Filing Separately

• Nia currently earns $1,500/month (18,000/year)

• Lee currently earns 2,500/month (30,000/year)

• Bev has no income

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

Whose Income Is

Counted for

Medicaid HH Size

Lee Nia BevTotal

Income Used

Lee 2 2,500

Nia 2 1,500

Bev 4 4,000

Married Parents with No Common Child Filing Jointly

• Jim and Sue are married. They file jointly and Sue and Eve are claimed as dependents.

• Sue is the mother of Eve.

• Eve is an 18 year old student living in another State attending university.

DHS/DFO/IMTA/2013-07-15 16


For

ApplyTax

Rules?

TaxHH Size

MedicaidHH Size

Jim Sue Eve

Jim Y 3 3

Sue Y 3 3

Eve Y 3 3


• Jim works and earns 2,800/month (33,600/year) and Sue has no income

• Eve works part-time and earns 400/month (4,800/year)

DHS/DFO/IMTA/2013-07-15 17

Whose Income Is

Counted For

MedicaidHH Size

Jim Sue EveTotal

Income Used

Jim 3 2,800

Sue 3 2,800

Eve 3 2,800


• Jim works and earns 2,800/month (33,600/year)

• Sue has no income

• Eve works part-time and earns 1,500/month (18,000/year)

DHS/DFO/IMTA/2013-07-15 18

Whose Income Is

Counted For

MedicaidHH Size

Jim Sue EveTotal

Income Used

Jim 3 4,300

Sue 3 4,300

Eve 3 4,300

Unmarried Parents with Common Child Filing Taxes Separately

• Jim and Sue are the unmarried parents of Eve (5).

• Jim and Sue file taxes separately.

• Jim claims Eve as a dependent.

DHS/DFO/IMTA/2013-07-15 19


For

ApplyTax

Rules?

Tax HHSize

MedicaidHH Size

Jim Sue Eve

Jim Y 2 2

Sue Y 1 1

Eve N 2 3

Unmarried Parents with Common Child Filing Taxes Separately


• Sue works and earns 3,000/month (36,000/year)

• Eve has no income

DHS/DFO/IMTA/2013-07-15 20

Whose Income Is

Counted For

MedicaidHH Size

Jim Sue EveTotal

Income Used

Jim 2 2,800

Sue 1 3,000

Eve 3 5,800

Unrelated Tax Dependent Living in the Household

• Jim is the unmarried parent of Eve.

• Sue is an unrelated individual living in the household.

• Jim claims Eve and Sue as tax dependents.

DHS/DFO/IMTA/2013-07-15 21


For

ApplyTax

Rules?

Tax HHSize

MedicaidHH Size

Jim Sue Eve

Jim Y 3 3

Sue N 3 1

Eve Y 3 3

Unrelated Tax Dependent Living in the Household


• Sue works and earns 300/month (3,600/year)

DHS/DFO/IMTA/2013-07-15 22

Whose Income Is

Counted For

MedicaidHH Size

Jim Sue EveTotal

Income Used

Jim 3 3,100

Sue 1 300

Eve 3 3,100

Non-Custodial Parent Claiming Child as Tax Dependent

• Jim and Sue are the unmarried parents of Eve

• Sue is the non-custodial parent living in her own home

• Jim and Sue file taxes separately. Sue claims Eve as a tax dependent, but she lives with her dad, Jim

• Jim requests Medicaid for himself and Eve

DHS/DFO/IMTA/2013-07-15 23


For

ApplyTax

Rules?

Tax HHSize

MedicaidHH Size

Jim Eve

Jim Y 1 1

Eve N 2 2

Non-Custodial Parent Claiming Child as Tax Dependent


• Jim receives child support of 1,200/month for Eve from Sue

DHS/DFO/IMTA/2013-07-15 24

Whose Income Is Counted For

MedicaidHH Size

Jim EveTotal

Income Used

Jim 1 2,800

Eve 2 2,800

Three Generation Household - 1

• Sue is the mother of Eve, 18, and grandmother of Tim, 2.

• Sue files taxes and claims Eve and Tim as dependents.

DHS/DFO/IMTA/2013-07-15 25


For

ApplyTax Rules?

Tax HH Size

Medicaid HH Size

Sue Eve Tim

Sue Y 3 3

Eve Y 3 3

Tim N 3 2


• Sue works and earns 2,000/month (24,000 annual)

• Eve works and earns 1,000/month (12,000 annual)

DHS/DFO/IMTA/2013-07-15 26


For

Medicaid HH Size

Sue Eve TimTotal

Income Used

Sue 3 2,000

Eve 3 2,000

Tim 2 0


• Sue is the mother of Eve and grandmother of Tim.

• Eve and Pat are the unmarried parents of Tim.

• Sue, Eve and Pat file taxes separately.

• Pat claims Tim as a tax dependent.

DHS/DFO/IMTA/2013-07-15 27


For

ApplyTax

Rules?

Tax HHSize

Medicaid HH Size

Sue Eve Pat Tim

Sue Y 1 1

Eve Y 1 1

Pat Y 2 2

Tim N 2 3

Three Generation Household -2


• Eve works and earns 2,000/month (24,000/year)

• Pat works and earns 2,500/month (30,000/year)

• Tim has no income

DHS/DFO/IMTA/2013-07-15 28


For

Medicaid HH Size

Sue Eve Pat TimTotal

Income Used

Sue 1 3,000Eve 1 2,000Pat 2 2,500Tim 3 4,500

Unmarried Parents with Common and Not Common Children

• Jim and Sue are unmarried and have a common child, Eve. Jim is also the father of Joe.

• Jim and Sue file taxes separately.

• Jim claims both Eve and Joe as his dependents.

DHS/DFO/IMTA/2013-07-15 29


For

ApplyTax

Rules?

Tax HHSize

Medicaid HH Size

Jim Sue Eve Joe

Jim Y 3 3 Sue Y 1 1 Eve N 3 4 Joe Y 3 3

Unmarried Parents with Common and Not Common Children



• Joe and Eve have no income

DHS/DFO/IMTA/2013-07-15 30

Whose Income Is

Counted For

Medicaid HH Size

Jim Sue Eve JoeTotal

Income Used

Jim 3 3,000Sue 1 2,500Eve 4 5,500Joe 3 3,000

Married with Common Child Possible Non-MAGI

• Stu and Vi are married and have a common child, Ian (6).

• Stu and Vi file joint taxes and claim Ian as a dependent.

• Vi applied online indicating Stu may be disabled, but no one receives Medicare.

DHS/DFO/IMTA/2013-07-15 31


For

ApplyTax

Rules?

Tax HHSize

Medicaid HH Size

Stu Vi Ian

Stu Y 3 3

Vi Y 3 3

Ian Y 3 3

Processing Eligibility on Non-MAGI Basis

• Vi does not indicate on the application that either Vi or Ian may be disabled, that either has high medical expenses or that either needs long term care services. She does indicate that Stu may be disabled. Based on this information, the appropriate actions are:

– The agency does not need to evaluate eligibility based on a non-MAGI basis for Vi or Ian, but appropriate information and notice will be provided so that they can request such determination.

– The agency must evaluate Stu for eligibility for any applicable non-MAGI coverage groups.

DHS/DFO/IMTA/2013-07-15 32

Processing Eligibility on Non-MAGI Basis

– The agency will collect additional information from Stu needed to determine eligibility based on disability.

– It will apply the SSI-based methods to determine Stu’s income and resources, including any optional disregards, to determine Stu’s income under non-MAGI coverage groups.

– Determination of eligibility for Stu based on disability does not affect the Medicaid MAGI households used for Vi or Ian.

– Vi and Stu will be evaluated for eligibility under MAGI coverage groups. If not eligible, refer to the Marketplace and evaluated for CSR/APTCs and enrollment even as Stu’s determination is being considered.

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Conclusion

• Additional ACA webinars

• Session review – Income Maintenance Workers ONLY

DHS/DFO/IMTA/2013-07-15 34

affordable care act household composition

Documents

tax household

tax return dhsdfoimta2013

tax definition of household

tax filers

household stepparents

tax dependency relationships

principles of tax dependency

inclusion of tax dependent