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Household Composition. What’s Changing For Medicaid?. Classic Medicaid –The financial eligibility rules for these programs are not subject to the new MAGI methodology rules .
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What’s Changing For Medicaid? • Classic Medicaid –The financial eligibility rules for these programs are not subject to the new MAGI methodology rules. • MAGI-based Medicaid – Refers to individuals who are relatable to Medicaid/CHIP that includes family, Apple Health for Kids, pregnant women, or the newly eligible adults between the age of 19 up to 65. • Does not relate to classic Medicaid groups. HealthPlanFinder will get you to the right place • Washington Apple Health (WAH) – the new brand name for all Medicaid programs.
Household Calculation is also applied to Subsidies • Calculated differently than Medicaid
Are you confused/Anxious? • It will be ok! • What you need to know • Definitions of filing status • Why family members may have differing eligibility • Importance of telling the Exchange of any change in household or income as it occurs • Very general understanding of household calculations.
What you don’t need to know • How the Exchange calculates every family composition situation • Tax law • Answers to clients questions about how they should file taxes
Key Takeaways • Households for premium credits and Medicaid will not necessarily match people’s actual living situation • Household rules could split families into different coverage programs (subsidies or Medicaid)
Why • Medicaid and premium subsidies are calculated by income and family size. • Medicaid and premium subsidies define who is in a family differently.
Why Household Size and Composition Matter • Necessary to convert income to a federal poverty level (FPL) standard • Who is in the household determines whose income counts in determining eligibility
New Medicaid Household Composition • An assistance unit is comprised of those household members who must be looked at together due to income, age or tax-filing status in order to determine the household size. • Household size determines the income standard we use to determine an individual household member’s eligibility. • MAGI assistance rules can be found in Washington Administrative Code 182-506-0010 effective October 1, 2013. • Although income of other household members may be used in determining the household’s income eligibility and size for an assistance unit, each individual in the family unit will have their own Medicaid determination.
Key Components There are several key components required to create assistance units such as: • A individual’s tax filing status; • How household members are related to each other; • Their age; and • If a woman in the household is pregnant* *If there is a pregnant woman in the household, the assistance unit (or units) she is included in, is increased by one count for each unborn child.
Households for Premium Tax Credits Household = individuals for whom a taxpayer claims a deduction for a personal exemption Household for Medicaid Household = Individuals living under one roof Don’t worry – the HealthPlanFinder will sort this out!
Terms you need to know Head of Household - You can claim the Head of Household filing status on your tax return if you are unmarried at the end of the year, have cared for a closely-related dependent for over half the year, and paid more than half the cost of maintaining a home for yourself and your dependent or dependents Dependent - see next slide Filer - files taxes Non-filer - does not file taxes Married filing single Married filing jointly The term you chose will be the one your client filed on his or her taxes
Definitions • Tax Filer: A tax filer is an individual who files taxes and is not claimed as a tax dependent by another tax filer. • Tax Dependent: A tax dependent is an Individual who is claimed as tax a dependent by another person who is a tax filer. • Non-Filer/Non-tax dependent: A non-filer/non-tax dependent is an individual who does not file a tax return and who is also not claimed as a tax dependent by another tax payer.
Even though Washington Healthplanfinder will establish the assistance units, it will be helpful for individuals who assist families in the application process to understand the assistance unit rules so that they can: • Confirm that the system results are correct and no error was made in the data entry; and • Explain why some household members received different results
On the “Primary Applicant’s Taxes” screen in the Washington Healthplanfinder, the following questions are asked: • The tax-filing status of the primary applicant; and • How they filed for the past tax year; how they plan to file in the current tax year; and how they plan to file in the next year. The information gathered on this screen will establish assistance units for determining eligibility.
WA Healthplanfinder will collect the following information about: • Other household members; • Their current/future tax filing status; • Relationship to the primary applicant; • If they live in the same home; • Demographics, age, SSN, race, etc.
There are 3 Rules that determine who must be • included in an assistance unit. • Rule #1 • The individual (tax filer) must expect to file taxes for: • Themselves; • Their spouse living with them; • All individuals expected to be claimed as a tax dependent regardless of age
Rule #2 • The individual answered NO to Rule #1 – they do not plan to file taxes (tax dependent): • Does the individual expect to be claimed as a tax dependent by someone else? • If no: They are a non-filer and must go onto Rule #3 • If yes: The basic rule is that their household is exactly the same as the tax filer that claims them, but there are some exceptions.
Rule #2 Exceptions • A child under age 19 living with parents who do not file a joint tax return • A child under age 19 who expects to be claimed by a non-custodial parent • A child under the age of 19 who lives with both parents and the parents are not married to each other • The individual expects to be claimed as a tax dependent by someone other than a spouse or parent
Rule #2 Exceptions If one of the exceptions applies to the tax dependent, then the individual is treated as a non-filer and the assistance unit is determined according to Rule #3
Married Parents with a Common Child • Bob and Suzie are married and file taxes jointly with their child in common, Tommy • Bob and Suzie claim Tommy as their tax dependent
Single Adult Claimed as a Tax Dependent • Jon is an unmarried 20 year old residing in his parent’s home • Parents claim Jon as a tax dependent
Married Parents with a Child not in Common • Steve and Donna are married and file taxes jointly • Donna’s child, Jonny (10), from a previous relationship, lives with them • Steve and Donna claim Jonny, as their tax dependent
Rule # 3 • If the individual answered no to rule #1, no to rule #2 or, yes to rule #2 but an exception applies, the individual is considered a NON-FILER. • A non-filer’s assistance unit includes: • The individual • Their spouse • Their children under age 19 • If the applicant is under age 19, include their parents and siblings under age 19
Single Mom with Children • Ann is a single parent and is not filing taxes • Ann has two children, Drew (12) and Annabelle (7) • Drew’s father claims him as his tax dependent but Drew is currently living with his mother, Ann
Let’s stop here and discuss how to implement this with a client 1. How might you explain the results to a family when the child is eligible for Medicaid (CHIP), the mom is eligible for a subsidy, and the dad is not eligible for a subsidy? 2. How might you answer questions such as “should I claim my child next year on my taxes or have his dad do so?” or “ should I file separately from my spouse instead of together?”
Questions End here.
Exception Examples Examples of how each of the four exceptions apply when determining who to include in the assistance unit
Exception Examples • Exception 1: • “A child under the age of 19 living with parents that do not file a joint tax return”
Exception 1: Married Parents with a Child in Common Filing Taxes Separately • Brad and Julie are married with child in common, Jesse (1) • Brad and Julie file taxes separately • Brad claims child, Jesse, as his tax dependent
Exception Examples Exception 2 “A child under the age of 19 who expects to be claimed by a non-custodial parent”
Exception 2: Non-Custodial Parent Claims Child as Tax Dependent • Ryan and Kari are married with a child in common, Austin, and Kari’s child, Monica, from a previous relationship • Ryan and Kari file taxes jointly and claim their child, Austin, as their tax dependent • Monica’s father (non-custodial parent) claims her as his tax dependent
Exception 2: Child Claimed as a Tax Dependent of a Non-Custodial Parent • Kevin files taxes and lives with his daughter, Jane (18) • Jane is claimed as a tax dependent by her mother, Ann, who does not live in Kevin and Jane’s home • Kevin applies for medical for himself and child Jane
Exception Examples Exception 3 “A child under the age of 19 who lives with both parents and the parents are not married to each other”
Exception 3: Unmarried Parents with a Child in common • Chris and Carrie are unmarried with a common child, Bertha (3) • Chris and Carrie file taxes separately • Chris claims child, Bertha, as his tax dependent
