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Effective: December 1, 2006 |
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21.15ar1 - MinnesotaCare Excess Income (Archive) |
Archived: July 1, 2008 |
When increased income is reported, at renewal or when adding a household member, evaluate households with gross annual income above the MCRE income standard for their household size.
MCHA is a plan which provides health insurance to people who are otherwise uninsurable due to health conditions or other circumstances specified in statute. To qualify for MCHA, people must provide a denial of private coverage. MCHA coverage often has high premiums and may require deductibles, co-insurance, or co-payments.
Do not close coverage for excess income for:
l Pregnant women with incomes over 275% FPG. They remain eligible through the end of the postpartum period .
l Auto newborns.
Close coverage for the following:
l Adults without children whose income exceeds 200% FPG, including adults who lose parental status between renewals. Close for the end of the month following the month in which excess income is determined.
l Non-pregnant parents and caretakers whose gross annual income exceeds 275% FPG but is less than $50,000. Close for the end of the month following the month in which excess income is determined.
Note: Regardless of the renewal date, coverage should not be cancelled for individuals exceeding the 275% FPG standard but not the $50,000 limit, until the month following the month that the income determination is made.
l Non-pregnant parents and caretakers whose gross annual income exceeds $50,000, regardless of whether income is over 275% FPG. Close coverage for the first available month for which timely notice can be given for.
Note: Additional 10-day notice is not required if income reported at renewal exceeds $50,000 limit and the household was sent a Notice of Cancellation for Failure to Renew or Incomplete Renewal.
The renewal form advises enrollees that their coverage may stop or change based on information provided on the renewal form; that changes may be made without 10-day notice, and that DHS will send a notice no later than the effective date of the change.
Take the following steps for all children under age 21 who report income over 275% FPG to determine if the child meets the MCHA exemption:
1. Determine 10% of their gross annual income.
2. Determine the MCHA premium amount for the household using the Annual MCHA Premiums Table.
Note: Include all household members in the household size whether or not they are enrolled in MinnesotaCare.
3. Determine if 10% of the gross annual income (Step 1) is less than the premium amount for a policy with a $500 deductible available through MCHA (Step 2).
4. If the results from Step 3 are:
n Equal to or greater than the annual MCHA premium, close coverage for the end of the month following the month in which excess income is determined.
n Less than the annual MCHA premium, eligibility continues. This is known as the MCHA exemption.
Example:
A household consists of John, age 35, Abby, age 31, and their child, age 12. On March 15, their renewal is processed and the household's gross annual income is determined to exceed the MinnesotaCare income standard of 275% FPG for a family of three. Gross income remains under $50,000.
Action:
Close coverage for the parents effective April 30 (the month following the month they are determined to have excess income).
To determine continued eligibility for the child:
1. Multiply the household's gross annual income by 10%.
2. Calculate the household's annual MCHA premium by adding together the following amounts from Annual MCHA Premiums Table:
m For Abby, age 31, add the amount for an adult age 30 to 34.
m For John, age 35, add the amount for an adult age 35 to 39.
m For the child, add the amount for a child under age 15.
3. Compare the Step 1 figure to the Step 2 figure.
m If 10% of the annual income is greater than the MCHA premium, close coverage for the child effective April 30.
m If 10% of the annual income is less than the MCHA premium, eligibility continues for the child.
Example:
Aman, his wife and their three daughters receive MCRE. At the time of their annual renewal, processed on March 15, gross income exceeds $50,000. It also exceeds the 275% FPG standard for the household size.
Action:
Aman and his wife are no longer eligible for MCRE. Close their coverage effective March 31 (the first available month).
The children may remain eligible if 10% of their gross income is less than the premium amount for an MCHA policy with a $500 deductible. If 10% of gross income is equal to or greater than the applicable MCHA premium, close the children's coverage effective April 30.
For children who have the MCHA exemption:
l If income later increases so that 10% of the gross annual income is equal to or greater than the MCHA premium, the children lose the MCHA exemption.
n Send the MinnesotaCare Over Income Letter (DHS-3407) advising the household that their MCRE will end in 12 months.
n Start the12-month extension period effective the first of the next month.
Example:
Sue (age 12) is enrolled in MCRE. At her last renewal, her income was over 275% FPG, but she met the MCHA exemption. At this year’s renewal, processed on March 15, the gross annual income has increased so that 10% of the annual income now exceeds the household's MCHA premium.
Action:
Send the DHS-3407 notifying the household that Sue’s coverage will end in 12 months. The 12-month extension period begins April 1.
l If income later decreases or a new household member is added before the next renewal:
n Determine if the new income amount remains equal to or greater than the appropriate standard. If the new income amount is now under the standard, send the MinnesotaCare Income Change Evaluation Letter (DHS-3408) to notify the household that they will not be closed.
n If income remains equal to or greater than the income standard, determine if the MCHA exemption is met.
m If it is, send the DHS-3407 to let the household know that they will continue to receive coverage.
m If it is not, send the DHS-3407 to let the household know that they will be closed in 12 months.
Use the following policy for children receiving the 12-month extension who later report a change such as decreased income or request to add a new household member before the next renewal.
Note: Adults can be added to the household when a case is over income, but not to MCRE coverage, unless the new household member causes income to decrease below the applicable standard.
Coverage for new members added to the household will end at the same time as the rest of the household.
l Re-determine the household annual gross income. If the income is:
n Under the income standard, end the 12-month over income period. Send the DHS-3408.
n Over the income standard and the MCHA exemption is met, end the 12-month extension period. The child is eligible for the MCHA extension. Send the DHS-3408.
n Equal to or greater than the appropriate standard and the MCHA exemption is not met, the household remains in the original 12-month over income period.
l Reevaluate the household's income:
n At the next renewal.
n When a change in income is reported.
n At the end of the 12-month extension period.
m If the household reports that employment and income have not changed, document in case notes and close MCRE with 10-day notice.
m If the household reports a change in employment or income, re-determine income eligibility.
Note: Verification of the new income must be requested and returned in 30 days.
If the household fails to submit verification close MCRE for excess income giving 10-day notice.
q If the income continues to be equal to or greater than the applicable standard and the MCHA exemption is not met give the household 10-day notice and close MCRE at the end of the month. Mail a DHS-3408 with the results of the evaluation and a Certificate of Creditable Coverage (COCC) to the household.
q If the income is less than the applicable standard or the MCHA exemption is met, send the DHS-3408 to notify the household that they will not be closed.