Health, Children's Health Insurance Program

Rule R382-10

Eligibility

Notice of Proposed Rule

(Amendment)

DAR File No.: 34561
Filed: 04/07/2011 04:31:38 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to implement a provision from H.B. 260 of the 2010 General Session of the Legislature, which allows households to use adjusted gross income as reported to the Utah State Tax Commission to become eligible for benefits in the Children's Health Insurance Program (CHIP). (DAR NOTE: H.B. 260 (2010) is found at Chapter 67, Laws of Utah 2010, and was effective 05/11/2010.)

Summary of the rule or change:

This amendment implements a provision from H.B. 260 of the 2010 General Session of the Legislature, which allows households to use adjusted gross income as reported to the Utah State Tax Commission to become eligible for CHIP benefits. It also clarifies other income provisions to become CHIP eligible and implements two federally required exclusions from income.

State statutory or constitutional authorization for this rule:

• Title 26, Chapter 40

Anticipated cost or savings to:

the state budget:

There is no anticipated impact to the state budget. One-time implementation costs of $30,000 will be paid by a Robert Wood Johnson Foundation grant.

local governments:

There is no impact to local governments because they do not fund or provide CHIP services and do not determine CHIP eligibility.

small businesses:

There is no anticipated impact to small businesses. One-time implementation costs of $30,000 will be paid by a Robert Wood Johnson Foundation grant. Further, this change does not impose any additional fees or costs on small businesses.

persons other than small businesses, businesses, or local governmental entities:

There is no anticipated cost to other persons or entities. Those CHIP clients who opt to verify their income through the Tax Commission will experience a minor reduction in effort because they will not need to submit paper documentation of income.

Compliance costs for affected persons:

There is no anticipated cost to a single person or entity. A CHIP client who opts to verify income through the Tax Commission will experience a minor reduction in effort because it is unnecessary to submit paper documentation of income.

Comments by the department head on the fiscal impact the rule may have on businesses:

Accuracy and simplification of income verification through Tax Commission records has the potential to be a cost savings to all parties.

W. David Patton, PhD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Children's Health Insurance Program
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

• Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/31/2011

This rule may become effective on:

06/07/2011

Authorized by:

W. David Patton, Executive Director

R382. Health, Children's Health Insurance Program.

R382-10. Eligibility.

R382-10-13. Income Provisions.

(1) To be eligible to enroll in the Children's Health Insurance Program, gross household income must be equal to or less than 200% of the federal non-farm poverty guideline for a household of equal size.

(a) All gross income, earned and unearned, received by the parents and stepparents of any child who is included in the household size, [is] count s[ed] toward household income, unless this section specifically describes a different treatment of the income.

(b) When a CHIP household is scheduled for a renewal of eligibility, the household may give consent to the eligibility agency to access the household's most recent adjusted gross income from the Utah State Tax Commission. Only CHIP eligible households with no other assistance programs open can elect this option. When the household elects this option, the eligibility agency shall use the adjusted gross income from the most recent tax record as the countable income of the household.

([1]2) The Department [does]may not count as income any payments from sources that federal law specifically prohibit s from being counted as income to determine eligibility for federally-funded programs.

([2]3) The Department may count [Any]any income in a trust that is available to, or is received by [a]any of the following household members: [household member]

(a) a parent or spouse of a parent;

(b) an eligible child who is the head of the household;

(c) a spouse of an eligible child if the spouse is 19 years of age or older; or

(d) a spouse who is under 19 years old and is the head of the household.[, is countable income.]

([3]4) Payments received from the Family Employment Program, General Assistance, or refugee cash assistance[ or adoption support services as authorized under Title 35A, Chapter 3] is countable income.

([4]5) Rental income is countable income. The following expenses can be deducted:

(a) taxes and attorney fees needed to make the income available;

(b) upkeep and repair costs necessary to maintain the current value of the property;

(c) utility costs only if they are paid by the owner; and

(d) interest only on a loan or mortgage secured by the rental property.

([5]6) Deposits to joint checking or savings accounts are countable income, even if the deposits are made by a non-household member. An applicant or enrollee who disputes household ownership of deposits to joint checking or savings accounts shall be given an opportunity to prove that the deposits do not represent income to the household. Funds that are successfully disputed are not countable income.

([6]7) Cash contributions made by non-household members are counted as income unless the parties have a signed written agreement for repayment of the funds.

([7]8) The interest earned from payments made under a sales contract or a loan agreement is countable income to the extent that these payments will continue to be received during the eligibility period.

([8]9) In-kind income, which is goods or services provided to the individual from a non-household member and which is not in the form of cash, for which the individual performed a service or is provided as part of the individual's wages is counted as income. In-kind income for which the individual did not perform a service or did not work to receive is not counted as income.

([9]10) SSI and State Supplemental Payments are countable income.

([10]11) Death benefits are not countable income to the extent that the funds are spent on the deceased person's burial or last illness.

([11]12) A bona fide loan that an individual must repay and that the individual has contracted in good faith without fraud or deceit, and genuinely endorsed in writing for repayment is not countable income.

([12]13) Child Care Assistance under Title XX is not countable income.

([13]14) Reimbursements of Medicare premiums received by an individual from Social Security Administration or the Department are not countable income.

([14]15) Needs-based Veteran's pensions are [not] counted as income. [If the income is not needs-based,] count only the portion of a Veteran's Administration benefit [check] to which the individual is legally entitled[ is countable income].

([15]16) The Department may not count the [I]income of a child under the age of 19[is excluded] if the child is not the head of a household.

(17) The Department shall count the income of the spouse of an eligible child if:

(a) the spouse is 19 years of age or older; or

(b) the spouse is under 19 years old and is the head of the household.

([16]18) Educational income such as educational loans, grants, scholarships, and work-study programs are not countable income. The individual must verify enrollment in an educational program.

([17]19) Reimbursements for expenses incurred by an individual are not countable income.

([18]20) Any payments made to an individual because of his status as a victim of Nazi persecution as defined in Pub. L. No. 103[-]286 are not countable income, including payments made by the Federal Republic of Germany, Austrian Social Insurance payments, and Netherlands WUV payments.

([19]21) Victim's Compensation payments as defined in Pub. L. No. 101[-]508 are not countable income.

([20]22) Disaster relief funds received if a catastrophe has been declared a major disaster by the President of the United States as defined in Pub. L. No. 103[-] 286 are not countable income.

([21]23) Income of an alien's sponsor or the sponsor's spouse is not countable income.

([22]24) If the household expects to receive less than $500 per year in taxable interest and dividend income, then they are not countable income.

([23]25) Income paid by the U.S. Census Bureau to a temporary census taker to prepare for and conduct the census is not countable income.

([24]26) The additional $25 a week payment to unemployment insurance recipients provided under Section 2002 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111[-] 5, 123 Stat. 115, which an individual may receive from March 2009 through June 2010 is not countable income.

([25]27) The one-time economic recovery payments received by individuals receiving social security, supplemental security income, railroad retirement, or veteran's benefits under the provisions of Section 2201 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111[-] 5, 123 Stat. 115, and refunds received under the provisions of Section 2202 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111[-]5, 123 Stat. 115, for certain government retirees are not countable income.

([26]28) The Consolidated Omnibus Reconciliation Act (COBRA) premium subsidy provided under Section 3001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No.111-5, 123 Stat. 115, is not countable income.

([27]29) The making work pay credit provided under Section 1001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111[-]5, 123 Stat. 115, is not countable income.

(30) The eligibility agency may not count as income any payments that an individual receives pursuant to the Individual Indian Money Account Litigation Settlement under the Claims Resolution Act of 2010, Pub. L. No. 111 291, 124 Stat. 3064.

(31) The eligibility agency may not count as income any federal tax refund and refundable credit that an individual receives between January 1, 2010, and December 31, 2012, pursuant to the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010, Pub. L. No. 111 312, 124, Stat 3296.

 

R382-10-14. Budgeting.

[ The following section describes methods that the Department will use to determine the household's countable monthly or annual income.

] (1) The Department shall count[T]the gross income for parents and stepparents of any child included in the household size [is counted] to determine a child's eligibility, unless the income is excluded under this rule. The Department may only deduct [Only]required expenses from the gross income[that are required] to make an income available to the individual[ are deducted from the gross income]. No other deductions are allowed.

(2) The Department shall determine monthly income by taking into account the months of pay where an individual receives a fifth paycheck when paid weekly, or a third paycheck when paid every other week. The Department shall multiply the weekly amount by 4.3 to obtain a monthly amount. The Department shall multiply income paid bi-weekly by 2.15 to obtain a monthly amount.

(3) The Department shall determine a child's eligibility and cost-sharing requirements prospectively for the upcoming eligibility period at the time of application and at each renewal for continuing eligibility. The Department shall determine prospective eligibility by using the best estimate of the household's average monthly income that is expected to be received or made available to the household during the upcoming eligibility period. The Department shall prorate income that is received less often than monthly over the eligibility period to determine an average monthly income. The Department may request prior years' tax returns as well as current income information to determine a household's income.

(4) A household with only CHIP coverage may elect upon renewal to have the Department use the most recent adjusted gross income (AGI) from the Utah State Tax Commission.

(a) The eligibility agency shall then use AGI instead of requesting verification of current income. If the use of AGI should result in an adverse change, the household may provide verification of current income.

([4]5) Methods of determining the best estimate are income averaging, income anticipating, and income annualizing. The Department may use a combination of methods to obtain the most accurate best estimate. The best estimate may be a monthly amount that is expected to be received each month of the eligibility period, or an annual amount that is prorated over the eligibility period. Different methods may be used for different types of income received in the same household.

([5]6) The Department shall determine farm and self-employment income by using the individual's recent tax return forms. If tax returns are not available, or are not reflective of the individual's current farm or self-employment income, the Department may request income information from a recent time period during which the individual had farm or self-employment income. The Department shall deduct[s] 40% of the gross income as a deduction for business expenses to determine the countable income of the individual. For individuals who have business expenses greater than 40%, the Department may exclude more than 40% if the individual can demonstrate that the actual expenses are greater than 40%. The Department shall deduct[s] the same expenses from gross income that the Internal Revenue Service allows as self-employment expenses.

([6]7) The Department may annualize income for any household and in particular for households that have self-employment income, receive income sporadically under contract or commission agreements, or receive income at irregular intervals throughout the year.

 

KEY: children's health benefits

Date of Enactment or Last Substantive Amendment: [October 22, 2009]2011

Notice of Continuation: May 19, 2008

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-40