Employees’ Manual Title 8, Chapter B Revised October 17, 2025 Medicaid Application Processing

Title 8: Medicaid Table of Contents Chapter B: Application Processing Revised October 17, 2025 Page 1 Page Iowa Department of Health and Human Services Employees’ Manual Overview .................................................................................................................................... 1 Filing a Medicaid Application .................................................................................................. 1 Which Application Form to Use .......................................................................................... 2 Application Referrals from and to the Federally Facilitated Marketplace (FFM) ................. 2 Who Must Sign the Application ........................................................................................... 3 Where the Application Must Be Filed .................................................................................. 4 Date of Application ............................................................................................................. 4 Withdrawal of Application ................................................................................................... 5 Procedures for SSI Applicants or Potential SSI Eligibles ..................................................... 5 Concurrent Medicaid and Social Security Disability Determinations .................................. 6 Medicare Savings Program Applications ............................................................................ 8 Interviews ................................................................................................................................ 11 Information Provided ........................................................................................................ 12 Voter Registration Procedures ......................................................................................... 14 Verification .............................................................................................................................. 15 Pregnant Women.............................................................................................................. 16 IRS Tax Information .......................................................................................................... 16 Reasonable Opportunity Period (ROP) for Verifying Citizenship or Alien Status .............. 16 Moving and Returned Mail ................................................................................................ 17 Processing Standards ............................................................................................................ 17 Guidelines for All Applications .......................................................................................... 17 Unnecessary Application .................................................................................................. 18 Grace Period Following the Denial of an Application ........................................................ 19 Effective Date of Eligibility ..................................................................................................... 22 Effective Date for SSI Recipients ..................................................................................... 22 Establishing Beginning Months of Eligibility for MEPD ..................................................... 24 Determining Eligibility for the Retroactive Period ............................................................... 26 Verification Requirements ................................................................................................ 28 Retroactive Eligibility for Medically Needy Recipients ...................................................... 29 Retroactive Eligibility for SSI Recipients ........................................................................... 30 Referrals to CSS ..................................................................................................................... 30 Referral Procedures ......................................................................................................... 32 Pregnant Women.............................................................................................................. 32 Representation ....................................................................................................................... 33 Responsible Person ......................................................................................................... 34 Authorized Representative ............................................................................................... 35 Authorization to Represent ............................................................................................... 36

Title 8: Medicaid Page 1 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Overview Revised October 17, 2025

Overview This chapter explains the procedures for processing Medicaid applications. The mechanics of filing and handling applications are covered first, followed by interview and verification procedures. Timelines for processing applications and effective date of eligibility are given in the next sections. The remaining pages of the chapter address eligibility for the retroactive period, referrals to Child Support Services (CSS) and representation. Filing a Medicaid Application Legal reference: 42 CFR 435.403, 435.906, 435.908, Iowa Code Section 249A.3, 441 IAC 76 (Rules in Process) and 86.3(2) All people have the right to apply, without delay, for Medicaid for themselves or on behalf of another. Give an application to anyone who asks for one regardless of the person’s county of residence. If the request is by mail or telephone, send the application in the next outgoing mail. See 8-F, FMAP-Related Coverage Groups- Express-Lane Eligibility for children under age 19 who are eligible without an application under the express-lane eligibility process. An application for SSI benefits is automatically considered an application for Medicaid if SSI is approved. A denied SSI application is not considered a Medicaid application, and the filing date is not protected for Medicaid purposes. See Collecting Eligibility Information from SSI Recipients. When requested, assist the applicant with completing an application. Applicants can authorize other people to represent them during the application process. Other people can also help the applicant during the application process. An application may be filed on behalf of a deceased person. Eligibility is based on whether the person would have been eligible had application been made on or before the date of death and whether there are unpaid medical bills. However, eligibility cannot be established any earlier than three months before the month of application. An application may be filed on behalf of a person temporarily out of the state. This situation usually happens when someone is visiting outside the state and has an accident or sudden illness. Apply all of Iowa’s policies regarding application processing

Title 8: Medicaid Page 2 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Filing a Medicaid Application Revised October 17, 2025 Which Application Form to Use and eligibility. See 8-C, Residency for more information about determining when a client is a resident of Iowa. Which Application Form to Use Legal reference: 42 CFR 435.907, 435.909, 441 IAC 76 (Rules in Process) Determine which of the following application forms to use based on the assistance the applicant is requesting: Application Form Who Should Use the Form Application for Health Coverage and Help Paying Costs, forms 470- 5170 or 470-5170(S)  Medicaid (MAGI-related and non- MAGI-related)  Hawki (Children’s Health Insurance Program or CHIP)  Iowa Health and Wellness Plan (IHAWP)  State Supplementary Assistance  Help paying for health insurance costs  Women who need treatment for breast or cervical cancer. Application for Foster Care and Subsidized Adoption Medicaid, forms 470-5535 or 470-5535(S) A child in foster care or subsidized adoption Application Referrals from and to the Federally Facilitated Marketplace (FFM) Legal reference: 42 CFR 435.1200(d) and (e), Iowa Code Section 249A.4, 441 IAC 76 (Rules in Process) and 76.3 Electronic application referrals that the Federally Facilitated Marketplace (FFM) (also known as healthcare.gov) has screened as potentially Medicaid eligible must be accepted. Medicaid eligibility shall be determined based on the referral without requiring submission of another application. When an applicant or member is determined to be ineligible for Medicaid but may be eligible for assistance at the FFM, the case shall be referred to the FFM for a determination of eligibility for financial assistance in paying for healthcare coverage.

Title 8: Medicaid Page 3 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Filing a Medicaid Application Revised October 17, 2025 Who Must Sign the Application Who Must Sign the Application Legal reference: 42 CFR 435.907 and 435.909, 441 IAC 76 (Rules in Process) and 76.9 To be considered a valid application, an application must have the following:  A legible name,  An address, and  A signature under penalty of perjury. Before eligibility can be approved, the application form must be signed by:  The applicant (including a child living independently), or  An adult in the applicant’s household or family, including: • A spouse, • A parent of an applicant child, including either parent of an unborn child, • A non-parental caretaker of an applicant child, • A tax-filer who claims the applicant as a dependent  A responsible person acting on behalf of a minor applicant or an incompetent, incapacitated, or deceased applicant, such as: • A guardian or conservator, • A friend or relative with knowledge of the applicant’s circumstances, or • A person or organization that has signed form 470-3356, Inability to Find a Responsible Person.  An authorized representative. If an authorized representative signs the application on behalf of the applicant, the signature of the applicant or responsible person must be on the application before eligibility can be approved. See Representation. NOTE: If the applicant is under a guardianship or conservatorship that was established voluntarily, the applicant may sign the application. When a person voluntarily asks the court to appoint a guardian or conservator, the court may do so without making a determination that the person is incompetent. Applications that are filed electronically, whether signed and faxed or scanned and e-mailed, do not have to be signed again.

Title 8: Medicaid Page 4 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Filing a Medicaid Application Revised October 17, 2025 Where the Application Must Be Filed Where the Application Must Be Filed Legal reference: 441 IAC 76 (Rules in Process) and 86.3(3) An application may be filed online at https://hhsservices.iowa.gov/apspssp/ssp.portal or any local HHS office; or any HHS outstation at a disproportionate share hospital, federally qualified health center in Iowa, or other facility in Iowa where outstationing activities are provided (i.e., mental health institute or hospital school). Applications may be submitted in person, by mail, by telephone at 1-855-889-7985, or by email or fax to a local HHS office. An application may also be filed at the office of a qualified entity under the Presumptive Medicaid program, a WIC office, a maternal health clinic, or a well- child clinic. Date of Application Legal reference: 441 IAC 76 (Rules in Process) and 86.3(4) Policy: An application is considered filed on the date when the application containing a legible name, address, and signature of the client or representative is received at a location defined under Where the Application Must Be Filed. For SSI recipients, the date the SSI application was filed with the Social Security Administration, as shown on the SDX, is the date of application for Medicaid. See Effective Date for SSI Recipients and 14-E, SSI State Data Exchange for SDX information. Procedure: An application left at a closed office will be considered received on the first day that is not a weekend or state holiday following the day that office was last open.

County A is a less-than-full-time office and open on Monday and Wednesday. The office was last open Wednesday, April 24. When the office re-opens on the following Monday, staff find several applications that have been left under the door. All applications are date-stamped as being received Thursday, April 25.

Title 8: Medicaid Page 5 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Filing a Medicaid Application Revised October 17, 2025 Date of Application A faxed or electronic application shall be considered as an original application. A faxed or electronic application is considered filed on the date it is received when it comes in during normal business hours. If the application comes in after normal business hours (during the evening, weekend, or holiday), the application is considered received on the first day that is not a weekend or state holiday following the day that office was last open. When a person fills out an incorrect application form, the person must complete the correct form before eligibility can be established. Use the filing date on the incorrect application as the filing date when the correct application is received. Attach the incorrect application to the correct application and file it in the case record. On all applications, use the filing date as the application date. Withdrawal of Application Legal reference: 42 CFR 435.907 and 435.914(b)(1), 441 IAC 76.10(249A) and 86.3(5) Applicants may withdraw the application entirely or for any month covered by the application, if the request is made before the eligibility determination has been made. EXCEPTION: The Medically Needy coverage group requires that concurrent months be included in the certification period. A Medically Needy applicant may withdraw the application for the month in which the application is filed, if the applicant wants to have the certification period begin the following month. The request to withdraw the application may be oral or in writing. Document the withdrawal in the case record. Issue an adequate notice of decision if the entire application is withdrawn. If only a month of the application is withdrawn, and a notice of decision will be issued when the remaining application is processed, a separate notice is not necessary. Procedures for SSI Applicants or Potential SSI Eligibles Legal reference: 441 IAC 76.5(249A) Persons who would be eligible for Supplemental Security Income (SSI) may apply at the Social Security Administration district office for both SSI and Medicaid. Normally it is to a low-income person’s advantage to apply for SSI because of the money payment. However, application for SSI is not a condition of eligibility for Medicaid.

Title 8: Medicaid Page 6 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Procedures for SSI Applicants or Potential… Revised October 17, 2025 Concurrent Medicaid and Social Security… If a person applying for Medicaid at an HHS office has income less than the SSI payment standard for the person’s living arrangement, refer the person to the Social Security Administration district office to apply for SSI benefits:  If the person chooses not to apply with the Social Security Administration, process the application as you would any non-MAGI-related application. See 8-F, Non- MAGI-Related Coverage Groups: People Eligible for SSI Benefits But Not Receiving Them.  If the person has already applied for or intends to apply for SSI or Social Security disability benefits (SSDI) within ten working days of the Medicaid application, see Concurrent Medicaid and Social Security Disability Determinations. If the Social Security Administration has made an SSI eligibility determination, the information is sent to the Department via the SSI State Data Exchange (SDX) system. Information from the SDX is used to process SSI recipients for Medicaid. Chapter 14-E explains the SDX system and how to use and interpret the fields. If the individual is not active on Medicaid, the worker will receive the Notification of SSI Approval in WISE. If the individual is currently active on Medicaid, the worker will receive an alert. The Social Security Administration may presumptively determine an SSI applicant to be disabled. “Presumptive” disability is indicated by code “P” in the disability field on the SDX. If all other Medicaid eligibility criteria are met, the person is eligible for Medicaid for a maximum of six months. See 8-C, Presumptive Disability. When more than 60 days have passed since the person filed for SSI, you can send form 470-0363, Certification of Eligibility of SSI Applicant to determine the status of the person’s SSI eligibility determination. You may also use this procedure before 60 days have passed if the applicant has an urgent need. Form 470-0363 completed by the Social Security Administration indicating that a person is eligible for SSI may be accepted as verification in place of an SDX. Concurrent Medicaid and Social Security Disability Determinations Legal reference: 42 CFR 435.909 and 435.541, 441 IAC 75 (Rules in Process) Policy: When a person has applied concurrently for both Social Security disability benefits and non-MAGI-related Medicaid, the Department is required to await the outcome of the Social Security Administration disability determination.

Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Procedures for SSI Applicants or Potential… Revised October 17, 2025 Concurrent Medicaid and Social Security… If the applicant is eligible only for Medically Needy, see 8-J, SSI-Related Medically Needy. Procedure: If a non-MAGI-related applicant has not been determined to be disabled by the Social Security Administration, take the following actions: 1. Ask the applicant to apply for SSI and Social Security disability (SSDI) benefits from the Social Security Administration. The applicant will either:  State that an application has already been filed, or  Agree to apply for benefits within ten working days of the Medicaid application date. 2. When the applicant has already applied or agrees to apply for SSI and SSDI, complete form 470-2631, Notice of Pending Medicaid Applications, and send it to:  The Social Security Administration, and  Disability Determination Services (DDS). DDS completes the status of the disability determination on Section II of the form and returns the form to the IM worker within 15 calendar days. 3. If DDS does not have a referral from the Social Security Administration, follow up on the DDS response by contacting the applicant to verify that the benefit application has been filed with the Social Security Administration. 4. If DDS has a pending disability determination for this person:  Make a note in the narrative, and  Set a reminder to check completed disability determination on the Data Sources in WISE 5. If DDS has already completed the disability determination for Social Security, check the Data Sources in WISE  If the SDX shows SSI was approved, then approve Medicaid if all other eligibility requirements are met.  If the SDX shows SSI was denied due to disability, deny Medicaid as “not disabled.” 6. If the SSI was denied due to other eligibility requirements, such as income or resources, contact the Social Security Administration to see if an eligibility decision for SSDI will be made within 30 days.  If so, wait for the Social Security Administration decision on SSDI.

Title 8: Medicaid Page 8 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Procedures for SSI Applicants or Potential… Revised October 17, 2025 Concurrent Medicaid and Social Security…  If not, then get a copy of the disability determination from the Social Security Administration and get the income and resource verification from the applicant. Complete the application processing. 7. When a final Social Security disability determination has been made, contact the Social Security Administration to see if the full eligibility determination will be made within ten days.  If so, wait for the Social Security Administration decision.  If not, get a copy of the Social Security Administration disability decision and determine Medicaid eligibility. Medicare Savings Program Applications Legal reference: 441 IAC 76.6 Policy: When the Social Security Administration (SSA) sends data on an Application for Extra Help with Medicare Prescription Drug Plan Costs to the Department, that data is considered an application for the Medicare Savings Programs. Medicare Savings Programs (MSP) include qualified Medicare beneficiaries (QMB), specified low-income beneficiaries (SLMB), expanded specified low- income beneficiaries (E-SLMB), and qualified disabled working persons (QDWP). The date that SSA received the Extra Help application is the application filing date for purposes of establishing eligibility for the Medicare Savings Programs. The date the Department receives the data from SSA begins the 30-day processing time to determine eligibility. The applicant’s signature on the Extra Help application from which the data was generated shall be treated as the signature for the MSP application. Income and resource data provided by the SSA shall be considered verified unless the applicant provides different information. The Department will issue form 470-4846, Medicare Savings Programs Additional Information Request which the applicant must complete and return within ten days to provide the rest of the information needed to establish eligibility.

Title 8: Medicaid Page 9 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Procedures for SSI Applicants or Potential… Revised October 17, 2025 Medicare Savings Program Applications Comment: Medicare beneficiaries apply to the SSA for Extra Help. The Application for Extra Help with Medicare Prescription Drug Plan Costs tells beneficiaries that:  They may be able to get help from Medicaid with their Medicare costs under the Medicare Savings Programs; and  By completing the Extra Help application, they also start the application process for a Medicare Savings Program benefit, unless they check the ‘No’ box on the application form indicating they do not want to apply for MSP. Procedure: SSA sends HHS data on a daily basis for all Iowa Medicare beneficiaries who do not check the ‘No’ box for the Medicare Savings Program on the Extra Help application. SSA does not forward the data to HHS until it has made a decision on eligibility for Extra Help. The application data is forwarded to HHS regardless of whether Extra Help was approved or denied. When data sent by the SSA indicates the applicant is not a Medicare beneficiary or is over income or over resources for MSP, the MSPS system automatically denies the application and generates a Notice of Decision sent to the applicant. For all other cases, MSPS generates form 470-4846, Medicare Savings Programs Additional Information Request populated with the data from SSA. (See 6-Appendix for a list of this data.) The form is sent to the applicant at the mailing address the applicant provided to the SSA. When the applicant returns the form: 1. Determine if the mailing address and living address are the same. If the addresses are different and the living address is in another state, deny the application on the basis of the applicant’s residency. 2. Determine eligibility for MSP using the policies in Employees’ Manual 8-F. IMPORTANT:  A “V” following the case number printed on page 1 of form 470-4846 indicates that the Department accepts the information that was printed on the form as verified. If the applicant has made changes to the printed income or resource information, verify the change.  An “NV” behind the case number indicates that the information on the form is not verified and must be verified.

Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Procedures for SSI Applicants or Potential… Revised October 17, 2025 Medicare Savings Program Applications 3. Make ELIAS system entries to approve or deny the application. If no decision has been entered by the 30th day, the system will automatically send a Notice of Decision denying the MSP application for failure to return form 470-4846. The Medicare Savings Programs (MSPS) screen displays data from the SSA that was used to deny the application. Use this information to support a denial of eligibility for MSP in the event the applicant appeals the denial decision. See 14-B(4), MSPS = LIS-Application History.

1. SSA receives Ms. Z’s application for Extra Help on January 15. SSA determines that Ms. Z is eligible for Extra Help on March 1. Ms. Z indicated that she wanted to also apply for the Medicare Savings Program. On March 1, SSA sends Ms. Z’s data from the Extra Help application to the Department. The Department receives the data on March 1. Ms. Z’s application date for MSP is January 15. The Department has 30 days beginning March 1 to determine Ms. Z’s eligibility for MSP. On March 1, the Department sends her form 470-4846, Medicaid Savings Programs Additional Information Request. The cover letter tells Ms. Z to return the form by March 11. Ms. Z reviews the forms and does not make any changes to the data printed in the form. She returns the form on March 8. The worker determines that Ms. Z is eligible for QMB effective April 1. 2. Same situation as above except that Ms. Z is determined to be eligible for SLMB. Ms. Z’s eligibility is effective January 1. If Ms. Z indicates that she has medical expenses for the three months before January 1 and she meets the SLMB eligibility requirements before January 1, Ms. Z would need to meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. If she does, Ms. Z could be eligible for SLMB benefits effective October 1.

Title 8: Medicaid Page 11 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Interviews Revised October 17, 2025

Interviews Legal reference: 42 CFR 435.905 through 914; 441 IAC 76 (Rules in Process) and 76.5 An interview shall not be required when determining Medicaid eligibility for MAGI households. Applicants or members who are being evaluated for non-MAGI-related Medicaid may be required to attend a face-to-face or telephone interview to:  Clarify information on the application,  Clarify questionable information, or  Ensure there is a better understanding of programs. It is important to treat applicants and members equitably and to use the “prudent person concept.” See 8-A, Definitions for “prudent person concept.” An interview shall not be required for children as defined by the Medicaid program. Grant an interview if the applicant, member, or authorized representative requests one. Procedure: To require a face-to-face interview or a phone interview, you must request a scheduled time with the applicant or member. When an interview is needed or is requested by an applicant, a member, or an authorized representative, schedule a date, time, place, and method of the interview (in the local office, home visit, or by phone, etc.). Grant requests to reschedule when you determine that the applicant, member, or authorized representative is making every effort to cooperate with the interview process. Interviews rescheduled at the request of the applicant, member, or authorized representative may be agreed upon verbally and documented without written confirmation. Failure to attend the interview you requested, including a scheduled phone interview, is cause to deny or cancel the adults on the application. Contact the applicant or member whenever you need to clarify information in order to determine eligibility. When you ask a client to come in to the local office for an interview, do not deny or cancel the children if the adult fails to attend the interview. However, if you request information at the same time as you set up an interview and the information is not provided within ten days, you may cancel or deny the entire household for failure to provide requested information.

Title 8: Medicaid Page 12 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Interviews Revised October 17, 2025 Information Provided Information Provided Legal reference: 42 CFR 435.905 When conducting the interview or by other means, explain to the client:  The programs for which the client may be eligible such as: • MAGI-related Medicaid • Non-MAGI-related Medicaid • Medically Needy • Home- and community-based service waivers • State Supplementary Assistance • FIP • Food Assistance  The policies and procedures for the client’s coverage group.  The factors of eligibility that must be verified, including what is needed as verification, and that documents that are the property of the client are not returned to the client.  The penalties for giving false information.  The client’s right to receive a ten-day advance notice of adverse actions and the right to appeal any decisions on Medicaid eligibility.  The social service programs available. Make referrals when necessary.  The client’s responsibility to: • Report changes within ten days of the change and report any changes in medical resources. See 8-G, Reporting Changes. • Cooperate with the Quality Control and Economic Assistance Fraud Bureaus. See 8-C, Cooperation with Investigations and Quality Control. • Apply for and accept other benefits for which the client is eligible. See 8-C, Benefits from Other Sources. • Cooperate with the Third-Party Liability Unit and refund third-party payments for services paid by Medicaid. See 8-C, Cooperation with the Third-Party Liability Unit. Give or mail to applicants or anyone inquiring about the Medicaid program the following pamphlets that explain coverage, conditions of eligibility, benefits of the program, related services available and client rights and responsibilities:  Comm. 020, Your Guide to Medicaid, Fee-for-Service

Title 8: Medicaid Page 13 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Interviews Revised October 17, 2025 Information Provided  Comm. 030, Medicaid for the Medically Needy  Comm. 051, Information Practices  Comm. 123 and Comm. 123(S), Important Information for You and Your Family Members About the Estate Recovery Program  Comm. 209, Information About Your Privacy Rights  Comm. 233 and Comm. 233(S), Rights and Responsibilities  Comm. 255 and 255(S), Benefits of the Health Insurance Premium Program  Comm. 258 and 258(S), Verifying Citizenship/Identity and/or Immigration Status  470-0306 or 470-0307(Spanish), Application for Food Assistance. EXCEPTIONS: Do not give this application to people living in a medical institution or to children entering foster care unless supervised apartment living is the first foster care placement. For all applicants under the age of 21, discuss the availability and benefits of the EPSDT “Care for Kids” program. Make sure the client understands the program and the advantages of screening. Give or mail to the applicant Comm. 004, Early and Periodic Screening, Diagnosis, and Testing Program (EPSDT) Brochure. See 8-M, Care for Kids (EPSDT), for more information. To MAGI-related applicants, also give:  Comm. 027, Medicaid for Families and Children  Iowa WIC Program income guidelines The Department of Public Health revises the WIC flyer annually in March to incorporate updated WIC income guidelines. The revised flyer is effective April 1. Public Health sends a blanket supply of the revised flyer to local offices. Destroy previous versions of the flyer. Get additional supplies of the WIC flyer cost-free by calling 1-800-532-1579. To applicants who are aged, blind, or disabled, also give:  Comm. 28, Medicaid for SSI-Related Persons.  Comm. 60, Medicaid for the Qualified Medicare Beneficiary.

Title 8: Medicaid Page 14 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Interviews Revised October 17, 2025 Information Provided  Comm. 121 and Comm. 121(S), Important Notice to Property Owners and Renters.  Comm. 180, Medicaid for Employed People with Disabilities. To applicants who are in a nursing facility, also give Comm. 052, Medicaid for People in Nursing Homes and Other Care Facilities. If the applicant has a spouse at home, also give Comm. 072, Protection of Your Resources and Income. Voter Registration Procedures Legal reference: National Voter Registration Act (NVRA) of 1993, Section 7, Iowa Code Section 48A.19, 721 IAC Chapter 23 The Department is responsible for helping clients complete voter registration forms and for mailing the forms to the county election office. (The actual voter registration occurs at the election office.) Issue voter registration forms:  With all applications,  With all Medicaid/Hawki Review and Medicaid/State Supp Review forms, and  When the client moves within Iowa. When an interview is held, ask if the client wants to register to vote. If the client wants to register and has not filled out the voter registration form, have the client complete it at the interview. Offer to help the client complete the form. Be careful when helping the client that you do not influence the client’s voter registration options in any way. If you are conducting a phone interview, ask the questions and send the form to the client for signature. No follow-up is necessary after the form has been mailed. Review the client’s rights as listed on the form. If the client chooses not to check “yes” or “no,” leave the section blank and consider that the client has chosen not to register to vote. If the client chooses not to sign the form, print the client’s name and the date where indicated, and initial the form. If there isn’t an interview, and the client indicates they would like to register to vote on the electronic application, mail the form to the client and document your actions. If the client returns the form, follow your office procedures for handling it. Tear off the voter registration information section and give it to the client. Keep the declination part of the form. See 6-Appendix for a copy of the Voter Registration form and for office procedures for handling the form after completion.

Title 8: Medicaid Page 15 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Verification Revised October 17, 2025

Verification Legal reference: 42 CFR 435.907(e), 435.911(c)(2), and 435.952(c)–(d); 441 IAC 76 (Rules in Process) and 86.3(7)(c) Applicants must provide requested verification. Notify the applicant in writing what additional information or verification is needed. Provide this notice to the applicant personally, by mail, or by facsimile. Give the applicant ten calendar days to supply the information. Explain the following to the applicant in writing:  An applicant who must obtain information from a third party should not leave the information with the expectation that the third party will return it timely.  The applicant is responsible for following up with the third party to be sure the third party has the information ready to pick up or has mailed the information to the Department in time to be received by the due date.  The applicant may ask the Department for more time to get the information if the third party does not have the information ready or it will not arrive by the due date. When the applicant is making every effort to obtain the information from a third party but is unable to do so in ten days and notifies you about the problem, you can allow additional time. Help the applicant to get the needed information, as requested. An applicant who provides a signed release to a specific individual or organization for specific information has met the requirement for supplying requested information or verification to give you permission to get it. The general release does not meet this requirement unless the applicant asks for help. Before denying a MAGI-related application, a request must be sent to applicants and members for information that cannot be obtained electronically, or is obtained electronically but is not reasonably compatible with information provided by or on behalf of an individual. Deny the application if the applicant does not provide the requested information by the specified due date and does not authorize the Department to obtain the information within the requested time.

Title 8: Medicaid Page 16 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Verification Revised October 17, 2025 Pregnant Women If the applicant is unable to get information from a spouse who is no longer in the household, do not deny the application. Contact the applicant to obtain the best information available. Ask the applicant about bank accounts, records showing deposits of the spouse’s income, information from the divorce proceedings, and tax returns. Ask the applicant to provide information that would help to verify what the applicant is telling you about a spouse who is no longer in the home. From the information provided, determine eligibility. If the applicant fails to provide the requested information, deny the application. Pregnant Women Legal reference: 42 CFR 435.956(e), 441 IAC 75 (Rules in Process) When establishing Medicaid eligibility for pregnant women, attestation of the date of conception, due date, and number of children expected shall be accepted unless questionable. IRS Tax Information Legal reference: Sections 1137(a)(6) and 1942(b)(1) of the Social Security Act, Iowa Code Section 249A.4, By signing the application, applicants authorize HHS to verify application information with electronic data sources including IRS tax information. When redetermining eligibility, such as at annual review, HHS shall not attempt to verify income with IRS tax information unless the member provides written permission on an appropriate form. Reasonable Opportunity Period (ROP) for Verifying Citizenship or Alien Status Legal reference: 42 CFR 435.956(a)(5) through (b)(1) through (3) and 435.911(c), 42 U.S.C. 1396a(46)(B)(i)-(ii); Iowa Code Section 249A.4; 441 IAC 75 (Rules in Process) An applicant or member whose attested U.S. citizenship or eligible alien status cannot be verified through an electronic data match shall be allowed a 90-day Reasonable Opportunity Period (ROP) to provide proof. Medicaid shall be provided during the ROP if the person is otherwise eligible. If proof is not received by the end of the 90-day ROP, benefits end subject to timely notice requirements.

Title 8: Medicaid Page 17 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Verification Revised October 17, 2025 Moving and Returned Mail Moving and Returned Mail Legal reference: 441 IAC 75.10(249A) Policy: A member must remain an Iowa resident for Medicaid eligibility purposes. Procedure: When mail is returned to the Department, handle the mail as follows:  When the Post Office has attached a forwarding address and it is in Iowa: • Use this address and update the HHS systems. • It is not necessary to contact the member. • Send any returned mail to the member at the correct address and keep a copy in the case record.  When the Post Office has attached a forwarding address and it is out-of-state, contact the member to ensure they are no longer an Iowa resident.  When there is no forwarding address (i.e., address unknown, undeliverable), deny the case for unable to locate using the only address HHS has on file.  When there is hand-writing on the returned mail, attempt to contact the member to resolve the issue. Deny the case for unable to locate if you are unable to contact the member. Comment: Reporting a change in a mailing or living address is required. Processing Standards Legal reference: 42 CFR 435.912(c)(3)(i)-(ii), Iowa Code Section 249A.4 The following sections explain:  Processing guidelines that apply to all Medicaid applications.  Grace period following the denial of an application.  Guidelines for processing applications for children. Guidelines for All Applications Process applications on the earliest possible date. Determine eligibility and issue a written notice of decision for MAGI-related, non-MAGI-related, and Medically Needy Medicaid by making system entries no later than the 45th day following the date of application. If the 45th day falls on a weekend or holiday, process the application by making system entries the next working day.

Title 8: Medicaid Page 18 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Processing Standards Revised October 17, 2025 Guidelines for All Applications When the application is for non-MAGI-related Medicaid, including non- MAGI-related Medically Needy, and a blindness or disability determination is pending, the time limit is 90 days. See Concurrent Medicaid and Social Security Disability Determinations. If a person’s eligibility is dependent upon a 30-day period of residency in a medical institution, delay the eligibility decision until the 30-day period has been met, unless the person is ineligible due to some other factor. The time limit for approving or denying a Medicaid application can be waived in unusual circumstances. Examples of unusual circumstances include:  You and the applicant have made every reasonable effort to get necessary information but have not been able to do so within the time frames.  Retroactive Medicaid was requested for a person whose proof of citizenship and identity has not yet been provided as described in 8-C, Reasonable Opportunity Period.  Emergencies, such as fire or flood.  Other conditions beyond the administrative control of the local office. You must document the reason for the delay. You cannot deny an application because of the time period alone. To deny the application, there must be either failure to act on the part of the applicant or a determination of ineligibility. An applicant must cooperate with the application process. This may include providing information or verification, attending required interviews or signing documents. Failure to cooperate with the application process shall serve as a basis to deny an application. Unnecessary Application Legal reference: 42 CFR 435.912, Iowa Code Section 249A.4, 441 IAC 441 7.7(1) A Notice of Decision or a Notice of Action must be issued to approve or deny all applications, including unnecessary applications.

Title 8: Medicaid Page 19 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Processing Standards Revised October 17, 2025 Grace Period Following the Denial… Grace Period Following the Denial of an Application Legal reference: 42 CFR 435.902, 441 IAC 76 (Rules in Process) Policy: A “grace period” is a specified period of time during which an applicant has the opportunity to “cure” the reason for the denial of an application. The grace period is defined as the 14 calendar days immediately following the date of denial. “Day one” of the 14-day grace period is the day following the date printed on the notice of decision. If the 14th day falls on a weekend or a state holiday, the 14th day is extended to the next working day for which there is regular mail service. A previously denied application shall be reconsidered when all information necessary to determine eligibility is provided within 14 calendar days of the date of denial. Any changes reported during the grace period that may affect eligibility must be verified when required by policy and be considered in the eligibility determination. If the applicant is eligible, the original filing date of the application establishes the effective date of eligibility. The effective date of eligibility is the first day of the month an application was filed or the first day of the month in which all eligibility factors were met, whichever is later. Comment: The grace period does not apply to late payment of premiums or noncooperation actions. Denial reasons for which a grace period may apply include, but are not limited to, failure to provide information necessary to determine eligibility and inability to locate the applicant. If the application was denied because mail was returned or the Department was otherwise unable to locate the applicant, a new application is not required if the household contacts the Department within the 14 days, provides a current Iowa address, and eligibility can otherwise be established. Procedure: Based on the circumstances of your case, take appropriate action as follows:  No information provided: When no information is provided by the 14th day after the date of denial, no further action is required.

Title 8: Medicaid Page 20 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Processing Standards Revised October 17, 2025 Grace Period Following the Denial…  Partial information provided: When some of the information is returned, but there is still information needed to determine eligibility: • Attempt to contact the household to let the household know what is needed and that if the information is not received so that a decision can be made by the end of the grace period, the household will have to reapply. A written request for the previously requested information is not required. • If the information is not provided by the end of the grace period, no further action is necessary.  Requested information provided and a change has occurred: If the original requested information is provided, but the household also reports a change for which verification is necessary: • Make every effort to verify the information and inform the applicant that you cannot reconsider the application unless the change is verified by the end of the grace period. If a generic release is on file, use it to obtain the information if possible. A written request for the new information is not required. • If the new information is not verified so that an eligibility determination can be made by the end of the 14-day grace period, send a manual “remain denied” notice (see below for language). This is because the original reason for denial has been cured, but you cannot process the application due to a change in circumstances that is required to be verified.

Your application for Medicaid is still denied because you did not give us the information we asked for. We cannot determine if (insert persons name) (is/are) eligible. 441 IAC 74.3 and IAC 76 (Rules in Process)  Unable to verify change within grace period: When an additional change is reported and it is unlikely the information can be verified and eligibility established by the end of the 14-day grace period, attempt to notify the applicant that they will need to file a new application.

1. Mr. A, a Medicaid applicant, fails to provide an employer’s statement of earnings that was requested by the Department. The IM worker issues a denial notice on April 1, which is dated April 2. Mr. A provides the employer’s statement on April 16. There have been no other changes in the household circumstances. The IM worker reopens Mr. A’s application and processes it.

Title 8: Medicaid Page 21 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Processing Standards Revised October 17, 2025 Grace Period Following the Denial…

2. Ms. B, a Medicaid applicant, fails to provide an employer’s statement of earnings that was requested by the Department. The IM worker issues a denial notice on April 5, which is dated April 6. Ms. B provides the employer’s statement on April 21. Since the 14-day grace period has expired, Ms. B must file a new application and the original denial stands. 3. Mr. C, a Medicaid applicant, fails to provide three pieces of information requested by the Department. The IM worker issues a denial notice on May 10, which is dated May 11. Mr. C provides two of the items on May 13.

The worker attempts to contact Mr. C since not all the items needed to determine eligibility came in. The third item is received on May 25. There have been no other changes in the household circumstances. The IM worker processes the application. 4. Mr. D, a Medicaid applicant, fails to provide three pieces of information requested by the Department. The IM worker issues a denial notice on May 15, which is dated May 16. Mr. D provides two of the items on May 17.

The worker attempts to contact Mr. D since not all the items needed to determine eligibility came in. The third item is received on May 31. Since the 14-day grace period has expired, the original denial stands and Mr. D must file a new application. 5. Ms. E, a Medicaid applicant, fails to provide three pieces of information that were requested by the Department. The IM worker issues a denial notice on July 21, which is dated July 22. Ms. E provides two of the items on July 31 and the third item on August 1.

Also on August 1, Ms. E reports that she has changed jobs. The IM worker explains that in order for the original application to be reconsidered, Ms. E has until August 5 to provide verification of the old job ending and the beginning of the new job. Otherwise, Ms. E will have to reapply.

Ms. E does not provide verification of the end of the old job or the beginning of the new job. The IM worker issues a “remain denied” notice since Ms. E had provided the original requested information but did not provide the new verification.

Title 8: Medicaid Page 22 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Processing Standards Revised October 17, 2025 Grace Period Following the Denial…

6. Mr. F, a Medicaid applicant, fails to provide three pieces of information that were requested by the Department. The IM worker issues a denial notice on August 30, which is dated August 31. Mr. F provides two of the items on September 2 and the third item on September 6.

Also on September 6, Mr. F reports that he has changed jobs. The IM worker explains that in order for the original application to be reconsidered, Mr. F has until September 14 to provide verification of the old job ending and the beginning of the new job. Otherwise, Mr. F will have to reapply for Medicaid.

Mr. F provides verification of the old job ending and the beginning of the new job on September 7. The application is processed with the new information and a notice is sent informing Mr. F of the decision. Effective Date of Eligibility Legal reference: 42 CFR 435.915(b), 441 IAC 76.13(249A) and 86.5(514I) The effective date of eligibility for Medicaid is the first day of the month an application was filed or the first day of the month all eligibility factors were met, whichever is later. EXCEPTION: Eligibility under the qualified Medicare beneficiary coverage group begins the first day of the month after the month of decision. See 8-F, Express-Lane Eligibility for the effective date of eligibility for children under age 19 who are eligible without an application under the express-lane eligibility process. For MAGI-related coverage groups, eligibility for Medicaid begins on the first day of the month when eligibility was established any time during the month. For non-MAGI-related coverage groups and State Supplementary Assistance, the applicant must meet all eligibility criteria and be resource-eligible as of the first moment of the first day of the month in order to be eligible for the month. Effective Date for SSI Recipients Legal reference: 441 IAC 76.5(249A) An SSI recipient is eligible for Medicaid as of the first of the month before the month that the person attains SSI eligibility, unless either:  The person’s Iowa residency date is later, or  There is a Medicaid policy that precludes eligibility, as listed in 8-F, SSI Recipients.

Title 8: Medicaid Page 23 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Effective Date of Eligibility Revised October 17, 2025 Effective Date for SSI Recipients

Mr. M lives in Nebraska and files an application for SSI in January. In March, Mr. M moves to Iowa. Social Security processes Mr. M’s application in March and establishes SSI eligibility effective January 1. Even though Mr. M was determined SSI-eligible in March, he is not eligible for Iowa Medicaid in January and February because he was not an Iowa resident. The earliest Mr. E’s Iowa Medicaid eligibility can begin is March 1. Beginning with determinations made on or after August 22, 1996, the effective date of approval under the SSI program is the later of:  The month following the month of application for SSI, or  The month following the month the client first meets all SSI eligibility factors.

1. Mr. A files for SSI on January 15. Mr. A meets all SSI eligibility criteria for January. SSI payment is approved effective February 1. 2. Mr. B files for SSI on January 15. Mr. B does not meet all SSI eligibility criteria until February (turns 65 in February). The earliest date that SSI payment will begin is March 1 (the month following the month that all SSI eligibility factors are first met). For the month immediately before the effective date of approval, the Social Security Administration has already determined that the client meets all SSI eligibility factors. (The client does not receive an SSI payment due to SSI’s effective date of approval policy.) Thus, for Medicaid purposes, it is not necessary to verify eligibility factors independently for that month. Determine Medicaid eligibility for that month in the same manner as if the client was an SSI cash recipient.

1. Mr. A files for SSI on June 15. SSI cash payments are approved effective July 1. In order for SSI payments to begin effective July 1, the Social Security Administration must have determined that Mr. A met all SSI eligibility criteria for the month of June. Thus, it is not necessary to verify information independently for June. Mr. A is eligible for Medicaid in the month of June and ongoing (and potentially the retroactive months if he meets a category of eligibility for the retroactive period as defined in 8-A, Definitions).

Title 8: Medicaid Page 24 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Effective Date of Eligibility Revised October 17, 2025 Effective Date for SSI Recipients

2. Mr. B files for SSI on January 15. SSI cash payments are approved effective March 1. In order for SSI payments to begin effective March 1, the Social Security Administration must have determined that Mr. B met all SSI eligibility criteria for the month of February. Mr. B did not meet all eligibility criteria for the month of January (or SSI would have begun February 1). It is not necessary to verify information independently for the month of February. It is necessary to verify information and determine the reason that Mr. B was ineligible for January. Use the SSI application date as the Medicaid application date. The effective date of eligibility can be no earlier than three months before the date of application for SSI if the individual meets a category of eligibility for the retroactive period as defined in 8-A, Definitions. This date is on the SDX. When the date of the SSI application is in a different month from the month that SSI eligibility begins, determine if there is Medicaid eligibility for:  The month of SSI application.  All months between the date of application and the month of eligibility for SSI.  The retroactive period. Establishing Beginning Months of Eligibility for MEPD Legal reference: 441 IAC 75.6(6)”b””4”and “6” Policy: Medicaid for Employed People with Disabilities (MEPD) applicants may choose to have either MEPD or Medically Needy coverage for months between the date of application and the date that the case is approved on the ELIAS system. Comment: Application processing may be delayed due to waiting for a disability determination decision. This may result in a delay of several months between the date of application and the date of approval. “Back months” are the months between the date of application and the month when the case is actually approved. “Conditional eligibility” for MEPD means the member must pay a premium before getting Medicaid eligibility for a month. If the member wants to have Medically Needy for some back months, see the procedures in 8-F, Relationship to Medically Needy.

Title 8: Medicaid Page 25 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Effective Date of Eligibility Revised October 17, 2025 Establishing Beginning Months of Eligibility… Procedure: The MEPD Billing System applies premium payments in a specified order. The person who enters the payments in the MEPD system cannot change the order of how the payment will be applied to pay for “back months.” Before entering conditional approval for back months, it is important to check with the applicant to see if the applicant wants Medicaid for each of the back months. Do not give the applicant conditional MEPD eligibility for a month when the applicant does not want MEPD benefits. Corrections can be made on the MEPC screens after the initial and back months are assessed for MEPD premiums.

Changing Conditionally Approved Months for MEPD Situation: Worker Action: After conditional eligibility has already been entered for “back months,” the member tells the worker that there are some months for which the member does not want to pay premiums. Ask the member to sign a statement that lists the “back months” for which the member does not want Medicaid. Do not block months until the signed statement is received.  If the premiums for those months have not been paid… “Block” the months when the member does not want MEPD coverage so that payments are not applied to premiums for those months. Enter “B” for the months that need to be blocked on the member’s MEPC screen.  If the premiums for those months have been paid… Do not block the month, as Medicaid eligibility was already given.

Title 8: Medicaid Page 26 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Effective Date of Eligibility Revised October 17, 2025 Establishing Beginning Months of Eligibility…

Situation: Worker Action: The worker needs to “block” a paid month due to an error in giving conditional eligibility for that month. “Block” the month by entering “B” for that month on the member’s MEPC screen. The system will:  “Back out” the premium payment for the blocked month.  Hold the premium payment as a credit or apply it to another unpaid month.  Issue an alert from WISE requesting recoupment of the paid Medicaid claim for that month. A month is blocked in error. “Unblock” the month on the MEPC by entering a “U” for unblock over the “B” on the month line. Remember, once a month is blocked, the member will not be given Medicaid eligibility for that month until it is unblocked. Comment: See 14-B(9), Change to MEPD Premium: Using MEPC and 8-F, Relationship to Medically Needy. Determining Eligibility for the Retroactive Period Legal reference: 42 CFR 435.914 and 435.915(a), 441 IAC 76.13(3) and 86.5 Medicaid benefits may be available for any or all of the three months before the month in which the application is filed. This time is called the “retroactive period.” The person must meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. EXCEPTION: The following coverage groups do not have retroactive eligibility:  Presumptive Medicaid benefits.  Qualified Medicare Beneficiary (QMB).  Home- and community-based services waivers.  Program for all-inclusive care for the elderly (PACE).

Title 8: Medicaid Page 27 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Determining Eligibility for the Retroactive… Revised October 17, 2025

Persons whose citizenship or alien status has not been verified, even though they are eligible during a 90-day reasonable opportunity period, are not eligible for retroactive coverage. For children under age 19 who are eligible without an application under the express- lane eligibility process described at 8-F, Express-Lane Eligibility, the “retroactive period” is any of the three months before the effective date of the child’s express-lane eligibility. To be eligible for retroactive benefits, an applicant must meet both of these conditions:  The applicant has paid or unpaid medical bills for Medicaid-covered services received during the retroactive period, and  The applicant would have been eligible for Medicaid benefits in the months services were received, if a valid application had been filed. An applicant does not need to be eligible in the month of application to be eligible for the retroactive period. If an application is submitted on behalf of a deceased person, determine the deceased person’s retroactive eligibility using the same requirements. When retroactive coverage is requested, evaluate the three months before the month of the current application to see if eligibility exists even if some of those months were denied on a previous application.

1. Ms. A, a pregnant woman, files an application on July 8. She indicates on the application that she wants retroactive benefits. The worker requests in writing that Ms. A provide income verification for the months April through June. Ms. A fails to provide the income information and is denied Medicaid for the retroactive period. The application is approved for ongoing eligibility. 2. Same as Example 1, except that Ms. A is also denied for ongoing benefits due to failure to provide requested information. She reapplies on August 15, and this time cooperates in providing information needed to establish eligibility. She is eligible for the retroactive period of May through July, the three months before the month of the reapplication, and also for ongoing benefits. Determine eligibility for the retroactive period on a month-by-month basis. This includes using a third or fifth paycheck when calculating monthly income. The coverage group under which the person is eligible in the retroactive period may be different for each month. EXCEPTION: See Retroactive Eligibility for Medically Needy Recipients.

Title 8: Medicaid Page 28 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Determining Eligibility for the Retroactive… Revised October 17, 2025 Verification Requirements If the self-attested income that the household reported verifies with electronic data sources or is cohort approved and results in ongoing eligibility, this amount can be used to determine retroactive eligibility. If the self-attested income does not verify with electronic data sources, the worker will need verification of actual income to determine eligibility for the retroactive period. Issue a notice of decision when retroactive eligibility is denied. When approving an application for retroactive Medicaid only, include the month when eligibility ended on either the Notice of Decision approving the retroactive months or on a separate notice. The notice does not need to be timely when assistance is simultaneously approved and ended for retroactive eligibility. A member who did not know that there were bills in the retroactive period at the time of application can ask to have eligibility for retroactive benefits determined at a later date. The retroactive period is the three months before the month of the most recently approved and active Medicaid application. Retroactive eligibility cannot be determined later on an application that was denied or canceled for ongoing benefits. Also, a person may request retroactive coverage but may fail to provide the information needed to determine eligibility. Even though a notice of decision was issued, the member may request to have eligibility determined again for the same retroactive period if the application was approved for ongoing benefits and it remains the most recently approved Medicaid application. Although a member may request retroactive benefits at any time, payment will not be authorized for services provided 23 months or more before the current month unless extenuating circumstances exist. See 8-M, Submitting Claims for more information. Benefits can be approved for SSI approvals beyond the two years by submitting special updates when the SSI eligibility determination went beyond the two years. Verification Requirements When determining retroactive eligibility, accept a client’s statement that the client has paid or unpaid medical bills (unless questionable). See 8-F, Continuous Eligibility for Pregnant and Postpartum Women for requirements when establishing continuous eligibility for pregnant women at the time of application.

Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Determining Eligibility for the Retroactive… Revised October 17, 2025 Verification Requirements Clearly document in the case record how eligibility or ineligibility for each month was established. Information to be documented includes:  Verification of income and resources.  Household composition for each month.  Beginning date of disability, if applicable. Retroactive Eligibility for Medically Needy Recipients Legal reference: 441 IAC 75 (Rules in Process) and 76.13(3) A Medically Needy certification period is considered as one unit. Even though the period may include one or more months, determine eligibility for the entire certification period only. The retroactive period for Medically Needy is a one-month, two-month, or three-month period, depending on which month the client first incurred a medical expense. See 8-J.

1. Ms. S, a pregnant woman, applies for Medically Needy on March 5. The certification period is March and April. Ms. S claims to have unpaid bills for December and January, which are within the three-month retroactive period. The worker requests income and resource information for all three months of the retroactive period (December - February). If income or resource verification is not provided for December through February, eligibility for the retroactive period cannot be determined. 2. Ms. B, a pregnant woman, applies for Medically Needy on April 15. The certification period will be April and May. She states that there are no unpaid medical bills for the retroactive period (January - March). In June, Ms. B reports that there is an unpaid medical bill for January. The worker establishes eligibility for the three-month retroactive period. Income from all three months is used in computing spenddown. Spenddown for the retroactive period is $100. The unpaid bill is $500. The amount in excess of the spenddown ($400) is Medicaid-payable in the retroactive period.

Title 8: Medicaid Page 30 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Determining Eligibility for the Retroactive… Revised October 17, 2025 Retroactive Eligibility for SSI Recipients Retroactive Eligibility for SSI Recipients Legal reference: 441 IAC 76.13(3) and 76.13(3)”d” For an SSI recipient to be eligible for retroactive benefits, they must meet a category of eligibility during the retroactive period as defined in 8-A, Definitions. In addition:  The person must have been eligible for Medicaid benefits in the months services were received (if an application had been filed), and  The person must have paid or unpaid medical bills for Medicaid-covered services received during the retroactive period. The SDX shows unpaid medical claims in the UNPAID RETRO field. A person who is presumptively disabled (disability code P on the SDX) is not entitled to retroactive benefits until a final determination has been made that the person is eligible for disability. Examine retroactive eligibility for an SSI recipient as you would any other applicant. During the retroactive period, the person must have been either:  At least 65 years of age, or  Under 18 years of age, or  Blind, or  Disabled, and  Meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. Accept the member’s statement regarding the date of onset of blindness or disability, unless there is evidence to the contrary. Referrals to CSS Legal reference: 42 CFR 433.145, 441 IAC 75.14(249A) and 75 (Rules in Process) Policy: As a condition of eligibility, Medicaid applicants and members must assign their rights to payments for medical support to the Department unless good cause exists. Child Support Services (CSS) seeks cash medical support as well as financial support for people in the Medicaid eligible group. A child support referral is mandatory in the following situations:  There is an active CSS case;

Title 8: Medicaid Page 31 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Referrals to CSS Revised October 17, 2025

 The applicant requests CSS services;  The applicant or member receives cash medical support;  The application is for a child in foster care; or  The applicant is also applying for FIP. Do not make a referral to CSS:  When the applicant does not want CSS services and CSS does not have an active case on the absent parent.  When both parents are in the home, even when paternity has not been established.  If the applicant or member has proven that good cause exists.  On a parent whose parental rights have been terminated by the court.  On the parents of an underage parent who is a payee.  When a child in subsidized adoption is placed in foster care and no child support order currently exists.  When a parent’s absence is solely because of the performance of active duty in the uniformed services of the United States. “Uniformed service” means the United States Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanographic and Atmospheric Administration, or Public Health Service. NOTE: A parent whose absence is solely because of the performance of active duty in the uniformed services of the United States is considered to be absent for purposes of determining Medicaid eligibility. (See 8-C, Absence.) However, a parent who is absent for this reason is not referred to CSS. See 8-C, Cooperation with Child Support Services.

1. Ms. D applies only for Medicaid for herself and her daughter, Lisa. Lisa’s father is not in the home. Ms. D says on the application that:  She does not want a referral to CSS, and  There is no court order for cash medical support. The IM worker checks ICAR and finds there is not an active child support case in the ICAR system. The IM worker processes the application and does not complete a referral to CSS.

Title 8: Medicaid Page 32 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Referrals to CSS Revised October 17, 2025 Referral Procedures

2. Mr. W applies only for Medicaid for himself and his two children. He says on the application that:  He does not want to pursue child support, and  The absent parent is court-ordered to pay cash medical support. The IM worker explains to Mr. W that a referral will be made to CSS because of the cash medical support order; that he is required to cooperate with CSS to receive Medicaid for himself; and that if he does not cooperate, he will not receive Medicaid for himself. 3. Mr. Q applies for FIP, Medicaid, and Food Assistance for himself and his children. His children’s mother is absent from the home. Mr. Q says on the application that:  He does not want to cooperate in obtaining medical support,  CSS is not helping him, and  There is no court order for cash medical support. The worker tells Mr. Q that as a condition of eligibility for FIP he must cooperate with CSS in obtaining financial support or the household will be subject to sanction of cash benefits. The worker completes a CSS referral and it will be “active” for both FIP and Medicaid programs. If Mr. Q later fails to cooperate with CSS, then CSS will notify the worker to apply the appropriate sanctions to the FIP, Medicaid, and Food Assistance benefits. Referral Procedures Procedures: If the household has more than one absent parent and there is no active CSS case, the applicant can determine which absent parents are to be referred, if any. For foster care cases, link both parents. If the ICAR referrals have not been made, complete the referral. Pregnant Women Legal reference: 441 IAC 75 (Rules in Process) Policy: As a condition of her eligibility, the woman must agree to cooperate in establishing paternity and obtaining support for the children for whom she receives Medicaid (except for pregnant women under MAC). However, a woman will be referred only as listed under Referrals to CSS.

Title 8: Medicaid Page 33 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Referrals to CSS Revised October 17, 2025 Pregnant Women Procedure: Do not make a referral regarding the father of the unborn child until the postpartum period has ended. Then refer only if the mother requests a CSS referral or is otherwise required. See also 8-C, Cooperation With Child Support Services, and 8-F, Mothers and Children (MAC) Program.

1. Ms. A is pregnant and lives alone. She applies for Medicaid. No CSS referral is made and no information is requested regarding the father of the unborn child. The worker does not make a referral until the postpartum period has ended, and then only if Ms. A requests CSS services. 2. Ms. B is pregnant and lives with her two children. She applies for Medicaid for herself and the children. Eligibility is examined under the FMAP coverage group. The worker makes the referral to CSS only if Ms. B wants CSS services or if CSS already has an active ICAR case. When the postpartum period ends, the worker refers the newborn if a referral was made on the other children of this absent parent. 3. Ms. D is pregnant and receives Medicaid under the MAC coverage group for herself and her daughter. Ms. D wishes to have CSS establish paternity and support for her daughter. The worker makes the referral to CSS for the daughter. 4. Same as Example 5. The referral is made to CSS. However, Ms. D changes her mind and does not cooperate with CSS. Her Medicaid is not canceled, because she receives Medicaid under MAC as a pregnant woman, and is, therefore, exempt from the cooperation requirement. Representation Legal reference: 441 IAC 76.9 A Medicaid applicant or member may need or want to be represented by another person or organization.  When an applicant or member is a minor, incompetent, incapacitated, or deceased, a “responsible person” is allowed to act on the client’s behalf.  A competent person may name an “authorized representative” to participate in pursuing Medicaid eligibility.

Title 8: Medicaid Page 34 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Representation Revised October 17, 2025 Responsible Person The policies and procedures for these two types of representation are discussed in this section. Responsible Person Legal reference: 42 CFR 435.907(a), 441 IAC 76.1 and 76.9(1) and (3) When an applicant or member is unable to act on their own behalf because they are a minor, incompetent, incapacitated, or deceased, another person may act responsibly for the client. The responsible person must be:  A family member, friend, or other person who has knowledge of the client’s financial affairs and circumstances, and a personal interest in the client’s welfare,  An adult in the child’s household or family, or  A legal representative, such as a conservator, guardian, executor, or someone with power of attorney. A responsible person assumes the applicant’s or member’s position and responsibilities during the application process or for ongoing eligibility. A responsible person may designate an authorized representative to represent the incompetent, incapacitated, or deceased applicant or member. (See Authorized Representative.) However, this does not relieve the responsible person from assuming the applicant’s or member’s position and responsibilities during the application process or for ongoing eligibility. Provide copies of all correspondence and documents that you would normally provide to the applicant or member to the responsible person and to the representative, if the responsible person has authorized one. When there is no person as described above to act as a responsible person, any individual or organization can act as the responsible person if the individual or organization:  Conducts a diligent search for someone who meets the criteria for a responsible person but cannot locate such a person, and  Completes form 470-3356, Inability to Find a Responsible Person.

Title 8: Medicaid Page 35 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Representation Revised October 17, 2025 Authorized Representative Authorized Representative Legal reference: 42 CFR 435.907(a) and 435.923, 441 IAC 76.1 and 76.9(2)- (3) Policy: A competent applicant or member or a responsible person (see Responsible Person) may authorize any individual or organization to represent the applicant or member in the application process or for ongoing eligibility. See Authorization to Represent for authorization requirements. Authorized representatives may participate in the application process or in the ongoing eligibility process. Authorized representatives are allowed to:  File applications.  Check on the progress of an application or ongoing eligibility.  Request reschedules of interviews or extensions for providing documentation or verification. Appointment of an authorized representative does not relieve a competent applicant or member or a responsible person of the primary responsibility to cooperate with the application process or for establishing ongoing eligibility. The applicant, member, or responsible person is still required to:  Attend interviews, when requested.  Sign documents.  Supply information or verifications.  Meet all other requirements necessary to determine eligibility. Procedure: When an applicant, member, or responsible person has named an authorized representative, send the authorized representative copies of all correspondence sent to the applicant or member that will affect eligibility. When a competent applicant names an authorized representative, send all correspondence to the applicant and copies of all correspondence that pertains to the eligibility determination to the authorized representative. For a minor, or incompetent, incapacitated, or deceased applicants, send correspondence to the responsible person and copies to the authorized representative. For members under Medicaid for Employed People with Disabilities (MEPD), also provide a copy of each MEPD Billing Statement, form 470-3902, to the authorized representative.

Title 8: Medicaid Page 36 Iowa Department of Health and Human Services Employees’ Manual Chapter B: Application Processing Representation Revised October 17, 2025 Authorized Representative Make entries on the member’s MEPD STMT screen to generate a copy of the MEPD Billing Statement. See 14-C, STMT = MEPD Billing Statement Screen, (REPRINT (WRKR) field) for entry instructions. After the entries are updated, the worker will receive the duplicate bill and send it to the authorized representative. Authorization to Represent Legal reference: 441 IAC 76.1(7)“b” An authorization to represent is a written document or statement signed and dated by the competent applicant or member or by a responsible person that identifies the individual or organization that will act as the person’s authorized representative. If the authorization identifies the period or the dates of medical services it is to cover, the authorization is valid for the initial application and any additional application filed by the representative or applicant for the stated period or dates of medical services, as well as appeals relating to the application. If the authorization does not indicate the period or dates of medical services it is to cover, the authorization shall be valid until the applicant, member, or responsible person modifies the authorization, or notifies the Department that the representative is no longer authorized to act on behalf of the applicant or member or until the authorized representative informs the Department that the representative no longer is acting in such capacity. If an applicant, member, or responsible person notifies the Department in writing that the client or responsible person no longer wants an authorized representative to act on the person’s behalf, the Department will no longer recognize that individual or organization as the authorized representative.

Employees’ Manual Title 8, Chapter C Revised October 10, 2025 Medicaid Nonfinancial Eligibility

Title 8: Medicaid Table of Contents Chapter C: Nonfinancial Eligibility Revised October 10, 2025 Page 1 Page Iowa Department of Health and Human Services Employees’ Manual Overview .................................................................................................................................... 1 Assignment of Medical Support .............................................................................................. 1 Medical Benefits from Other Sources ..................................................................................... 1 Citizenship ................................................................................................................................ 3 Declaring Citizenship or Alien Status .................................................................................. 4 Persons Exempt from Verification ...................................................................................... 4 Verifying Citizenship and Identity ....................................................................................... 6 Reasonable Opportunity Period (ROP) ...................................................................... 7 Loss of Exemption ...................................................................................................... 9 Retroactive Eligibility ................................................................................................ 10 Documentation Process ................................................................................................... 11 Consistent Match (Verified) ...................................................................................... 12 Inconsistent Match (Not Verified) .............................................................................. 12 No Match (Not Verified) ............................................................................................ 13 Acceptable Documentation ............................................................................................... 14 Health Insurance Premium Payment (HIPP) Program ......................................................... 15 Referral to the HIPP Program Not Needed ....................................................................... 16 Cooperation in Obtaining Medical Resources ..................................................................... 17 Cooperation with the Third-Party Liability Unit .................................................................. 17 Failure to Cooperate With Third-Party Liability Unit .................................................. 18 Good Cause for Failure to Cooperate ............................................................................... 19 Cooperation with Investigations and Quality Control ......................................................... 19 Cooperation with Child Support Services ............................................................................ 20 What the Client Must Do to Cooperate ............................................................................. 21 Minors Living Independently of Parents .................................................................... 22 Pregnant Women Who Are Exempt from Cooperation ............................................. 23 Good Cause for Refusal to Cooperate ............................................................................. 24 Determining if Good Cause Exists ............................................................................ 25 Client Responsibilities When Filing a Good Cause Claim ........................................ 26 Worker Responsibilities When a Good Cause Claim Is Filed ................................... 27 Making the Decision About Good Cause .................................................................. 28 Failure to Cooperate in Obtaining Support ....................................................................... 29 If the Sanctioned Parent or Other Caretaker Decides to Cooperate ................................. 30 Sanctions and Appeals .......................................................................................................... 32

Title 8: Medicaid Table of Contents Chapter C: Nonfinancial Eligibility Revised October 10, 2025 Page 2 Page Iowa Department of Health and Human Services Employees’ Manual Residency ................................................................................................................................ 32 Determining Residency for Persons Aged 21 or Over ...................................................... 34 Not in an Institution ................................................................................................... 35 In an Institution ......................................................................................................... 35 Determining Residency for Persons Under Age 21 .......................................................... 37 Not in an Institution or in Foster Care ....................................................................... 38 In an Institution or in Foster Care ............................................................................. 38 Living in Iowa for Employment Purposes .......................................................................... 39 Intent to Live in Iowa ......................................................................................................... 40 Temporary Absence ................................................................................................. 40 Incapability of Expressing Intent ....................................................................................... 40 State Placement ............................................................................................................... 41 Eligibility in Out-of-State Medical Institutions .................................................................... 42 Intent to Return to Iowa from an Out-of-State Facility ............................................... 43 Guidelines for Discharge Planners ........................................................................... 45 Approval for Out-of-State Skilled Care ..................................................................... 45 When a Medicaid-Eligible Person Moves to Iowa ............................................................. 46 Residents of Institutions ........................................................................................................ 48 Residents of Institutions for Mental Disease ..................................................................... 48 Residents of Public Nonmedical Institutions ..................................................................... 49 Halfway House ......................................................................................................... 51 Inpatient Medical Institutions .................................................................................... 52 Non-MAGI-Related Eligibility Under Levings Rule .................................................... 53 Social Security Number ......................................................................................................... 54 How Clients Can Apply for a Social Security Number ...................................................... 55 Acting on an Error Report ................................................................................................. 56 Nonfinancial Non-MAGI-Related Eligibility ........................................................................... 56 Household Size ................................................................................................................ 57 Presence of Age, Blindness, or Disability ......................................................................... 59 When the Department Follows an SSA Disability Determination ...................................... 62 Presumptive Disability .............................................................................................. 67 SSA Disability Denial and Appeal Process ............................................................... 69 When SSA Denies Disability After Disability Approval By DDS or SSA .................... 73 When the Department Determines Disability .................................................................... 74 Substantial Gainful Activity for an Employee ............................................................ 77 Substantial Gainful Activity for a Self-Employed Person .......................................... 80 Submitting Medical Evidence to DDS ....................................................................... 84 Disability Approved by DDS ..................................................................................... 86 HHS Responsibility for Disability Review and Redetermination ....................................... 86 Disability Reviews ..................................................................................................... 87 Redetermination at Age 18 ....................................................................................... 89

Title 8: Medicaid Table of Contents Chapter C: Nonfinancial Eligibility Revised October 10, 2025 Page 3 Page Iowa Department of Health and Human Services Employees’ Manual Denial of Medicaid Based on Disability Denial ................................................................. 91 When the Department Denies Disability ................................................................... 92 Appeal of a Medicaid Denial Based on a Disability Denial ....................................... 93 When SSA Denial Is Reversed in an SSA Appeal .................................................... 94 Reapplications Based on Disability................................................................................... 96 Reapplying After Disability Is Denied ........................................................................ 97 Reapplying After Cancellation for a Nondisability Reason ........................................ 98 Nonfinancial MAGI-Related Eligibility ................................................................................... 98 Absence ........................................................................................................................... 98 Questionable Cases ............................................................................................... 100 Temporary Absence ............................................................................................... 100 MAGI Household Size .................................................................................................... 104 Applicant or Member is a Tax-Filer ......................................................................... 105 Applicant or Member is a Tax Dependent .............................................................. 105 Applicant or Member is a Non-Filer (does not file taxes) and is Not Claimed as a Tax Dependent ......................................................................................................... 106 Married Couples ..................................................................................................... 107 Pregnancy .............................................................................................................. 107 Applicant or Member Attestation of Federal Tax Status ......................................... 107 Determining If a Common-Law Marriage Exists ............................................................. 108 Adoption ......................................................................................................................... 109 Joint Custody .................................................................................................................. 109 Verification of Pregnancy ................................................................................................ 110

Title 8: Medicaid Page 1 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Overview Revised October 10, 2025

Overview All Medicaid clients must meet certain nonfinancial eligibility requirements. This chapter describes those requirements that apply to all Medicaid coverage groups in alphabetical order. These sections are followed by sections on nonfinancial requirements specific only to MAGI-related clients and to non-MAGI-related clients. Assignment of Medical Support Legal reference: 42 CFR 433.145, 441 IAC 75.14(4), 75 (Rule in Process) As a condition of eligibility, Medicaid applicants and members must assign to the Department their rights to payments for medical support unless good cause exists. The support can be from any person for whom the client can legally make assignment. This includes the client’s own rights to support, as well as those of other family members for whom application is made. By signing the application form, the client or responsible person assigns payments from the client’s health insurance to the Department. If other medical benefits are available to the client (possibly as a result of an injury or other trauma), the applicant assigns to the Department the rights to payment from the responsible party. This assignment begins upon the effective date of Medicaid eligibility. Medical support payments made by an absent parent are assigned by entries on the Iowa Collections and Reporting (ICAR) system. Assignment is effective the same date that you enter information to approve the applicant’s Medicaid eligibility. A Medicaid assignment does not apply to cash support payments that are not intended for medical support. Assignment remains effective for the entire period for which assistance is granted. See Cooperation with Child Support Services for medical support determined through the child support services unit. Medical Benefits from Other Sources Legal reference: 441 IAC 75 (Rules in Process) Medicaid applicants and members must apply for and accept any medical resources that are reasonably available to them without charge when such resources are reasonably available to them. A medical resource is considered “reasonably available” when it may be obtained by filing a claim or an application.

Title 8: Medicaid Page 2 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Medical Benefits from Other Sources Revised October 10, 2025 Medical Benefits Such medical resources include:  Health and accident insurance.  Eligibility for care through Veteran’s Administration.  Specialized health care services.  Medicare, when the state will pay the premiums through the buy-in process. EXCEPTION: Requirement to Apply for Medicare When Not Eligible for Free Medicare Part A.  Medicaid applicants and members who are over 65 that do not qualify for free Medicare Part A are required to apply for Conditional Medicare Part A and Medicare Part B if they: • Are not already enrolled in a major medical plan, • Have income at or below 100% of the poverty level and assets within the Medicare Savings Plan limit, and • Do not receive Medicare Part B  Medicaid applicants and members who are over 65 that do not qualify for free Medicare Part A are required to apply for Medicare Part B only if they: • Are not already enrolled in a major medical plan, • Have income above 100% of the poverty level and/or have assets within the Medicare Savings plan limit, and • Do not receive Medicare Part B.  Medicaid applicants and members who already receive Medicare Part B are not required to apply for Conditional Medicare Part A as buy-in will automatically occur for Part A if QMB eligible.  Elderly Legal Permanent Residents (LPR) are not eligible for Conditional Medicare Part A until they have lived in the USA for 60 continuous months. If the 60-months are interrupted by a trip outside of the USA that lasts at least one month, then the 60-month period starts anew with the date they return to the USA. • If date of entry is less than 60 months ago, set a reminder in WISE for the last month of the 60 month period and send them a request to apply for Conditional Medicare Part A and Part B as necessary in that month.

Title 8: Medicaid Page 3 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Medical Benefits from Other Sources Revised October 10, 2025 Medical Benefits NOTE: Members may not apply for Conditional Medicare by using the online Medicare application. They must either enroll in person at their local Social Security office or they may call Social Security and schedule a telephone interview for assistance with the Conditional Medicare application. Deny or cancel Medicaid benefits of the individual by entering a noncompliance reason in ELIAS when a Medicaid applicant or member fails to file a claim or application or to cooperate in the processing of that claim or application without proving good cause. See Cooperation in Obtaining Medical Resources and Cooperation With Investigations and Quality Control for additional information. Citizenship Legal reference: 42 CFR 435.406(a)(1), 441 IAC 75.11(2)“a”, P. L. 104-193 To be eligible for Medicaid, a person must be one of the following:  A citizen of the United States,  A U.S. national, or  A qualified alien. See 8-L, Aliens for more information on eligibility criteria. A “U.S. citizen” is defined as a person born in any of the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, or the Northern Mariana Islands. People born abroad to U.S. citizen parents are generally, but not always, considered U.S. citizens. A “U.S. national” is a person born in American Samoa, including Swain Island. However, the Independent State of Samoa (also known as Western Samoa) is not part of American Samoa, so individuals from this country are not U.S. nationals. People who are not citizens or nationals by birth can become citizens through a process called “naturalization.” In addition, certain children born abroad who were not U.S. citizens at the time of birth may establish citizenship automatically under the Child Citizenship Act.

Title 8: Medicaid Page 4 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Declaring Citizenship or Alien Status Declaring Citizenship or Alien Status Legal reference: 42 CFR 435.407, 441 IAC 75.11(2)“b”, P. L. 99-603, Sec. 121, P. L. 104-193 Medicaid applicants must:  Declare their citizenship or alien status as part of the application process.  Have their status verified. (See Verifying Citizenship and Identity for citizenship verification requirements. For information about acceptable forms of verification for aliens, see 8-L.) As a condition of eligibility, an attestation of citizenship or alien status shall be made for all applicants and members:  On a state-approved Medicaid application or review form, or  On form 470-2549, Statement of Citizenship Status. Applicants and members must attest to their citizenship or alien status. The attestation may be signed by:  The applicant or member, or  Someone acting responsibly on the applicant’s or member’s behalf if the applicant or member is incompetent or deceased, or  By any adult member of a family or household for whom Medicaid is being requested or received. If this attestation is not made, the person for whom the attestation is required is not eligible for Medicaid (except emergency medical assistance). Persons Exempt from Verification Legal reference: 42 CFR 435.406, 435.407; 441 IAC 75 (Rules in Process), Sections 211(a) and 211(b)(3) of Public Law 111-3 Policy: Unless specifically exempted, all Medicaid applicants or members who claim to be United States citizens are required to have their citizenship and identity verified as a condition of eligibility. The requirement to verify citizenship and identity does not apply to the following people who claim to be United States citizens:  Current recipients of Supplemental Security Income (SSI), including 1619b individuals.

Title 8: Medicaid Page 5 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Persons Exempt from Verification  Current recipients of Social Security disability income (SSDI) (benefits based on the person’s disability).  Current Medicare beneficiaries.  People who were initially eligible for Medicaid due to deemed “newborn” status. This exemption continues even when “newborn” status ends, because people born in the U.S. to Medicaid-eligible mothers are permanently exempt from proving citizenship and identity.  People born in another state who were initially eligible due to having deemed newborn status in that state. This includes people born to CHIP-eligible mothers if the other state’s CHIP program covers pregnant women. NOTE: Children born to Medicaid–eligible or CHIP–eligible mothers in another state do not qualify for deemed newborn status in Iowa because the mother was not receiving Iowa Medicaid at the time of the child’s birth.  Children who are or were exempted while in out-of-home placement (e.g., foster care or relative placement) under the placement and care responsibility of the Department through a court order or voluntary placement agreement, regardless of the placement’s licensing or payment status.  Children who are or were exempted while in IV-E-funded subsidized adoption or subsidized guardianship.  Applicants for presumptive Medicaid eligibility (but they are no longer exempt when they apply for ongoing Medicaid).  Individuals who have previously presented satisfactory documentary evidence of citizenship. NOTE: A person claiming to be an alien rather than a U.S. citizen must have their alien status verified as described in 8-L, Aliens. These exceptions do not apply to aliens. All other Medicaid applicants or members claiming to be United States citizens are required to have their citizenship and identity verified as a condition of eligibility. See Loss of Exemption for procedures when a member becomes subject to verification after approval.

Title 8: Medicaid Page 6 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Persons Exempt from Verification Procedure: Maintain any documentation needed to support the exempt status in the permanent section of the person’s case file. Examples of documents showing an exempt status include:  State Data Exchange (SDXD) printout showing current receipt of SSI.  Benefit award letter from Social Security Administration.  Income and Eligibility Verification System (IEVS) printout or copy of Medicare card showing current receipt of Medicare.  Mother’s SSNI screen print showing Medicaid eligibility in the month of the birth or other proof that the person had deemed “newborn” status.  Other documents showing the person meets one of the exempt statuses. Verifying Citizenship and Identity Legal reference: 42 CFR 435.406, 435.407, and 435.949; 441 IAC 75.11(2)“c”; Sections 211(a) and 211(b)(3) of Public Law 111-3 Policy: Unless specifically exempted, all Medicaid applicants or members claiming to be United States citizens are required to have their citizenship and identity verified as a condition of eligibility. In most cases, Medicaid is available while the client is verifying citizenship and identity. See Reasonable Opportunity Period. Documentation that citizenship and identity has been verified for each person subject to this requirement must be maintained in the Department’s records. A hard copy of the document does not need to be retained. For this purpose, the Department’s records include:  The Inquiry Citizenship (ICIT) screen when proof was obtained electronically through the IEVS match with the Social Security Administration.  The Vital Statistics List page in ELIAS.  Copies of paper documents maintained in the Medicaid or Hawki case file.  Notation in the Medicaid or Hawki electronic case file of the type of citizenship and identity verification received in either electronic or paper format. Procedure: Electronic data matching is the primary method of verifying attested U.S. citizenship status. When possible, proof of citizenship and identity will be obtained via an automated match either through electronic data sources (EDS) in ELIAS or through Income and Eligibility Verification System (IEVS). When using the Vital Statistics Detail page in ELIAS, the verification will be displayed on the Vital Statistics List page.

Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Verifying Citizenship and Identity When citizenship and identity is verified through the automated IEVS match, a record of the proof will be maintained electronically and displayed on the ICIT (Inquiry Citizenship) screen. When acceptable proof is instead provided by the applicant or member, enter coding in the US and ID fields on each person’s TD03 screen in the Automated Benefit Calculation (ABC) system to document that both citizenship and identity have been verified. Acceptable codes are listed in 14-B-Appendix and in “Easy Help.” For cases in ELIAS, use the Vital Statistics Detail page. See Reasonable Opportunity Period and Documentation Process for instructions on how to proceed when acceptable proof is not obtained via electronic data matching and was not provided by the applicant or member. When a paper document is used as verification, a hard copy does not need to be retained if the verification is noted in the electronic case file. If a member has more than one case record and citizenship and identity verification is in only one case file, note in the other case records where the documentation can be found. Comment: Members are required to provide proof of citizenship and identity only once. Once provided, proof cannot be required again as a condition of Medicaid eligibility, unless there is reason to question the proof that was previously provided. A person cannot receive Medicaid if that person is ineligible for a nonfinancial reason. Failure to provide proof of citizenship or identity within the reasonable opportunity period will result in Medicaid being denied or canceled. See 14-B-Appendix, Notice Codes for valid notice reasons. Reasonable Opportunity Period (ROP) Legal reference: 435.956(b), 435.911(c), 441 IAC 75(11)(2)(c) Policy: Individuals whose attested U.S. citizenship status cannot be verified through an electronic data match shall be allowed a reasonable opportunity period (ROP) to provide proof of U.S. citizenship and identity. The ROP begins with the date a written request to provide the information is issued to the person or the date the Notice of Action is received and continues for 90 days. The date of receipt is considered to be 5 days after the date of the Notice of Action.

Title 8: Medicaid Page 8 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Verifying Citizenship and Identity Medicaid shall be provided during the 90-day ROP if the person is otherwise eligible. If proof is not received by the end of the 90-day ROP, benefits end subject to timely notice requirements. Procedure: Whenever possible, proof of citizenship and identity will be obtained through electronic data matching. The system will update eligibility coding if the match is consistent. When the match is inconsistent or unavailable, the system will generate form 470-4858 or 470-4858(S), Request for Verification of Citizenship and Identity, or form 470-4909 or 470-4909(S), Request for Proof of Citizenship and Identity, as applicable to the case situation. The system tracks the ROP. (See Inconsistent Match or No Match for specific procedures.) NOTE: These forms are not available for worker issuance because this would interfere with system tracking of the 90-day ROP. You may print a copy of the form from the electronic case file if necessary (e.g., if the client loses the original). Approve Medicaid for new applicants and continue Medicaid for members during a 90-day ROP. See Retroactive Eligibility if an applicant has requested coverage in retroactive months. For ABC cases, if acceptable proof is provided, record the receipt in the US and ID fields on the person’s TD03 screen. To keep the system from incorrectly blocking subsequent Medicaid approvals, record receipt of the proof on TD03 even if the person is not currently in an active Medicaid status. For ELIAS cases, if acceptable proof is provided, select the document type from the U.S. Citizenship Verification and Identity Verification fields. Then change the Verified field to a “verified” status. If acceptable documentation has not been provided within 90 days, the systems will cancel the individual with timely notice. Comment: Once a 90-day ROP begins, it does not change even if Medicaid is canceled for a different reason before the end of the 90-day period. The ROP lasts 90 days even if the person does not receive Medicaid during the entire 90-day period.

Title 8: Medicaid Page 9 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Verifying Citizenship and Identity If a person who has been denied or canceled for another reason reapplies, begin a new 90-day ROP. This will be done automatically for cases in ELIAS. No extensions are allowed for the 90-day ROP for providing proof of citizenship and identity. However, reinstatement and grace period policies do apply when proof is provided before the effective date of cancellation or within 14 days of cancellation or denial. Continuous eligibility does not apply to children whose citizenship and identity is not verified within the 90-day ROP or the subsequent reinstatement and grace period. ELIAS generates notification to the household about the ROP and explains what qualifies as acceptable proof, tracks the 90-day period, and cancels with timely notice if information is not received. In ELIAS, the worker cannot see if an ROP has been granted. The worker can review past Notice of Actions to determine if an ROP has been granted. For information specific to the ROP for immigrants, see 8-L, Aliens. Loss of Exemption Policy: When a member who was previously exempt from the citizenship and identity verification requirements loses the exempt status, Medicaid eligibility continues during the 90-day ROP. Children losing an exempt status who are already continuously eligible are not required to verify citizenship and identity until the next annual review. Procedure: The system will need to be updated to reflect that the member is no longer exempt from verifying citizenship and identity. EXCEPTION: For a child who is continuously eligible but loses an exempt status, do not make updates until the annual review. Form 470-4909 or 470-4909(S), Request for Proof of Citizenship and Identity, will be system-generated to request proof of citizenship and identity from the person, and the 90-day ROP will begin. Continue Medicaid during the 90-day ROP. If acceptable proof is provided, record the documentation in the system.

Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Verifying Citizenship and Identity Do not cancel the person’s Medicaid due to lack of proof of citizenship and identity during the 90-day ROP. When proof is provided but is questionable or not acceptable:  Contact the person by phone or by mail.  Explain why the proof submitted is not acceptable, how acceptable proof can be obtained, and, if appropriate, offer to assist in obtaining the proof.  Document phone contacts in the case file. Retroactive Eligibility Policy: Retroactive months are outside the ROP. Retroactive Medicaid eligibility shall not be approved until proof of citizenship and identity is received, and provided that retroactive coverage is needed and all retroactive eligibility requirements have been met as detailed at 8-B, Determining Eligibility for the Retroactive Period, and 8-A, Definitions: Retroactive Period. Procedure: Process the Medicaid application as soon as it is received to begin the electronic data match process for verifying citizenship and identity. This will reduce processing delays on the retroactive portion of the Medicaid application. Comment: Proof of citizenship and identity may be obtained directly from the applicant to allow the retroactive portion of the Medicaid application to be acted on without delay. If proof is requested for the purpose of approving retroactive Medicaid, inform the person that submission of proof is optional unless electronic data matching does not verify the person’s citizenship (including identity), but retroactive Medicaid cannot be approved until proof of citizenship and identity is received. If the applicant provides proof of citizenship and identity, record the documentation in the system. If optional proof is not provided, take no negative action.

Title 8: Medicaid Page 11 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Documentation Process Documentation Process Legal reference: Section 211(a) of Public Law 111-3; 441 IAC 75 (Rules in Process) Policy: A person who attests to U.S. citizenship and provides name, social security number, and date of birth meets the citizenship and identity documentation requirements if the electronic data match verifies the person’s citizenship (and identity). A written request for verification shall be issued if:  The electronic data match returns a response that does not verify the person’s citizenship (and identity), or  An electronic data match cannot be requested because the person does not have a social security number. Procedure: The system will automatically attempt an electronic data match when a person:  Is pended or approved on the system, and  The system indicates documentation has not been provided. Proof of citizenship and identity may be obtained directly from the applicant so that documentation is already on file in case the electronic data match is unable to verify the person’s citizenship and identity.

Mr. B files an application for Medicaid in person at the local office on June 28. An electronic data match will occur when his information is entered into the system. Since Mr. B is already in the local office, the IM worker records Mr. B’s verification of identity since Mr. B provided his driver’s license as proof of identity. When a verification request will not be generated for a person who is required to verify citizenship and identity and has not done so, follow the procedures under No Match. A request for proof of citizenship and identity will not be sent when the worker indicates verification is not needed (e.g., person is exempt, verification is already on file, person is an alien).

Title 8: Medicaid Page 12 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Documentation Process Consistent Match (Verified) Policy: When the electronic data match response to a request for proof of citizenship and identity is a consistent match, the person’s citizenship (and identity) are verified. The person has met the citizenship and identity documentation requirements. Procedure: No further action is needed for that person’s ongoing Medicaid. Comment: A response about an individual’s citizenship (and identity) can be used only for the purposes of determining Medicaid or Hawki eligibility. These citizenship data matches cannot be used to determine eligibility for other programs (Food Assistance, FIP, CCA, etc.). Inconsistent Match (Not Verified) Policy: When the electronic data match response to a request for proof of citizenship and identity is an inconsistent match, the person’s citizenship (and identity) are not verified. The system will generate a written request for verification of citizenship and identity to notify the person that:  The person has 90 days to provide verification by either: • Correcting any errors in the name, social security number, or date of birth given to the Department so that SSA can verify the person’s citizenship and identity; • Correcting any errors in the SSA’s records and providing proof of citizenship and identity from SSA when this is done; or • Providing proof of citizenship and identity from the list of documents described under Acceptable Documentation.  If proof of citizenship and identity is not provided within 90 days: • Medicaid eligibility will end and • Retroactive Medicaid, if requested, will be denied. If the corrections produce a response that verifies the person’s citizenship and identity, the system will update the coding. If retroactive eligibility has been entered in the system, a WISE alert will be sent to tell you that retroactive Medicaid coverage was requested and a decision may still be needed on retroactive eligibility.

Title 8: Medicaid Page 13 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Documentation Process If the person provides acceptable proof during the 90-day ROP, record the documentation in the system. If proof is provided but is questionable or not acceptable:  Contact the person by phone or by mail.  Explain why the proof submitted is not acceptable, how acceptable proof can be obtained, and offer to assist in obtaining the proof if appropriate.  Document phone contacts in the case file. Do not cancel the person’s Medicaid due to lack of proof of citizenship and identity during the 90-day ROP. If the person has not provided acceptable documentation within 90 days, the system will:  Cancel the individual with timely notice.  Send a WISE alert if the system shows retroactive coverage was requested, to tell you to deny retroactive eligibility. See Retroactive Eligibility for additional information about retroactive Medicaid coverage and citizenship and identity requirements. No Match (Not Verified) Policy: An electronic data match request for proof of citizenship and identity will not be sent when:  The person does not have a social security number or  A request was already sent and the person’s name, date of birth, social security number, or sex has not been changed on the system. A written request for verification shall be issued. Medicaid shall be approved during the 90-day ROP. Procedure: When proof of citizenship and identity is required for a person but cannot be requested via electronic data sources, a written request for proof will be system-generated. The request notifies the person that if proof of citizenship and identity is not provided within 90 days:  Medicaid eligibility will end and  Retroactive Medicaid, if requested, will be denied.

Title 8: Medicaid Page 14 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Documentation Process Form 470-4909 or 470-4909(S), Request for Proof of Citizenship and Identity and Comm. 258, Verifying Citizenship and Identity will be system- generated and sent to a person who:  Is approved on the system,  Has all 9s or all 0s in the social security number field, and  The system indicates documentation has not been provided. NOTE: If a person with all 9s or all 0s later provides a social security number, entry of the social security number will cause a request for proof of citizenship and identity to be sent via electronic data sources. If acceptable proof is provided during the 90-day ROP, record the documentation on the system. See Retroactive Eligibility for additional information. If proof is provided but is questionable or not acceptable:  Contact the person by phone or by mail.  Explain why the proof submitted is not acceptable, how acceptable proof can be obtained, and, if appropriate, offer to assist in obtaining the proof.  Document phone contacts in the case file. Do not cancel the person’s Medicaid due to lack of proof of citizenship and identity during the 90-day ROP. If the person has not provided acceptable documentation within 90 days, the system will:  Cancel the individual with timely notice.  Send a WISE alert to tell you to deny retroactive eligibility, if applicable. See Retroactive Eligibility for additional information about retroactive Medicaid coverage and citizenship and identity requirements. Acceptable Documentation Legal reference: 42 CFR 435.407, 441 IAC 75 (Rules in Process), P. L. 111-3 Policy: Documents that are acceptable verification of U.S. citizenship and identity are categorized as either primary or secondary. Primary documents are acceptable proof of both citizenship and identity. When secondary documents are used to verify citizenship, separate proof of identity is also required. See the ROP Reference Guide for a list of documents that are acceptable as verification of citizenship and identity.

Title 8: Medicaid Page 15 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Citizenship Revised October 10, 2025 Acceptable Documentation An individual may use affidavits to verify both citizenship and identity. However, accept affidavits only as a last resort when no other form of verification is available. Affidavits must be signed under penalty of perjury but need not be notarized. Original documents or copies certified by the issuing agency are not required. A photocopy, fax, scanned, or other copy must be accepted to the same extent as an original document, unless information on the copy submitted is inconsistent with other available information or the validity of the documentation is questionable. Procedure: When a client submits original documents to prove citizenship or identity, do not date-stamp the originals. Instead, if retaining the documents, photocopy the originals and return them to the client. Date stamp the copy and place it in the case file. Make a notation in the electronic case file, of the type of citizenship and identity verification received. Each state must conduct its own verification of citizenship and identity. However, Iowa can accept another state’s copy of a document or another state’s data match with that state’s vital records. Documents submitted by a person whose last name has changed (e.g., due to marriage or divorce) may be accepted if the documents match in every way except the last name. If there is reason to question whether the documents belong to the same person, request an official document verifying the change (e.g., marriage license, divorce decree). Persons who have changed both their first and last names must produce documentation of the official change from a court or governing agency. Health Insurance Premium Payment (HIPP) Program Legal reference: 441 IAC 75.21(14) The Health Insurance Premium Payment (HIPP) program is operated by the HIPP Unit at the Iowa Medicaid Enterprise (IME). The purpose of the HIPP program is to pay the cost of health insurance for Medicaid members when it is determined that doing so would result in cost savings to the Medicaid program. Refer all households with a member who has health insurance available to the HIPP Unit, except under the circumstances listed in 8-M, Situations Not Covered by HIPP.

Title 8: Medicaid Page 16 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Health Insurance Premium Payment (HIPP) Program Revised October 10, 2025 Referral to the HIPP Program Not Needed To make a referral to the HIPP Unit have the member, applicant, or parent contact the HIPP Unit as follows: Toll-free phone: 1-888-346-9562 Local phone: (515) 974-3282 Fax: (515) 725-0725 Interoffice mail: IME/HIPP NOTE: Refer to NJA0093, Cooperation for the process to enter a HIPP referral in ELIAS and/or the process when Medicaid has been requested and a noncompliance still exists. Referral to the HIPP Program Not Needed Legal reference: 441 IAC 75.21(5) and 75.21(14)”b” A referral to the HIPP program is not needed when the only Medicaid-eligible member:  Has Medicare.  Is eligible for Medicaid only under one or more of the following coverage groups: • Medicaid for Kids with Special Needs (MKSN) • Medically needy  Has health insurance maintained by another entity (e.g., an absent parent maintains insurance on the Medicaid member’s children or the policyholder is not in the Medicaid household).  Has an insurance plan designed to provide temporary coverage.  Has an indemnity insurance policy that supplements the policyholder’s income or pays a predetermined amount for medical services (e.g., $50 per day for hospital services instead of 80% of the charge).  Has an insurance plan offered on the basis of school attendance or enrollment.  Is the policyholder and an absent parent. CSS is responsible for obtaining cash and medical support for children in households where a parent is absent.  Uses the health insurance premium as a deduction in computing the client participation.  Is the policyholder or potential policyholder and is an undocumented alien.

Title 8: Medicaid Page 17 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation in Obtaining Medical Resources Revised October 10, 2025 Cooperation with the Third Party Liability Unit Cooperation in Obtaining Medical Resources Legal reference: 42 CFR 433.146-148 and 435.610; 441 IAC 75 (Rules in Process) and 75.14, 75.21(249A) All applicants and members are required to cooperate with certain processes related to obtaining medical resources as a condition of eligibility for Medicaid, unless good cause exists for failure to cooperate. This includes pregnant minors living independently. The applicant’s signature on the application form shall constitute agreement to the assignment. Deny Medicaid benefits to an applicant who fails to cooperate in determining the availability of medical resources. However, do not deny Medicaid benefits of a child due to the failure of the child’s parent or specified relative to cooperate. This section covers procedures for:  Cooperation with the Third-Party Liability Unit  Good cause for failure to cooperate Cooperation with the Third-Party Liability Unit Legal reference: 42 CFR 433.138, 433.145-148, and 435.610(a); 441 IAC 75 (Rules in Process) and 80.3(2) A Third-Party Liability Unit is part of the Iowa Medicaid Enterprise Revenue Collection Unit and the managed care contractors. The primary purpose of the Third-Party Liability Units is to identify and collect monies from any available medical resource that can pay all or part of a member’s medical expense. A member or a person acting on the member’s behalf must cooperate with Third- Party Liability by providing information and verification about any medical or third- party resources by completing form 470-2826, Insurance Questionnaire. Third-party resources include:  Medicare  Insurance policies • Private health insurance • Group health insurance • Liability insurance • Automobile medical insurance • Family health insurance carried by an absent parent

Title 8: Medicaid Page 18 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation in Obtaining Medical Resources Revised October 10, 2025 Cooperation with the Third Party Liability Unit  Railroad Retirement benefits  Worker’s compensation  Veterans Affairs benefits  TRICARE (military health insurance)  Liability lawsuits (tort action)  Orders for restitution as a result of a criminal conviction Send the completed Insurance Questionnaire to the IME Third-Party Liability Unit:  By interoffice mail to RevCol/IME  By fax to 515-725-1352  By E-mail to revcol@hhs.iowa.gov Collect and report all necessary information about an accident, including:  The name of the insurance company.  The policy number or claim number.  The type of accident (motor vehicle, slip and fall, worker’s compensation).  The name and address of any attorney or insurance adjuster involved in the case. NOTE: Refer to NJA0093, Cooperation for the process of a Third Party Liability noncompliance in ELIAS and/or the process when Medicaid has been requested and a noncompliance still exists. Failure to Cooperate With Third-Party Liability Unit Legal reference: 441 IAC 75 (Rules in Process) When a person fails to cooperate with Third-Party Liability, a sanction must be applied to Medicaid eligibility. EXCEPTION: See Good Cause for Failure to Cooperate. Apply a sanction to a minor parent who does not cooperate. NOTE: Do not apply a sanction to a child when a parent or specified relative fails to cooperate. A person under sanction counts in the household size.

Title 8: Medicaid Page 19 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation in Obtaining Medical Resources Revised October 10, 2025 Good Cause for Failure to Cooperate Good Cause for Failure to Cooperate Legal reference: 441 IAC 75.21, 75 (Rules in Process) The Third-Party Liability or the IM worker may be responsible for determining if good cause for failure to cooperate exists. Good cause for failure to cooperate exists when the applicant, member, parent, or family has one or more of the following situations:  Serious illness or death of a member of the family.  A family emergency or a household disaster, such as a fire, flood, or tornado.  Verified good cause reasons beyond the applicant, member, or parent’s control.  Not receiving a request for information for a reason that was not the member’s or responsible parent’s fault. A member or parent’s failure to provide a forwarding address does not qualify. Cooperation with Investigations and Quality Control Legal reference: 441 IAC 75.29 and 76.8(249A) Medicaid clients must cooperate with Quality Control reviewers when their case is selected for verification of eligibility. Apply a sanction to the Medicaid case if Quality Control sends you form 470-0479, Noncooperation Notice on an active client. Do not sanction children who are continuously eligible. See 8-F, Cooperation with DIAL and QC. Department of Inspections, Appeals, and Licensing (DIAL) conducts front-end investigations of applicant and member cases. DIAL also conducts fraud investigations. DIAL will send you the results of an investigation. Take into consideration the findings of the investigator. The evidence in the findings is considered verified information. Do not delay determining eligibility pending receipt of the investigator’s report. Apply a sanction to the Medicaid case if the DIAL report says the client is not cooperating. When a sanction is applied, Medicaid is not available until cooperation occurs.

Title 8: Medicaid Page 20 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation in Obtaining Medical Resources Revised October 10, 2025 Good Cause for Failure to Cooperate EXCEPTIONS:  Do not apply a sanction when the eligibility requirements under investigation or review would not result in the person being ineligible. (For example, do not apply a sanction to children on the case when the investigation involves resources, since resources are not considered when determining eligibility for children.)  Do not apply a sanction if the DIAL investigation involves only the circumstances of someone whose income and resources do not affect Medicaid eligibility.  If the report from DIAL involves an SSI recipient, do not apply a sanction unless the report is that the client moved out of state. Inform the Social Security Administration’s district office of any reported findings that may affect SSI eligibility using form 470-0641, Report of Change in Circumstances--SSI-Related Programs. If you have sanctioned a case for failure to cooperate, do not re-establish eligibility until you are notified that the client is cooperating or that the client no longer needs to cooperate. When a person under an existing DIAL sanction applies for Medicaid, do not determine eligibility until DIAL sends notification that the person has cooperated. Eligibility may then be determined beginning on the date of the application. NOTE: Remove the noncompliance in ELIAS. NOTE: Refer to NJA0093, Cooperation for the process when Medicaid has been requested and a noncompliance still exists. Cooperation with Child Support Services Legal reference: 42 CFR 433.146-148 and 435.610, 441 IAC 75.14(249A) Policy: Applicants and members in households with children must agree to cooperate in obtaining court-ordered medical support when there is an absent parent. The only exceptions are when good cause for refusal to cooperate exists. (See Good Cause for Refusal to Cooperate.) Applicants demonstrate their willingness by signing the application. Applicants and members must cooperate in obtaining support for themselves and for any other person in the household when:  Medicaid is requested for that person, and  The applicant or member can legally assign rights to court-ordered medical support for that person.

Title 8: Medicaid Page 21 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 What the Client Must Do to Cooperate A referral to CSS will be made only as listed in 8-B, Referrals to CSS.

Mrs. J, age 40, is an SSI recipient. Her two children, ages 10 and 12, receive Medicaid coverage. Mr. J, the father of the children, is absent from the home. The children have court-ordered medical support from their absent father. Mrs. J is required to cooperate in obtaining support as a condition of her Medicaid eligibility. Cooperation with Child Support Services (CSS) is not required when:  The referred person is no longer considered a child by the program.  A pregnant woman is eligible for Medicaid under the Mother and Children (MAC) coverage group. See Pregnant Women Who Are Exempt from Cooperation for more information. Referrals are not required when:  There is good cause for not cooperating. See Good Cause for Refusal to Cooperate for an explanation of client responsibilities, good cause, and what you need to do when a client claims good cause.  The children in the household are not applying for or receiving Medicaid.

Mrs. L is an SSI recipient. Her two children, ages 6 and 7, do not receive Medicaid. Mrs. L is not required to cooperate in obtaining support as a condition of her Medicaid eligibility.  Children are living on their own and no parent or other caretaker is acting in a parental capacity over them. The following sections contain more information on:  What the client must do to cooperate  Good cause for failure to cooperate  Failure to cooperate  If sanctioned parent decides to cooperate What the Client Must Do to Cooperate Legal reference: 441 IAC 75.14(1)“a”, “b”, “c”, and “d” Unless good cause exists, clients must cooperate in the following areas:  Identifying and locating the absent parent of a child for whom Medicaid is requested.

Title 8: Medicaid Page 22 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 What the Client Must Do to Cooperate  Establishing the liability of the absent parent of a child for whom Medicaid is requested.  Obtaining any court-ordered medical support payments for the client and for a child for whom Medicaid is requested.  Supplying enough information about the absent parent, the receipt of court- ordered medical support, and the establishment of liability (when needed) to establish Medicaid eligibility and permit an appropriate referral to the CSS.  Appearing at the CSS local office to provide verbal or written information to establish liability when needed and secure medical support for the children in the eligible group. This includes information or documentary evidence that the client knows about, possesses, or could reasonably obtain.  Appearing as a witness at judicial or other hearings or proceedings.  Providing information, or attesting to the lack of information, under penalty of perjury.  Paying to the Department any medical support payments that the client receives after the date of decision.  Completing and signing documents needed by the state’s attorney for any relevant judicial or administrative purpose. Child Support Services shall make the determination of whether or not the adult member has cooperated. Special previsions apply to:  Minors living independently of their parents.  Pregnant women under the MAC coverage group. Minors Living Independently of Parents Legal reference: 441 IAC 75.14(249A) When a minor and the minor’s child are living independently of the minor’s parents, the minor must cooperate with Child Support Services (CSS) only on the absent parent of the minor’s child. Do not require the minor to cooperate in establishing liability or obtaining medical support from the minor’s parents. However, if the minor is living with an adult who is acting in a parental capacity, request the parent or other caretaker to cooperate with CSS.

Title 8: Medicaid Page 23 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 What the Client Must Do to Cooperate

1. The households consist of Ms. J; her daughter, Mary, age 17; and Mary’s daughter Ann, age 2. This household receives Medicaid under the MAGI-related Medicaid coverage group. The worker requires Mary to cooperate with CSS on Ann’s father. The worker also requires Ms. J to cooperate with CSS on Mary’s absent father. 2. Mr. J, age 32, receives Medicaid for Larry, his nephew, age 4. The worker requires Mr. J to cooperate with CSS in obtaining medical support from Larry’s parents, because Mr. J is acting in a parental capacity. Pregnant Women Who Are Exempt from Cooperation Legal reference: 441 IAC 75 (Rules in Process) Pregnant and postpartum women who are eligible for Medicaid under the Mother and Children (MAC) coverage group do not have to cooperate in establishing liability and obtaining medical support for their Medicaid eligible born children. Pregnant women eligible under a coverage group other than MAC must cooperate in establishing liability and obtaining support. If the woman fails or refuses to cooperate, cancel eligibility under her current coverage group, complete an automatic redetermination and establish eligibility under MAC.

1. Ms. D, age 32 and pregnant, receives Medicaid for herself and her two children, ages 6 and 8, as a household of four. Ms. D failed to cooperate with CSS. (Ms. D has an active CSS case). Ms. D’s Medicaid eligibility is automatically redetermined under the MAC coverage group since cooperation is not an eligibility factor under MAC for pregnant women. Ms. D is informed that she will be required to cooperate when her postpartum period expires. 2. Ms. B, age 23 and pregnant, receives Medicaid for herself and her two children, ages 2 and 4, under MAC coverage group. Ms. B previously requested CSS services and a referral to CSS was made. Ms B has now failed without good cause to cooperate with CSS. The IM worker takes no further action, since no sanction can be applied until the postpartum period expires.

Title 8: Medicaid Page 24 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate Good Cause for Refusal to Cooperate Legal reference: 441 IAC 75.14(3) and (9) Policy: Each applicant and member has the opportunity to claim good cause for refusing to cooperate with the CSS in establishing liability or securing medical support payments. Procedure: Give applicants and members form 470-0169, Requirements of Support Enforcement. This form explains the right to claim good cause as an exception to the cooperation requirement, and how to file a claim. Document in the case record that the form was provided. Issue form 470-0170, Requirements of Claiming Good Cause whenever the member:  Asks for a copy, or  Wants to make a claim of good cause, or.  Indicates on the application that the member does not want to cooperate with CSS The member has the burden of proof that good cause circumstances exist. To meet this requirement, the member must:  Specify the circumstances claimed as good cause for not cooperating.  Corroborate the good cause circumstances.  Provide enough information to permit an investigation, when requested. If an applicant claims good cause, do not act on the application until the time frame for providing the evidence has lapsed or until the applicant provides the evidence, whichever is sooner. You have good cause to delay the eligibility determination if the time frame for providing the evidence exceeds the time frame for processing applications. If the applicant is making efforts but is unable to provide the evidence within the required time frame, continue pending the application until all members are eligible. Or, at the applicant’s request, determine eligibility for the immediately eligible members. In the latter case, the date the ineligible person provides the required evidence is the date of application to add that person.

Title 8: Medicaid Page 25 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate If a member claims good cause, continue Medicaid pending receipt of the evidence in the required time frame. If the member fails to provide the needed proof by the due date, cancel the member’s Medicaid. See Failure to Cooperate in Obtaining Support. Once the applicant or member has provided all necessary proof, process the good cause claim. See Making the Decision About Good Cause. Comment: The following sections give more information on:  Determining if good cause exists  Evidence of physical and emotional harm  Client responsibilities when filing a good cause claim  Worker responsibilities when a good cause claim is filed  Making the decision about good cause Determining if Good Cause Exists Legal reference: 441 IAC 75 (Rule in Process) Good cause exists when cooperation in establishing liability and securing support is against the best interest of the child. Cooperation is against the best interests of the child only if one of the following exists:  The child for whom medical support is sought was conceived as a result of incest or forcible rape.  Legal adoption proceedings are pending before a court of competent jurisdiction.  The applicant or member has been working with a public or licensed private social agency less than three months to decide whether to keep the child or relinquish the child for adoption.  It is reasonably anticipated that cooperation would result in physical or emotional harm to the child for whom medical support is being sought.  It is reasonably anticipated that cooperation would result in physical or emotional harm to the parent or other caretaker with whom the child is living which reduces the person’s capacity to care for the child adequately. Evidence of Physical and Emotional Harm Legal reference: 441 IAC 75.14 Physical and emotional harm must be of a serious nature in order to justify a finding of good cause.

Title 8: Medicaid Page 26 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate A finding of good cause because of emotional harm must be based on a demonstration of an emotional impairment that substantially affects the person’s functioning. Consider the following when deciding if good cause exists based on anticipated emotional harm:  The current and past emotional state of the person subject to emotional harm.  The emotional health history of the person subject to the emotional harm.  The intensity and probable duration of the emotional impairment.  The degree of cooperation required.  The involvement of the child in the liability establishment or medical support enforcement activity to be undertaken. When a claim is based on the client’s anticipation of physical harm, and corroborative evidence is not submitted in support of the claim, investigate the claim if you believe that:  The claim is credible without corroborative evidence.  Corroborative evidence is not available.  Grant good cause if the claimant’s statement and the investigation which is conducted provide sufficient evidence that the client has good cause for refusing to cooperate.  Your immediate supervisor must approve or disapprove your decision. Record the findings in the case record. Client Responsibilities When Filing a Good Cause Claim Legal reference: 441 IAC 75.14 The client must prove the existence of good cause circumstances. Evidence must be provided within 20 days from the date of the claim. If your supervisor approves, you may allow more time in exceptional cases where the evidence is especially difficult to obtain. A good cause claim may be supported with the following types of evidence:  Birth certificates or medical or law enforcement records that indicate the child was conceived as the result of incest or forcible rape.

Title 8: Medicaid Page 27 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate  Court documents or other records that indicate that legal proceedings for adoption are pending before a court of competent jurisdiction.  Court, medical, criminal, child protective services, social services, psychological, or law enforcement records that indicate that the putative father or absent parent might inflict physical or emotional harm on the child, parent, or other caretaker.  Medical records that indicate emotional health history and present emotional health status of the parent or other caretaker or the child for whom support would be sought.  Written statements from a mental health professional indicating a diagnosis or prognosis concerning the emotional health of the parent or other caretaker of the child for whom support would be sought.  Written statements from a public or licensed private social agency that the member is being assisted by the agency to resolve the issue of whether to keep the child or relinquish the child for adoption.  Sworn statements from persons other than the member or applicant with knowledge of the circumstances that provide the basis for the good cause claim. Written statements from the client’s relatives and friends are not sufficient to grant good cause but may be used to support other evidence provided. If requested, the member must also provide additional evidence that may be needed, and help with an investigation of good cause. Failure to meet these requirements is sufficient basis for determining that good cause does not exist. Worker Responsibilities When a Good Cause Claim Is Filed Legal reference: 441 IAC 75.14 Immediately notify Child Support Services whenever a client files a claim for good cause. Enter all information relating to the claim and determination of good cause into the case record. When a client asks for help in getting evidence, offer suggestions about how to obtain the necessary documents. Make a reasonable effort to obtain necessary documents that the client has been unable to obtain.

Title 8: Medicaid Page 28 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate Further investigation of good cause may be necessary if the client’s claim and the supporting evidence are not enough to make a decision. Notify the client in writing if additional supporting evidence is needed, and what type of documents are needed. If you need to contact the putative father or absent parent, notify the client first. The client can choose to:  Give additional supporting evidence to avoid the need for the contact.  Withdraw the application or have the case closed.  Withdraw the good cause claim. Consult Child Support Services before contacting an absent parent, and document details in the case record. If there is any indication the absent parent may try to harm the child or caretaker either physically or emotionally, be especially careful not to reveal any information about their location. Confer with the CSS before making a final decision about good cause. Making the Decision About Good Cause Legal reference: 441 IAC 75.14 Within 45 days from the date the claim is filed, determine whether or not good cause exists. Determine each good cause claim at the earliest possible date. Do not use the 45-day time frame as a waiting period before determining good cause nor as a basis to deny the good cause claim. Extend the time frame only if:  You cannot obtain evidence needed to verify the claim within 45 days, or  The client cannot provide supporting evidence within the 20-day limit. Document any time extensions in the case record. Grant good cause if the claimant’s statement and the investigation which is conducted provide sufficient evidence that the client has good cause for refusing to cooperate. Your immediate supervisor must approve or disapprove your decision. Record the findings in the case record. Notify Child Support Services within two working days after the final decision to deny or grant good cause has been made. Give Child Support Services the opportunity to participate in any appeal hearing.

Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate Notify the client of your final decision in writing. This notification must explain the decision and the basis for the decision. If the decision is that good cause does not exist, give the client the opportunity to cooperate. Notify the client that continued refusal to cooperate will result in the loss of Medicaid for the adult who fails to cooperate. If the decision is that good cause does exist and a referral to CSS is required, consult with the CSS to decide whether medical support enforcement can proceed without risk of harm to the child, parent, or other caretaker if the enforcement activities do not involve their participation. (See 8-B, Referrals to CSS.) When medical support enforcement activities will proceed without the cooperation of the parent or other caretaker, notify the client in writing. At least once every six months, review the circumstances that led to the determination of good cause when the circumstances are subject to change. If circumstances have changed and good cause no longer exists, notify the client in writing that child support enforcement activities will proceed, if a referral is required. Also, notify CSS within two working days of the determination that good cause no longer exists. Failure to Cooperate in Obtaining Support Legal reference: 441 IAC 75.14 Deny or cancel Medicaid benefits for an applicant or member whom CSS reports failed to cooperate in obtaining medical support or establishing liability without good cause. Sanction only the parent or other caretaker for failing to cooperate. If the parent of a child who is receiving SSI or non-MAGI-related Medicaid fails to cooperate and that parent is receiving Medicaid on another case, cancel the parent’s Medicaid coverage. If the parent cooperates on or after the effective date of cancelation, the parent will need to reapply.

1. Mrs. M, age 31, is receiving SSI and Medicaid. Without good cause, she fails to cooperate in obtaining medical support for her two children who are receiving Medicaid. Mrs. M’s Medicaid is canceled. However, the children continue to receive Medicaid if otherwise eligible.

Title 8: Medicaid Page 30 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 Good Cause for Refusal to Cooperate

2. Ms. T receives Medicaid for herself and one child. Ms. T refuses without good cause to cooperate in obtaining medical support for the child. Ms. T’s Medicaid is canceled for failure to cooperate. The child continues to be eligible. If the Sanctioned Parent or Other Caretaker Decides to Cooperate Legal reference: 441 IAC 76.12(1)”b” A client who is not receiving Medicaid due to failure to cooperate may be eligible to receive Medicaid when the client indicates a willingness to cooperate. When adding the client back to an existing household, the date the client expresses a willingness to cooperate is the date of application. The parent or other caretaker may contact you or CSS to express willingness to cooperate. Contact with either office establishes the date of application. NOTE: An application must be filed when the client cannot be added to an existing household. If the client contacts you to indicate a willingness to cooperate, tell the client to contact CSS. State in writing that the client has ten calendar days to contact and cooperate with CSS. Make it clear to the client that the client cannot receive Medicaid benefits until the client has followed through on the action required by CSS. Grant an extension if appropriate. If the client fails to cooperate by the due date, deny the application. The client remains ineligible for Medicaid. Do not take action to approve the parent or other caretaker until CSS gives notice that the parent or other caretaker has cooperated. Approve the client’s Medicaid beginning with the first day of the month that the client has cooperated with CSS. If the client is otherwise eligible and meets retroactive eligibility criteria as defined in 8-A, Definitions, approve Medicaid up to three months before the date of application. When the client contacts CSS to indicate a willingness to cooperate, you may not find out that the client has cooperated until CSS notifies you. The notification from CSS will contain the date the client initially contacted CSS and expressed willingness to cooperate. If necessary, contact CSS to confirm the date the client first indicated a willingness to cooperate to determine the correct date of application.

Title 8: Medicaid Page 31 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Cooperation with Child Support Services Revised October 10, 2025 If the Sanctioned Parent or Other Caretaker… Document details in the case record of any contact with the client or with CSS. When the parent or other caretaker expresses a willingness to cooperate before the effective date of their loss of Medicaid, notify CSS. When CSS notifies you that the parent or other caretaker has cooperated, reinstate their Medicaid. When the parent or other caretaker expresses a willingness to cooperate on or after the effective date of losing Medicaid, the earliest effective date they can be added and approved for Medicaid is the first day of the month in which the parent or other caretaker expressed a willingness to cooperate. NOTE: Refer to NJA0093, Cooperation for the process when Medicaid has been requested and a noncompliance still exists.

1. On December 1, CSS notifies the IM worker that Mrs. A failed to cooperate. On December 3, the IM worker sends Notice of Decision or Notice of Action canceling Mrs. A’s Medicaid effective January 1. On December 10, Mrs. A calls the IM worker and expresses her willingness to cooperate. On December 26, CSS notifies the IM worker that Mrs. A has cooperated. The IM worker reinstates Mrs. A’s Medicaid effective January 1. 2. The same as Example 1, except CSS does not notify the IM worker until January 10 that Mrs. A has cooperated. The worker reinstates Mrs. A’s Medicaid effective January 1 because she indicated her willingness to cooperate before the effective date of cancellation of her medical assistance. 3. Same as Example 1, except Mrs. A does not contact the IM worker until January 2 to express her intent to cooperate. On January 4, CSS notifies the IM worker that Mrs. A has cooperated. The worker reopens Mrs. A’s Medicaid effective January 1. 4. Same as Example 3, except CSS does not notify the IM worker until February 1 that Mrs. A cooperated in January. The worker reopens Mrs. A’s Medicaid effective January 1.

Title 8: Medicaid Page 32 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Sanctions and Appeals Revised October 10, 2025

Sanctions and Appeals Legal reference: 42 CFR 431.200, 431.220, and 433.147; 441 IAC 7.5(17A), 75 (Rules in Process), 75.14(249A), 75.21(249A), 76.8(249A), and 80.3(249A) A sanction is a penalty for not cooperating with the Department. The penalty is the loss of Medicaid eligibility. A person may be sanctioned for failure to cooperate with:  Child Support Services (CSS)  Third-Party Liability (TPL) Unit  Department of Inspections, Appeals, and Licensing (DIAL)  Quality Control (QC) When you reinstate or reopen a case that includes a sanctioned person, you will receive a Notice of Decision or Notice of Action. If you receive an appeal on this Notice of Decision or Notice of Action, you will need to include the following in your appeal summary:  An explanation of when the sanction was originally issued,  The original Notice of Decision or Notice of Action sanctioning the person, and  The current Notice of Decision or Notice of Action reinstating or reopening the household. The household has rights to appeal the sanction based only on the original Notice of Decision sanctioning the individual. However, the way Medicaid was calculated may be appealed, which is true for all decisions. If a sanctioned person applies for Medicaid and the sanction has not been cured, the sanctioned person should receive a Notice of Decision or Notice of Action that gives the person the right to appeal the sanction. Residency Legal reference: 42 CFR 435.403 and 435.956(c), 441 IAC 75.10(249A), Iowa Code Section 249A.3 A person must be a resident of Iowa to be eligible for Iowa Medicaid. In general, a resident of Iowa is a person who is living in the state with the intent to remain permanently or for an indefinite period. However, other rules may apply, based on age, institutional or foster care status, ability to indicate intent, or disability.

Title 8: Medicaid Page 33 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025

How these factors affect residency is explained in this section. See Nonfinancial MAGI- Related Eligibility: Residency, for additional policies specific to MAGI cases. Accept the person’s statement, unless questionable. The person does not need to live in the state for a specified period nor maintain a permanent residence or fixed address. If a person in an institution satisfies the residency rules, eligibility cannot be denied because the person did not establish residency in Iowa before entering the institution. If two or more states cannot resolve a disagreement about which state is a person’s state of residence, the state where the person is physically located is the state of residence. Before approval in Iowa, a person receiving care in another state must take all steps available to obtain Medicaid in that state, including appealing any adverse decision. If the other state has denied an application or canceled benefits and is not currently providing Medicaid because the other state does not consider the person a resident of that state, the person is considered a resident of Iowa. The discussion of residency policies is organized as follows:  Two sections on the factors in determining residency for adults (aged 21 or over) and children.  Four sections that further explain the concepts used in determining residency: • Living in Iowa for employment • Intent to live in Iowa • Incapability of expressing intent • State placements  Two sections that address special situations: • Persons in medical institutions outside Iowa who claim Iowa residence • Persons receiving Medicaid from another state who move into Iowa

Title 8: Medicaid Page 34 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21… Determining Residency for Persons Aged 21 or Over

State of residence is:  Where living with a job commitment or to seek employment, or  Where living with the intent to remain. In institution? Capable of indicating intent? Did a state arrange placement? State of residence is state arranging placement. Capable of indicating intent? State of residence is where living. State where living with intent to remain. Age the person became incapable of indicating intent? Before Age 21 State of residence is state where the person is physically present. The state of residence is:  Parent’s or legal guardian’s state of residence at the time of entry into living arrangement, or  The current state of residence of the parent or legal guardian who files the application, if the person is institutionalized in that state or if the parents reside in separate states.  The state where the person is institutionalized, if the person has been abandoned by his or her parents and a legal guardian has not been appointed. No Yes No Yes No Yes Yes No At or After Age 21

Title 8: Medicaid Page 35 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21… Residency policies for persons aged 21 or over depend on whether the person lives in an institution. Not in an Institution Legal reference: 441 IAC 75.10(2) If the person aged 21 or over is not in an institution, determine if the person is capable of expressing intent. (See Incapability of Expressing Intent.)

Capacity State of Residence Capable of expressing intent State where the person is living:  With a job commitment or seeking employment. (See Living in Iowa for Employment Purposes.)  With intent to remain there permanently or indefinitely. (See Intent to Live in Iowa.) Not capable of expressing intent State where the person is living (i.e., physically present). In an Institution Legal reference: 42 CFR 435.403, 441 IAC 75.10 If the person aged 21 or older is in an institution, find out whether a state arranged placement. When a state arranged placement, the state of residence is the state making the placement. See State Placement. When a state did not make the arrangement, state of residence is determined by whether the person is capable of expressing intent as explained in the following chart. See Incapability of Expressing Intent.

Title 8: Medicaid Page 36 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21…

Capacity State of Residence Capable of expressing intent State where the person is living with intent to remain there permanently or indefinitely. See Intent to Live in Iowa. (If the person was a resident of another state before being institutionalized in a second state, and the person intends to return to the first state, the state of residence is the first state.) Not capable of expressing intent  If the person was 21 or older when the person became incapable of expressing intent, state where the person is physically present.  If the person was under 21 when the person became incapable of expressing intent: • The parent’s or legal guardian’s state of residence at the time of placement; or • The current state of residence of the parent or legal guardian who files the application, if the person is institutionalized in that state, or if the parents reside in separate states; or • The state where the person is institutionalized, if the person has been abandoned by the person’s parents and a legal guardian has not been appointed. Unless questionable, accept the statement of the representative regarding the age when the person became incapable of expressing intent.

Title 8: Medicaid Page 37 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21… Determining Residency for Persons Under Age 21

Is the person institutionalized or in foster care? No  For a person who is emancipated or married and capable of indicating intent, the state of residence is the state where the person is living with intent to remain there permanently or indefinitely (even if the person is temporarily absent from that state).  For a person whose Medicaid eligibility is based on blindness or disability, the state of residence is where the person is living.  For any other noninstitutionalized person under age 21, the state of residence is determined according to MAGI-related residency rules. (See cross reference to MAGI-related manual provisions). Yes Did a state arrange the person’s placement? State arranging placement is the state of residence. For a person who is neither married nor emancipated, the state of residence is:  The parent’s state of residence at the time of the person’s placement, or NOTE: If a legal guardian has been appointed and parental rights are terminated, use the guardian’s state of residence instead of the parent’s.  The current state of residence of the parent or legal guardian who files the application if the person is institutionalized in that state.  The state where the person is institutionalized, if the person has been abandoned by the person’s parents and a legal guardian has not been appointed. The client may have choice of two different states of residency under options 1 and 2. Yes No

Title 8: Medicaid Page 38 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21… Residency policies for a person who is under aged 21 depend on whether or not the person lives in an institutional or foster care setting. Not in an Institution or in Foster Care Legal reference: 441 IAC 75.10(2) When the person under age 21 is not institutionalized and is not in foster care, the state of residence depends upon the person’s situation:  For a person who is emancipated or married and capable of expressing intent, the state of residence is the state where the person is living with intent to remain there permanently or indefinitely. This applies even if the person is temporarily absent from that state.  For a person whose Medicaid eligibility is based on blindness or disability, the state of residence is where the person is living.  For children receiving adoption assistance under Title IV-E, the state of residence is the state where the child lives. A baby whose adoption is being done by an Iowa adoption agency is not considered an Iowa resident if neither the biological mother nor the adoptive parents are Iowa residents. But if either the biological mother or the adoptive parents are Iowa residents, the baby is an Iowa resident. Once adopted, the baby’s residency is that of the adoptive parents.  For any other noninstitutionalized person, use MAGI-related residency rules to determine state of residency. See Nonfinancial MAGI-Related Eligibility: Residency. In an Institution or in Foster Care Legal reference: 441 IAC 75.10 When the person under age 21 is institutionalized or in foster care, the state of residency depends upon whether or not a state arranged the placement:  If a state arranged placement, the state of residency is that state. However, a Title IV-E-eligible child placed out of state by HHS is eligible for Medicaid from the other state. A Title IV-E-eligible child placed in Iowa by another state is eligible for Iowa Medicaid.  If a state did not arrange the placement, the state of residence for an institutionalized person under 21 is: • The parent’s or legal guardian’s state of residence at the time of placement, or

Title 8: Medicaid Page 39 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Determining Residency for Persons Aged 21… • The current state of residence of the parent or legal guardian who files the application, if the person is institutionalized in that state, or • The state where the person is institutionalized, if the person has been abandoned by the person’s parents and a legal guardian has not been appointed. NOTE: In the first and second options listed above, if parental rights have been terminated, use the guardian’s state of residence instead of the parent’s. Also, under the first and second options, the client may have a choice of two different states of residency. Living in Iowa for Employment Purposes Legal reference: 42 CFR 435.403, 441 IAC 75.10(2), Iowa Code Section 249A.3 When a person enters Iowa for employment purposes, this fact, in and of itself, qualifies the person as a resident of Iowa for Medicaid eligibility. Entering the state for employment purposes means either having a job commitment or coming to Iowa to seek employment.

Ms. V moves to Iowa to look for a job. If she can find one in six months, she will stay in Iowa. Her intent is to live for a definite period for the purpose of seeking employment. She is an Iowa resident. This provision applies even if:  The person intends to return to another state once employment has ended, or  The person retains ownership of a homestead in the other state. A person could be eligible for Medicaid in two states at the same time. This occurs when a person is temporarily absent from a state and remains eligible in that state but is also eligible in another state where the person is living for employment purposes. However, a person cannot receive Medicaid in both states at the same time. Discuss with the person the pros and cons of eligibility in Iowa as opposed to the other state (i.e., use of Medicaid card between states, coverage provisions, etc.). The person can choose in which state the person would prefer Medicaid eligibility.

Title 8: Medicaid Page 40 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Intent to Live in Iowa Intent to Live in Iowa Legal reference: 42 CFR 435.403, 441 IAC 75.10(249A) Generally a person’s state of residency is the state where the person is living with intent to remain there permanently or indefinitely. To make a determination of intent, evaluate all facts and circumstances surrounding the person’s living arrangement. EXCEPTION: See Living in Iowa for Employment Purposes. Following is a list of factors to consider:  Location of personal and real property and intent to return to that property.  Where the spouse and/or family live.  Place of employment or business.  Driver’s license and automobile registration.  Where state and local taxes are paid.  Membership in unions, fraternal organizations, churches, clubs, and other associations.  Voter registration and voting practices.  Placement on waiting lists with medical facilities (for persons who were Iowa residents before entering an out-of-state facility). Temporary Absence A person who has been living in Iowa with intent to remain permanently or indefinitely continues to be an Iowa resident while temporarily out of the state if the person intends to:  Return to Iowa and  Remain in Iowa permanently or indefinitely. Incapability of Expressing Intent Legal reference: 42 CFR 435.403, 441 IAC 75.10(249A) A person is considered incapable of expressing intent if:  The person has an IQ of 49 or less or has a mental age of 7 or less, or  The person has been declared legally incompetent by a court, or

Title 8: Medicaid Page 41 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Incapability of Expressing Intent  Medical documentation from a physician, psychologist, or other person licensed by the state in the field of intellectual disability indicates the person is incapable of expressing intent.

1. Ms. V, a 76-year-old woman, comes to Iowa to enter a nursing facility. She intends to return to Wisconsin. She is not an Iowa resident. 2. Mr. C, age 24, was living in Los Angeles when he is involved in a car accident. He remains in a coma. Mr. C is moved to a hospital in Iowa to be close to his parents. Mr. C becomes an Iowa resident. His residency is where he is living, because he became incapable of expressing intent after age 21. 3. Mr. M, a 25-year-old living in an Iowa ICF-MR, was injured at age 15. The court issued an order that he was not competent and appointed a legal guardian. After placing Mr. M in an ICF-MR, his guardian moved to Florida. Mr. M is an Iowa resident because his entry into the living arrangement occurred while his guardian was a resident of Iowa. State Placement Legal reference: 42 CFR 435.403, 441 IAC 75.10(249A) “State placement” is an arrangement by any state agency, including an agency under contract with the state for such purposes, for a person to be placed in an institution in another state. Providing information to the person or acting on behalf of a person is not state placement. Examples of actions that are not considered state placement are:  Providing information about the availability of services or medical benefits in another state.  Assisting the person in locating an out-of-state institution.  Approving Medicaid eligibility for a person in an out-of-state facility. If the person who is living out of state alleges placement by a state agency, obtain verification from the placing agency. NOTE: If the person is an SSI recipient, use the state of residence as indicated on the SDX. If the SSI recipient has been placed by the State of Iowa in an out of state institution, the representative payee or the Social Worker who placed them in the out of state institution must make certain SSI is aware this is an out of state placement and the State of Iowa is the placing agency.

Title 8: Medicaid Page 42 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Incapability of Expressing Intent Generally, if HHS has not been declared the person’s legal guardian or does not have some other legal relationship to the person, HHS does not arrange for a person’s entry into an institution. Arrangements for a person to enter a facility are generally made by the person entering the facility or by someone acting on the person’s behalf, such as a responsible relative or hospital staff. If there is a question about whether HHS was the placing agency, check whether or not HHS was legally responsible for the person’s welfare at the time the person entered the institution. If HHS was not legally responsible, then generally HHS could not be considered to have placed the person. Eligibility in Out-of-State Medical Institutions When a person wants Iowa Medicaid to pay for care in an out-of-state facility, the issue of residency must be decided. Under federal Medicaid regulations, when a person in an institution satisfies the residency requirements, no state can deny eligibility on the grounds that the person did not establish residency in the state before entering the institution. If a person was not an Iowa resident before entering an out-of-state facility, Medicaid eligibility cannot be established until the person actually moves to Iowa, unless:  The person was placed by Iowa, or  The person is under 21 and residency must be determined by the residency of the person’s parents. When an Iowa resident enters an out-of-state facility, the person’s intent for living out of state must be established:  If the person expects to remain in that facility permanently or indefinitely, the person is considered to be a resident of the state in which the person is living.  If the person entered the out-of-state facility with the intent of remaining in that facility but now wants to return to Iowa, the person must return to Iowa before Medicaid can be approved based on residency.  If the person can establish that the person’s intent when the person entered the facility was to return to Iowa, and the person still intends to return to Iowa, the person can be approved for Iowa Medicaid while in the out-of-state facility.

Title 8: Medicaid Page 43 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 State Placement When a person uses the person’s own funds or other resources to pay for care in a facility with the intention of living there permanently or for an indefinite period of time, then the person has made a commitment to that facility and it appears to be the person’s home. If the facility is out-of-state, then that is considered the state of residence the person chose. If the person applies for Iowa Medicaid and states a desire to return to Iowa, then the person must establish that the person always intended to return to Iowa, e.g., the person’s name may be on a waiting list at an Iowa facility. Residency can also be established by actually returning to Iowa with intent to remain. One of the main reasons for Iowa residents to seek out-of-state care is the lack of a reasonable alternative in Iowa. See Intent to Return to Iowa From an Out-of- State Facility and Guidelines for Discharge Planners. Payment for out-of-state skilled care requires prior approval from central office. See Approval for Out-of-State Skilled Care. When a person is approved for Iowa Medicaid in an out-of-state facility based on an intent to return to Iowa, the local office must periodically verify this intent. Intent to Return to Iowa from an Out-of-State Facility Legal reference: 441 IAC 75.10 If a person has a reasonable explanation for entering an out-of-state facility and has the intent to return to Iowa, the person can be approved for Medicaid based on residency. If there is no intent to return to Iowa, cancel the case with timely notice and refer the client to the state in which the client is living to apply for Medicaid. If no reasonable nursing facility arrangement can be made for a person in Iowa, you can approve payment for an out-of-state facility if the person intends to return to Iowa. A “reasonable” nursing facility arrangement is one that a person who intends to return to Iowa would reasonably be expected to accept. Consider such factors as:  Level of care.  Location.  Participation in Iowa Medicaid.

Title 8: Medicaid Page 44 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Eligibility in Out-of-State Medical Institutions “Reasonable” does not mean within a certain mile range of an area, but location of available facilities may be a consideration in determining intent to return to Iowa. If a reasonable arrangement can be made in Iowa but the person chooses an out-of-state facility, this raises questions about the person’s intent to return to Iowa. If comparable Iowa facilities would accept the person but do not have a bed immediately available, the person should be put on a waiting list. Clients do not have to put their names on waiting lists with every available facility and accept the first opening available. To show intent to return, they only have to put their name on waiting lists for the facilities of their choice that will accept them. Payment to the out-of-state facility would be approved until the bed in state becomes available. Generally, you do not need to check each month with the facility named by the client to see if the facility has an opening for the client. However, if the facility is known to have frequent openings, track those cases and check with the facility monthly if there has been no report from the client. Failure to go on waiting lists or to accept an opening indicates that the client no longer intends to return to Iowa. The client has chosen the other state as state of residence. Unless failure to comply can be explained, cancel Iowa Medicaid based on residence. If no comparable Iowa facilities would accept the client, meaning the facility would not put the client on a waiting list, then payment in an out-of-state facility can be made if the client intends to return to Iowa. Assess the availability of an in-state facility at the next annual review. The client may change intent about returning to Iowa after living in the out-of-state facility for some time. If so, the client loses Iowa residence. Use “prudent-person” judgment to determine if the client really does intend to return to Iowa when:  There is no acceptable facility in Iowa, or  There appears to be a facility in Iowa that is comparable to the out-of-state facility but the client expresses no intent to return to Iowa if an opening occurs there.

Title 8: Medicaid Page 45 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Eligibility in Out-of-State Medical Institutions To do this, discuss the following with the client or the client’s representative and make a decision about intent:  Reason for entry into the out-of-state facility.  A statement of when the client intends to return.  A statement of under what circumstances the client would return.  A statement of why any available facilities in Iowa are not acceptable. Guidelines for Discharge Planners Advise local hospital social workers not to make any out-of-state placements of Medicaid members if the member wants to continue to receive Iowa Medicaid unless the local office has determined that Iowa Medicaid will pay the out-of-state facility. For members who want to maintain Iowa residency, the first placement options should be in Iowa. The person’s name should immediately be placed on the waiting list for an Iowa facility, so that when the person is ready for discharge from the hospital, the bed may be available. For short-term placements, the member may choose an out-of-state facility, as long as the member intends to return to Iowa. Review these placements annually for intent to return to Iowa. For long-term placements, the hospital should try to place the patient where the patient wants to live on a long-term basis immediately from the hospital. A patient who wants to apply and live in another state can be placed in that state. If it is agreeable to the patient, the patient could be placed in another state until an in-state placement is available. The patient will need to return to Iowa to remain eligible for Iowa Medicaid. Patients and families intending to apply for Medicaid need to be advised of that requirement. Approval for Out-of-State Skilled Care Legal reference: 441 IAC 81.20 For fee-for-service, skilled care in an out-of-state facility requires approval from the Iowa Medicaid Enterprise (IME). For individuals under a Managed Care Organization (MCO), the MCO will make the approval.

Title 8: Medicaid Page 46 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 Eligibility in Out-of-State Medical Institutions Payment will be approved for out-of-state skilled care when the following criteria are met:  The facility is eligible to participate in the Iowa Medicaid program.  The facility has been certified for Medicare and Medicaid participation by the state where it is located.  The placement is recommended because: • Moving the person back to Iowa would endanger the person’s health, • Services are not readily available in Iowa, or • The out-of-state placement is cost-effective.  The placement is temporary until services are available to the resident in Iowa or the program of treatment is completed. When the type of skilled care needed is available from any skilled facility, out- of-state payment will not be approved if there is a skilled facility in the area that will accept the resident, unless the client can explain why that facility is not acceptable and how the client intends to return to Iowa. When the out-of-state skilled care is designed for very specialized types of rehabilitation services, the placement may be approved on the basis that no appropriate facility is available in Iowa, if the client intends to return. When a person is on Medicare, Medicare will pay for 100 days of skilled care. For a Medicare-covered skilled stay, members may go to any Medicare skilled facility they choose. However, if the person wants Medicaid to pay the cost of out-of-state care once the Medicare coverage is exhausted or otherwise wants Medicaid, the person would have to meet residency requirements and a determination of intent must be made. When a Medicaid-Eligible Person Moves to Iowa Legal reference: 441 IAC 75.10(2) Policy: If a Medicaid-eligible person from another state becomes an Iowa resident, grant Iowa Medicaid eligibility beginning with the month of Iowa residency if:  The person meets all eligibility criteria and  The person surrenders the other state’s medical card, if a card was issued for any months for which the person is requesting Iowa Medicaid.

Title 8: Medicaid Page 47 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 When a Medicaid-Eligible Person Moves… EXCEPTION: The person does not have to surrender the other state’s medical card if the person has good cause not to do so. Good cause exists when:  The other state does not issue medical cards.  The other state’s medical card is a plastic magnetic strip or a computer chip card that contains more than Medicaid-related information.  Some Medicaid-eligible members of the person’s household in the other state did not move with the person to Iowa, and the card was left with those members.  The other state’s medical card was lost, mutilated, or destroyed.  The other state’s medical card was thrown away because of the person’s impending move to Iowa, since the person assumed that the card would not be valid in Iowa.  The other state’s medical card was already surrendered to the other state. Procedure: The case record must contain:  A scanned copy of the medical card, or  A scanned copy of the surrendered card and documentation of its return to the other state, or  Sufficient documentation to show that the client did or did not have good cause for not surrendering the card. When the person moves to Iowa in the middle of the month, grant Iowa Medicaid if Iowa eligibility exists in the month when the applicant lived in both states. If the applicant used the other state’s card in Iowa before choosing Iowa Medicaid, an Iowa medical card may be issued. Verify the effective date of cancellation of Medicaid in the other state. Use either the notice of decision or other documents issued by the other states or by a collateral contact with the other state’s Medicaid agency.

1. Ms. W and her children move to Iowa on September 13 from Hawaii, where she and her children were eligible for Medicaid. She applies for Medicaid. She cannot find a provider to accept the Hawaiian medical card and surrenders it to the worker. Ms. W and her children are determined Medicaid eligible in Iowa beginning the month of September.

Title 8: Medicaid Page 48 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residency Revised October 10, 2025 When a Medicaid-Eligible Person Moves…

2. Mr. B, an SSI recipient, moves to Iowa from Texas on March 2. He applies for Medicaid in Iowa on March 8 and completes form 470-0364(M), SSI Medicaid Information. The worker calls Texas on March 10 and verifies that Mr. B’s case will be canceled effective April 1. When the worker asks for Mr. B’s March medical card from Texas, he refuses to surrender it to the worker and when asked why, offers no good cause reason. Mr. B is not granted good cause in March for not surrendering the Texas medical card. The worker records this in the case file. If all other eligibility factors are met, Mr. B is determined Medicaid eligible in Iowa beginning the month of April. 3. Mr. and Mrs. A and their child move to Iowa from Missouri in May. They file a Medicaid application on May 20. The A’s report their medical card from Missouri for May was lost during their move to Iowa. The worker verifies that the A’s Medicaid in Missouri was canceled effective May 31. The A’s are granted good cause for not surrendering the Missouri medical card and the worker documents this in the case file. If all other eligibility factors are met, the A’s are determined Medicaid eligible in Iowa beginning with the month of May. Residents of Institutions An “institution” is an establishment that furnishes (in single or multiple facilities) food, shelter, and some treatment or services to four or more people unrelated to the proprietor. The following sections give policy information on:  Residents of institutions for mental disease.  Residents of public nonmedical institution. For policies applicable to residents of medical institutions, see 8-I, Medical Institutions. Residents of Institutions for Mental Disease Legal reference: 42 CFR 435.1009(a)(2), 435.1009(c), 440.160, and 441.151 “Institutions for mental disease” include mental health institutions (MHIs) and psychiatric medical institutions. A person who is over age 21 and under age 65 is not eligible for Medicaid when the person lives in an institution for mental disease.

Title 8: Medicaid Page 49 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residents of Institutions Revised October 10, 2025 Residents of Institutions for Mental… EXCEPTION: A person who enters a psychiatric medical institution for children before turning age 22 may receive Medicaid through age 22. When a Medicaid member who is over age 21 and under age 65 enters an institution for mental disease and is expected to remain for more than a calendar month, cancel the person’s Medicaid. EXCEPTION: Medicaid members enrolled with an MCO who are age 21 to 65 and are in an MHI for 15 or fewer days per month are eligible for payment to the MHI through the MCO. In this situation, do not cancel the member when they enter the MHI. Review the member’s eligibility and if they continue to be eligible under the same coverage group, leave the case active. The MHI facility worker will need to add the MHI stay to ISIS. Although a person who is between age 21 and age 65 and is living in an institution for mental disease may qualify for SSI benefits, the person is still categorically ineligible for Medicaid unless the exception listed in this section applies. Residents of Public Nonmedical Institutions Legal reference: 20 CFR 416.211, 42 CFR 435.1009-1010; 441 IAC 75.12(249A) Policy: Federal Medicaid regulations prohibit the use of federal Medicaid funds for people who are inmates of a public, non-medical institution. A “public institution is one that is the responsibility of a government unit or over which a governmental unit exercises administrative control. It includes, but is not limited to:  Publicly operated penal institutions,  Jails,  Work release centers, or  Wholly tax-supported care facilities, such as some county residential care facilities Department of Corrections (DOC) prisons and county jails are public institutions. EXCEPTION: A publicly operated community residence that serves fewer than 16 residents is not considered a public institution. For example, a county-owned and operated residential care facility that has fewer than 16 beds may be a publicly operated community residence.

Title 8: Medicaid Page 50 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residents of Institutions Revised October 10, 2025 Residents of Public Nonmedical Institutions To be a “publicly operated community residence,” the facility:  Must provide some services beyond food and shelter, such as social services, help with personal living activities, or training in social and life skills.  Must not be a jail, prison, or other holding facility for people who have been arrested or detained pending charges.  Must not be located on the grounds of or immediately adjacent to any large institution or multiple-purpose complex. Procedure: Effective January 1, 2012, members who have been incarcerated for 30 days or more and continue to retain their eligibility status while incarcerated are eligible to have their Medicaid benefits limited to inpatient hospital claims only. Workers will be notified of members who are incarcerated for more than 30 days via a WISE alert. WISE alerts will also be generated when a member has been released. Medicaid may be reinstated without an application when a member is released from the public institution. When an individual calls to report their release from incarceration, the worker should follow up to verify the date of release by checking online sources and/or contacting the facility to verify the date of release. Full Medicaid is not available to individuals considered to be inmates. “Inmates” are people living in a public, non-medical institution regardless of whether they have been convicted or are awaiting trial, release, etc. The following are considered to be inmates of a public institution, and are not eligible for full Medicaid:  A Department of Corrections (DOC) inmate (regardless of the inmate’s status, i.e., convicted, awaiting trial, etc.).  An inmate of a jail (regardless of the inmate’s status, i.e., convicted, awaiting trial, etc.).  Someone who is on work release and living in a halfway house/residential facility.  Someone who is serving a sentence in a halfway house/residential facility.

Title 8: Medicaid Page 51 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residents of Institutions Revised October 10, 2025 Residents of Public Nonmedical Institutions If someone is listed as serving a special sentence or you find something questionable, request additional information regarding their individual status. Regardless of the label attached to any particular custody status, an important consideration of whether an individual is an “inmate” is his or her legal ability to exercise personal freedom. If full Medicaid benefits are paid while an inmate is incarcerated, HHS will seek repayment of the incorrect benefits paid from the member or provider. In order to get either type of Medicaid, the person must also meet all other eligibility requirements for Medicaid, including, but not limited to:  Income and asset limits.  Citizenship and Identity  Have a medical necessity for the service that is provided (i.e., if in a nursing facility, require the level of care provided by the facility. An inmate of a public nonmedical institution is not eligible for non-MAGI-related Medicaid except as listed under Non-MAGI-Related Eligibility Under Levings Rule. Halfway House Legal reference: 42 CFR 435.1010 Some people in halfway houses (called “community residential facilities”) are serving a prison sentence or have been placed on a work release program. Other people in halfway houses are on probation or parole and are ordered to live in a halfway house as a condition of the probation or parole. People serving a prison sentence and those who have been placed on a work release program are considered inmates and are not Medicaid-eligible. But people placed on probation or parole who are living in a halfway house are not considered inmates and can be eligible for Medicaid, as long as they meet the other eligibility criteria. To determine eligibility, you must verify whether the person living in a halfway house is serving a sentence, is on a work release program, or is on probation or parole.

Title 8: Medicaid Page 52 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residents of Institutions Revised October 10, 2025 Residents of Public Nonmedical Institutions Inpatient Medical Institutions Legal reference: 42 CFR 435.1010 A “medical institution” is one that:  Provides medical care  Has the necessary professional personnel, equipment, and facilities to manage the medical, nursing, and other health needs of patients on a continuing basis in accordance with accepted standards  Is authorized under State law to provide medical care; and  Is staffed by professional personnel who are responsible to the institution for professional medical and nursing services. An inmate of a penal institution who is admitted as an inpatient of a medical institution (hospital, nursing facility, juvenile psychiatric facility) that is not on the grounds of the penal institution and is not owned or operated by the penal institution may be eligible for Medicaid. The person must meet the other eligibility criteria before Medicaid can be approved. An inmate of a penal institution is not eligible for Medicaid when taken to a prison hospital or dispensary or when receiving outpatient care.

1. Ms. M is a disabled person who is serving a prison sentence. She received Medicaid before being incarcerated. She is taken by ambulance to the local, private hospital in a nearby town where she is treated and released, and then returned to prison. Ms. M is not eligible for Medicaid for her ambulance trip or treatment at the hospital because she was not admitted as an inpatient. 2. Mr. N is a prison inmate. Mr. N was eligible for Medicaid as a disabled person before being incarcerated. Mr. N is injured and must be treated as an inpatient in the prison hospital for several days. Mr. N is not eligible for Medicaid since he was treated in a hospital operated by the penal institution. 3. Mr. L is active on Medicaid. The worker receives a WISE alert that Mr. L has been incarcerated for more than 30 days. Mr. L’s Medicaid is limited to inpatient hospital claims until the worker receives an alert indicating Mr. L’s release.

Title 8: Medicaid Page 53 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Residents of Institutions Revised October 10, 2025 Residents of Public Nonmedical Institutions Non-MAGI-Related Eligibility Under Levings Rule Legal reference: AR-88-6(8), 604F.2d 591 For non-MAGI-related groups, an inmate of a public nonmedical institution is not eligible for payment of Medicaid services other than inpatient hospital. EXCEPTION: Due to a U.S. District Court ruling, Levings vs. Califano, residents of public nonmedical institutions can be eligible for SSI (and therefore also non-MAGI-related Medicaid) if they:  Live in the institution on a voluntary basis and  Are paying for the full cost of their care in the institution or will be paying for the full cost if SSI or State Supplementary Assistance is approved. For the purposes of the Levings exception, assume the person is a voluntary resident unless there is evidence to the contrary. If the person has a legal guardian or court-appointed representative, the person is a voluntary resident if the guardian or representative has the right to remove the person from the institution. If a court order instructs that a person be placed in a specific institution, the person is not living in the facility voluntarily. However, if a court instructs only that a person be placed in a facility providing a certain type of care (without indicating a specific facility), and the person chooses a public institution, the person’s residence in the institution is voluntary, as long as the person retains the right to leave that institution. A person is paying for “all of the institutional care” if the person pays the facility’s usual charges for food, shelter, and other services. The person’s payment to the facility must come from personal income or resources or from third-party payments to the institution (e.g., Medicare or private insurance payments). Payment of all or part of the cost of care by a local government agency (e.g., county governments, state health or welfare agencies) is not considered a third-party payment under this exception. The Social Security Administration has determined that State Supplementary Assistance payments are considered as personal income. This means that if a person is or will be paying the entire cost of RCF care with a combination of State Supplementary Assistance and other income, this exception applies.

Title 8: Medicaid Page 54 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Social Security Number Revised October 10, 2025

Social Security Number Legal reference: 42 CFR 435.910, 441 IAC 75 (Rules in Process) A social security number or proof that an application for a number has been made is required for each person for whom Medicaid is being requested or received. This requirement does not apply to:  A child in “newborn” status (see 8-F, Newborn Children of Medicaid-Eligible Mothers), or  An unlawful alien, or  Any person for whom Medicaid is not being requested or received, such as parents whose children receive Medicaid but who don’t receive Medicaid themselves, or  A person who is not eligible to receive a social security number as determined by the Social Security Administration, or  A person who does not have a social security number and may only be issued a social security number for a valid non-work reason as determined by the Social Security Administration, or  A person who is a member of a recognized religious sect who conscientiously opposes applying for or using a social security number. As long as the applicant is cooperating in obtaining a number for a person, the person remains eligible for Medicaid. Cancel or deny Medicaid for clients who do not provide a valid social security number or who do not cooperate in obtaining a social security number. A person who is not eligible to receive a social security number or a person who may only be issued a social security number for non-work reasons must provide verification from the Social Security Administration. A person who will not apply for or use a social security number due to religious beliefs must provide verification from the church elder or other officiant that it is against the church doctrine. The following sections explain:  How clients can apply for a number  Acting on an error report

Title 8: Medicaid Page 55 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Social Security Number Revised October 10, 2025 How Clients Can Apply for a Social Security… How Clients Can Apply for a Social Security Number Legal reference: 42 CFR 435.910”e”, 441 IAC 75 (Rule in Process) Assist the client to apply for a social security number as needed. There are several different ways to apply:  The client can apply directly to the Social Security Administration (SSA).  You can issue form SS-5 or SS-5-SP, Application for a Social Security Number Card to the client to apply for a social security number. Either you or the client can submit the form. The Social Security Administration will automatically notify the Department when the number has been assigned, if form SS-5 or SS-5-SP is completed as instructed in 14-G, Enumeration.  The client can apply for a number for a newborn child at the hospital where the child was born, under the “Enumeration at Birth” project. Form SSA-2853, Information About When You Will Receive Your Baby’s Social Security Card, is available through the hospital. Proof of an application for a social security number is not required for an infant that is born in a hospital and goes home with the mother. The client must give you one of the following forms that are issued by the Social Security Administration as proof the an application has been made:  Form SSA-2853, Information About When You Will Receive Your Baby’s Social Security Card, when application is made through the “Enumeration at Birth” project.  Form SSA-5028, Proof of Application.  Form SSA L669, Request for Evidence in Support of an SSN Application - U.S. Born Applicant.  Form SSA L670, Request for Evidence in Support of an SSN Application - Foreign Born Applicant. The client must report the social security number to you within ten days of receipt. If the client does not provide a number within two months, contact the client to determine the cause of the delay. You may also require verification from the Social Security Administration if it appears that the client is not cooperating.

Title 8: Medicaid Page 56 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Social Security Number Revised October 10, 2025 Acting on an Error Report Acting on an Error Report Legal reference: 441 IAC 75 (Rules in Process) Social security numbers are verified by the Social Security Administration. When a social security number entered into the system does not match its records, the Social Security Administration will indicate the reason there was not a match. If you receive notification of an error, check the system and the case record to see if the discrepancy is the number, the name, or the date of birth. If the social security number was correctly entered into the system but cannot be verified, first check that the name matches what the Social Security Administration has on its records. If there is not a match, either HHS records or Social Security Administration records must change so that there is a match or the discrepancy is resolved. Issue a written notice to the client to contact the Social Security Administration and resolve the discrepancy. If the applicant or member must apply for a new social security number, allow the person ten calendar days to provide form SSA-5028, Proof of Application. If the form is not provided within ten calendar days or if the person has not requested an extension, the person is ineligible for Medicaid due to failure to provide a valid social security number. Nonfinancial Non-MAGI-Related Eligibility In addition to the general Medicaid nonfinancial eligibility requirements listed above, applicants for non-MAGI-related Medicaid must also meet the categorical requirements of age, blindness, or disability and are subject to different policies regarding household size (eligible group). These policies are explained in the following sections:  Household size.  Presence of age, blindness, or disability.  Department disability determination process.  Disability denial.  Presumptive disability.  Disability determination on reapplications.

Title 8: Medicaid Page 57 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Household Size Household Size Legal reference: 20 CFR 416.1160, 416.1163, 416.1166, and 416.1202; 441 IAC 75 (Rules in Process) For non-MAGI-related Medicaid purposes, a person is always treated as an individual, unless the person has a spouse who is also an eligible person. In that case, treat the person and the spouse as a couple. EXCEPTION: For the Medicaid for Employed People with Disabilities (MEPD) coverage group, determine countable income based on “family size.” Family size is determined as follows:  If the disabled person is under age 18 and unmarried, include parents, unmarried siblings under age 18, and children of the person who live with the person.  If the disabled person is aged 18 or older, or is married, include the person’s spouse and any children of the person or of the person’s spouse who are living with the person, under age 18, and unmarried. There may be situations where income is deemed to a non-MAGI-related eligible person from an ineligible spouse or parent. Also, in some instances when deeming from an ineligible spouse, an eligible spouse’s income should be compared to the income limits for a couple. See 8-E, Deeming Non-MAGI-Related Income. When a non-MAGI-related person is living with a spouse, consider the resources of the spouse (whether an ineligible or eligible spouse) and compare the couple’s total resources to the resource limit for a couple. See 8-D, Non-MAGI-Related Resource Limits.

1. Child A is disabled and lives with his parents and a sibling, Child B, who is also disabled. To determine Child A’s eligibility, his income and resources are compared to the eligibility limits for an individual (although income and resources from his parents may be deemed to him). Child B is also treated as an individual. 2. Mr. L, who is disabled, lives with Child D, who is also disabled. Mr. L’s eligibility is determined by comparing his income and resources to limits for an individual. Child D’s eligibility is also determined by comparing his income and resources (including any deemed income or resources) to the limits for an individual.

Title 8: Medicaid Page 58 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Household Size

3. Mr. G, who is disabled, lives with Mrs. G, who is not aged, blind, or disabled (an ineligible spouse). Mr. G’s worker determines that deeming from Mrs. G to Mr. G is not applicable. Mr. G’s eligibility is determined by comparing his income to the limits for an individual. Mr. G’s resource eligibility is determined by comparing both spouses’ resources to the resource limit for a couple. When a married couple who are both eligible for Medicaid separate, continue to treat them as a married couple for the month of separation. Beginning with the month after the month of separation, treat each spouse separately for Medicaid eligibility. “Separation” means a change in living arrangement that results in the couple no longer living together. This includes one spouse moving to a nursing facility or medical institution. If a married couple with only one Medicaid-eligible spouse separates for any reason, consider the spouses to be separate for eligibility beginning with the month after the month of separation. When neither spouse is receiving Medicaid, and the spouses separate before application, treat them as separate individuals for application processing.

Mr. and Mrs. S live together. Mr. S receives Medicaid as a non-MAGI-related person. In June, he and Mrs. S separate. Mr. S is considered as an individual for July. Only his income and resources are considered. No income or resources owned exclusively by Mrs. S are considered for Mr. S’s eligibility for July. See 8-I, Income and Resources of Married Persons when one or both spouses are in a medical institution.

Title 8: Medicaid Page 59 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Presence of Age, Blindness, or Disability Presence of Age, Blindness, or Disability Legal reference: 20 CFR 416.801 and 416.901; 42 CFR 436.540, 436.541; 441 IAC 50.2(1), 50.2(3)“d”,75.1(249A), and 75 (Rules in Process); Balanced Budget Act of 1997 (P. L. 105-33) Policy: To be eligible for Medicaid under a non-MAGI-related coverage group, a person must:  Be 65 years of age or older, or  Be blind or disabled based on the criteria used for Supplemental Security Income (SSI). The criteria for establishing disability for adults (over age 18) are:  The person must be unable to earn income in the amount of “substantial gainful activity” because of a severe physical or mental impairment. EXCEPTION: This requirement does not apply to Medicaid for employed people with disabilities.  The impairment must be medically documented and must be expected to last continuously for 12 months or result in death. To be eligible for SSI on the basis of blindness, a person must have central visual acuity of 20/200 or less in the better eye with the use of corrective lens or visual field restriction to 20 degrees or less. The criteria for establishing disability for children (under age 18) are:  The child must be unable to earn income in the amount of “substantial gainful activity” because of a severe physical or mental impairment.  The impairment must have a physical or mental disability that results in marked and severe functional limitation and must be expected to last continuously for 12 months or result in death. Children who were receiving SSI as of August 22, 1996, but lost eligibility due to the change disability criteria made on that date may qualify as disabled if they continue to meet the criteria in effect before the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P. L. 104-193). When a person is applying on the basis of disability and the existence of a disability cannot be documented through receipt of federal disability benefits, the Department must determine whether the applicant is disabled.

Title 8: Medicaid Page 60 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Presence of Age, Blindness, or Disability Comment: The Social Security Administration (SSA) determines disability for claimants for SSI and Social Security Disability Insurance (SSDI). SSA makes no distinction between blindness and other disabilities when approving benefits. The Department has a contract with the Disability Determination Services (DDS) Bureau of the Iowa Department of Education to determine disability using the same criteria as SSA uses to determine eligibility for SSI or SSDI. Procedure: When the person is applying for benefits on the basis of age: 1. Check for verification of age through receipt of federal benefits as follows:

Situation Action The applicant is over 65 and has social security income. Accept the Social Security Administration’s verification that the person is age 65 or older. The applicant claims to be at least 65 and has not applied for social security or SSI. Refer the person to the Social Security district office to apply for benefits and give the person form 470-0383, Notice Regarding Acceptance of Other Benefits. 2. If age is verified, process the application. When the person is applying for benefits on the basis of blindness or disability: 1. Make sure the applicant’s coverage group requires a disability determination. (Determination of blindness is not necessary if both eyes are missing.)

Groups that do require disability determination include:  Medically Needy (if applying as disabled)  Medicaid for Employed People with Disabilities  Medicaid for Kids with Special Needs  Ill and handicapped waiver  Physical disability waiver  Persons applying for the following HCBS waivers under non-MAGI-related eligibility • AIDS/HIV waiver • Brain injury waiver • Children’s mental health waiver • Intellectual disabilities waiver Groups that do not require a disability determination include children under 21 in the 300% group applying for the following HCBS waivers:  AIDS/HIV waiver  Brain injury waiver  Children’s mental health waiver  Intellectual disabilities waiver

Title 8: Medicaid Page 61 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Presence of Age, Blindness, or Disability 2. For all applicants claiming disability, determine whether the presence of disability can be verified through receipt of federal benefits by checking SDX and IEVS. For specific situations, see the following chart:

Situation Action The applicant is under 65 and gets SSI. Verify the disability on the SDX screens in WISE. Electronic Data Sources (EDS) will verify disability in ELIAS. The applicant is under 65 and gets SSDI. Verify the disability on the IEVS TPQ2 screen if not verified by EDS. The applicant is under 65 and gets Social Security survivor benefits. Verify any disability on the IEVS TPQ2 screen if not verified by EDS. NOTE: A person does not have to be disabled to receive survivor benefits. The applicant was canceled from SSDI due to losing disability status because of substantial gainful activity (SGA) but remains eligible for extended Medicare benefits. The only coverage group the applicant can qualify for is MEPD, which skips the SGA requirement. Request a disability determination by the Bureau of Disability Determination Services. The applicant qualifies under Railroad Retirement permanent disability benefits. Send form 470-0461 or 470-0461(S), Authorization for Release of Information to the Railroad Retirement Board to verify whether the person is getting benefits based on Social Security criteria for disability. Verify the type of RR benefits the person receives. Options include:  Disabled former railroad worker  Disabled adult child  Disabled survivor of a railroad worker who is at least age 50 Consider the person disabled for Medicaid if the benefits are received due to permanent disability.

Title 8: Medicaid Page 62 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Presence of Age, Blindness, or Disability

Situation Action The applicant has a Railroad Retirement benefit due to temporary inability to work. Disability must be determined, because this person is not considered disabled according to Social Security requirements. The applicant receives disability income from the Veterans Affairs Department but does not receive disability benefits from Social Security. Disability may need to be determined, because this person does not automatically qualify as disabled according to Social Security requirements. 3. If age, blindness, or disability is verified, establish the correct Medicaid coverage group and process the application. 4. If disability is not verified, determine the status of any SSA activity. See When the Department Follows an SSA Disability Determination. 5. If the Department is not required to wait for an SSA disability decision, refer the applicant for a disability determination by the Department. See When the Department Determines Disability. Comment: For more information on disability requirements and procedures, also see:  8-B, Concurrent Medicaid and Social Security Disability Determinations.  8-J, Disability Criteria.  8-F, People Ineligible for SSI (or SSA): Due to Reevaluation of Childhood Disability. When the Department Follows an SSA Disability Determination Legal reference: 20 CFR 416.901-999d Policy: The Department is required to follow decisions on disability made by the federal Social Security Administration (SSA), with the following exceptions on denials:  The Department does not rely on an SSDI denial to deny eligibility for Medically Needy. If the client does not meet the eligibility requirements for any other group except for Medically Needy, then the Department must determine disability.

Title 8: Medicaid Page 63 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability…  The Department will determine disability when the client is claiming that a new disabling condition or a worsening of the original condition has occurred after a final SSA denial. Procedure: Always determine the status of any Social Security Administration activity before processing applications based on disability, regardless of the coverage group for which the person is applying. The SSA status may be:  Benefits have been approved.  The person has not applied with SSA for benefits.  An application for benefits is pending.  An application for benefits has been denied. (See SSA Disability Denial and Appeal Process for more information.) When SSA-administered disability benefits have been approved, proceed with the Medicaid eligibility determination. Use the following chart to determine what action to take based on the SSA status.

Status Action Client receives SSI Determine Medicaid eligibility. Client has not applied for SSI but agrees to file an SSI application within ten days. Notify both SSA and DDS about the concurrent application with form 470-2631, Notice of Pending Medicaid Application within 15 working days. Possible DDS responses are:  Have SSA claim and are processing. If so, hold the Medicaid application until the determination has been made.  Have SSA claim and recently completed disability determination. If so, check for an SDX message.  Do not have a claim. If so, check for an SSI denial for reasons other than disability. If the client has not applied or SSA denies the client for reasons other than disability, proceed with a disability determination by the Department. Contact the client to explain that the Department will determine disability. Client has never applied for SSI and is not willing to do so. Proceed with disability determination by the Department if the client meets all other eligibility requirements.

Title 8: Medicaid Page 64 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability…

Status Action Client has applied for disability benefits. Initial SSA decision is pending. Notify both SSA and DDS about the concurrent application with form 470-2631, Notice of Pending Medicaid Application within 15 working days. Possible responses are:  Have SSA claim and are processing. If so, hold the Medicaid application until the determination has been made.  Have recently completed a disability determination. If so, check for an SDX.  Do not have a claim. If so, check for an SSI denial for reasons other than disability. If SSA denies the client for reasons other than disability, proceed with a disability determination by the Department. Contact the client to explain that HHS will determine disability. Client has applied for disability benefits. SSA denied disability, but decision is not “final.” Deny the Medicaid application based on the SSA denial. Manually issue a Notice of Action using the language listed below this chart. Determine if Medicaid eligibility exists under another coverage group. See SSA Disability Denial and Appeal Process. Client has applied for disability benefits. SSA denied disability and decision is “final.” Client states there is no new disabling condition and the original has not worsened Deny the Medicaid application based on the SSA denial. Manually issue a Notice of Action using the language listed below this chart. Determine if Medicaid eligibility exists under another coverage group. See SSA Disability Denial and Appeal Process. EXCEPTION: For an SSDI denial on a Medically Needy applicant, see 8-J, When a Client Has Been Denied Disability Benefits.

Title 8: Medicaid Page 65 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability…

Status Action Client has applied for disability benefits. SSA denied disability within the last 12 months and decision is “final.” Client states the disabling condition has worsened and claims a new 12- month disability period. Ask the following questions:  Has the SSA refused to reconsider the claim on the worsening of the condition?  Has the client lost eligibility for SSI due to other factors (income, resources, etc.)? If the answer to both questions is “no,” deny the Medicaid application based on the SSA decision and refer the client back to SSA. Manually issue a Notice of Action using the language listed below this chart. Determine if Medicaid eligibility exists under another coverage group. If the answer to either question is “yes,” proceed with a disability determination by the Department if the client is otherwise eligible. Client has applied for disability benefits. SSA denied disability within the last 12 months and decision is “final.” Client states there is a new condition that is expected to last 12 months. Determine whether the client has a different condition than those considered by SSA.  Request a copy of the denial explanation from the applicant.  Compare the information on the denial explanation to the disability information on the Medicaid application. If there is a new disabling condition, proceed with disability determination by the Department unless the client reapplies at SSA. If the client has reapplied at SSA, notify both SSA and DDS about the concurrent application with form 470-2631, Notice of Pending Medicaid Application, within 15 working days.

Title 8: Medicaid Page 66 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability…

Status Action Client has not applied for disability benefits but agrees to file an SSDI application within ten days. Notify both SSA and DDS about the concurrent application with form 470-2631, Notice of Pending Medicaid Application within 15 working days.  Have SSA claim and are processing. If so, hold the Medicaid application until the determination has been made.  Have recently completed a disability determination. If so, check for an SDX.  Do not have a claim. If so, check for an SSDI denial for reasons other than disability. If SSA denies the client for reasons other than disability, proceed with a disability determination by the Department. Contact the client to explain that HHS will determine disability. Client has never applied for disability benefits and is not choosing to do so. Proceed with disability determination by the Department if the client meets all other eligibility requirements. Comment:

1. Ms. R applies for Medicaid on August 1. She was denied SSI benefits on June 15 because the SSA determined she was not disabled based on her reported disabilities of arthritis and shortness of breath. Ms. R is not claiming any new disabilities. She says the arthritis has gotten worse. This is a change in an existing condition that was considered by SSA. It does not represent a different condition or an addition to the conditions considered by SSA, so the SSI Medicaid application is denied based on the SSA decision. (This is assuming no other conditions apply, such as an SSA refusal to consider the worsening of her condition.) The IM worker refers Ms. R back to SSA to determine eligibility for SSI, because Ms. R claims a change in her arthritis (the original condition). If Ms. R were ineligible for SSI because of income or resources, a HHS disability determination would be done instead of referring Mrs. R. back to SSA.

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2. Same as Example 1, except that Ms. R also has a broken leg that is expected to heal in six months. The broken leg is an additional condition to the conditions existing at the time of the SSA disability decision. However, since it does not meet the durational requirement of 12 continuous months, the worker denies Medicaid based on the previous SSA decision for SSI. 3. Same as Example 2, except the break is so severe that it is expected to be 16 months before Ms. R will be able to return to work. Because this is a different disabling condition than previously claimed with SSA and it meets the durational requirements of 12 months, the Department will determine disability unless Ms. R refiles a claim with SSA. Presumptive Disability Legal reference: 20 CFR 416.931-933, 441 IAC 50.2(1) and 75 (Rules in Process) Policy: If all other eligibility criteria are met for Medicaid, eligibility for Medicaid begins with the month that a Social Security Administration (SSA) presumptive disability decision is made. Medicaid eligibility continues for up to six months or until a final determination of disability is made, if earlier. Comment: “Presumptive disability” means a person has a medical condition indicating a high degree of probability that the person is disabled, but available evidence is not sufficient to quickly make a final determination of disability. Procedure: 1. The SSA determines presumptive disability for SSI benefits and notifies the Department of this determination.

Title 8: Medicaid Page 68 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability… 2. Approve the case under SSI Medicaid. Determine eligibility for the retroactive period, as defined in 8-A, Definitions, only after the final disability determination has been made. Manually issue a Notice of Action using the following language:

Social Security found _______ to be presumptively eligible for disability. Medicaid is approved **/**/** through **/**/**. You will keep getting Medicaid after this date if Social Security finds you are disabled. Your Medicaid will end if Social Security finds that you are not disabled. EM 8-C Presumptive Disability; 20 CFR 416.931-933, 441 Iowa Admin. Code 50.2(1), 75 (Rules in Process). 3. When SSA makes the final determination that the person is disabled, establish ongoing eligibility for Medicaid benefits under the applicable coverage group. If the final decision is that the person was disabled during the retroactive period, as defined in 8-A, Definitions, issue a manual Notice of Action identifying:  Approval of ongoing eligibility.  Months of retroactive eligibility.  Any other months of eligibility when presumptive benefits were not received. 4. If SSA determines during the six-month presumptive period that the person is not permanently disabled, or if there is no decision by the end of the six-month period, cancel the case because SSA did not establish permanent disability. Manually issue a Notice of Action using the following language:

____ is not blind or disabled. The Social Security Administration denied benefits as you are not disabled at this time. We are required to follow Social Security’s decision. If you are approved for disability benefits at a later date, please tell us within 10 days of the date on your notice from Social Security. EM 8-C Denial Based on Disability; 441 Iowa Admin. Code 75 (Rules in Process) Determine if Medicaid eligibility exists under another coverage group.

Title 8: Medicaid Page 69 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability… SSA Disability Denial and Appeal Process Legal reference: 42 CFR 435.541; 441 IAC 50.1(249), 50.2(1), and 75 (Rules in Process) Policy: The Department is required to deny Medicaid eligibility based on a final Social Security Administration (SSA) decision that an applicant is not disabled. EXCEPTIONS:  Medically Needy eligibility cannot be denied based on an SSDI (Title II) denial of disability.  The Department must make a disability determination on medical impairments when the SSA has denied disability benefits because the person is engaging in substantial gainful activity but the person could qualify under Medicaid for Employed People with Disabilities (MEPD).  The Department will determine disability when the client is claiming that a new disabling condition or a worsening of the original condition has occurred after a final SSA denial. Comment: There is a specific meaning for a “final” SSA decision. When the SSA determines that a claimant (applicant) is not disabled, the person may appeal the decision. There are four levels to the SSA appeal process:

Appeal Level Process 1. Initial determination The claimant has 65 days from the date the SSA denial is issued to request a reconsideration of the disability determination. 2. Reconsideration The claimant has 65 days from the date the SSA reconsideration is issued to request an appeal hearing with a SSA administrative law judge (ALJ). 3. Decision by an SSA ALJ The claimant has 65 days from the date the SSA appeal denial is issued to request a review by the SSA Appeals Council. In some cases the ALJ may not issue a decision, but instead may recommend a decision and send it on to the Appeals Council. Recommended decisions are not considered a new SSI decision for Medicaid purposes until acted on by the Appeals Council.

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Appeal Level Process 4. Review by the Appeals Council The Appeals Council hears cases sent in by the ALJ or upon the request of a claimant. The Appeals Council decides if a request for hearing before the Council will be granted. The Appeals Council can, on its own, take a case from an ALJ before a hearing is conducted. If the Appeals Council denies the request for review, the decision of the ALJ becomes final. A decision on disability by the Appeals Council is the final decision for SSA. Disability may be denied or approved at any level. The claimant may stop the appeal at any level if the claimant does not want benefits from SSA. A “final” decision is reached when either:  The person has gone through the full SSA appeal process, been denied at all levels, and cannot go further in the SSA system.  A denial was made at any level of the SSA appeal process and the person did not appeal to the next level within 65 calendar days. Procedure: Use the following procedures when the SSA has made a disability denial:

Status Action SSA decision is not final. Deny the Medicaid application issuing a manual Notice of Action using the language listed in the following chart. Determine if Medicaid eligibility exists under another coverage group. SSA decision on SSDI is final but the applicant could be eligible for Medically Needy coverage Proceed with Department disability determination. See When the Department Determines Disability.

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Status Action SSA final decision denies disability based on substantial gainful activity but the applicant could be eligible for MEPD coverage Check for SDX payment status code N44. Proceed with Department disability determination. See When the Department Determines Disability. SSA decision is final. The original condition has not worsened and client does not claim a new 12- month period of disability Deny the Medicaid application issuing a manual Notice of Action using the language listed in the following chart. Determine if Medicaid eligibility exists under another coverage group. SSA decision is final. Client claims a new disabling condition that will last at least 12 months. Determine whether the client has a different condition than those considered by SSA.  Request a copy of the denial explanation from the applicant.  Compare the information on the denial explanation to the disability information on the Medicaid application. If there is a new disabling condition, proceed with a disability determination by the Department unless the client reapplies at SSA. SSA decision has been final for at least 12 months. Client claims a change or deterioration in the disability that is expected to last 12 months. Proceed with a Department disability determination unless the client reapplies with SSA. See When the Department Determines Disability.

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____ is not blind or disabled. The Social Security Administration denied benefits as you are not disabled at this time. We are required to follow Social Security’s decision. If you are approved for disability benefits at a later date, please tell us within 10 days of the date on your notice from Social Security. EM 8-C Denial Based on Disability; 441 Iowa Admin. Code 75 (Rules in Process)

Status Action SSA decision is final within the last 12 months. Client claims a change or deterioration in the disability that is expected to last 12 months. Ask the following questions:  Has the SSA refused to reconsider the claim on the worsening of the condition?  Has the client lost eligibility for SSI due to other factors (income, resources, etc.)? If the answer to both questions is “no,” deny the Medicaid application based on the SSA decision and refer the client back to SSA. Determine is Medicaid eligibility exists under another coverage group. If the answer to either question is “yes,” proceed with a disability determination by the Department if the client is otherwise eligible. Comment: The only payment status code on the SDX that means disability was denied due to substantial gainful activity is N44. Payment status codes of N31, N32, N42, or N43, indicate denials of disability based on “capacity for substantial gainful activity.” This means that, despite a medical impairment, the person has the ability to perform sedentary, light, or medium work that would allow the person to return to customary past work or other work.

Title 8: Medicaid Page 73 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability… When SSA Denies Disability After Disability Approval By DDS or SSA Legal reference: 441 IAC 75 (Rules in Process) Policy: A member may have been approved for Medicaid or State Supplementary Assistance based on the Department’s or the Social Security Administration’s (SSA’s) determination of disability but at a later date the Social Security Administration (SSA) makes a determination the person is not disabled. The Department is required to follow the final SSA decision. Comment: Since the SSA allows 65 calendar days to file an appeal, an SSA decision cannot be considered final until the 65 day appeal period has expired. It is important to understand the difference between an SSA decision that is final and one that is not final, because they affect Medicaid eligibility differently. Procedure: Use the procedures in the following chart for the correct action at each step in the decision process when the SSA denies disability for a Medicaid member who has been determined to be disabled by DDS or SSA:

Status Action HHS receives notification that SSA has denied disability for a person who was approved based on a DDS or SSA disability decision. 1. Continue Medicaid or State Supplementary Assistance for 65 days from the date of the SSA denial. 2. Set a reminder to track the 65 days. 3. On the 66th day, check to see if an SSA appeal has been filed. If the member has not filed an appeal with SSA by the end of the 65 days, the SSA decision is a final decision. Cancel benefits with timely notice using a manual Notice of Action with the language listed below. If the member appeals the denial within 65 days, the SSA decision is not a final decision. Continue benefits until there is a final decision from SSA. This could be either:  A decision issued at the Social Security Appeals Council level; or  The most recent decision that the member does not pursue to the next appeal level by the end of 65 days.

Title 8: Medicaid Page 74 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Follows an SSA Disability… To cancel the Medicaid case, use the language below.

The Social Security Administration has determined that ____ is no longer disabled. EM 8-C Denial Based on Disability; 441 Iowa Admin. Code 75 (Rules in Process) See also:  Reapplying After Cancellation for a Nondisability Reason  SSA Disability Denial and Appeal Process  8-F, People Ineligible for SSI (or SSA): Due to Reevaluation of Childhood Disability

Mr. C is determined eligible for Medicaid in November based on the Department’s disability determination. In April of the following year, Mr. C applies for SSI but on June 5, he is denied SSI as not disabled. The worker continues Mr. C’s Medicaid eligibility for 65 days until the time to appeal has expired (August 8). As of August 8, Mr. C has not filed an appeal. On August 9, the worker issues a timely notice canceling Medicaid benefits for Mr. C effective September 1 and determines if Mr C would be Medicaid eligible under another coverage group. When the Department Determines Disability Legal reference: 20 CFR 416.901, 416.971, 416.972, 416.973; 441 IAC 75 (Rules in Process) Policy: The Department must determine an applicant’s disability when the applicant:  Is applying for a coverage group that requires a determination of disability according to Social security Administration (SSA) standards, and  Has not been approved for disability through an SSA disability determination. The Department must make a determination on disability within 90 calendar days of the date of application. The time can exceed 90 calendar days if:  The applicant or examining physician causes a delay, or  There is an emergency beyond the control of the Department or the applicant.

Title 8: Medicaid Page 75 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability Procedure: The Department’s process for determining disability is a shared responsibility of the IM worker and Disability Determination Services (DDS). NOTE: When the applicant has also applied for disability benefits from the SSA, wait on the SSA disability decision unless the applicant is eligible for only Medically Needy and the SSA is looking at SSDI (Title II) eligibility only. When the Department must determine disability, first decide if the person performs substantial gainful activity. EXCEPTION: Skip this step when determining eligibility under Medicaid for Employed People with Disabilities (MEPD). Make this decision within 15 calendar days of the application date. See Substantial Gainful Activity for an Employee and Substantial Gainful Activity for a Self- Employed Person for instructions. If the person is not engaged in substantial gainful activity (except for MEPD), send the medical evidence to the DDS. Do this no later than 15 calendar days from the application date. (See Submitting Medical Evidence to DDS.) Follow the steps listed below when an HHS determination is required. Step 1: IM worker determines if the client engages in substantial gainful activity (SGA). Clients whose current earnings are at or higher than the SGA level are earning too much to meet disability requirements. Determination:  Yes, the client engages in SGA. Deny disability. Determine if Medicaid eligibility exists under another coverage group.  No, the client does not engage in SGA Go to step 2. Step 2: DDS evaluates the client’s medical impairments and compares them to a list of qualifying impairments published in federal regulations. Determination:  Yes, impairment is listed. Go to step 3.

Title 8: Medicaid Page 76 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability  No, severe impairments Deny Medicaid as not disabled. Determine if Medicaid eligibility exists under another coverage group. Step 3: DDS staff determines whether the client has an impairment of a severity that meets or equals the severity of impairments listed in the federal regulations. Determination:  Yes, impairment meets severity Go to step 4.  No, impairment does not meet severity Deny Medicaid as not disabled. Determine if Medicaid eligibility exists under another coverage group. Step 4: DDS staff determines whether the client has the ability to perform past work activities. Determination:  Yes, the client can do past work Deny Medicaid as not disabled. Determine if Medicaid eligibility exists under another coverage group.  No, the client cannot perform past work Go to step 5. Step 5: DDS staff determines whether the client is able to perform other work activities at the SGA level. Determination:  Yes, the client can do other work Deny Medicaid as not disabled. Determine if Medicaid eligibility exists under another coverage group.  No, the client cannot perform other work activities Approve Medicaid based on disability if client meets all other eligibility requirements

Title 8: Medicaid Page 77 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised May 22, 2026 When the Department Determines Disability

Mr. J, age 50, applies for Medicaid on the basis that he is disabled. Mr. J’s countable resources are over $2,000, he is single, he has no dependent children, and he is not employed. The worker determines that Mr. J may be eligible only for the Medically Needy coverage group based upon disability. Mr. J provides proof that he has applied for SSDI and that disability was denied by the SSA four months earlier. The worker initiates a disability determination because the Department cannot rely on an SSA denial of disability for Medically Needy applicants. The following sections give further instructions on:  Determining substantial gainful activity for an employee  Determining substantial gainful activity for a self-employed person  Submitting medical evidence to DDS Substantial Gainful Activity for an Employee Legal reference: 20 CFR 416.974, Program Operations Manual System POMS 10505.020, 441 IAC 75 (Rules in Process) The first test of disability determination is evaluation of “substantial gainful activity” (SGA). SGA means the performance of “significant” physical or mental activities in work for substantial pay or profit.  “Significant physical or mental activities” are useful in a job or business and have economic value. Self-care, household tasks, unpaid training, therapy, school attendance, clubs, and social programs are not considered SGA.  Work may pay either in cash or in kind.  The current earnings threshold for determining “substantial” activity is $1,690. A person who is engaged in SGA despite physical or mental limitations is not disabled (unless the person would qualify under MEPD). Comment: There is no SGA if the person’s former job made many job accommodations or the person became more incapacitated and cannot find another similar job. Loss of work detrimental to health does not result in SGA. There may be SGA if the person worked for longer than six months despite the impairment, lost the job, and applied for Medicaid in the same month. If there is reasonable doubt, do not consider the person engaged in SGA.

Title 8: Medicaid Page 78 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability Procedure: To determine SGA for an employed person, calculate the person’s countable income by averaging gross income over the time the income was earned after the disability occurred. EXCEPTION: Do not consider the earned income limits under SGA for eligibility under the Medicaid for Employed People with Disabilities (MEPD) coverage group. Use the following procedure to determine if an employed client’s countable monthly income demonstrates SGA:

Step Action Determine average monthly earnings. Count earnings from employment and self-employment. Determine seasonal income by averaging income over the season to arrive at a monthly countable income. See 8-E, Income Policies for Non-MAGI-Related Coverage Groups. Determine excluded earnings. Do not count:  Earnings of volunteers under the Small Business and Domestic Volunteer Acts.  Employer subsidies to an impaired person that are not earned through the person’s productivity. Ask the employer to determine the subsidy. If the employer cannot calculate the subsidy, compare the work to similar work of an unimpaired person, and the value of that work by the prevailing wage scale. Determine deductions. Deduct work expenses related to the person’s disability. See 8-E, Deduction for Impairment-Related Work Expenses.

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Step Action Compare remainder to $1,690 per month. When the countable earnings exceed $1,690 per month, the applicant does not meet the first requirement of being disabled under SSA standards. Deny Medicaid as not disabled. See When the Department Denies Disability. When the countable earnings are less than $1,690 per month, complete a disability determination, as the client is not engaged in SGA. When countable earnings are less than $1,690 per month and there is evidence that an individual may be engaging in SGA, or appears to be in a position to defer compensation, or by special arrangement, is able to suppress earnings, proceed to the next tests. Do the Comparability Test. Compare the client’s work to that of unimpaired people in the area. Look at time, energy, skills, and responsibility. If the work is the same as that done by unimpaired people, the client has SGA and is not disabled. Do the Worth Test. Determine if the client’s work activity is worth more than $1,690 per month. If so, the client is engaging in SGA, even if the client’s work activity is not comparable to that of an unimpaired person. The value of work in the military must be compared to similar work in a nonmilitary setting. Military wages may continue and the client may be placed on limited duty. Ask your area income maintenance administrator or the HHS SPIRS Help Desk to contact Medicaid Policy to determine the actual value of the work.

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Mrs. P applies for Medicaid based on disability. She states that her disability is fibromyalgia. The worker evaluates Mrs. P’s employment status for SGA. Mrs. P continues to work at the same job with the same duties (meeting the Comparability Test), but her medical condition has caused her to reduce her work schedule from 40 hours per week to 20 hours per week, which has cut her earnings in half (the Worth Test). Her hourly wage is $21 per hour. Her average monthly pay is $1,806. The worker determines that Mrs. P does not meet the SGA test for disability for most Medicaid coverage groups because she continues to do the same work and her earnings were over $1,690. However, because Mrs. P is still employed, she appears to be eligible for MEPD. The worker makes a referral to DDS for a disability determination; noting on the Disability Transmittal to skip the step of determining SGA. Substantial Gainful Activity for a Self-Employed Person Legal reference: 20 CFR 416.975, 441 IAC 75 (Rules in Process) Policy: There are three tests for “substantial gainful activity” (SGA) for a self- employed person. If the person does not meet the criteria in all three tests, the person is not engaged in SGA, and a HHS disability determination must be done.

Name of Test: What this means: 1. Significant services and substantial income This test is met if significant services are combined with substantial income. a. Significant services When a person (with the exception of a farm landlord who rents farmland to another farmer) gives significant services by participating in the following:  Gets a social security earnings credit on the federal income tax return.  Advises or consults with the renter and inspects production periodically.  Furnishes a large portion of the machinery and financing.

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Name of Test: What this means: b. Substantial income When a person has:  Countable income over $1,690 per month.  Countable income that meets the community standard of livelihood for a self-employed person with a similar business. 2. Comparability of work If work activities are comparable to that of an unimpaired person in the community engaged in the same or similar business, the person is engaged in SGA. 3. Work activity If the value of the work is more than $1,690 per month based on the amount an employer would pay any employee to do the same job, the person engages in SGA. Procedure: To determine SGA for a self-employed person, consider the three tests in order, as explained in the following chart. EXCEPTION: Do not determine SGA for the Medicaid for Employed People with Disabilities (MEPD) group. If the earnings are comparable to unimpaired people in the community in the same business, there is substantial income and the person engages in SGA. If there is “material participation” and “substantial income,” this means there is SGA, unless material participation has been reduced or has stopped. Determine if the significant services are the same at the time of application as before the person’s impairment. If the self-employment was less than six months and has stopped, or the income level indicating substantial gainful activity continued for less than six months, there is no SGA. If there is reasonable doubt whether the person meets SGA, assume the person does not meet SGA criteria.

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Test 1: Significant Services and Substantial Income 1. Use only the income of the person’s productivity, not the productivity of the person’s agent (employee or assistant). 2. Subtract any business expenses from the gross self-employment income. Also subtract:  Unpaid help by a spouse, children, or others.  Soil bank income if included in farm income from the tax return.  Impairment-related expenses if not deducted as a business expense.  Business expense paid for by a third party, such as business rent paid by Vocational Rehabilitation or space furnished by a third party. 3. Determine if the income is the same as before the onset of disability. To determine if the onset of disability affected the person’s ability to engage in SGA, use the income of at least the last five years. If the person’s income is the same as before the onset of disability, there is substantial income and the person engages in SGA. 4. If the person’s income is not the same as before the onset of disability, then determine if the earnings are comparable to unimpaired people in the community in the same business. (For farming, add in the value of produce grown for home consumption.) Test 2: Comparability of Work Evaluate work activity using:  Hours worked  Skills  Energy output  Efficiency  Duties  Job responsibilities

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Test 3: Work Activity Evaluate by determining countable income:  A person who earns more than $1,690 per month meets the criteria for engaging in SGA, which results in not being considered disabled.  See the procedures for Substantial Gainful Activity for an Employee. Comment:

Mr. Q applies for Medically Needy on the basis of disability. His wife is employed and her earnings put their joint income higher than the MEPD income limit of 250% of the federal poverty level. Mr. Q explains that he is not able to work full time because of his heart condition, but he has a self-employment business building bookcases, which averages $600 per month net income after business expenses are deducted. He pays his adult son $50 per month to deliver the lumber to his home workshop and to deliver the finished bookcases. The worker evaluates Mr. Q’s self-employment for SGA by applying the three tests in order: Test 1. Significant services and substantial income:  Mr. Q is not able to do all the work for his business himself.  Mr. Q earns less than $1,690 per month.  Mr. Q’s income has dropped significantly from his previous full-time earnings.  There is no one else in the local community who builds custom bookcases, so the worker cannot compare Mr. Q’s income to the same type of work done by others. Test 2. Comparability of work:  Mr. Q formerly worked at least 40 hours per week and often more due to overtime assignments.  Mr. Q currently has to take frequent rest breaks as he tires easily due to the heart condition. He works an average of ten hours per week. Test 3. Work activity: Mr. Q earns less than $1,690 per month. The worker determines that Mr. Q does not engage in SGA, so he is referred for a Department disability determination.

Title 8: Medicaid Page 84 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability Submitting Medical Evidence to DDS Legal reference: 441 IAC 75 (Rules in Process) Policy: If the applicant does not meet the requirements for substantial gainful activity, then the Department must make a referral to the Bureau of Disability Determination Services (DDS) for a disability determination. Comment: DDS may request additional information from the applicant and may require the applicant to have a medical examination. DDS pays for medical information and transportation. Procedure: Use the Disability Determination Checklist, RC-0103 as a guide.

Submit to DDS: Explanation: Form 470-2465, Disability Report for Adults or Form 470-3912, Disability Report for Children (under 18) The applicant or the applicant’s representative completes the form, which includes a release of information. Check the report to make sure the correct person signed the form, as follows:  If the release is for mental health information, only an applicant 18 years of age or older or a legal representative can sign the form.  If the release is for substance abuse information, only the applicant can sign the form, regardless of age. Form 470-2472, Disability Transmittal This form contains case-related information that helps DDS determine disability. For an MEPD applicant, check the status, “MEPD – SGA not considered” in first step of disability determination.

Title 8: Medicaid Page 85 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability

Submit to DDS: Explanation: Form 470-4459 or 470-4459(S) Authorization to Disclose Information to the Iowa Department of Human Services The release allows DDS to contact sources to get the information needed to determine disability. Send a signed release for each source listed on the applicable Disability Report and the additional sources of information for children. This includes releases for any doctors who provide care in a hospital. Additional records, if available: This could include:  Supplemental vocational information.  Any information from the Social Security Administration.  Copies of medical reports or letters from a provider about the applicant’s medical condition from the last 12 months.  For an adult applicant, evidence about work activity, even if the work done was not SGA.  For a child applicant: • School information • Any work history • Any involvement with vocational rehabilitation or other social services Records about a deceased applicant Send either:  Medical records including a note certifying the cause and date of death signed by a medical practitioner, or  A death certificate. (When a person dies at home and has no history of medical treatment for the cause of death, a death certificate is required.) If an applicant moves before a disability determination is completed, provide the new address to DDS by entering it on a copy of the Disability Transmittal, form 470-2472, and sending the form to DDS.

Title 8: Medicaid Page 86 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 When the Department Determines Disability If HHS denies a Medicaid application for nondisability reasons (over resources, no longer a resident, etc.) after a disability determination has been sent to DDS, notify DDS to stop the disability determination by using Disability Transmittal, form 470-2472. Disability Approved by DDS Legal reference: 441 IAC 50.1(249) and 75 (Rules in Process) Policy: Disability Determination Services (DDS) makes the disability determination decision on behalf of the Department. Comment: DDS must make a determination on disability within 75 calendar days of the referral from HHS. If DDS cannot complete the disability determination within 75 calendar days, DDS will notify the local office of the delay. DDS issues the disability decision on form 470-2472, Disability Transmittal which is returned to the IM worker along with the entire disability file. The finding that the applicant is disabled is entered in Part II, Item 1 on the form. Procedure: When DDS determines the person is disabled, and all other eligibility requirements are met, approve the Medicaid case. HHS Responsibility for Disability Review and Redetermination Legal reference: 42 CFR 435.541, 441 IAC 75 (Rules in Process), P. L. 104- 193; P. L. 105-33 Policy: When a member who is eligible for Medicaid because of disability is not receiving disability benefits through the Social Security Administration (SSA), the Department is responsible for:  Conducting reviews of the disability if required, and  Redetermining disability when the member reaches the age of 18. Comment: When disability is established, a date for review of the disability may be established to determine if the person continues to meet the disability or blindness requirements. Redetermination is required when a disabled child turns 18, since disability must then be determined using adult criteria. This is a separate process from a disability review.

Title 8: Medicaid Page 87 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 HHS Responsibility for Disability Review… Procedure: No action is required when SSA is responsible for reviews unless SSA finds that the member is no longer disabled.

Member Status Responsibility for Disability Review Receiving SSI or SSDI cash benefits The SSA processes the disability reviews. Not receiving SSI or SSDI cash benefits The income maintenance worker must schedule the disability review and initiate the review with Bureau of Disability Determination Services (DDS). For detailed procedures when the Department is responsible, see the following sections:  Disability Reviews  Redetermination at Age 18 Disability Reviews Legal reference: 42 CFR 435.541, 441 IAC 75 (Rules in Process), P. L. 104-193; P. L. 105-33 Policy: A review may be required to verify that the member continues to meet disability requirements. Comment: DDS lists the review date in the “Diary Date” box on form 470- 2472, Disability Transmittal. Diary dates are by month, year, and “reason,” which is the number of years until the next review. If disability was gained through an appeal of the Department’s denial of medical assistance, a review date may be established in the final decision issued on the appeal. If the review date is not given on the final decision, contact the HHS SPIRS Help Desk. The Social Security Administration (SSA) sends review dates to the states for children who were canceled from SSI due to the revised disability criteria under Public Law 104-193 but receive Medicaid due to the provisions of the Balanced Budget Act of 1997. The Department’s central office sends individual notices regarding review dates for children canceled due to revised disability criteria. Do not contact SSA for review dates for children in this coverage group.

Title 8: Medicaid Page 88 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 HHS Responsibility for Disability Review… Procedure: When the Department is required to complete a disability review, send a request for a disability review to DDS. Schedule the disability review at the Medicaid eligibility review date closest to the review date scheduled by:  DDS for determinations made on behalf of the Department, or  The SSA for a child qualified under previous disability criteria, or  The administrative law judge in an appeal of the disability determination. Use RC-0103, Disability Determination Checklist, as a guide to making the review referral to DDS. Include the following documents in a disability review referral:

Document: Preparation: A new form 470-2472, Disability Transmittal Notify DDS of the need for special review requirements by writing in the “Comment” section of the form:  For MEPD disregard SGA, or  For a child under the standards in effect before enactment of P. L. 104-193. The previous form 470-2463, Explanation of Disability Determination, or the Personalized Disability Explanation issued by DDS. If this form is not available, note on the Disability Transmittal the reason it is not included. Proposed Decision and Final Decision If disability was approved through an appeal of a Medicaid denial, include a copy of the proposed and final appeal decisions.

Title 8: Medicaid Page 89 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 HHS Responsibility for Disability Review…

Document: Preparation: A new form 470-2465, Disability Report for Adults, or form 470-3912, Disability Report for Children if the member is under age 18 Request a new report from the client or the person acting on the client’s behalf. Check the report for completeness. Since the form includes a release of information, verify that the correct person signed it:  If the disability is related to mental health, only a client 18 years of age or older or a legal representative can sign the form.  If the disability is related to substance abuse, only the client can sign the form, regardless of age. New copies of form 470-4459 or 470-4459(S), Authorization to Disclose Information to the Iowa Department of Human Services Send a signed release to allow DDS to get information from each source listed on the Disability Report and the additional sources of information for children. This includes releases for any doctors who provide care in a hospital. A complete copy of the previous disability file. If HHS does not have a copy of the previous disability file because the SSA made the previous disability determination decision, note on the Disability Transmittal the reason the file is not attached. If DDS notifies you that the member no longer meets disability requirements, follow the procedure under When the Department Denies Disability to cancel the Medicaid case. Redetermination at Age 18 Legal reference: 20 CFR 416.987, 441 IAC 75 (Rules in Process) Policy: The Department must request a redetermination of disability based on adult criteria when a child reaches the age of 18 unless the child is receiving SSI.

Title 8: Medicaid Page 90 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 HHS Responsibility for Disability Review… If the child is found no longer disabled based on a redetermination using adult criteria, cancel medical assistance based on denial of disability no sooner than the month after the child’s eighteenth birthday. Procedure: For a disability redetermination, send the following information to DDS no earlier than 30 days before the child’s 18th birthday:

Document: Preparation: A completed form 470-2472, Disability Transmittal Note that the SGA step should be skipped, if the redetermination is for the MEPD group. The previous form 470-2463, Explanation of Disability Determination or the Personalized Disability Explanation issued by DDS. If this form is not available, note on the Disability Transmittal the reason it is not included. A completed form 470-2465, Disability Report for Adults Request the report from the client or the person acting on the client’s behalf. Check the report for completeness. Since the form includes a release of information, verify that the correct person signed it:  If the disability is related to mental health, only a client 18 years of age or older or a legal representative can sign the form.  If the disability is related to substance abuse, only the client can sign the form, regardless of age. New copies of form 470-4459 or 470-4459(S), Authorization to Disclose Information to the Iowa Department of Human Services Send a signed release to allow DDS to get information from each source listed on the Disability Report and the additional sources of information for children. This includes releases for any doctors who provide care in a hospital.

Title 8: Medicaid Page 91 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 HHS Responsibility for Disability Review…

Document: Preparation: A complete copy of the previous disability file If HHS does not have a copy of the previous disability file, note on the Disability Transmittal the reason the file is not attached (such as, the SSA made the previous decision and the file is not available to HHS). If DDS notifies you that the 18-year-old no longer meets disability requirements, follow the procedure under When the Department Denies Disability to cancel the Medicaid case. Denial of Medicaid Based on Disability Denial Legal reference: 441 IAC 75 (Rules in Process) Policy: Non-MAGI-related Medicaid eligibility can be denied based on a disability determination decision made:  By the Social Security Administration (SSA). or  By the Bureau of Disability Determination Services (DDS) on behalf of the Department of Health and Human Services. Procedure: When the Medicaid denial is based on a denial of disability from the SSA, manually issue a Notice of Action using the language below. Determine if Medicaid eligibility exists under another coverage group.

____ is not blind or disabled. The Social Security Administration denied benefits as you are not disabled at this time. We are required to follow Social Security’s decision. If you are approved for disability benefits at a later date, please tell us within 10 days of the date on your notice from Social Security. EM 8-C Denial Based on Disability; 441 Iowa Admin. Code 75 (Rules in Process) See the following sections for more procedures:  When the Department Denies Disability  Appeal of a Medicaid Denial Based on a Disability Denial  When SSA Denial Is Reversed in an SSA Appeal

Title 8: Medicaid Page 92 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Denial of Medicaid Based on Disability Denial When the Department Denies Disability Legal reference: 441 IAC 50.1(249), 50.2(1), 75 (Rules in Process) Policy: Medicaid eligibility based on disability shall be denied or canceled when the Department determines that an applicant or member is not disabled. Comment: When there is a DDS denial of disability, DDS issues the decision using form 470-2463, Explanation of Disability Determination or a Personalized Disability Explanation. The form is sent to the IM worker along with the entire disability file. The finding that the client is not disabled is also entered in Part II, 2 of the Disability Transmittal, form 470-2472. Procedure: Send the client:  A copy of form 470-2463, Explanation of Disability Determination or the Personalized Disability Explanation and  A Notice of Action denying the application or cancelling assistance because the person is not disabled. For an applicant, it is important to issue a manual Notice of Action using the following language.

…you are not blind or disabled. You will get a separate letter that tells you about the disability decision. EM 6-B SSA Policies Applicable to All Programs; EM 8-C Presence of Age, Blindness, or Disability; EM 8-J SSI-Related Medically Needy; EM 8-J Age Criteria; 8-J Blindness Criteria; EM 8-J Disability Criteria; 441 Iowa Admin. Code 50.1(249), 50.2(1), 75 (Rules in Process). If a member’s disability is denied due to a review of disability or due to a redetermination of disability for an 18-year-old using adult criteria, cancel the Medicaid coverage group and redetermine to another coverage group. Comment: For more information, see:  Appeal of a Medicaid Denial Based on a Disability Denial  When SSA Denies Disability After HHS Disability Approval  When SSA Denial Is Reversed in an SSA Appeal  Disability Reviews  Redetermination at Age 18

Title 8: Medicaid Page 93 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Denial of Medicaid Based on Disability Denial Appeal of a Medicaid Denial Based on a Disability Denial Legal reference: 441 IAC 7.8(17A) Policy: An applicant has the right to appeal a denial of Medicaid based on the determination that the applicant is not disabled, according to the policies and procedures in 1-E, Appeals and Hearings. Procedure: Use the following steps to process appeals regarding denial of Medicaid based on the denial of disability.

Step 1: Send the appeal request along with a copy of the Notice of Action within 24 hours to the HHS Appeals Section at the following address: HHS Appeals Section Fifth Floor 1305 E Walnut Street Des Moines, IA 50319-0114 Step 2: Within ten calendar days, submit a summary of the action taken to the Appeals Section. Include the following information:  The non-MAGI-related coverage groups under which the person is eligible.  The reason benefits were denied: either • A Social Security Administration (SSA) decision or • A DDS decision from an HHS referral.

If benefits were denied based on an SSA decision, include:  The date of the decision.  Proof of the SSA denial of disability Step 3: If the disability determination was done by DDS for HHS, send a complete copy of the disability file to each of the following:  HHS Appeals Section  The appellant  The appellant’s representative  DDS at the following address: Disability Determination Services Bureau Disability Hearing Unit, SW 5th Street, Suite D, Des Moines, Iowa 50309 NOTE: Keep the original disability determination file with the case record.

Title 8: Medicaid Page 94 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Denial of Medicaid Based on Disability Denial The Department of Inspections, Appeals, and Licensing (DIAL) notifies the HHS worker, the appellant, the appellant’s representative, and DDS (if appropriate) of the hearing date. The worker is the representative for the Department (HHS) and must attend the hearing to explain HHS procedures leading to the denial of Medicaid. If DDS made the disability determination on behalf of HHS, the DDS representative attends the hearing to:  Explain DDS procedures,  Explain the disability determination decision, and to  Answer questions from the administrative law judge, the appellant, or the appellant’s representative. On rare occasions, the administrative law judge (ALJ) may determine that additional medical examinations are required to make a decision. DDS is responsible for obtaining these services. After the ALJ issues a written order to DDS describing the required tests or examinations, DDS requests the disability file from the local office. DDS may ask the worker to obtain signed releases from the appellant as needed. DDS will then schedule the tests, provide the results to the ALJ, and return the disability file to the local office. If the Final Decision states that the appellant is disabled, and all other eligibility requirements are met, approve Medicaid. Under this circumstance, if a date is not given for a Continuing Disability Review (CDR), contact the HHS, SPIRS help desk for guidance. When SSA Denial Is Reversed in an SSA Appeal Legal reference: 441 IAC 50.2(1) and 75 (Rules in Process) Policy: When an applicant reports that the Social Security Administration (SSA) appeal process has reversed the denial of disability and the person is now determined to be disabled, the Department must determine if this change affects Medicaid eligibility. Procedure: If Medicaid was denied based on the Department’s disability determination and not based on an SSI or Title II denial, the SSA reversal has no effect on the Medicaid denial. Advise the client to file a new Medicaid application.

Title 8: Medicaid Page 95 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Denial of Medicaid Based on Disability Denial If the SSA reverses an SSI denial, approve Medicaid based on the SSI eligibility. Determine Medicaid eligibility based on the date of the Medicaid application. Compare the disability onset dates established by the SSA to the dates of the Medicaid application. Obtain the date of onset as follows:  The IEVS Third-Party Query (TPQY) response lists a specific month, day, and year as the onset date for a SSDI (Title II) disability decision. See the last page of the TPQY.  For SSI, the onset date is usually shown as the first day of the month that disability is established as shown on the SDX screen.

If SSA disability onset date is … Then… Before the date of the Medicaid application … Allow applicable retroactive months of eligibility for individuals who meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. On or before the date of the Medicaid denial … Allow applicable retroactive months of eligibility for individuals who meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. After the date of the date of the Medicaid denial notice … The person is not entitled to Medicaid based on the denied Medicaid application. The person must file a new Medicaid application.

Title 8: Medicaid Page 96 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Denial of Medicaid Based on Disability Denial Comment:

Ms. L applies for Medicaid based upon disability in February 2008. The IM worker refers Ms. L for a Department disability determination because she has resources higher than the limit for non-MAGI-related coverage groups but lower than the limit for the Medically Needy program. DDS evaluates Ms. L and determines that she does not meet the criteria for disability. Ms. L applies for SSDI in July 2008. The SSA denies that she is disabled. Ms. L asks for all levels of the SSA appeal process. In the final level of appeal, Ms. L is approved for disability effective May 2008. Although Ms. L is determined to be disabled by SSA, the Department requires a new application because the original denial was not based on the SSA disability denial. Reapplications Based on Disability Legal reference: 20 CFR 416.913, and 416.920; 441 IAC 50.2(1) and 75 (Rules in Process) Policy: The Department must reevaluate the disability status of an applicant each time a Medicaid application is filed. Procedure: Evaluate the current claim for disability when a person reapplies for Medicaid based on disability:  After a denial because the person was not determined to be disabled, or  After a cancellation due to the determination that the person is no longer disabled. See the following sections:  Reapplying After Disability Is Denied  Reapplying After Cancellation for a Nondisability Reason

Title 8: Medicaid Page 97 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Reapplications Based on Disability Reapplying After Disability Is Denied Legal reference: 20 CFR 416.913 and 416.920; 441 IAC 50.2(1), 75 (Rules in Process) Policy: When a person reapplies for Medicaid following a denial or cancellation based on a decision of disability or blindness by the Bureau of Disability Determination Services (DDS):  HHS continues to use the initial denial of disability when the person does not claim a worsening of the disabling condition or a new disabling condition.  A new referral to DDS must be made when the person claims a worsening of the condition or a new disabling condition. Procedure: If the person claims a worsening of the disabling condition or a new disabling condition, send all previous disability reports to DDS along with any new material. If the person claims there is no change in condition, no disability exists. Manually issue a Notice of Action using the language below. Determine if eligibility exists under another coverage group.

_______ is not blind or disabled. If your medical condition gets worse or you have a new condition, then you may re-apply for Medicaid. EM 8-C, Reapplying after Disability is Denied; 441 Iowa Admin. Code 75 (Rules in Process), 20 CFR 416.913 and 416.920. Comment:

Mr. K applies for Medicaid as a disabled person because of arthritis in May 2008. The worker makes a referral to DDS. In July 2008, DDS determines that Mr. K is not disabled due to the arthritis. The worker issues a Notice of Action in July 2008, denying Medicaid as Mr. K is not disabled. The worker determines if eligibility exists under another coverage group. In January 2009, Mr. K again applies for Medicaid. He does not claim a new disabling condition nor a worsening of his arthritis. The worker denies his Medicaid application as not disabled.

Title 8: Medicaid Page 98 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial Non-MAGI-Related Eligibility Revised October 10, 2025 Reapplications Based on Disability Reapplying After Cancellation for a Nondisability Reason Policy: In most instances, disability or blindness does not need to be reestablished for a person reapplying for Medicaid when the cancellation was done due to nondisability reasons. A disability determination is required when:  The person states there has been improvement in the condition.  The person has turned age 18, which means the disability must be redetermined under adult disability standards.  A review of disability or blindness is due or should have been completed during the period that the person was not on Medicaid. The review date may have been scheduled either by the Department or by the Social Security Administration. Procedure: Follow procedure under When the Department Determines Disability to complete a referral for disability determination. Nonfinancial MAGI-Related Eligibility This section deals with additional nonfinancial eligibility policies specific to MAGI-related applicants and members. These additional requirements include:  Absence  Residency  Specified relatives  Verification of pregnancy Absence Legal reference: 441 IAC 75.53 Do not include in the eligible group any person who is absent from the home and does not meet the temporary absence provisions:  Consider a parent to be absent from the home when the parent is committed, imprisoned, or admitted to an institution.  Consider a parent to be absent from the home when the parent is a convicted offender but is permitted to live at home while serving a court-imposed sentence by performing unpaid public work or unpaid community service during the workday.

Title 8: Medicaid Page 99 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence  Consider a parent to be absent from the home when the parent is absent because of the performance of active duty in the uniformed services of the United States. “Uniformed service” means the United States Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanographic and Atmospheric Administration, or Public Health Service.

Mr. A is on active duty with the U.S. Army, based in another state. His wife, Mrs. A, and their children live in Iowa. Mr. and Mrs. A do not consider themselves estranged. Mr. A is absent only because of his active duty military service. If Mrs. A applies for Medicaid, Mr. A is not included in the eligible group and his income is considered only to the extent he makes it available. NOTE: Although Mr. A is considered “absent,” a referral to CSS is not made. See 8-B, Referrals to CSS.  Do not consider a parent to be absent from the home when the parent is absent solely because of a pattern of employment. Examples include salespeople and truck drivers.

1. Mr. and Mrs. B receive Medicaid for themselves and their children. Mr. B takes a job as a truck driver. Due to the nature of the job, he will be home only one or two days a week and on the road the rest of the week.

Mr. B is away solely because of his employment. He is not considered to be absent. He must be included in the eligible group and his income considered in determining eligibility for the family. 2. Mr. C and Ms. D receive Medicaid for themselves and their common child. Mr. D takes a job with a carnival that will require him to be away from home for six months.

Mr. C is away solely because of his employment. He is not considered to be absent. He must be included in the eligible group and his income considered in determining eligibility for the family.

Title 8: Medicaid Page 100 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence Questionable Cases Legal reference: 441 IAC 75 (Rules in Process) In questionable cases, you may need verification before you can consider a parent absent and determine eligibility. Do not take action based on suspicion or complaint alone when you believe that an “absent parent” is not absent. Try to get several items that support your belief. The following are examples of situations that could justify more verification:  The case was recently denied or canceled because the “absent parent’s” income or resources were considered.  The absent parent moves in and out of the home frequently.  Living expenses exceed income.  The parent’s absence occurs when the parent is on strike or during slack times for a self-employment business, etc.  There is no verifiable residence for the absent parent.  The verifiable residence for the absent parent is very close to the child’s home. The absent parent may be out of contact with the family, especially if the separation was recent. The client may verify the circumstance by providing a statement from the landlord, minister, lawyer, or other knowledgeable nonrelative. Apply the “prudent person” concept and document the basis for the decision on all questionable cases. Temporary Absence Legal reference: 42 CFR 435.403(j)(3), 441 IAC 75.53 Policy: Include in the eligible group the needs of a person who is temporarily out of the home, if otherwise eligible. A temporary absence exists when the person is:  Out of the home to secure education or training.  In a medical institution for less than a year as verified by a physician’s statement.  Out of the home for another reason and the person intends to return to the home within three months. Document the temporary absence and request verification as needed.

Title 8: Medicaid Page 101 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence Absence for Education Legal reference: 441 IAC 75.53 Policy: Include in the eligible group a person who is temporarily out of the home for the purpose of education or training. “Education and training” means any academic or vocational training program which prepares the person for a specific professional or vocational area of employment. Procedure: If a child was in the home before leaving for education or training, a temporary absence exists as long as the child remains a dependent. Continue assistance if the child remains a member of the relative’s family group. When a child is attending Job Corps, the Iowa Braille and Sight Saving School, or the Iowa School for the Deaf, consider the child to be in a public educational or vocational training institution and include the child in the eligible group if otherwise eligible. A parent or other caretaker who is temporarily out of the home for training or education may be included in the eligible group, provided the parent or other caretaker was in the home before leaving to secure education or training. Absence in a Medical Institution Legal reference: 441 IAC 75.53 Include in the eligible group a person who is temporarily absent from the home and in a medical institution. Assistance may be approved for a person who is confined to or living in a medical institution as long as the person:  Is anticipated to be in a medical institution for less than a year, as verified by a physician’s statement.  Will be returning directly to the home from the medical institution. When determining the 12-month period, the first full calendar month after the person enters the medical institution is considered “month one.”

Title 8: Medicaid Page 102 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence A “medical institution” is a facility that provides medical care, including nursing and convalescent care, in accordance with accepted standards as authorized by state law and as evidenced by the facility’s license. A medical institution may be public or private. Medical institutions include:  Hospitals  Nursing facilities  Intermediate care facilities for persons with an intellectual disability  Psychiatric medical institutions for children  Psychiatric institutions  State hospital schools  Mental health institutions EXCEPTION: Children in a psychiatric medical institution for children (PMIC) who are in court-ordered foster care status are not considered in the eligible group at home. A person, who enters a medical institution from foster care, or from any place other than the home, is not considered in the eligible group at home. This is true even if the person anticipates being in the medical institution for less than a year and returning to the home upon leaving the medical institution. EXCEPTION: Include in the eligible group a child who has remained in a medical institution since birth, but is expected to enter the home in less than one year.

1. Mrs. A applies for assistance for herself and her child, who has been in the hospital for five months. The child left the home to enter the hospital and is expected to return to the home in two months.

Mrs. A and the child are eligible, because the total time the child is expected to be out of the home and in a medical institution is less than one year.

Title 8: Medicaid Page 103 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence

2. Mrs. B applies for assistance for herself and her child who has been in a nursing facility for ten months. The child is expected to return to the home in four months.

There is no MAGI-related Medicaid eligibility because the total length of time the child is expected to be out of the home is greater than one year. 3. Mrs. C applies for MAGI-related Medicaid for herself and a child. The child was in foster care for two months before entering the medical institution. The child is expected to return to the home within three months.

There is no MAGI-related Medicaid eligibility, because the child did not enter the medical institution from the home. If the person does not return within one year, remove the person’s needs from the eligible group. Absence for Less than Three Months Legal reference: 441 IAC 75.53 and 75.12(249A) Include in the eligible group a person who is temporarily absent from the home. A “temporary absence” exists when a person is out of the home for reasons other than in a medical institution or for education or training and it is expected that the person will return to the home within three months. NOTE: A person who is expected to be absent from the MAGI-related eligible group for less than three months due to incarceration is still eligible for Medicaid. See Residents of Public Nonmedical Institutions. A child may be out of the home for purposes such as visiting the absent parent or vacation. The child remains eligible if the child’s absence is anticipated to last less than three months. Even though the parent’s or other caretaker’s responsibility for care and control is lost, continue eligibility as long as the loss is temporary. For example, a child visiting the other parent can be included in the eligible group, as long as the absence is expected to be less than three months and all other factors of eligibility are met.

Title 8: Medicaid Page 104 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Absence Assistance may be approved for a person when the total length of time the person is anticipated to be out of the home is less than three months. If the person does not return home within three months, remove the person’s needs from the eligible group. When determining the three-month period, the first full calendar month after the person has left the home is considered “month one.” For applicants, the total length of time is from the date the person left the home (not the date of application) until the date the person is expected to return.

1. Jim, a member of the MAGI eligible group, leaves home on May 2 to visit his father. He is expected to return home August 29. His needs continue to be included in the MAGI eligible group. 2. Mrs. A applies for assistance for herself and four children. Three of her children live with her. The fourth child has been living with his father for the past two months and will be returning to Mrs. A’s home in two months. Mrs. A is eligible to receive assistance for the three children living in the home. The fourth child is not eligible until he returns to the home because his total length of absence from the home is anticipated to be greater than three months. 3. Mrs. B applies for assistance for herself and one child. The child was living with her grandmother for one month. Before this, the child had been living with Mrs. B. The child will be returning to Mrs. B’s home in one month. If the grandmother is not receiving assistance for the child, the worker continues assistance for Mrs. B and the child, because the total length of absence is anticipated to be less than three months. MAGI Household Size Legal Reference: 441 IAC 75 (Rules in Process) For the purpose of determining financial eligibility, each applicant’s or member’s household size is determined individually based on federal tax policy and with regard to the applicant’s or member’s federal tax status.

Title 8: Medicaid Page 105 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 MAGI Household Size The application and renewal forms ask whether an individual plans to file a tax return for the year. The individual’s household is constructed based on their plan to file a federal income tax return, regardless of whether or not they actually file a return at the end of the year, or be claimed as a tax dependent. It is not necessary to have filed a federal income tax return in previous years. Different households may exist within a single family, depending on each of the family members’ familial and tax relationships to each other. Applicant or Member is a Tax-Filer Legal Reference: 441 IAC 75 (Rules in Process) An applicant or member who expects to file a federal tax return for the year in which the applicant or member requests Medicaid and does not expect to be claimed as a tax dependent by another taxpayer is considered a “tax-filer”. A tax-filer’s Medicaid household size shall include: a. The tax-filer, b. The tax-filer’s spouse (if living together), or if expected tax status is married filing jointly (regardless if a spouse is absent from the home or whether the absence meets the definition of temporary), and c. Each dependent that the tax-filer expects to claim. Applicant or Member is a Tax Dependent Legal Reference: 441 IAC 75 (Rules in Process) An applicant or member who expects to be claimed as a tax dependent on a federal tax return for the year in which the applicant or member requests Medicaid is a “tax dependent”. A tax dependent’s Medicaid household size is the same as the tax-filer who claims the dependent. EXCEPTION: The dependent’s household size is determined the same as a non-filer who is not claimed as a tax dependent when the dependent meets one of the following exceptions: a. Expects to be claimed by someone other than a spouse or parent (biological, adoptive or step). b. Is a child under 19 who expects to be claimed by one parent while living with both parents who do not expect to file a joint return.

Title 8: Medicaid Page 106 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 MAGI Household Size c. Is a child under age 19 who expects to be claimed by a non-custodial parent in accordance with a:  Court order or binding separation, divorce, or custody agreement establishing physical custody controls, or  If there is no such order or agreement, or if there is a shared custody agreement, the custodial parent is the parent with whom the child spends most nights. Applicant or Member is a Non-Filer (does not file taxes) and is Not Claimed as a Tax Dependent Legal Reference: 441 IAC 75 (Rules in Process) A non-filer who is not claimed as a tax dependent can be an applicant or member who:  Does not expect to file a federal tax return for the year in which Medicaid is requested,  Does not expect to be claimed as a tax dependent for the year in which Medicaid is requested, or  Meets one of the following exceptions: a. Expects to be claimed by someone other than a spouse or parent (biological, adoptive or step). b. Is a child under 19 who expects to be claimed by one parent while living with both parents who do not expect to file a joint return. c. Is a child under age 19 who expects to be claimed by a non-custodial parent as described above in Applicant or Member is a Tax Dependent. The household size shall consist of the applicant or member, and each of the following who is living with and in relation to the applicant: 1. Parent (natural, adopted and step) when the applicant or member is a child under the age of 19. 2. Spouse; 3. Child (natural, adopted and step) under the age of 19; 4. Sibling (natural, adopted and step) under the age of 19 when the applicant or member is a child under the age of 19.

Title 8: Medicaid Page 107 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 MAGI Household Size Married Couples Legal Reference: 441 IAC 75 (Rules in Process) In the case of a married couple living together, each spouse will be included in the household size of the other spouse, regardless of federal tax status. In the case of a married couple filing jointly, each spouse will be included in the household size of the other spouse, even when they are not living together. Pregnancy Legal Reference: 441 IAC 75 (Rules in Process) In establishing eligibility for a pregnant woman or any person whose household includes a pregnant woman, the unborn child (children if more than one fetus exists) shall be considered when determining the number of persons in the household size. The applicant’s or member’s attestation of the pregnancy, date of conception, due date, and number of children expected to deliver shall serve as verification unless questionable. The composition of a MAGI household that includes a pregnant woman counts all eligible individuals, the pregnant woman, and the number of children she is expecting to deliver. When the mother intends to place her child for adoption shortly after birth, the child shall be considered as living with the mother until custody is relinquished. Applicant or Member Attestation of Federal Tax Status Legal Reference: 441 IAC 75 (Rules in Process) The department shall accept the applicant’s or member’s statement of their federal tax status and claimed dependents, or such statement from an adult who is living with and in the Medicaid household size of an applicant or member who is a child. In cases where tax status or tax dependency cannot be established, the individual’s household is determined following non-filer rules.

Title 8: Medicaid Page 108 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Determining If a Common-Law Marriage Exists Determining If a Common-Law Marriage Exists Legal reference: Legislative Guide to Marriage Law/Iowa Legislative Services Agency at https://www.legis.iowa.gov/docs/central/guides/marriage.pdf; IowaLegalAid.org at http://www.iowalegalaid.org/resource/common-law-marriage- in-iowa When determining if someone is a parent or other caretaker, there may be situations where a common-law marriage exists or the applicant or member claims a common law marriage exists. Accept a couple’s claim that a common-law marriage exists unless you have reason to question the claim. If you question the claim, a common law marriage exists if both people:  Are free to marry  Have intended or have agreed to be married  Continue to live together  Publicly declare themselves to be husband and wife. The following items can further indicate that a common-law marriage exists:  Joint income tax forms  Joint purchase of property (house, car, etc.)  Mortgages or loans  Insurance policies  School records  Employment records  Birth records  Joint bank accounts  Statements to friends or relatives  Hotel or motel registrations Evidence must represent the couple as husband and wife. One item is not enough evidence, but several items might indicate a common-law marriage. A common-law marriage is a legal and valid marriage. When a common-law marriage exists, treat the adults the same as any other married couple.

Title 8: Medicaid Page 109 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Adoption Adoption Legal reference: 441 IAC 75 (Rules in Process) When a mother intends to place her child for adoption shortly after birth, the child is considered as living with the mother until the legal release of custody is signed and custody is actually relinquished. Iowa law requires that when a child is voluntarily placed for adoption, a release of custody cannot be signed less than 72 hours after the child’s birth. The adoption does not sever a biological relationship. Joint Custody Legal reference: 441 IAC 75 (Rules in Process) A child can receive Medicaid in one household only. Living with a parent or other caretaker implies the existence of a relationship involving an accepted responsibility on the part of the caretaker for the primary care of the child. A non-parental caretaker must attest to having primary responsibility for the child’s care. In joint custody situations, the child shall be considered to be living with the custodial parent or other caretaker (which is determined as follows) when a child lives in the home of one parent or other caretaker some of the time and also lives in the separate home of the other parent or another caretaker:  As specified in a court order or binding separation, divorce or custody agreement, or,  If there is no such order, the parent or other caretaker with whom the child spends most nights shall be considered the custodial parent or other caretaker. • When a child spends equal amounts of time in the home of each parent and both parents apply for Medicaid for the child, the parents must decide which parent will continue with the application. Likewise, when a child spends equal amounts of time in the home of a parent and the home of another caretaker, the parent or other caretaker must decide which caretaker will continue with the application. • If the parents, or the parent and other caretaker, cannot reach a decision, the department will make the determination based on the totality of the available circumstances.

Title 8: Medicaid Page 110 Iowa Department of Health and Human Services Employees’ Manual Chapter C: Nonfinancial Eligibility Nonfinancial MAGI-Related Eligibility Revised October 10, 2025 Joint Custody The following questions may be helpful when deciding who the child is living with if the child appears to be spending equal amounts of time in each home and the parents cannot decide who will receive Medicaid. This is not a complete or final list of questions but gives some general guidance.  Which parent lives in the same school district as the child’s school?  Who purchases most of the child’s clothing?  Which parent does the school contact in an emergency?  Where are most of the child’s clothing and toys stored?  Who does most of the child’s laundry?  Who maintains medical records and sets up medical appointments?  Who has the final say as to what the child can or cannot do if there is a disagreement? Upon the determination that a child is living with a parent or other caretaker, the Medicaid household for the child is determined as described above in MAGI Household Size. Verification of Pregnancy Legal reference: 441 IAC 75 (Rules in Process) If a woman’s eligibility is dependent upon pregnancy, accept a woman’s statement, unless questionable, as verification for the following:  The claim that she is currently pregnant.  The probable date of conception to establish retroactive eligibility. If the pregnancy is questionable, accept a signed statement from any of the following:  A maternal health center  A family planning clinic  A physician’s office  A certified nurse midwife  Another physician-directed provider, such as a rural health clinic or birthing center.

Employees’ Manual Title 8, Chapter D Revised September 13, 2024 Medicaid Resources

Title 8: Medicaid Table of Contents Chapter D: Resources Revised September 13, 2024 Page 1 Page Iowa Department of Health and Human Services Employees’ Manual Overview .................................................................................................................................... 1 Attribution of Resources .......................................................................................................... 1 Resources Excluded from Attribution ................................................................................. 4 Calculating the Amount to Attribute to the Community Spouse .......................................... 5 If the Applicant Appeals the Attribution Amount.......................................................... 7 Increase in the Minimum and Maximum Allowance for Community Spouse ............ 15 Processing a Medicaid Application After Attribution ......................................................... 16 When Spouses Are Estranged ................................................................................. 19 Assignment of Support Rights .................................................................................. 19 Transfers to Establish Ongoing Eligibility ................................................................. 20 Summary Examples ......................................................................................................... 22 Estate Recovery ...................................................................................................................... 24 Establishing Whether a Member Under Age 55 Can Return Home .................................. 25 Estate Recovery Agent ..................................................................................................... 26 Amount Due ..................................................................................................................... 27 When Estate Recovery Is Waived .................................................................................... 28 Transfer of Assets .................................................................................................................. 29 Transfers That Cause a Medicaid Penalty ........................................................................ 31 Purchases Considered Transfers for Less Than Fair Market Value ......................... 31 Transfers That Do Not Cause a Penalty ........................................................................... 34 Rebuttal of Transfer of Assets .......................................................................................... 39 Penalties for Transferring Assets ..................................................................................... 42 Multiple Transfers ............................................................................................................. 48 Transfers Before February 8, 2006 ........................................................................... 48 Transfers on or After February 8, 2006 .................................................................... 48 Return or Partial Return of the Transferred Asset .................................................... 50 Trusts....................................................................................................................................... 51 Trust Definitions ............................................................................................................... 52 Evaluating a Trust............................................................................................................. 54 Treatment of Resources in a Trust ................................................................................... 56 Trusts Established with Assets Not Owned by Beneficiary ............................................... 62 Medicaid Qualifying Trusts ............................................................................................... 63 Counting Income or Resources ................................................................................ 64 Client Participation .................................................................................................... 66 Trusts Established After August 10, 1993 ........................................................................ 67 Revocable Trusts ...................................................................................................... 67 Irrevocable Trusts ..................................................................................................... 68 Special Needs Trust for Persons Under 65 Years Old ............................................. 69 Medical Assistance Income Trust (MAIT) ................................................................. 70 Special Needs Trust (Pooled Trust) .......................................................................... 70

Title 8: Medicaid Table of Contents Chapter D: Resources Revised September 13, 2024 Page 2 Page Iowa Department of Health and Human Services Employees’ Manual Resource Eligibility of Non-MAGI-Related Children ............................................................ 71 General Non-MAGI-Related Resource Policies .................................................................... 73 Non-MAGI-Related Resource Limits ................................................................................ 73 What Resources to Count ................................................................................................ 75 Nonliquid Resources ................................................................................................ 75 Liquid Resources ...................................................................................................... 76 Joint Ownership of Real Property ..................................................................................... 78 Disputed Ownership ......................................................................................................... 79 Determining the Value of a Resource ............................................................................... 80 Deeming Resources ......................................................................................................... 82 Deeming From a Spouse .......................................................................................... 82 Deeming From a Parent to a Child ........................................................................... 83 Eligibility While Trying to Sell a Nonliquid Resource......................................................... 85 Long-Term Care Asset Preservation ................................................................................ 86 Exempt Resources for Medicaid for Employed People With Disabilities .......................... 88 Specific Non-MAGI-Related Resources ................................................................................ 90 ABLE Account .................................................................................................................. 90 AIDS/HIV Settlement Payments ....................................................................................... 91 Annuities ........................................................................................................................... 92 Burial Contracts ................................................................................................................ 93 Burial Funds ..................................................................................................................... 98 Burial Funds’ Increase in Value ...................................................................................... 101 Burial Space ................................................................................................................... 102 Child Tax Credit .............................................................................................................. 102 Continuing Care Retirement and Life Care Community Entrance Fees ......................... 103 Dedicated Accounts ........................................................................................................ 103 Disaster Assistance ........................................................................................................ 103 Earned Income Credit ..................................................................................................... 104 Educational Assistance .................................................................................................. 104 Emergency Energy Conservation Assistance ................................................................. 105 Food Programs ............................................................................................................... 106 Gifts Made Under Uniform Gift Act ................................................................................. 106 Household Goods and Personal Effects ......................................................................... 106 Housing Assistance Provided by HUD or FMHA ............................................................ 107 Income Tax Refunds ...................................................................................................... 107 Individual Development Accounts .................................................................................. 108 Indian Assistance ........................................................................................................... 108 Insurance (Death Benefits) ............................................................................................. 108 Insurance (Life) .............................................................................................................. 108 Insurance (VA Term Life) ............................................................................................... 111 Life Estates or Remainderman Interest .......................................................................... 112 Loans and Promissory Notes ......................................................................................... 117

Title 8: Medicaid Table of Contents Chapter D: Resources Revised September 13, 2024 Page 3 Page Iowa Department of Health and Human Services Employees’ Manual Mortgages and Contracts ............................................................................................... 118 Other Excluded Federal Payments ................................................................................. 120 Plan for Achieving Self-Support (PASS) ......................................................................... 122 Property Necessary for Employment .............................................................................. 122 Property in a Homestead ................................................................................................ 122 Property in a Homestead for People Requesting Long-Term Care ................................ 125 Property Earning Six Percent of Equity .......................................................................... 125 Property Used for Self-Support ...................................................................................... 126 Resource Replacement .................................................................................................. 126 Retirement Funds ........................................................................................................... 127 Retroactive Cash Payments ........................................................................................... 128 Retroactive SSI and Social Security Lump-Sum Payments ............................................ 128 Self-Employment Property and Resources ..................................................................... 129 Social Services ............................................................................................................... 130 Third-Party Medical Payments ....................................................................................... 130 Vehicles .......................................................................................................................... 130 Victim’s Compensation Funds ........................................................................................ 131 Worker’s Compensation Medicare Set-Aside Arrangements .......................................... 132

Title 8: Medicaid Page 1 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Overview Revised July 10, 2026

Overview Pursuant to 42 CFR 435.603(g) and 441 IAC 75.70(249A), there is no resource test for MAGI-related Medicaid. This chapter describes Medicaid resource requirements. Resource policies that apply to all coverage groups are described in the first part of the chapter:  Attribution of resources between an institutionalized spouse and a community spouse.  Estate recovery for members who are over age 55 or in a medical institution.  Transfers of assets.  Trusts. The remaining part of this chapter provides resource requirements for people whose eligibility is based on their relationship to the Supplemental Security Income program (non-MAGI-related coverage groups), including persons who are aged, blind, or disabled. Attribution of Resources Legal reference: 441 IAC 75 (Rules in Process) When one spouse enters a medical institution or applies for a home- and community- based services (HCBS) waiver or Programs for All-Inclusive Care for the Elderly (PACE) services, resources are “attributed” to the “community spouse” to protect sufficient resources for the community spouse’s maintenance. A “community spouse” is a person who is not in an institution but who is the spouse of a person who is in an institution or applying for or receiving PACE or waiver services. The community spouse could live:  In the couple’s own home.  In a custodial home, such as a residential care facility.  In an apartment.  With relatives.  In another nonfacility or noninstitutional setting.

Title 8: Medicaid Page 2 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026

Complete the attribution using the resources the couple had as of the first day of the month that:  The institutionalized spouse enters a medical institution (on or after September 30, 1989) expecting to stay 30 consecutive days or more, or  The Medical Services Unit at the Iowa Medicaid or Managed Care Organization (MCO) determines that the Medicaid HCBS waiver or PACE applicant meets level of care. Information needed to attribute resources is included on the Medicaid application forms. Use form 470-2577, Resources Upon Entering a Medical Institution to attribute resources when:  The month of entry to the institution and the month of application are different, or  A married Medicaid member requests home- and community-based waiver or PACE services, or  Either the institutionalized spouse or the community spouse requests attribution but does not apply for Medicaid. Do not approve Medicaid until the attribution is completed. Complete the attribution within 45 calendar days. Complete only one attribution per community spouse per case. After an attribution has been completed, do not complete a new attribution if:  The institutionalized spouse is discharged after the 30 days but later reenters a medical institution.  The attribution was completed for a waiver or PACE application but the application was denied.  The attribution was completed for waiver or PACE services and the waiver or PACE spouse later enters a medical facility.  A person whose attribution was completed in another state applies for institutional care in Iowa. However, if that state has a lower minimum community spouse resource allowance, recalculate the attribution and assign Iowa’s minimum.

Title 8: Medicaid Page 3 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024

In specific circumstances, attribution guidelines may be different:  If both spouses entered an institution but one goes home, complete an attribution for the month the spouse who remains institutionalized entered the institution.  If the previously institutionalized spouse goes home and then the community spouse enters a medical institution expecting to stay for 30 days or more, complete a new attribution for the new institutionalized spouse.  If either spouse dies in the month of application or died in the retroactive period, attribute resources for the month of entry to the institution. Use the attributed resources to determine eligibility for months the spouse was living.  If the applicant marries after entering the institution but before Medicaid eligibility is determined, complete an attribution of resources for the community spouse. Complete the attribution for the month of entry.  If a single member or a member who was widowed after the attribution marries after entering the institution and after Medicaid eligibility for institutional care has been established, do not complete an attribution. If the institutionalized spouse later becomes ineligible for Medicaid and reapplies for Medicaid benefits, complete an attribution for the month of entry. Revise attribution results when:  A final appeal establishes a greater amount of protected resources for the community spouse. See If the Applicant Appeals the Attribution Amount.  The member is later able to verify resources that were owned at the date of entry to the institution. See Calculating the Amount to Attribute to the Community Spouse.  The amount of resources used in the original attribution was not correct. If a person who requests an attribution without filing a Medicaid application fails to cooperate in determining attribution, a new determination is not necessary when you receive an IRS report. (However, do complete the attribution and consider the IRS report when the person later applies for Medicaid if you receive verification and can establish what resources existed when the person entered the institution.) Further details on the attribution procedure are organized as follows:  Resources excluded from attributions  Calculating the amount to attribute the community spouse  Processing a Medicaid application after the attribution is completed  Summary examples of attribution situations

Title 8: Medicaid Page 4 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Resources Excluded from Attribution Resources Excluded from Attribution Legal reference: 441 IAC 75 (Rules in Process) Some resources are not considered for attribution, whether owned by one or both spouses. Resources that do not count in the attribution process also do not count when determining eligibility. Do not count for either the attribution process or eligibility:  One vehicle regardless of value.  Burial and related expense funds for each spouse that are separately identified and set aside for that purpose. Each spouse may have a fund or multiple funds but no more than $1,500. Subtract from this $1,500 limit the total face value of excluded whole life and term life insurance policies and any amounts in irrevocable trusts or arrangements available to meet burial and related expenses.  Burial spaces held for either spouse or any other member of the immediate family.  Disaster Relief Act Assistance and Emergency Act Assistance or other assistance provided because of a Presidential declaration of disaster. Exclude these resources and any interest earned on the funds for nine months, beginning with the date of receipt. (These funds may be excluded for a longer period if good cause is shown.)  Household goods and personal effects, regardless of value.  Housing assistance paid by HUD or FMHA for housing occupied by the community spouse.  Life insurance policies with a total face value of $1,500 or less for each spouse.  Property in a homestead, including the home and related land.  Property used for self-support of either spouse if it would be excluded by SSI.  Real property up to $6,000 if it is earning six percent of equity.  Relocation assistance provided by a state or local government which is comparable to assistance provided under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.  Resources of a blind or disabled person who has a Plan for Achieving Self- Support, as determined by the Division of Vocational Rehabilitation, the Department of Human Services, or the Department for the Blind.

Title 8: Medicaid Page 5 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Resources Excluded from Attribution  Resources necessary for self-employment.  Retirement funds if the member or the member’s spouse has to quit a job or claim hardship in order to withdraw them.  Shares of stock held by natives of Alaska in a regional or village corporation. Exclude for the 20 years in which the stock is inalienable, as provided in Sections 7(h) and 8(c) of the Alaska Native Claim Settlement Act.  Underpayment of SSI or Social Security that is due either spouse for any month before the month it is received. Exclude for six months after receipt.  Victim’s compensation from a fund established by a state for victims of crime. Do not count the assistance for nine months from receipt. The applicant must prove that the payment was for expenses incurred or losses suffered as a result of a crime. See Specific SSI-Related Resources for more descriptive information about these excluded resources. (Note that there are other types of resources described under that heading that are excluded for determining eligibility, but not for attribution.) Resources affected by a prenuptial or antenuptial agreement are countable as resources unless excluded under the criteria listed above. Calculating the Amount to Attribute to the Community Spouse Legal reference: 441 IAC 75 (Rules in Process); P. L. 100-360, P. L. 100-485 Use non-MAGI-related resource policies when determining which resources to count in completing an attribution. To calculate how much to attribute to each spouse: 1. Determine what resources the couple owned as of the first moment of the first day of the month of entry into the medical institution (or the month the HCBS waiver or PACE applicant meets the institutional level). Count all resources that are owned by either spouse. It does not matter which spouse owns the resource. Include the value of resources that are for sale. The applicant must provide verification of the value of the resources. Count only those resources that can be verified. If the applicant provides partial verification, use that documentation to determine the attribution.

Title 8: Medicaid Page 6 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

Mr. and Mrs. G claimed resources of $60,000 on the application for attribution. However, they could provide verification for only $50,000. The attribution was based on the verified resources of $50,000. Count the uncompensated value of any divested resources owned by either spouse if the resource was owned on the first moment of the first day of the month. “Uncompensated value” is the fair market value of the asset minus the amount that was received for the asset. NOTE: If either spouse transferred resources at less than fair market value to attain eligibility, see Transfer of Assets for procedures to handle such transfers when determining eligibility. 2. Add together all resources of both spouses. 3. Attribute one-half of the documented resources to each spouse. If necessary, adjust the division so that the community spouse will receive no less than $32,532 (if there is that much) but no more than $162,660.

Value of Combined Resources $0 - $65,064 $65,064.01 - $325,320 $325,320.01 or more Amount attributed to:

Community spouse $32,532 One-half $162,660 Institutionalized spouse Remainder One-half Remainder After the attribution is complete, send each spouse the results on form 470-2588, Notice of Attribution of Resources with copies of the resource documents. The notice includes an explanation of the spouses’ appeal rights. (See If the Applicant Appeals the Attribution Amount.) If a court or administrative appeal decision has ordered an amount greater than half the resources for the community spouse, or more than $162,660, attribute the amount ordered.

1. Mr. A enters a medical institution and his wife remains at home. Mr. and Mrs. A furnish verification of a total of $69,500 in resources. One-half of this is $34,750. Mrs. A is attributed $34,750 and Mr. A is attributed $34,750. 2. Mr. B enters skilled care expecting to stay indefinitely. His wife remains at home. Their total resources are $35,600. One-half of this is $17,800. Since this result is less than $32,532, the minimum amount of $32,532 is attributed to Mrs. B. $3,068 is attributed to Mr. B.

Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

3. Mrs. D enters a hospital and is expected to stay over 30 days. Her husband remains at home. Their total resources are $420,000. One-half of this is $210,000. The community spouse cannot be attributed more than $162,660 without a court order or final appeal decision. Therefore, $257,340 is attributed to Mrs. D and $162,660 is attributed to Mr. D ($420,000 - $162,660 = $257,340). 4. Mr. M enters a nursing facility and Mrs. M remains at home. The total value of their resources is $50,000. However, the court has ordered that $40,000 be transferred to Mrs. M for support. In this case, $40,000 is attributed to Mrs. M, even though this amount exceeds the $32,532 minimum; $10,000 is attributed to Mr. M. If the Applicant Appeals the Attribution Amount Legal reference: 441 IAC 75 (Rules in Process) The current minimum monthly maintenance needs allowance (MMMNA) for a community spouse is $4,066.50. If the income available to the community spouse is less than the MMMNA, the applicant or the community spouse may file an appeal to set aside additional resources that would generate income equal to the difference between the income available to the community spouse and the MMMNA. The appeal request must be filed within 90 days of the Notice of Attribution of Resources (NOA) or any Notice of Decision (NOD) regarding medical assistance. If the applicant does not file an appeal within 90 days of an NOA or NOD, the applicant loses the right to a hearing on the attribution for that application. If requested, help the applicant to complete form 470-0487 or 470-0487(S), Appeal and Request for Hearing. If the appeal is filed after one or more applications has been denied, and the appeal allows a substitution of resources that result in the institutionalized spouse now being eligible, the date of approval begins with the most recent application. Only one appeal to allow a substitution of resources will be conducted.

Title 8: Medicaid Page 8 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Calculating the Amount to Attribute to the…

1. Mr. Q enters a facility in January 2002. Mrs. Q remains at home. The Qs file an application for medical assistance in March 2002. An attribution of resources is completed, and the application is denied in April 2002. Another application is filed for Mr. Q in February 2003. The worker totals all of the household resources and subtracts the community spouse resource allowance assigned in the attribution process. The remaining resources continue to exceed the resource limit. The worker issues an NOD denying the application in March 2003. A third application is filed for Mr. Q in March 2004. The worker again totals all of the household resources and subtracts the community spouse resource allowance assigned in the attribution process. Again the remaining resources continue to exceed the resource limit. The worker issues an NOD denying benefits in March 2004. Mr. Q files an appeal in April 2004 regarding the March 2004 NOD. A hearing is granted. Mrs. Q’s income is low enough that the cost of an annuity is used to set aside additional resources for Mrs. Q. The final appeal decision attributes additional resources to Mrs. Q. The new community spouse resource allowance exceeds the current resources owned by Mr. and Mrs. Q. The March 2004 application decision is reversed. The prior decisions on the March 2002 and March 2003 applications stand as issued. 2. Mrs. Z enters a facility in August 2013. Mr. Z remains at home. The Zs file an application for medical assistance for Mrs. Z in August 2013. An attribution of resources is completed, and the application is denied in September 2013. Another application is filed for Mrs. Z in January 2017. The worker totals all of the household resources, and subtracts the community spouse resource allowance assigned in the attribution process. The remaining resources continue to exceed the resource limit. The worker issues an NOD denying the application in February 2017. Mrs. Z appeals the NOD in February 2017. A hearing is granted. Mr. and Mrs. Z are unable to obtain an annuity quote. The worker assists them in getting the quote. The administrative law judge issues a decision upholding the original attribution. Once this decision becomes final, no other hearings regarding the attribution will be granted, as the Zs were granted a hearing on the attribution of resources.

Title 8: Medicaid Page 9 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Calculating the Amount to Attribute to the…

3. Mr. M enters a facility in January 2016. Mrs. M remains at home. The Ms file an application for medical assistance for Mr. M in August 2016. An attribution of resources is completed. Mrs. M is attributed $24,000. The Ms have $6,000 in resources. The application is approved. The review form is sent out in January 2017 and not returned. The case is canceled effective February 1, 2017. Another application is filed in March 2017. The Ms now have $42,000 in resources. The worker subtracts the current year’s community spouse resource allowance. The remaining resources exceed the resource limit. The worker issues an NOD denying the application in March 2017. Mr. M files an appeal regarding the NOD. A hearing is granted. The final appeal decision attributes additional resources to Mrs. M. The couple’s income is low enough that the average of the annuities, $99,424, is used to set aside additional resources for Mrs. M. The new community spouse resource allowance exceeds the current resources owned by Mr. and Mrs. M. The March 2017 decision to deny the application based on excess resources is reversed. Verify the couple’s available gross monthly income. Do not count income that is earned by resources used in the attribution process. When determining gross monthly income, include any income the community spouse or institutionalized spouse may be entitled to but is not receiving. When the community spouse works only part of the year and received income only during the time worked, annualize the income as directed in 8-E, Determining Income from Self-Employment. For couples where one spouse entered an institution before February 8, 2006, county only the community spouse’s income. For couples where one spouse entered an institution on or after February 8, 2006, consider the institutionalized spouse’s income that can be made available to the community spouse according to the facility client participation calculation. See 8-I, Deductions from Client Participation. Allow a $50 personal needs allowance deduction from the gross countable income of the institutionalized spouse for facility, HCBS waiver, or PACE applicants.

Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

1. Mrs. B enters a facility in January 2006. Mr. B remains at home. The Bs file an application for medical assistance for Mrs. B in March 2006. An attribution of resources is completed. The worker totals all of the household resources as of January 1, 2006, and subtracts the community spouse resource allowance assigned in the attribution process. The remaining resources continue to exceed the resource limit. The worker issues an NOD denying the application in April 2006. Mrs. B files an appeal regarding the NOD. A hearing is granted. Since Mrs. B entered the facility before February 8, 2006, only Mr. B’s income is used when the Bs provide a quote for the cost of an annuity to set aside additional resources for Mr. B. 2. Mr. C enters a facility on April 19, and files an application on April 21. Mr. C has a community spouse, Mrs. C. The Cs have combined total resources that are counted in the attribution, in the amount of $35,400. $32,532 was attributed to Mrs. C and that left $2,868 for Mr. C. Mr. C has $1,410 Social Security and $1,500 pension with a total income of $2,910. Mr. C has Medicare and a Medicare supplement with a monthly premium of $150. Mr. C has total unmet medical deductions in the amount of $352.90 ($202.90 Medicare premium + $150 Medicare supplement = $352.90). Mrs. C has $2,100 Social Security. The April application was denied since Mr. C’s resources exceed the $2,000 resource limit. Mr. C appealed the attribution and the denial. Since Mr. C became institutionalized after February 8, 2006, Mrs. C’s income, plus the income that will be made available from Mr. C is used when determining the shortfall of income between the MMMNA and Mrs. C’s available income for the attribution process.

Title 8: Medicaid Page 11 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

$ 1,410

+ 1,500

$ 2,910

- 55

$ 2,855

+ 2,100

$ 4,955

$ 4,066.50

- 4,955

$ 0 Social Security Pension

Personal needs allowance Total of Mr. C’s income available to Mrs. C Mrs. C’s income Total income available to Mrs. C when determining her shortfall for the annuity quote MMMNA Total income available to Mrs. C Shortfall of income used to determine the cost of an annuity for the attribution Since there is not a shortfall of income for Mrs. C, additional resources cannot be attributed to Mrs. C. Mr. C remains ineligible until he spends down his resources to $2,000. If Mr. C is determined eligible, calculate the CP as follows:

$ 1,410

+ 1,500

$ 2,910

- 55

- 1,966.50

$ 888.50 Social Security Pension

Personal needs allowance Mrs. C’s deficit Client participation

$ 4,066.50

- 2,100

$ 1,966.50 MMMNA Mrs. C’s Social Security Mrs. C’s deficit of income Since Mr. C has income left after the spousal diversion, this is when you will allow other deductions in the CP calculation, such as unmet medical needs (Medicare and health insurance premiums). Since there is $888.50 left, Mr. C will have $888.50 that he can use to pay towards his Medicare premium and health insurance premium.

Title 8: Medicaid Page 12 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

3. Mr. D applied for waiver services in April and meets level of care for waiver services on May 5. Mr. D has a community spouse, Mrs. D. The Ds have combined total resources that are counted in the attribution, in the amount of $78,000. $39,000 was attributed to each spouse ($78,000 ÷ 2 = $39,000). Mr. D has $1,390 Social Security and $233 pension with a total income of $1,623. Mr. D has Medicare and a Medicare supplement with a monthly premium of $100. Mr. D has total unmet medical deductions in the amount of $302.90 ($202.90 Medicare premium + $100 Medicare supplement = $302.90). Mrs. D has $1,535 Social Security. The April application was denied since Mr. D’s resources exceed the $2,000 resource limit. Mr. D appealed the attribution and the denial. Since Mr. D became institutionalized after February 8, 2006, Mrs. D’s income, plus the income that will be made available from Mr. D is used when determining the shortfall of income between the MMMNA and Mrs. D’s available income for the attribution process.

$ 1,390

+ 233

$ 1,623

- 55

$ 1,568

+ 1,535

$ 3,103

$ 4,066.50

- 3,103.00

$ 963.50 Social Security Pension

Personal needs allowance Total of Mr. D’s income available to Mrs. D Mrs. Ds income Total income available to Mrs. D when determining her shortfall for the annuity quote MMMNA Total income available to Mrs. D Shortfall of income used to determine the cost of an annuity for the attribution If Mr. D is determined eligible, calculate the CP as follows:

$ 1,390

+ 233

$ 1,623

- 2,982

$ 0

$ 4,066.50

- 1,535.00

$ 2,531.50 Social Security Pension

Mr. D’s maintenance needs Client participation MMMNA Mrs. D’s Social Security Mrs. D’s deficit of income

Title 8: Medicaid Page 13 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Calculating the Amount to Attribute to the…

In this situation for client participation, Mrs. D has a $2,531.50 deficit of income and Mr. D has no income left to divert to Mrs. D. If Mr. D had income left after the spousal diversion, this is when you would allow other deductions in the CP calculation, such as unmet medical needs (Medicare and health insurance premiums). NOTE: Do not annualize the community spouse’s income when determining the diversion to the community spouse in the client participation calculation. The appellant must obtain one estimate of the cost of a single-premium lifetime annuity, based on the community spouse’s age at the time of appeal, that would generate income equal to the difference between:  The couple’s available gross income and  The MMMNA in effect when the appeal was filed. Neither the applicant nor the community spouse has to purchase an annuity as a condition of Medicaid eligibility. If the applicant is unable to obtain one estimate, assist the couple by contacting financial institutions. If the institution requires the identity of the applicant, obtain a release of information from the applicant. If the financial institution is unable to provide an estimate, determine the shortfall between the couple’s available gross income and the MMMNA. Multiply the shortfall by 12. Multiply this amount by the community spouse’s “Life Expectancy in Years” row from the Table for an Annuity for Life from the Mortality Table issued by the Iowa Department of Revenue. (See next page.) Formula: (MMMNA – couple’s available gross monthly income) x 12 x community spouse’s life expectancy in years = single-premium lifetime annuity quote. Complete form 470-3144, Attribution of Resources Appeal Summary according to instructions in 6-Appendix. Report the verified available income of the couple. Note and estimate the amount of any benefits for which the community spouse is eligible but is not receiving. Attach copies of the annuity bid to the form. Send the form to the Appeals Section, 321 E. 12th Street, Des Moines, Iowa 50319.

Title 8: Medicaid Page 14 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Calculating the Amount to Attribute to the… If the annuity quote is greater than the original attribution amount, the administrative law judge will order that the annuity quote be used instead of the original amount. Send a new Notice of Attribution of Resources reflecting the revised amount. (The 90-day transfer policy applies as of the date of Medicaid approval. See Transfers to Establish Ongoing Eligibility.) If the annuity quote is equal to or less than the original attribution amount, the original attribution is left as is. Table For an Annuity For Life 2001 CSO-D mortality table based on blending 50% male-50% female (pivotal age 45) age nearest birthday Source: Iowa Department of Revenue

Age In Years Life Expectancy In Years Age In Years Life Expectancy In Years Age In Years Life Expectancy In Years 0 78.65 26 53.49 52 29.15 1 77.73 27 52.53 53 28.27 2 76.78 28 51.58 54 27.4 3 75.81 29 50.63 55 26.54 4 74.84 30 49.67 56 25.68 5 73.86 31 48.72 57 24.84 6 72.87 32 47.76 58 24.01 7 71.89 33 46.81 59 23.19 8 70.91 34 45.85 60 22.38 9 69.92 35 44.9 61 21.57 10 68.94 36 43.95 62 20.78 11 67.95 37 43 63 20 12 66.97 38 42.05 64 19.24 13 65.99 39 41.11 65 18.49 14 65.01 40 40.16 66 17.75 15 64.04 41 39.22 67 17.02 16 63.07 42 38.28 68 16.31 17 62.11 43 37.35 69 15.6 18 61.15 44 36.42 70 14.91 19 60.19 45 35.49 71 14.23 20 59.23 46 34.57 72 13.56 21 58.27 47 33.65 73 12.91 22 57.32 48 32.74 74 12.28 23 56.36 49 31.84 75 11.66 24 55.4 50 30.94 76 11.06 25 54.45 51 30.04 77 10.47

Title 8: Medicaid Page 15 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Calculating the Amount to Attribute to the…

Age In Years Life Expectancy In Years Age In Years Life Expectancy In Years Age In Years Life Expectancy In Years 78 9.91 93 3.94 108 1.35 79 9.36 94 3.67 109 1.25 80 8.83 95 3.43 110 1.16 81 8.32 96 3.21 111 1.08 82 7.84 97 3.03 112 1 83 7.38 98 2.88 113 0.93 84 6.94 99 2.71 114 0.86 85 6.52 100 2.53 115 0.79 86 6.13 101 2.35 116 0.73 87 5.75 102 2.18 117 0.67 88 5.41 103 2.02 118 0.61 89 5.09 104 1.87 119 0.56 90 4.79 105 1.72 120 0.5 91 4.51 106 1.59

92 4.23 107 1.47

Increase in the Minimum and Maximum Allowance for Community Spouse The minimum and maximum resource allowance for the community spouse increases each year beginning in 2017. This fact is noted on form 470-2588, Notice of Attribution of Resources. No further notice or action is necessary unless the household applies for Medicaid or requests a revision of the attribution based on the increase in the minimum or maximum allowance. When a household with the minimum or maximum community spouse attribution files an application or requests a revision of the attribution, assess the case to determine if the revised minimum or maximum must be attributed to the community spouse. (You do not need to increase attributed resources if the institutionalized spouse’s eligibility is already established.) If the new minimum or maximum applies, complete a revision and send a written statement. Do not send a Notice of Attribution. Suggested wording is as follows:

Title 8: Medicaid Page 16 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Calculating the Amount to Attribute to the…

The Department of Human Services completed an attribution of resources for your household in (month, year). At that time, the community spouse was attributed the maximum (or minimum) resource allowance of (amount). You have (filed an application or requested a revision of the attribution). We have revised the attribution, based on an increase in the maximum (or minimum) community spouse resource allowance to (amount). As of (date), the community spouse is attributed (current maximum (or minimum)). We subtract this amount from your household’s total resources at the time of the Medicaid application to determine the institutionalized spouse’s countable resources. If you have questions, please contact me. Processing a Medicaid Application After Attribution Legal reference: 441 IAC 75 (Rules in Process), P. L. 100-360, P. L. 100-485 When determining eligibility for the institutionalized spouse, the amount of resources to count is the difference between the couple’s total resources at the time of application and the amount attributed to the community spouse. Follow the requirements of 8-B to process a Medicaid application. However, do not approve Medicaid before completing an attribution of resources. If the couple does not have an attribution, total the countable resources of both spouses at the first moment of the month of entry. Exempt only those resources listed under Resources Excluded from Attribution. Complete the attribution as directed under Calculating the Amount to Attribute to the Community Spouse. Determine and verify countable resources of both spouses as of the first moment of the first day of the month for which application is being made (if this is a different month). Subtract the amount of resources attributed to the community spouse as of the date of entry to the facility from the couple’s total resources in the month of application. Count the remaining balance towards the Medicaid resource limit for the institutionalized spouse.

Title 8: Medicaid Page 17 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Processing a Medicaid Application After…

Mr. Z enters a nursing facility on May 22, 1994. Mrs. Z files a Medicaid application for him in September 1995. She lists resources of their homestead, one car, a $20,000 CD, a checking account of $55,000, and $5,000 in a savings account. When Mr. Z entered the facility, the Zs owned the following resources: their homestead, one car, $60,000 in CDs, a checking account of $65,000, and $15,000 in a savings account. Of these resources, the following items are used in completing the attribution: $ 60,000 65,000 + 15,000 $140,000 CDs Checking account Savings account Total resources The worker divides $140,000 by two, which equals $70,000. This amount is attributed to each spouse. When determining Mr. Z’s eligibility, the worker uses the Zs’ resources at the time of application: $ 20,000 55,000 + 5,000 $ 80,000 CD Checking account Savings account Total resources The worker then subtracts the community spouse resource allowance ($70,000 for Mrs. Z) from the total resources. This leaves $10,000 available for Mr. Z. He is not resource-eligible for Medicaid payment of nursing facility care. The attributed amount protected for the community spouse is maintained from the month of entry through the initial determination of the institutionalized spouse’s Medicaid eligibility. Even if the total resources have increased or decreased by the time the spouse applied for Medicaid, the amount protected for the community spouse is the value of the resources attributed when the other spouse entered the institution. However, if resources attributed to the community spouse are below the minimum allowance, and the couple later acquires resources that were not counted for attribution, these resources can be transferred to the community spouse to bring that spouse’s resources up to the minimum.

Title 8: Medicaid Page 18 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Processing a Medicaid Application After…

1. When Mr. H enters a medical institution, the resources attributed to Mrs. H are $40,828. When Mr. H applies for Medicaid, the resources of Mr. and Mrs. H are $41,500 as of the first moment of the first day of the month of application. The worker subtracts the $30,828 attributed to Mrs. H from the total. Mr. H has $672. He is resource eligible under any Medicaid coverage group. 2. Mr. and Mrs. J are SSI eligible. When Mrs. J enters a medical institution in November, Mr. and Mrs. J have $2,997 in resources. All of the resources are attributed to Mr. J to meet the minimum protection of $32,532. Mrs. J is resource eligible for Medicaid payment of nursing facility care. 3. Mr. and Mrs. K are eligible for Medically Needy. Their resources are $9,800 when Mr. K enters skilled care in December. All of the resources are attributed to Mrs. K to meet the minimum protection of $32,532. Mr. K is resource eligible for Medicaid payment of nursing facility care. 4. Mr. I enters a nursing facility in December. At that time, resources attributed to Mrs. I are $32,532. Mr. I applies for Medicaid six months later. He reports that his resources have increased. The total is $75,000 at the time of application. However, only $32,532 can be attributed to Mrs. I. The other $42,468 is countable to Mr. I. If the institutionalized spouse’s resources exceed limits for nursing facility coverage groups, check eligibility under the qualified Medicare beneficiary (QMB) group or Medically Needy coverage group. Review resource eligibility at redetermination to ensure that the coverage group continues to be correct.

Mr. D enters a nursing facility in November. Mrs. D remains at home. Their resources total $34,950 in November. Mrs. D is attributed $32,532 and $2,418 is attributed to Mr. D. He is resource-eligible for Medically Needy coverage. Mrs. D asks that the resources be reevaluated in February, since their resources have decreased. As of the first moment of the first day of the month, the combined resources of both spouses are $33,100. Subtracting the $32,532 attributed to Mrs. D, Mr. D has $568 in resources. Mr. D is resource- eligible under any Medicaid coverage group.

Title 8: Medicaid Page 19 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Processing a Medicaid Application After… When Spouses Are Estranged Legal reference: 441 IAC 75 (Rules in Process) Attribute resources for estranged couples. “Estrangement” means a breakdown to the point that the spouses would not be living together if one was not institutionalized or were not living together before one spouse entered the institution. Determine estrangement by talking with the applicant. If the institutionalized spouse is estranged from the community spouse, do not deny eligibility because of excess resources or failure to provide verification if the applicant can show hardship. To prove hardship, the applicant must demonstrate that:  The applicant cannot get information about the community spouse’s resources after exploring all legal means.  The applicant is unable to access the estranged community spouse’s resources after exploring all legal means, even though the community spouse’s resources cause the applicant to be ineligible. Assignment of Support Rights Legal reference: 441 IAC 75 (Rules in Process) Do not deny Medicaid for the institutionalized spouse if the resources owned by the institutionalized spouse are less than eligibility limits and the institutionalized spouse either:  Has assigned any rights to support from the community spouse to the state, or  Lacks the ability to execute an assignment because of physical or mental impairment. To decide if the applicant lacks the ability to assign support rights, determine if the applicant has a guardian or conservator. If the applicant did not voluntarily choose to have a guardian or conservator, the client lacks the ability to assign support rights. No further verification is required. If the applicant chose to have a guardian or conservator but it is alleged that the applicant lacks the ability to assign support rights, verify the lack of assignment ability with a physician’s statement.

Title 8: Medicaid Page 20 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised September 13, 2024 Processing a Medicaid Application After… If you approve eligibility for an applicant who voluntarily or involuntarily has a guardian or conservator, send the following information to the Bureau of Financial, Health and Work Supports:  The names and addresses of both spouses.  The amount of the community spouse resource allowance.  The amount of resources owned by the community spouse. The Department will pursue support from the community spouse on a case- by-case basis. The state has the right to bring a support proceeding against a community spouse without an assignment. The applicant is ineligible if the applicant owns resources that exceed limits, even if the applicant assigns support rights or lacks the ability to assign support rights. Transfers to Establish Ongoing Eligibility Legal reference: 441 IAC 75 (Rules in Process) After the month the institutionalized spouse is determined eligible, do not consider the resources owned by the community spouse to be available to the institutionalized spouse. Resources that are owned wholly or in part by the institutionalized spouse and are not transferred to the community spouse are counted when determining ongoing eligibility. However, do not consider these resources if the institutionalized spouse has declared, in writing, the intent to transfer ownership of the resources to the community spouse. Issue form 470-4888, Institutional Spouse Intent to Transfer Resources, to document the member’s intent. The member can chose to sign and return the form or can provide a written statement. If the institutionalized spouse does not intend to transfer resources, establish eligibility for the month of application only. Deny ongoing eligibility at the end of that month.

Title 8: Medicaid Page 21 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Processing a Medicaid Application After…

1. Mr. W, the institutionalized spouse, has $1,900 in resources attributed to him and is eligible for Medicaid. He jointly owns a CD valued at $20,000. To remain eligible for Medicaid payment to the nursing facility, he must transfer $18,000 of the CD to reduce his ownership down to $2,000. He may transfer the total value if he wishes. 2. Mr. J is determined eligible for Medicaid in a medical institution. The amount of resources attributed to Mrs. J (the community spouse) and owned by Mrs. J is $7,000, which is under the $32,532 minimum. A year later, Mr. J receives an inheritance of $5,000. The IM worker verifies that when Mr. J received the inheritance, Mrs. J’s resources were $6,000. Mr. J intends to transfer $4,000 to Mrs. J since her resources are under the $32,532 minimum. He signs a statement to this effect. Mr. J’s remaining resources are $1,000 ($5,000 - $4,000 = $1,000). He is below resource limits for Medicaid and continues to be eligible. When the member intends to transfer the resource, monitor the progress of the transfer. The transfer must take place within 90 days. The member must provide verification of the transfer. Send a notice similar to the following:

Medicaid has been approved effective ______________, since your intent is to transfer resources to your spouse within 90 days of the date of this eligibility determination. Failure to transfer the resource within 90 days will result in cancellation of Medicaid benefits unless unusual circumstances exist. Please notify this office when the resource is transferred and provide proof that the resource was transferred. 8-D, Transfers to Establish Ongoing Eligibility. Contact the member or authorized representative within 45 days of the notice to check the status of the transfer. Contact the member at the end of 90 days to see if the resources were transferred. If the institutionalized spouse is not able to transfer excess resources because of circumstances beyond the member’s control, you can allow another 90 days. If, at the end of this extended 90-day period, the resources have not been transferred, cancel the case.

Title 8: Medicaid Page 22 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Processing a Medicaid Application After… In some cases, the transfer of resources may cause Medicaid ineligibility for the community spouse. After the transfer has been made, examine the effect of the transfer on the community spouse’s Medicaid eligibility.

Mr. and Mrs. K are eligible for non-MAGI-related 503 program at home. Mrs. K enters a nursing facility in January. All $2,900 of their resources are attributed to Mr. K, who actually owns them. Mr. K is ineligible for the 503 program if he retains the $2,900 resources. However, he is eligible for the Medically Needy program. Summary Examples

1. When Mr. R enters a nursing facility, Mrs. R files form 470-2577, Resources Upon Entering a Medical Facility. The Rs list resources of a farm that includes their homestead, $4,000 in bonds, $20,000 in stock, two cars, and $6,000 in a checking account. Completing the Attribution The following items are used to complete the attribution: $ 4,000

20,000

4,500 + 6,000 $ 34,500 Bonds Stocks One car Checking account Total resources The worker divides $34,500 by 2, which equals $17,250. Because this is less than $32,532, the amount attributed to Mrs. R (the community spouse) is $32,532. The remaining amount of $1,968 is attributed to Mr. R. Appealing an Attribution After the attribution is complete, Mrs. R files an appeal to set aside additional resources that would generate income equal to the difference between the couple’s available income and the MMMNA. The deficit in income is $1,622. The cost of an annuity to generate $1,622 per month is $103,119. Because $103,119 is more than the $32,532 attributed to Mrs. R, the attribution will be modified to substitute $103,119 for the $32,532 previously attributed to Mrs. R. No resources are attributed to Mr. R.

Title 8: Medicaid Page 23 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Processing a Medicaid Application After…

Determining Eligibility After the Appeal After the appeal, Mrs. R applies for Medicaid for Mr. R. The worker subtracts the community spouse allowance of $103,119 from the couple’s resources. This leaves no resources available to Mr. R. He is resource-eligible for Medicaid payment for nursing facility care. Mr. R has 90 days to transfer resources to Mrs. R to maintain his eligibility. 2. Mrs. J enters a nursing facility and files form 470-2577, Resources Upon Entering a Medical Facility. The Js list resources of a $150,000 farm, a homestead, $10,000 in bonds, $100,000 in CDs, one car, $10,000 in a checking account, and $65,000 in a savings account. Completing the Attribution The following items are used to complete the attribution: $ 150,000

10,000

100,000

10,000 + 65,000 $ 335,000 Farm Bonds CDs Checking account Savings account Total resources $162,660 is attributed to Mr. J. $172,340 is attributed to Mrs. J. Appealing an Attribution After the attribution is complete, Mr. J files an appeal to set aside additional resources to generate income equal to the difference between the couple’s income and the MMMNA. The couple’s available income is $1,844 per month. $4,066.50 - $1,844 = $2,222.50 unmet need. The average estimate of the cost of an annuity to generate $2,222.50 per month is $101,000, which is less than the $162,660 attributed to Mr. J. The attribution remains the same.

Title 8: Medicaid Page 24 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Attribution of Resources Revised July 10, 2026 Processing a Medicaid Application After…

Determining Eligibility After the Appeal After the appeal, Mr. J files an application for medical assistance for Mrs. J. The Js have the following resources at the time of application: $ 61,920

50,000

20,000 + 40,000 $ 171,920 CDs Bonds Checking account Savings account Total resources The worker subtracts the community spouse allowance of $162,660. This leaves $9,260 in resources available to Mrs. J. She is ineligible for Medicaid payment for nursing facility care, because she is over the resource limit. Estate Recovery Legal reference: 441 IAC 75.28(7) The cost of medical assistance is subject to recovery from the estate of certain Medicaid members. Members affected by the estate recovery policy are those who:  Are 55 years of age or older, regardless of where they are living; or  Are under age 55 and: • Reside in a nursing facility, an intermediate care facility for persons with an intellectually disability, or a mental health institute, and • Cannot reasonably be expected to be discharged and return home. See Establishing Whether a Member Under Age 55 Can Return Home. Give a copy of Comm. 123 or Comm. 123(S), Important Information for You and Your Family Members About the Estate Recovery Program to all Medicaid applicants at the time of the application. An “estate” includes all real property, personal property, or any other asset in which the member had any legal title to or interest in at the time of the death of the member, to the extent of such interest. This includes, but is not limited to, interest in jointly held property, interest in trusts and retained life estates. All assets included in the Medicaid member’s estate are subject to probate for the purpose of estate recovery. NOTE: It is not allowable for assets of a deceased member to be used to pay for travel expenses of family members of the deceased at the time of the member’s death.

Title 8: Medicaid Page 25 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Estate Recovery Revised July 10, 2026 Establishing Whether a Member Under Age 55… Refer questions from members about estate recovery to the Iowa Medicaid Estate Recovery Unit at the toll-free number 1-888-513-5186 or in the Des Moines area, at (515) 246-9841. You may also give members Comm. 266, Iowa’s Estate Recovery Law, which gives detailed information about estate recovery procedures. Establishing Whether a Member Under Age 55 Can Return Home Legal reference: 441 IAC 75.28(7) Presume that a member in a medical institution who is under age 55 is unable to return home. You are required to inform members of this policy by manually issuing form 470-2980, Estate Recovery Notice for New Approvals, to all members who are under age 55 and a resident of a medical institution at the time of Medicaid approval. If a member under age 55 is discharged before six months has elapsed, no further action is necessary. Estate recovery will not be pursued because the member was not permanently institutionalized. A member in a medical institution who is under age 55 has the right to rebut this presumption. To do so, the member must make a written request to the Department after being in the institution for six months. If a member dies before six consecutive months of institutionalization, the family or another interested party may submit a written request to the Department to rebut the presumption that the member could not have been reasonably expected to be discharged. Inform members who are under age 55 of their rebuttal rights by manually issuing them form 470-3209, Estate Recovery Six-Month Follow-Up six months after their admission into the medical institution. If the member dies in the medical institution after a stay of less than six months, issue the form to the family or someone acting on the member’s behalf. Send all rebuttal requests to the Medical Services Unit at the Iowa Medicaid either by using the local mail or by U.S. mail to PO Box 36478, Des Moines, Iowa 50315. The Medical Services Unit determines whether the member can reasonably be expected to return home and sends a copy of its decision to you and to the member.

Title 8: Medicaid Page 26 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Estate Recovery Revised July 10, 2026 Establishing Whether a Member Under Age 55… If the Medical Services Unit determines that the member cannot reasonably expect to return home, the Unit will provide information to the member and to you about whether the member was ever able to return home within the first six months of institutionalization and the date the expectation and ability to return home ceased. File a copy of the determination in the case record. A member may appeal an adverse decision. The member first appeals through the IME Medical Services Unit for reconsideration. If the member disagrees with the reconsideration decision, the member or someone acting responsibly for the member can appeal an adverse reconsideration decision by IME Medical Services Unit though normal DHS appeal procedures. Requests for the IME Medical Services Unit determination are timely when filed within 30 calendar days from the date form 470-3209, Estate Recovery Six- Month Follow-Up is issued. The member may still make a request later. However, if the decision then is that the member is reasonably able to return home, assistance received before the date the request was submitted to DHS is still subject to estate recovery. Estate Recovery Agent Estate recovery activities are conducted by the Revenue Collection Unit at the Iowa Medicaid. The Revenue Collection Unit may request a copy of the member’s first and last application or review form to determine if there are resources that could be subject to estate recovery. When sending a copy of the requested forms, record the member’s name, state identification number, social security number, and case number on each sheet. Additionally, the Revenue Collection Unit compares monthly Medicaid eligibility files against Vital Statistics records on reported deaths in Iowa to determine when estate recovery can be initiated for an individual.

Title 8: Medicaid Page 27 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Estate Recovery Revised September 13, 2024 Amount Due Amount Due Legal reference: 441 IAC 75.28(7) The debt due the Department from the member’s estate is equal to all medical assistance provided on the member’s behalf on or after:  The date the person attained age 55, or  The date a person under age 55 entered a medical institution with no reasonable expectation of returning home. However, no debt is due for assistance provided before July 1, 1994 (the beginning of the estate recovery program). Effective January 1, 2010, Medicaid payments for Medicare cost-sharing benefits are excluded from estate recovery for the following members:  Qualified Medicare Beneficiaries (QMB)  Specified Low-Income Medicare Beneficiaries (SLMB)  Expanded Specified Low-Income Medicare Beneficiaries (E-SLMB)  Qualified Disabled Working People (QDWP)  Dually eligible for a full Medicaid coverage group and QMB  Dually eligible for a full Medicaid coverage group and SLMB Medicare cost-sharing benefits include Medicaid payments for Medicare Part A and Part B premiums, copayments, coinsurance, and deductibles. If a member under the age of 55 is discharged from the facility and returns home before six consecutive months, no debt is assessed for Medicaid payments made on the member’s behalf for the time of the institutionalization. A claim against the estate of a member who was eligible for Medicaid because resources were disregarded under the Long-Term Care Asset Preservation program is computed differently. The amount of the assets disregarded under this program is not subject to estate recovery. EXCEPTION: Medicaid paid before the member attained eligibility due to long-term care asset preservation is still recovered from the estate. Interest accrues on a debt due beginning six months after the death of a Medicaid member, surviving spouse, or surviving child, or upon the minor child reaching age 21. The Department does not use liens in the estate recovery program.

Title 8: Medicaid Page 28 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Estate Recovery Revised July 10, 2026 When Estate Recovery is Waived When Estate Recovery Is Waived Legal reference: 441 IAC 75.28(7) Waiver of collection from the estate based on undue hardship is determined on a case-by-case basis. Collection of the debt from the estate of a Medicaid member is waived when collection of the debt would result in:  Reduction in the amount received from the member’s estate by a surviving spouse, or by a surviving child who is under age 21, blind, or permanently and totally disabled at the time of the member’s death, or  Other undue hardship. Undue hardship exists when all of the following are true: • The household that claims hardship has gross monthly income, as defined by Family Investment Program (FIP) policy, of less than 200% of the poverty level for a household of the same size. • The household that claims hardship has total resources, as defined by FIP policy, that do not exceed $10,000. • Application of estate recovery would deprive a person of food, clothing, shelter, or medical care such that the person’s life or health would be endangered. When a person claims undue hardship, refer the person to the program manager for Estate Recovery at the Iowa Medicaid. If collection of all or part of a debt is waived for a surviving spouse or child, or for hardship, the amount waived creates a debt due from:  The estate of the member’s surviving spouse or blind or disabled child, upon the death of the spouse or child,  A surviving child who was under 21 years of age at the time of the member’s death, or upon the child reaching age 21,  The estate of a surviving child who was under age 21 at the time of the member’s death, if the child dies before reaching age 21, or  The person who received the hardship waiver if the hardship no longer exists or from the estate of the person, whichever is first. The debt owed by the surviving spouse, child, or person who received the hardship waiver will not exceed the amount in which recovery was waived.

Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026

Transfer of Assets Legal reference: 441 IAC 75.23(249A), P. L. 100-360 When an individual attest to transferring assets on an application, Electronic Data sources will be requested to check for a potential transfer for less than fair market value. “Transfer of assets” occurs when a person transfers resources or countable income for less than fair market value in order to become eligible or maintain eligibility for Medicaid. Transfer of assets includes, but is not limited to:  Giving away property to someone else.  Establishing a trust for the benefit of someone else.  Removing a name from an asset.  Disclaiming an inheritance on or after July 1, 2000.  Failure to “take” against a deceased spouse’s will on or after July 1, 2000.  Reducing ownership interest in an asset.  Transferring or disclaiming the right to income not yet received.  Use of funds to purchase some annuities.  Use of funds to purchase some promissory notes, loans, and mortgages.  Use of funds to purchase some life estates. See Determining the Value of a Resource when establishing the fair market value or equity value of a resource. Assume that a person who transfers assets does so to become eligible for Medicaid unless they prove otherwise. See Rebuttal of Transfer of Assets. Some transfers do not result in a penalty. These are listed under Transfers That Do Not a Cause Penalty. The penalty for transferring assets depends upon:  The date the transfer occurred,  To whom the assets were transferred, and  How much the assets were worth at the time of the transfer. The transfer of assets penalty affects Medicaid coverage of certain long-term care services. See Penalties for Transferring Assets.

Title 8: Medicaid Page 30 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024

Transfer of Assets Flow Chart Does the transfer meet any of the criteria for transfers that do not cause a penalty? No Yes Was the transfer on or after February 8, 2006? There is no penalty. Was the transfer made, within 60 months of application for Medicaid, to or by a trust? or Was any other type of transfer made within 36 months of application for Medicaid? There is no penalty. Calculate period of ineligibility based on the statewide average at time of application. Drop any partial month of ineligibility. Begin the period of ineligibility on the first day of the month the transfer was made. Was the transfer made within 60 months of application for Medicaid? There is no penalty. Calculate period of ineligibility based on the statewide average at time of application. Do not drop the partial month of ineligibility. Is the date the (first) transfer was made later than the date the person would otherwise be Medicaid eligible for institutional care? Begin the period of ineligibility on the day the person would otherwise be eligible for Medicaid and is receiving institutional care. Begin the period of ineligibility on the first day of the month the transfer was made. No Yes No No Yes Yes No Yes

Title 8: Medicaid Page 31 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Cause a Medicaid Penalty Transfers That Cause a Medicaid Penalty Legal reference: 441 IAC 75.23(249A), P. L. 100-360 Transfers that currently may result in a Medicaid penalty being applied are:  Transfers by an applicant or an applicant’s spouse to someone other than a spouse that are made on or after February 8, 2006, and within 60 months before the Medicaid application is filed or on or after the date of application. This includes: • The disclaimer of an inheritance, and • Failure to take a share of an estate as a surviving spouse (also known as “taking against a will”) if the value received by taking against the will would exceed the inheritance received under the will  Transfers by an applicant or an applicant’s spouse involving funds in a trust that are made after August 10, 1993, and during the 60 months before the Medicaid application is filed and after institutionalization. Purchases Considered Transfers for Less Than Fair Market Value Legal reference: 441 IAC 75.23(9), (10), and (11) A transfer of assets for less than fair market value includes, but is not limited to, the following actions:  Purchase of an annuity before February 8, 2006, if the expected return on the annuity is not commensurate with a reasonable estimate of life expectancy, also referred to as “actuarially sound.” When an annuity purchased before February 8, 2006, is “actuarially sound,” then it is not considered a transfer of assets for less than fair market value. The annuitant has just converted the resources to income. To determine whether the annuity is “actuarially sound,” use the life expectancy tables compiled from information published by the Office of the Chief Actuary of the Social Security Administration. These tables may be accessed at http://www.ssa.gov/OACT/STATS/table4c6.html. The average number of years of expected life remaining for the annuitant must coincide with the life of the annuity. If the annuitant is not reasonably expected to live as long as or longer than the guarantee period of the annuity, the annuitant will not receive fair market value for the annuity based on the projected return.

Title 8: Medicaid Page 32 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Cause a Medicaid Penalty In that case, the annuity is not actuarially sound and a transfer of assets for less than fair market value has taken place. The penalty is assessed based on a transfer of assets that is considered to have occurred at the time the annuity was purchased or the date the annuity became available as a countable resource, whichever is later.

1. Mr. W, at age 65, purchases a $10,000 annuity to be paid over the course of ten years. His life expectancy according to the table is 17.19 years. Thus, the annuity is actuarially sound. 2. Mr. A, at the age of 80, purchases a $10,000 annuity to be paid over the course of ten years. His life expectancy is only 7.9 years. Thus, a payout of the annuity for approximately three years is considered a transfer of assets for less than fair market value and the amount is subject to penalty.  Purchase of an annuity on or after February 8, 2006, by a Medicaid applicant or member as the annuitant, unless the annuity also meets one of first three conditions and the fourth condition described below: • The annuity is an annuity described in subsection (b) or (q) of section 408 of the United States Internal Revenue Code of 1986, or • The annuity is purchased with proceeds from:  An account or trust described in subsection (a), (c), or (p) of section 408 of the United States Internal Revenue Code of 1986;  A simplified employee pension (within the meaning of section 408(k) of the United States Internal Revenue Code of 1986); or  A Roth IRA described in section 408A of the United States Internal Revenue Code of 1986; or • The annuity:  Is irrevocable and nonassignable;  Is actuarially sound, as determined in accordance with actuarial publications of the Office of the Chief Actuary of the United States Social Security Administration (see Annuities); and  Provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made; and

Title 8: Medicaid Page 33 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Transfers That Cause a Medicaid Penalty • The annuity has the state of Iowa named as the remainder beneficiary for at least the total amount of medical assistance paid on behalf of the annuitant or the annuitant’s spouse, if either is currently institutionalized. Iowa may be named as either:  The remainder beneficiary in the first position, or  The remainder beneficiary in the second position, after the community spouse, minor child or disabled child, and in the first position if the spouse or a representative of the child does dispose of the remainder for less than fair market value. NOTE: When an annuity has the state of Iowa named as a remainder beneficiary, complete form 470-4382, Notification Regarding Annuity Benefits and send it to the annuity company. • Purchase of an annuity on or after February 8, 2006, with the spouse of a Medicaid applicant or member as the annuitant, unless the annuity has the state of Iowa named as the remainder beneficiary for at least the total amount of medical assistance paid on behalf of the annuitant or the annuitant’s spouse, if either is currently institutionalized. Iowa may be named as either:  The remainder beneficiary in the first position, or  The remainder beneficiary in the second position, after the community spouse, minor child or disabled child, and in the first position if the spouse or a representative of the child does dispose of the remainder for less than fair market value. NOTE: When an annuity has the state of Iowa named as a remainder beneficiary, complete form 470-4382, Notification Regarding Annuity Benefits and send it to the annuity company.  Any purchase of a promissory note, loan, or mortgage made before February 8, 2006; or any purchase of a promissory note, loan, or mortgage made on or after February 8, 2006, unless the note, loan, or mortgage meets all of the following criteria: • It has a repayment term that is actuarially sound, as determined in accordance with actuarial publications of the Office of the Chief Actuary of the Social Security Administration (see Loans and Promissory Notes); • It provides for payments to be made in equal amounts during the term of the loan, with no deferral and no balloon payments made; and • It prohibits the cancellation of the balance upon the death of the lender.

Title 8: Medicaid Page 34 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Transfers That Cause a Medicaid Penalty • Establishing a promissory note, loan or mortgage needs to be examined to determine if a potential transfer of asset has occurred.  Purchase of a life estate in another person’s home for more than its fair market value, regardless of whether the life estate was: • Purchased before February 8, 2006; or • Purchased on or after February 8, 2006, and the purchaser resided in the home for one year after the date of purchase. Transfers That Do Not Cause a Penalty Legal reference: 441 IAC 75.23(5) In the following situations, the transfer is exempt and does not cause a penalty:  A joint account is divided into separate accounts that reflect separate ownership, as long as the funds are divided equally in proportion of ownership. Funds not equally divided in proportion of ownership may be considered transferred and subject to penalty.

Mr. J and Ms. H have $8,000 in a joint account (A) and $3,000 in another joint account (B) that they cannot separate. Ms. H also has an account of $500 in her name alone. Mr. J enters a nursing home and applies for Medicaid. Ms. H has spent $5,000 from account A and $1,000 from account B on Mr. J’s nursing home care. At that point, she removes Mr. J’s name from the accounts. Since Ms. H spent more than half of the accounts on Mr. J’s care ($6,000 out of $11,000), she has rebutted the presumption of divesting. The account owned by Ms. H does not enter into the rebuttal of divesting.  A transfer is made to the institutionalized person’s child or adult child who is disabled as defined by Social Security Administration. The child is considered disabled if the child is: • Receiving SSI, Social Security disability benefits, or Railroad Retirement benefits as a disabled child, or • Declared disabled by a Department disability determination. See 8-C, When the Department Determines Disability.

Title 8: Medicaid Page 35 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Transfers That Do Not Cause a Penalty

Ms. E applies for Medicaid while living in a skilled nursing facility. She has transferred $10,000 to her son. She says her son is disabled, but he is not receiving any disability benefits. The Department refers the son to apply for SSI, because he has no income. Ms. E’s application is approved for other medical services but is pended for facility payments due to the need to determine her son’s disability. If the son does not apply for SSI, the Department determines disability. If the son is not determined to be disabled, transfer of asset penalties are applied.  The applicant or member or the applicant or member’s spouse transfers an asset that would have been exempt as a resource at the time of transfer. Mr. and Mrs. D have $11,000 in total assets in March. On April 14, they gave away $5,000 in certificates of deposit to their daughter. Mrs. D enters a medical institution to stay on April 30. Since the Ds owned total assets of less than $32,532, the minimum protected amount for the community spouse in the month before the month of entry and attribution, the transfer is not for the purpose of qualifying for Medicaid. EXCEPTION: Transfers of a home and surrounding property (including the transfer of a life estate interest only) are not exempt from transfer penalties.  A transfer was made into a trust established solely for the benefit of: • The person’s child or adult child who is blind or disabled, as defined by the Social Security Administration. • A person under 65 years of age who is disabled, as defined by the Social Security Administration.  A transfer made between spouses or to another person for the sole benefit and support of the community spouse.

1. Mr. Q transfers his half of a $25,000 certificate of deposit to his daughter on May 14, 2005, for Mrs. Q’s benefit. Mr. Q then applies for Medicaid on May 20, 2005. On June 1, 2005, he enters a skilled nursing facility. Mr. Q furnishes a statement that the money was transferred because Mrs. Q is handicapped, and the daughter will be handling Mrs. Q’s finances. This transfer does not disqualify Mr. Q for payment of nursing facility services because the transfer was for the benefit of his spouse.

Title 8: Medicaid Page 36 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Do Not Cause a Penalty

2. Mr. W transfers his car, valued at $25,000, to Mrs. W while living at home. Mr. W applies for Medicaid. This is not a disqualifying transfer, since the car was transferred to the spouse, and the spouse did not transfer it.  A transfer is made in response to a court order that the institutionalized spouse provide support for the community spouse, and the assets are transferred for: • The support of the community spouse, or • The support of a minor or dependent child, dependent parent, or dependent sibling of the institutionalized spouse or community spouse who lives with the community spouse.

When Mr. P enters a nursing facility, there is a court order stating that Mr. P should transfer $10,000 to First National Bank for the support of his son, Pat, who lives with Mrs. P. Since Pat lives with Mrs. P, and there is a court order requiring this transfer, it is not a disqualifying transfer. Mr. P is eligible for payment for nursing facility services.  The transfer results in denial of eligibility that causes an undue hardship to the applicant or member. Undue hardship exists only when all of the following conditions are met: • Application of the transfer of asset penalty would deprive the applicant or member of food, clothing, shelter, medical care, or other necessities of life, such that the applicant’s or member’s health or life would be endangered. • The client who transferred the resource or the client’s spouse has exhausted all means to recover the resource, including legal remedies and consultation with an attorney. • The client’s remaining available resources (after the attribution for the community spouse) are less than the monthly statewide average cost of nursing facility services to a private pay resident, counting the value of all resources except for:  The home, if occupied by a dependent relative or if a licensed physician verifies that the person is expected to return home.  Household goods.  A vehicle required by the applicant or member for transportation.  Funds for burial of $4,000 or less.

Title 8: Medicaid Page 37 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Do Not Cause a Penalty Hardship will not be found if the resource was transferred to a person who was handling the financial affairs of the client or to the spouse or children of a person handling the financial affairs of the client unless the client demonstrates that payments cannot be obtained from the funds of the person who handled the financial affairs to pay for nursing facility services.

Mr. C transfers his home, with an equity value of $75,000, to his nephew and applies for Medicaid payments in a nursing home. The IM worker determines that Mr. C is ineligible for Medicaid for 30 months. Mr. C replies that he does not have the money to pay for care. He goes to his lawyer, who writes to the nephew requesting that the nephew return the home. The nephew refuses to return the home, and the attorney advises that no further legal recourse is available. Mr. C has met the requirement of exhausting legal means. Mr. C has the following assets: $500 cash and a burial fund of $1,500. The $500 is countable because it is available. Since the $1,500 is earmarked for burial and under $4,000, it is not available. Because Mr. C’s available assets are less than the average statewide cost of nursing facility services, he also meets the second requirement and a hardship exception is granted. Because the transfer of asset penalty will not be applied and Mr. C is otherwise eligible, Medicaid nursing facility payments are approved from the date of entry.  The applicant or member who transferred the asset makes a satisfactory showing that the applicant or member intended to dispose of the asset either at fair market value or for other valuable consideration equal to the fair market value. The client must verify the attempts to sell the asset for fair market value through an independent source.  The applicant or member who transferred the asset makes a satisfactory showing that the asset was transferred exclusively for another purpose other than to establish eligibility for Medicaid. See Rebuttal of Transfer of Assets.  The applicant or member who transferred the asset makes a satisfactory showing that all assets transferred for less than fair market value have been returned to the applicant or member.

Title 8: Medicaid Page 38 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Do Not Cause a Penalty  The applicant’s or member’s home is transferred to one of the following: • The spouse of the institutionalized applicant or member. • A child of the institutionalized person who is under age 21, or who is blind or totally disabled as defined by the Social Security Administration. The child is considered disabled if the child is:  Receiving SSI or Social Security benefits or Railroad Retirement benefits as a blind or disabled person, or  Declared disabled by a Department disability determination. See 8-C, When the Department Determines Disability. • A sibling of the institutionalized applicant or member who has an equity interest in the home and who lived in the home at least one year immediately before the applicant or member became institutionalized or eligible for HCBS waiver or PACE services. Verify that the sibling has an equity interest and lived in the home for the required period of time. • A son or daughter who was living in the parent’s home for at least two years immediately before the date the parent became institutionalized, and who provided care to the parent that allowed the parent to live at home rather than in a medical institution. The parent can be either a biological parent or stepparent. Verify with a third party the length of time that the parent was able to stay home due to the care of the son or daughter.

1. On September 17, while Mr. W is living at home on his farm, he transfers his farm to his son, age 51. Mr. W enters a nursing facility on September 29. His son is not disabled, and did not provide care to Mr. W while Mr. W was at home. The worker determines Mr. W is subject to a penalty, because the son to whom the farm was transferred did not meet the criteria for exempting the transfer.

Title 8: Medicaid Page 39 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Transfers That Do Not Cause a Penalty

2. Ms. O has a 32-year-old daughter who has always lived with her, but does not provide care to Ms. O to enable her to stay at home rather than in a medical institution. She wants her daughter to have the home and transfers it after her entry to the skilled nursing facility. The daughter does not receive SSI, Social Security, or Railroad Retirement, but alleges a disability. Disability Determination Services determines that the daughter is disabled. The transfer of the home is not a disqualifying transfer. 3. Mr. E, who lives in a skilled nursing facility, transfers his share of his home to his brother. They inherited the home from their father and had lived there together for 20 years. This transfer does not disqualify Mr. E for payment of nursing facility services, since the brother had an equity interest and they had lived together more than one year before Mr. E’s entry to a nursing facility. Rebuttal of Transfer of Assets Legal reference: 20 CFR 416.1246, IAC 75.23(5)“c”(249A) Assume all applicants or members who transfer assets do so to become eligible for Medicaid unless the applicant or member proves otherwise. The burden of proof is on the applicant or member to prove assets were not transferred to meet eligibility requirements. The applicant or member must:  Explain why the asset was transferred.  Explain the applicant’s or member’s relationship to the person who received the transferred asset.  Establish the fair market value and the equity value of the resource.  Verify an attempt to dispose of the asset for a fair market value.  Explain why less than the fair market value was accepted.  Establish that an agreement, contract, or expectation was created at the time of transfer stating the applicant or member received or will receive compensation for the value of the transfer. Compensation is money, real or personal property, food, shelter, or services received by an owner in exchange for an asset.  Explain how the applicant or member planned for self-support after the asset was transferred.

Title 8: Medicaid Page 40 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Rebuttal of Transfer of Assets Include in the case record documents or letters made at the time of the transfer as evidence to verify that a transfer was not done to qualify for Medicaid. Certain factors may indicate that a transfer was done for some reason other than to obtain Medicaid eligibility, such as:  The transfer was made before the applicant or member was diagnosed with a previously undetected disabling condition or became suddenly traumatically disabled (for example, due to a car accident).  The transfer that would have prevented eligibility was made before the applicant or member unexpectedly lost other assets or income. For example, at the time the assets were transferred, the applicant or member had enough income or assets to meet the applicant’s or member’s own needs without the use of Medicaid but then unexpectedly lost that income or asset.

In July, Mr. J sells property valued at $8,000 for $5,000. He applies for Medicaid in October. Mr. J explains that he sold the property to pay medical bills of $3,900 incurred by his recently deceased wife. Although he was asking $8,000 for the property, he accepted less than fair market value because he needed the money quickly. At the time of the sale, Mr. J was receiving $1,500 in Social Security, $200 from a private pension, $200 in dividends from a company in which he owned stock, and $1,000 monthly cash support from his son. But in August, Mr. J’s son died and the cash support payments ceased. In September, the company from which he had been drawing dividends went bankrupt, rendering his stock worthless, and removing that source of income. Mr. J presents as evidence copies of paid medical bills, a March agreement with a realtor to sell the property, copies of canceled checks showing monthly $1,000 payments to Mr. J, a copy of his son’s death certificate, and newspaper clippings regarding the bankruptcy of the dividend-paying company. Mr. J has established that he sold the property exclusively for some other purpose than establishing Medicaid eligibility. The transfer does not affect Medicaid eligibility. The rationale for this determination is that Mr. J attempted to sell the property at fair market value and at the time of the sale had income that would have made him ineligible to receive Medicaid. He could not reasonably have expected to become entitled to Medicaid as a result of the sale.

Title 8: Medicaid Page 41 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Rebuttal of Transfer of Assets  The transfer was of an asset that was excluded on the date of transfer and would continue to be excluded even if retained. Property that was excluded as a homestead property is considered an asset for this purpose. If an excluded home is transferred for less than fair market value, the fact that it was excluded on the date of transfer and would continue to be excluded even if retained is not sufficient to establish that the transfer was done for some reason other than to obtain Medicaid eligibility.  The transfer was a gift and a pattern has been established of giving gifts or contributing to a charity.

Mr. Z applies for Medicaid on November 6. He has given his son $500 for Christmas every year since the son was born. Mr. Z shows convincing evidence that he made such gifts to his son every year at Christmas. The presumption that the assets were transferred to qualify for Medicaid is rebutted.  The transfer was in exchange for support, maintenance, or services provided to the applicant or member as part of a binding agreement at the time of transfer. Determine the fair market value of the services received and the length of time the services will be provided.

Mrs. H transferred her savings account of $5,000 to her son in July 1996, pursuant to a written agreement they made in October 1995 for him to provide her care until she went in the nursing home. The $5,000 was determined by the son charging $500 a month for 10 months of care. She rebutted the presumption that the transfer was made to attain eligibility. If services will be provided for the client’s lifetime, use the table of Average Number of Years of Life Remaining under Purchases Considered Transfers for Less Than Fair Market Value to determine if the resources were transferred for less than they are worth. This table comes from the Social Security Administration Office of the Actuary. To determine the total value of support and maintenance for the client, multiply the current market value of the support and maintenance by the figure for average years of life remaining opposite the client’s age. If the client’s age is not on the chart, use the next lowest age on the chart. If the value of the service is equal to or more than the asset, there is no transfer of assets.

Title 8: Medicaid Page 42 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Penalties for Transferring Assets Penalties for Transferring Assets Legal reference: 441 IAC 75.23(1) Transfer of assets after August 10, 1993, for less than fair market value by either a Medicaid applicant or member or the applicant or member’s spouse disqualifies the applicant or member for Medicaid payment for:  Nursing facility services.  Level of care in a medical institution equivalent to that of nursing facility services.  Home- and community-based (HCBS) waiver services. (A person receiving HCBS waiver services is considered as an institutionalized person.)  Program for All-Inclusive Care for the Elderly (PACE) services. (A person receiving PACE services is considered as an institutionalized person.)  Home health care services.  Home and community care for functionally disabled elderly people.  Personal care services.  Other long-term care services. The penalty period for transferring assets depends on when the assets were transferred and how much the assets were worth at the time the transfer occurred.

Title 8: Medicaid Page 43 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Penalties for Transferring Assets The value of the assets transferred is divided by the statewide average cost of nursing facility services at the time of application.

Time of Application Average Monthly Statewide Cost of Nursing Facility Services Average Daily Cost of Nursing Facility Services July 1, 2026 – June 30, 2027 $9,838.96 $323.65 July 1, 2025 – June 30, 2026 $9,702.77 $319.17 July 1, 2024 – June 20, 2025 $8,842.75 $290.88 July 1, 2023 – June 30, 2024 $8,581.61 $282.29 July 1, 2022 – June 30, 2023 $7,786.35 $256.13 July 1, 2021 – June 30, 2022 $7,710.66 $253.64 July 1, 2020 – June 30, 2021 $7,205.40 $237.02 July 1, 2019 – June 30, 2020 $6,799.88 $223.68 July 1, 2018 – June 30, 2019 $6,447.54 $212.09 July 1, 2017 – June 30, 2018 $6,269.63 $206.24 July 1, 2016 – June 30, 2017 $5,809.13 $191.09 July 1, 2015 – June 30, 2016 $5,407.24 $177.87 July 1, 2014 – June 30, 2015 $5,103.24 $167.87 July 1, 2013 – June 30, 2014 $5,057.65 $166.37 July 1, 2012 – June 30, 2013 $5,131.82 $168.81 July 1, 2011 – June 30, 2012 $4,853.36 $159.65 July 1, 2010 – June 30, 2011 $4,842.72 $159.30 July 1, 2009 – June 30, 2010 $4,598.61 $151.27 July 1, 2008 – June 30, 2009 $4,342.03 $142.83 July 1, 2007 – June 30, 2008 $4,173.92 $137.30 July 1, 2006 – June 30, 2007 $4,021.31 $132.28 July 1, 2005 – June 30, 2006 $3,697.55 $121.63

Title 8: Medicaid Page 44 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Penalties for Transferring Assets To establish the penalty period for transfers made before February 8, 2006: 1. Determine the equity value of all assets transferred in the 36 months before the client applied for Medicaid, other than those transferred to or by a trust. 2. Determine the equity value of all assets transferred into or by a trust in the 60 months before the client applied for Medicaid. 3. Divide the total equity value of the transferred assets by the average monthly cost of nursing services at the time of application to determine the number of months of penalty. Drop any fraction remaining, so the result is in whole months. 4. Start the penalty on the first day of the month assets were transferred.

1. Mr. T transfers $100,000 to his next-door neighbor on April 11, 2005. He enters a nursing facility and applies for Medicaid on June 3, 2006. The worker determines that the transfer was made to qualify for Medicaid. The penalty period is figured by dividing $100,000 by $3,697.55, with a result of 27.05 months. Since the transfer was made before February 8, 2006, the partial month of ineligibility is rounded down to 27 months. Also, the penalty period begins on the first day of the month the transfer was made. Mr. T’s period of ineligibility begins April 1, 2005, and lasts through June 30, 2007. He can reapply for Medicaid nursing facility payment and, if he is otherwise eligible, be approved on July 1, 2007. 2. Mrs. A transfers $3,000 to her daughter on January 11, 2006. She enters a nursing facility on March 3, 2006, and applies for Medicaid payment of her nursing facility care on June 9, 2006. The worker determines that the transfer was made in order to qualify for Medicaid. The penalty period is figured by dividing $3,000 by $3,697.55, with a result of 0.811. Since the transfer was made before February 8, 2006, the result is rounded down and there is no period of ineligibility. To establish the penalty period for transfers made on or after February 8, 2006: 1. Determine the equity value of all assets transferred in the 60 months before the client applied for Medicaid. 2. Divide the amount from step 1 above by the average monthly statewide cost of nursing facility services.

Title 8: Medicaid Page 45 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Penalties for Transferring Assets 3. Multiply the full number of months from step 2 by the average monthly statewide cost of nursing facility services to determine the amount of the transfer that would be used to cover the full months. 4. Subtract (result of step 3) from the total assets transferred (amount in step 1) to determine the balance or partial month amount. 5. Divide the partial month amount (result from step 4) by the daily average statewide cost of nursing facility services to come up with the number of additional days for the partial month penalty. 6. Start the penalty on:  The date the applicant or member would otherwise be eligible for Medicaid payment of long-term care services, or  The level of care effective date for Medicaid HCBS waiver applicants, or  The level of care effective date for PACE enrollees, or  The first day of the month assets were transferred, whichever is later.

1. Mr. Z transfers $95,000 to his best friend on February 11, 2006. He enters a nursing facility on March 3, 2006, and applies for Medicaid nursing facility payment on June 9, 2006. The worker determines that the transfer was made in order to qualify for Medicaid. Since the transfer took place after February 8, 2006, the partial month of ineligibility is not rounded down. The penalty period is figured as follows: a. Divide the total transferred by the statewide monthly cost of nursing facility services ($95,000 ÷ $3,697.55 = 25.69). b. Figure the amount used in the full 25 months of penalty (25 months × $3,697.55 = $92,438.75). c. Subtract this from the total transferred to come up with the partial month balance ($95,000 − $92,438.75 = $2,561.25). d. Take the partial month balance and divide by the statewide daily average cost of nursing facility services ($2,561.25 ÷ $121.63 = 21 days). The penalty period is 25 months and 21 days.

Title 8: Medicaid Page 46 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Penalties for Transferring Assets

If there were no penalty for transferring his assets for less than fair market value, Mr. Z could have been eligible for Medicaid payment of his facility care effective March 3, 2006. Since this date is later than the date he made the transfer, Mr. Z’s period of ineligibility begins March 3, 2006, and lasts through April 23, 2008. He can reapply for Medicaid nursing facility payment and, if he is otherwise eligible, be approved on May 24, 2008. 2. Mrs. G transfers $3,000 to her daughter on February 11, 2006. She enters a nursing facility on March 3, 2006, and applies for Medicaid nursing facility payment on June 9, 2006. The worker determines that the transfer was made to qualify for Medicaid. The transfer was made after February 8, 2006, so the partial month of ineligibility is not rounded down. The penalty period is figured and results in a penalty for 24 days ($3,000 ÷ 121.63 = 24.66). If there were no penalty for transferring her assets for less than fair market value, Mrs. G would have been eligible for Medicaid payment of her facility care effective March 3, 2006. Since this date is later than the date she made the transfer, Mrs. G’s period of ineligibility begins March 3, 2006, and lasts through March 26, 2006. If she is otherwise eligible, she can be approved effective March 27, 2006. The transfer period continues to run even if the individual stops receiving institutional level of care. The penalty period should not be stopped if an individual leaves the facility and then returns at a later time. If the transfer period is determined and the community spouse later becomes eligible for Medicaid payment of facility care, divide the remaining period of ineligibility in half and apply one-half of the penalty period to each spouse. When the transfer was made before February 8, 2006, combine the two partial months of ineligibility to equal one month and apply that month to the spouse that initiated the transfer. If one spouse dies before the penalty period is completed, apply the remaining period of ineligibility to the living spouse.

Title 8: Medicaid Page 47 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised July 10, 2026 Penalties for Transferring Assets

1. Mrs. L transfers $71,000 in January 2005. Mr. L enters a nursing facility in March 2006, and files an application for nursing facility care. A 19-month period of ineligibility is determined ($71,000 ÷ $3,697.55 = 19.2). Since the transfer was made before February 8, 2006, the period of ineligibility begins on the first day of the month the transfer was made. Mr. L is ineligible from January 1, 2005, through July 31, 2006. Mrs. L enters the facility on April 3, 2006. Sixteen months of the period of ineligibility have passed. The worker divides the remaining three months between the couple (3 months ÷ 2 = 1.5). Because Mrs. L initiated the transfer, she is ineligible for two months and Mr. L is ineligible for one month. Mrs. L is ineligible for nursing facility care beginning April 1, 2006, through May 31, 2006. Mr. L’s period of ineligibility is shortened to end May 31, 2006. 2. Mrs. S transfers $71,000 on March 2, 2006. Both enter a nursing facility on April 1, 2006, and file an application for nursing facility care in June 2006. A 19-month period of ineligibility is determined ($71,000 ÷ $3,697.55 = 19.2, or 19 months + 6 days). The total period of ineligibility is divided between Mr. and Mrs. S (19 months + 6 days ÷ 2 = 9 months + 18 days each). Since the transfer was made after February 8, 2006, the period of ineligibility begins on the first day that both would otherwise have been eligible for Medicaid payment of their facility care. The partial month of ineligibility is not rounded down. A period of ineligibility is imposed for both Mr. and Mrs. S beginning on March 1, 2006, through December 18, 2006. Mrs. S passed away on April 3, 2006. One month and 2 days of her period of ineligibility have passed. The remaining 8 months and 16 days of ineligibility are imposed on Mr. S’s period of ineligibility and is now extended to September 2, 2007. Do not put a penalized member in a facility aid type. If the member has been receiving Medicaid under another coverage group, leave the aid type the same as it was before the member entered the facility. If the person is a Medicaid applicant who is eligible under a coverage group not contingent on living in a medical institution, use the nonfacility aid type for that coverage group. Set a reminder in the system for the month before the end of the penalty period, and redetermine eligibility at that time.

Title 8: Medicaid Page 48 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Multiple Transfers Multiple Transfers Transfers Before February 8, 2006 When an applicant or member makes more than one transfer of assets for less than fair market value before February 8, 2006, determine ineligibility as follows:  If the penalty periods would not overlap, consider each transfer separately. Drop the partial month of ineligibility and begin each period of ineligibility on the first day of the month when the transfer was made.  If the penalty periods would overlap, consider the total uncompensated value as one transfer. Drop the partial month of ineligibility and begin the period of ineligibility on the first day of the month when the first transfer was made. Transfers on or After February 8, 2006 When there are multiple transfers made on or after February 8, 2006, total all of the transfers made on or after February 8, 2006, and within the 60 months before application. Consider the total uncompensated value as one transfer. Begin the period of ineligibility in the month of the first transfer or in the month the person would otherwise have been eligible for Medicaid payment of facility care, whichever is later.  When the date the applicant or member would otherwise have been eligible for Medicaid facility payment is later than the date the transfer was made, the period of ineligibility begins on the date the applicant or member would have been eligible.  When the date the applicant or member would otherwise have been eligible for Medicaid facility payment is earlier than the date the first transfer was made, the period of ineligibility begins on the date the first transfer was made.

Title 8: Medicaid Page 49 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Multiple Transfers

1. Mrs. B transfers $3,000 to her daughter on November 25, 2005, and another $3,500 to her son on January 11, 2006. She enters a nursing facility on March 3, 2006, and applies for Medicaid payment of her nursing facility care on March 9, 2006. The worker determines that the transfers were made in order to qualify for Medicaid. Since the transfers were made before February 8, 2006, partial months of ineligibility are rounded down. No penalty is imposed because the amounts transferred are less than the statewide average cost of nursing facility services and the penalty is less than one month. 2. Mrs. M gave her granddaughter $60,000 in January 2005 and another $60,000 in January 2006. She enters a nursing facility on March 3, 2006, and applies for Medicaid in June 2006. The penalty period is figured by dividing $60,000 by $3,697.55, with a result of 16.23. The 16-month-period of ineligibility for the transfer made in 2005 would overlap the date of the next transfer made in 2006. The transfers were made before February 8, 2006. Total the two transfers and treat them as one transfer. The penalty period is figured by dividing $120,000 by $3697.55, with a result of 32.45. The partial month of ineligibility is rounded down and the period of ineligibility is started on the first day of the month of the first transfer. The period of ineligibility begins on January 1, 2005, and runs through August 31, 2007. Mrs. M can reapply and, if otherwise eligible, be approved effective September 1, 2007. 3. Mrs. D gave her daughter $6,000 on February 1, 2006, and another $6,000 in March 2006. Mrs. D entered a nursing facility on March 3, 2006, and applied for Medicaid in June 2006. The worker determined the transfers were made in order to qualify for Medicaid. The first transfer was made before February 8, 2006, and the second one was made after February 8, 2006. The penalty period for the first transfer is one month. The partial month of ineligibility is rounded down ($6,000 ÷ $3,697.55 = 1.62 or 1 month). This period of ineligibility is started on the first day of the month of the transfer (February 2006). Mrs. D’s period of ineligibility for the second transfer is determined to be 1 month and 19 days. It is started on March 3, 2006, and runs through April 20, 2006. If otherwise eligible, Mrs. D can be approved effective April 21, 2006.

Title 8: Medicaid Page 50 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Multiple Transfers

4. Mrs. C transfers $3,000 to her daughter on February 25, 2006. She enters a nursing facility on March 3, 2006. On April 3, 2006, Mrs. C inherits $3,500 and transfers it to her son. On June 10, 2006, she applies for Medicaid payment of her nursing facility care. The worker determines that the transfers were made in order to qualify for Medicaid. Since the transfers were made after February 8, 2006, the worker totals the two transfers and treats them as one transfer. The penalty period is figured by dividing the total of $6,500 by $3,697.55, with a result of 1.76 months or 1 month and 23 days. If there were no penalty for transferring her assets, Mrs. C would have been eligible for Medicaid payment of her facility care effective March 3, 2006. Since the date the first transfer was made is earlier than the date she would otherwise have been eligible, Mrs. C’s period of ineligibility begins on March 3, 2006 (the day she would have been eligible). The penalty period lasts through April 25, 2006. If Mrs. C is otherwise eligible, she can be approved effective April 26, 2006. Return or Partial Return of the Transferred Asset Legal reference: 20 CFR 416.1246(a)(2), 441 IAC 75.23(5)“c” If the transferred asset is returned, there is a change in the period that the uncompensated value of the asset affects eligibility. If the asset is returned in its entirety, the transfer penalty is expunged as of the first moment of the first day of the month after the return. If the asset is partly returned, the period of ineligibility is determined by the difference in the value of the property transferred and the value of the property returned. Determine the changed period of ineligibility and apply it beginning the first month the transfer penalty was imposed. The increase or decrease in value of the property transferred that may have occurred due to inflation or deflation from the time of transfer to the time of return does not affect the length of the period of ineligibility. Changing the disqualification period does not necessarily establish eligibility. Assets returned are not considered income but are a countable resource if retained in the month following the month they were returned.

Title 8: Medicaid Page 51 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024

Trusts Legal reference: 20 CFR 416.1201, 441 IAC 75.24(249A) Treatment of resources in a trust depends on:  When the trust was established.  Whether the trust was established with the member’s assets or with someone else’s assets.  What use of the trust income and principal is allowed by the terms of the trust.  The member’s role in relation to the trust.  Whether the trust is revocable or irrevocable.  The coverage group under which eligibility is being explored or established when a child is the grantor or beneficiary of the trust. (See Resource Eligibility of Non-MAGI Children later in this chapter and 8-F, Coverage Groups for more information.) A person is considered to have “established” a trust if:  The person’s assets were used to form all or part of the principal of the trust, and  The trust was set up by any of the following: • That person, • That person’s spouse, or • A person, court, or administrative body with legal authority to act in place of, on behalf of, at the direction of, or upon the request of that person or that person’s spouse. “Assets” means all income and resources of the person and the person’s spouse. This includes any income or resources that the person or the person’s spouse is entitled to but does not receive, because of action taken by:  The person or the person’s spouse.  Another person, court, or administrative body acting at the direction or upon the request of the person or the person’s spouse.  Another person, court or administrative body with legal authority to act in place of or on behalf of the person or the person’s spouse. Trusts established with assets not owned by the beneficiary include testamentary trusts (established by a will) and inter vivos trusts (established by one living person to another).

Title 8: Medicaid Page 52 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trust Definitions Policy on trusts is organized as follows:  Definitions of the basic terms used in describing trusts.  How to evaluate a trust, depending on a client’s roles in relation to the trust.  Treatment of assets in a trust, including a comparison of the major kinds of trusts.  More information on specific kinds of trusts. Trusts established with assets owned by the beneficiary are treated differently depending on whether they are revocable or irrevocable and whether they were established after August 10, 1993. Irrevocable trusts established on or before August 10, 1993, are known as “Medicaid qualifying trusts.” Certain kinds of irrevocable trusts established after August 10, 1993, provide that the assets go to reimburse the state for the member’s Medicaid expenses after the member’s death. Trusts that are subject to different treatment because of these provisions are:  Medical assistance income (MAIT) trusts.  Special needs trusts for persons under 65.  Special needs trusts with no age limit. Trust Definitions A trust is an arrangement whereby one or more persons (the trustees) hold property for the benefit of one or more others (the beneficiaries). Trusts include two types of assets:  Trust principal is the property placed in trust by the grantor that the trustee holds, subject to the rights of the beneficiary, plus any trust earnings paid into the trust and left to accumulate the month following the month of receipt.  Trust earnings or income are amounts earned by trust principal, such as interest, dividends, royalties, or rents. These amounts are unearned income to the beneficiary if the beneficiary is legally able to use them for personal support and maintenance. A trust can be established by a written document, including a will. A trust can also be established by a verbal understanding between the grantor and the trustee when the property has been transferred to the trustee.

Title 8: Medicaid Page 53 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trust Definitions No court involvement is necessary to establish a trust. The grantor and the beneficiary can be the same person, and the grantor can be the trustee, but the trustee and the beneficiary cannot be identical. If the trustee and the beneficiary are identical, the trustee/beneficiary owns the property outright. NOTE: The trustee and the beneficiary are not identical if the state is a residuary beneficiary. The trustee and the life-time beneficiary may be the same person on a qualifying special needs or MAIT trust where the state is a residuary beneficiary. A grantor is a person who sets up a trust. A person may be a grantor if an agent or someone legally empowered to act on behalf of the person or the person’s spouse (such as a legal guardian, representative payee, person acting under a power of attorney, or conservator) establishes the trust with the person’s funds or property. The terms grantor, trustor, and settlor may be used interchangeably. A trustee is a person or entity who holds legal title to property for the use or benefit of another person. In most instances, the trustee has no legal right to revoke the trust or use the property for the trustee’s own benefit. However, if the member is a trustee and has the legal ability to revoke the trust and use the money for the member’s own benefit, the trust is a resource to the member. A beneficiary is a person who benefits from the principal or income. A beneficiary does not hold legal title to trust property but does have an equitable ownership interest in it. A trust may have more than one beneficiary. A residual or residuary beneficiary benefits from the income and principal after the primary beneficiary is no longer involved, for example, due to the death of the primary beneficiary. The residuary beneficiary receives no benefit from the trust until certain conditions are met. A Totten trust is a tentative trust in which a grantor makes himself or herself trustee of the grantor’s own funds for the benefit of another. The trustee can revoke a Totten trust at any time. Therefore, consider the principal and income of a Totten trust available to the member. Should the trustee die without revoking the trust, ownership of the money passes to the beneficiary. A conservatorship is similar to a trust. A conservatorship is always established by a court, which explicitly appoints a conservator to act on the ward’s behalf for the ward’s financial affairs. Treat a conservatorship established on or after February 9, 1994, as a trust. See Revocable Trusts and Irrevocable Trusts to determine availability and whether transfer of asset policies apply.

Title 8: Medicaid Page 54 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Evaluating a Trust Evaluating a Trust The following charts provide a guide to understanding trusts. Use the appropriate chart depending on whether the member is the grantor, the trustee, or the beneficiary. The member may occupy more than one role.

1. Mr. J is the grantor and also the beneficiary of a trust. Use the grantor and the beneficiary trust charts to determine availability and accessibility of the trust principal and income when determining Medicaid eligibility. 2. Mr. D is the grantor and trustee of a trust that names his niece as the beneficiary. Use the grantor and trustee charts to determine the availability of the trust principal and income when determining Mr. D’s Medicaid eligibility. 3. Ms. M is the beneficiary of a trust. Use the beneficiary chart to determine the availability of the trust principal and income when determining her eligibility.

Grantor Chart Use this chart if the member created the trust, or an agent or someone else legally empowered to act on the member’s behalf established the trust with funds or property belonging to the client. (The member is the grantor.)

YES The trust is available and countable. Is the trust revocable?

NO This is a transfer of assets. The trust is not available and therefore is not a countable resource. NO Is the member a beneficiary? YES Is the member the sole beneficiary?

NO Possible transfer of assets. See the beneficiary chart. YES See the beneficiary chart.

Title 8: Medicaid Page 55 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Evaluating a Trust

Trustee Chart Use this chart if the member holds legal title to property for the use or benefit of another. (The member is the trustee.)

Does the trustee have power to revoke and use the trust principal and income for the trustee’s own benefit? NO YES The trust is available to the trustee. The trust principal and income are countable as income and resources to the trustee. Is the trustee also a beneficiary?

NO The trust principal and income are not available. Look for trustee fees. YES Is the member both sole trustee and sole beneficiary (or are all trustees also all beneficiaries)?

NO See the beneficiary chart. Refer the trust to the Medicaid trust program at: trust@dhs.state.ia.us. YES The principal and income are available to the client or to all trustees as a joint asset. Refer the trust to the Medicaid trust program at: trust@dhs.state.ia.us.

Title 8: Medicaid Page 56 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Evaluating a Trust

Beneficiary Chart Use this chart if a trust exists for the benefit of the member. (The member is the beneficiary.) The member does not hold legal title to the trust property but does have an equitable ownership interest in it.

Treatment of Resources in a Trust When determining eligibility, first review the trust to see if it is accessible. If the principal and income are accessible, count the amounts toward the resource limits and use them when determining eligibility, client participation, and spenddown. For eligibility purposes, there is no requirement that the beneficiary of a trust take legal action to attempt to gain access to the trust principal. Was the trust established after August 10, 1993? Is the beneficiary also the grantor?

NO Apply appropriate non- MAGI-related or MAGI-related policy. YES

NO For trusts established on or before August 10, 1993, apply Medicaid qualifying trust policies.

YES For trusts established after August 10, 1993, evaluate the trust under the revocable or irrevocable policies unless it is:  A special needs trust for persons under 65 years old,  A medical assistance income trust, or  A special needs trust (no age limit). Treat according to the policies found in this chapter.

Title 8: Medicaid Page 57 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Treatment of Resources in a Trust

Testamentary and Inter Vivos Trusts Medicaid Qualifying Trust (set up before 8/10/93) Irrevocable Trust (set up after 8/10/93) Revocable Trust (set up after 8/10/93) Established by: Someone other than the member is the grantor of the trust. Member or someone acting on member’s behalf is the grantor of the trust. Member or someone acting on member’s behalf is the grantor of the trust. Member or someone acting on member’s behalf is the grantor of the trust. Established with: Funds not owned by the beneficiary before trust was established. Funds owned by the grantor or funds that the grantor is entitled to. Funds owned by the grantor or funds that the grantor is entitled to. Funds owned by the grantor or funds that the grantor is entitled to.

Title 8: Medicaid Page 58 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Treatment of Resources in a Trust

Testamentary and Inter Vivos Trusts Medicaid Qualifying Trust (set up before 8/10/93) Irrevocable Trust (set up after 8/10/93) Revocable Trust (set up after 8/10/93) Availability of principal and income Discretionary: Principal and income are not necessarily available to the beneficiary. Principal and income available to the beneficiary for basic needs is countable as resources and income when determining eligibility, client participation, and spenddown. Principal and income available for nonbasic needs only are not countable as resources and income. Discretionary: The maximum amount that may be made available by the trustee under the terms of the trust, assuming the trustee exercises full discretion in the distribution of the income and principal is countable in determining eligibility, client participation, and spenddown. See Transfer of Assets for any principal or income not available to the grantor. The principal and income are considered available and countable to the extent they could be made available, under any circumstances or for any purpose, according to the terms of the trust. See Transfer of Assets for any principal or income not available to the grantor. Principal and income are available and countable to the beneficiary when determining eligibility, client participation, and spenddown. See Transfer of Assets Any payments from the trust not for the benefit of the client are assets transferred for less than fair market value.

Title 8: Medicaid Page 59 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Treatment of Resources in a Trust

Testamentary and Inter Vivos Trusts Medicaid Qualifying Trust (set up before 8/10/93) Irrevocable Trust (set up after 8/10/93) Revocable Trust (set up after 8/10/93) Use in Medicaid and State Supplemen- tary Assistance Count amounts available according to the terms of the trust. Amounts that count toward FIP, SSI, or SSA cash payments are not used in determining Medicaid eligibility. Any available principal or income counts toward resource and income limits. If not available, see transfer of asset policy. Count principle and income as available. Procedure: Refer trusts and conservatorships, including MAITS, for review by the Medicaid Trust Program. Even if clarification is not needed for Medicaid eligibility purposes, the referral is needed for proper tracking of Medicaid payback trusts. A referral should also be made when requested by Trust Program staff even if there is no Medicaid case. Referring trusts and conservatorships is also needed to:  Clarify how the terms of the trust impact eligibility;  Make Trust Program staff aware when an inaccessible trust is held by an active member, a trustee is not abiding by the terms of the trust, or the trustee has the authority to use the principal of the trust for medical expenses but has not done so. Make the referral for initial review by sending form 470-5132, Clarification Request (located in WISE) to trust@dhs.state.ia.us. In the clarification request:  Identify the client by name (if the trust beneficiary is a child, provide the child’s name, not the case name), social security number, date of birth and state identification number. (This information is essential because program staff do not have access to the ABC system, Online Narrative, or electronic case files.)  Provide all the case numbers of the files where you want the response placed.  Identify relationship of client to the grantor or trustor.

Title 8: Medicaid Page 60 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Treatment of Resources in a Trust  Identify marital status.  Indicate what program the client is applying for or is eligible under (MAGI, non- MAGI, Food Assistance, or FIP).  Indicate whether this referral concerns a trust for third-party liability for medical expenses.  Attach a copy of the legal document or trust agreement to the request. Trust Program staff will first review each submitted document to determine whether it is a “pay-back” trust (defined as a special needs trust, an income trust, or a pooled trust).  Trusts that are not “pay-back” trusts are returned to the eligibility policy staff for review. (See procedures below.)  “Pay-back” trusts are kept for review by trust program staff. Of these, income trusts will be the priority for review. Review procedure for income trusts: 1. The Trust Program will:  Determine whether the document meets the criteria for a medical assistance income trust; and  Send a response indicating whether the trust was approved or denied directly to the scanning center indicated on the Clarification Request. (If the request does not contain a case number, the response will be emailed to the requesting worker.) 2. When the trust is approved, the worker issues form 470-4488, Medical Assistance Income Trust, to the client or the payee. 3. When the trust is denied, the Trust Program will:  Prepare a checklist indicating why the trust does not meet the criteria; and  Email the checklist to the scanning center indicated on the Clarification Request where it will be received in the electronic case file process list.

Title 8: Medicaid Page 61 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Treatment of Resources in a Trust Review procedure for other “pay-back” trusts: When the trust has been approved: 1. The Trust Program will:  Forward the request to eligibility policy staff for eligibility review; and  Email a status update to alert the worker that the trust is now at central office. 2. The worker should make a note in the on-line narrative in case another worker has questions. 3. Eligibility policy staff will:  Review the trust for eligibility;  Respond to the Clarification Request indicating how the trust will affect eligibility; and  Upload the response to the electronic case file indicated on the Clarification Request, where it will be received in the case file process list. When the trust has been denied, the Trust Program will: 1. Send a letter to the attorney or trustee explaining that the trust does not meet the criteria; and 2. Email a copy of the letter to the scanning center indicated on the Clarification Request, where it will be received in the electronic case file process list. (If the request does not contain a case number, the response will be emailed to the requesting worker.) Review procedure for non-“pay-back” trusts: 1. The Trust Program will:  Forward the request to the eligibility policy staff for review; and  Email a status update to alert the worker that the trust is now at central office. 2. The worker should make a note in the on-line narrative in case another worker has questions.

Title 8: Medicaid Page 62 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Treatment of Resources in a Trust 3. Eligibility policy staff will:  Review the trust for eligibility;  Respond to the Clarification Request indicating how the trust will affect eligibility; and  Upload the response to the electronic case file indicated on the Clarification Request where it will be received in the case file process list. Trusts Established with Assets Not Owned by Beneficiary Legal reference: 441 IAC 75 (Rules in Process) If the applicant or member is the beneficiary but not the grantor of a trust, Medicaid eligibility is determined by the terms of the trust. These trusts may be testamentary trusts or inter vivos trusts. Examine the terms of the trust to determine if it is countable. Under both non-MAGI and MAGI-related policy, income and resources are available to an applicant or member who is the beneficiary as follows:  Trust principal and income are countable resources and income to the beneficiary when the terms of the trust require the trustee to pay or to make available to the beneficiary trust principal and income for the beneficiary’s basic needs. (EXCEPTION: Do not count resources for MAGI-related Medicaid.)  Trust principal and income are countable income, but not a countable resource, to the beneficiary when the terms of the trust allow the trustee to make income or principal available to the beneficiary for basic needs, and the trustee makes either trust principal or income available to the beneficiary for basic needs.  Trust principal and income are countable resources and income to the beneficiary when the terms of the trust allow the beneficiary to withdraw trust principal and income for basic needs. (EXCEPTION: Do not count resources for MAGI-related Medicaid.) Income and resources are not available to the beneficiary under both non-MAGI- related and MAGI-related policy if:  The terms of the trust prohibit the trustee from making either trust principal or income available for the beneficiary’s basic needs.  The terms of the trust allow the trustee, at the trustee’s discretion, to make income or principal available to the beneficiary for basic needs, but the trustee does not make either income or resources available for basic needs.

Title 8: Medicaid Page 63 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established with Assets Not Owned… In both cases, any payments from either trust principal or trust income that are made to the applicant or member or made for the applicant’s or member’s basic needs are countable income in the period of intended use and a resource thereafter. (EXCEPTION: Do not count resources for MAGI-related Medicaid.) If payments are made to vendors for basic needs, see policies in 8-E, Non-MAGI- Related In-Kind Income or In-Kind Unearned Income. Medicaid Qualifying Trusts Legal reference: 441 IAC 75 (Rules in Process), P. L. 99-272, P. L. 99-509, section 9435(c) A Medicaid qualifying trust is a trust or similar legal device which:  Was established on or before August 10, 1993.  Is not established by a last will and testament.  Is established by an applicant or member, the applicant’s or member’s spouse, or someone acting for them.  Is established from funds belonging to the applicant or member or the spouse.  Allows or names the applicant or member to be the beneficiary of payments from the trust.  Has one or more trustees determine the distribution of payments.  Permits the trustees to exercise discretion with respect to the distribution of trust principal and income to the beneficiary. When someone with power of attorney, a conservator, a guardian, a lawyer, or a court acts on behalf of the applicant or member to set up the trust, treat it as though the applicant or member set up the trust. The amount of income and principal from a Medicaid qualifying trust that is considered available is the maximum amount that may be permitted under the terms of the trust, assuming the trustees exercise full discretion in the distribution of the income and principal. EXCEPTION: Trusts or initial trust decrees established before April 7, 1986, solely for the benefit of a person with an intellectual disability who lives in an intermediate care facility for persons with an intellectual disability are exempt.

Title 8: Medicaid Page 64 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Medicaid Qualifying Trusts Evaluate an irrevocable trust established on or before August 10, 1993, under this policy. The terms of the trust that specify the available income and principal determine the amount counted as available to the applicant or member, regardless of whether any payments are actually being made. Treat a trust established for medical payments as a third-party resource.

1. Miss T established a trust in July 1985 as the result of a settlement of a malpractice suit. Since she has an intellectual disability and lives in an intermediate care facility for persons with an intellectual disability (ICF/ID), and since the trust was established before April 7, 1986, this is not a Medicaid qualifying trust. 2. Mr. D established a trust for himself and his wife in 1972. Mrs. D applies for Medicaid and she is a co-beneficiary of the trust. This is a Medicaid qualifying trust. A trust established by the last will and testament of a spouse is not a Medicaid qualifying trust. Trusts set up with funds not owned by the member or spouse are not Medicaid qualifying trusts. Burial trusts set up by a member or spouse, are not Medicaid qualifying trusts when the funds are available only upon death, and the member is not the beneficiary of the trust. Trusts set up by charity or a fund raising activity are not Medicaid qualifying trusts unless the money is given to the member, who then creates the trust. NOTE: If the charity or fund raising present the proceeds to the person and the receiver sets up a trust on or before August 10, 1993, this is a Medicaid qualifying trust. Counting Income or Resources Legal reference: 441 IAC 75 (Rules in Process) Consider trust income available as specified by the terms of the trust, even if the trustees do not actually pay the income according to the terms of the trust. Count trust principal (including accumulated income) available to the member as a resource. (EXCEPTION: Do not count resources for MAGI-related Medicaid.) EXCEPTION: If the terms of the trust explicitly limit the amount of principal that is made available on an annual (or specified less frequent) basis, the principal is countable income beginning the month it becomes available. Prorate it for the period of accessibility and intended use.

Title 8: Medicaid Page 65 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Medicaid Qualifying Trusts Trusts established for medical payments are a third-party resource. Do not count trust principal and income if the terms of the trust specify that they are available only for medical care. The principal and income for these trusts are not countable as income and resources in determining eligibility. Compare the total countable resources, including the amount from the trust, to the resource limit of the coverage group under which the applicant seeks assistance. (EXCEPTION: Do not count resources for MAGI-related Medicaid.) If the applicant is ineligible by counting income and resources of a Medicaid qualifying trust according to the policies of the coverage group, determine whether the applicant is eligible under any other coverage group.

1. Ms. P receives SSI. She has a Medicaid qualifying trust that provides for “care and keep.” Any of the principal of $12,000 can be used to meet her living expenses, but no money is currently provided for her. $12,000 is added to Ms. P’s other countable resources. Ms. P is not eligible for Medicaid since $12,000 is greater than any resource limit. 2. Ms. W, a non-MAGI applicant, has a Medicaid qualifying trust set up as the result of a malpractice suit. The trust pays only for medical care. There is $100,000 in the trust. Since the trust provides for medical care only, it is not a resource. It is a third party medical resource. Ms. W is evaluated for resources based on her other resources of $500. She is income- and resource-eligible for Medicaid, based on the non- MAGI coverage group. The worker prepares and sends a memo to TPL stating the basic trust provisions and the name and address of the trustees. 3. Mr. N, a 503 applicant, has a Medicaid qualifying trust that provides payments of $100 a month from trust income. No principal can be used. The trustee has not made the income available. The worker determines whether Mr. N would qualify for SSI by adding all income together, including the $100 a month, and disregarding his COLAs. His social security income at time of cancellation was $230. He has no other income. $230 + $100 - $20 = $310. He is eligible under the 503 group.

Title 8: Medicaid Page 66 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised July 10, 2026 Medicaid Qualifying Trusts

4. Mr. O is living in a nursing facility. He applies for non-MAGI-related Medicaid on May 6, 1993. His gross social security and VA income is $965.30 monthly. He has $1,700 in savings and checking accounts as of April 30, 1993, at midnight. He also has a trust that he set up when he went into the nursing facility in May 1990. The trust was set up over 60 months ago, so divesting is not considered. According to the trust, money is available if he needs it, but he can have no more than one-third of the principal of the trust each year. The trustee verifies the principal as of the first of the year to be $99,000. Mr. O has used $1,000 of the trust this year. His resource from the trust is: $99,000 divided by 3 = $33,000 that can be withdrawn minus $1,000 used = $32,000 remainder. Therefore $32,000 plus his other resources of $1,700 is counted toward the resource limit. He is not eligible. 5. Ms. J, an SSI recipient in a residential care facility, has a Medicaid qualifying trust for educational benefits that she set up with inheritance funds. Each year she receives $2,500 for tuition, books, and living expenses. Since SSI policy provides that the income for living expenses counts for eligibility and is included as income for SSI, there is no more income to count from the Medicaid qualifying trust. Also since the only amount available from the trust is for education, the trust is not counted as a resource. Client Participation Legal reference: 441 IAC 75 (Rules in Process) Consider all income, including countable income from the Medicaid qualifying trust, as available when determining client participation in a medical institution, unless the income is expressly exempt income, as listed in 8-E.

Title 8: Medicaid Page 67 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Medicaid Qualifying Trusts

Mrs. P, an NF resident, has social security income of $245. She also has civil service income of $310. She has a Medicaid qualifying trust that could pay $120 a month for expenses if she needed the money. Eligibility for Medicaid is determined as follows: $ 120.00 245.00 +310.00 $ 675.00 Trust income Social Security Income Civil Service income To compare to the 300% income limit (Medicaid cap) Her income used to determine client participation is $675.00. Trusts Established After August 10, 1993 When the client or someone acting on the client’s behalf created a trust using the client’s assets after August 10, 1993, determine whether the client is a beneficiary of the trust. If the client is not a beneficiary, investigate the trust as a transfer of assets. If the client is a beneficiary, treatment of the trust depends on whether the trust is revocable or irrevocable. Three special kinds of irrevocable trusts (Medical Assistance Income Trusts (MAITs) and two special needs trusts) also receive different treatment. Revocable Trusts Legal reference: 441 IAC 75.24(2)“a” When an applicant or member establishes a revocable trust established after August 10, 1993, the principal of the trust is an available resource. Payments from the trust to or for the benefit of the applicant or member (as beneficiary) are countable income to the applicant or member in the period of intended use when determining income eligibility for Medicaid. Any payments from the trust other than those made to or for the benefit of the applicant or member (beneficiary) are assets transferred for less than fair market value.

Title 8: Medicaid Page 68 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established After August 10, 1993 Irrevocable Trusts Legal reference: 441 IAC 75.24(2)“b” If the applicant or member or that person’s spouse establishes an irrevocable trust after August 10, 1993, which names the applicant or member as a beneficiary, determine what payments are allowed from the trust. If payment could be made to or for the benefit of the applicant or member (as beneficiary) for any purpose, count the portion of the principal from which that payment could be made as a resource. Also count any income earned on the principal from which payment could be made. Payments from the trust principal or income to or for the benefit of the applicant or member (beneficiary) are countable income in the period of intended use and a countable resource the following month. Payments from trust principal or income for any other purpose are a transfer of assets for less than fair market value. Determine the period of ineligibility according to Penalties for Transferring Assets. Any portion of the trust or any income on the principal from which no payment could be made to the applicant or member (beneficiary) under any circumstances is a transfer of assets for less than fair market value. The transfer occurred on the later of the date the trust was established or the date on which payment to the beneficiary was no longer available. Determine the value of the transfer by including the amount of any payments made from the trust after the date of foreclosure. Determine a period of ineligibility according to Penalties for Transferring Assets. Payments made on behalf of the beneficiary are countable income in the month the payment is made despite the purpose of the payment. FIP and SSI rules do not apply to irrevocable trusts established with an applicant’s or a member’s own assets after August 10, 1993.

Title 8: Medicaid Page 69 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established After August 10, 1993 Special Needs Trust for Persons Under 65 Years Old Legal reference: 441 IAC 75.24(3)“a,” Iowa Code 633C.1, 633C.2 A special needs trust for persons under 65 years old must meet the following conditions:  The trust is an irrevocable trust.  The trust is established after August 10, 1993.  The trust is created with the assets of a person who is under the age of 65 and is disabled as defined by the Social Security Administration.  The trust is established for the benefit of the beneficiary by a parent, grandparent, legal guardian of the beneficiary, or a court.  The trust provides that the state of Iowa will receive all amounts remaining in the trust upon the death of the beneficiary, up to an amount equal to the total Medicaid paid on behalf of the beneficiary. When the Social Security Administration or the Railroad Retirement Board has not determined a person disabled, the Department must determine disability for this policy to apply. Send a referral to the Disability Determination Services Bureau. See 8-C, When the Department Determines Disability. The principal of a special needs trust is not a countable resource. Income paid into the trust is not countable. Count only the income paid from the trust or made available to the member as income. Payments from the trust follow the same rules as described in 8-E, Medical Assistance Income Trusts (MAITs). When a member with a special needs trust reaches age 65, the trust retains its exempt status. However, any additions to the trust after the member reaches age 65 (other than those generated by the preexisting trust assets) are countable assets. Also:  The income generated by any such additions is countable income.  These additions will be considered a transfer of assets for less than fair market value.

Title 8: Medicaid Page 70 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established After August 10, 1993 Medical Assistance Income Trust (MAIT) Legal reference: 441 IAC 75.24(3)“b,” Iowa Code 633C.1, 633C.3 A medical assistance income trust (MAIT) must meet the following conditions:  The trust is an irrevocable trust established after August 10, 1993.  Only the beneficiary’s earned and unearned income is deposited into the trust.  The state will receive the remaining balance in the trust upon the death of the beneficiary, up to the amount Medicaid paid out for the beneficiary.  The trust may be revocable, if a clause is added that upon revocation or termination, the trust and income will be paid back to the state up to the amount of medical assistance paid on behalf of the beneficiary. The principal of a medical assistance income trust is not a countable resource. Determine available income as directed in 8-I, Members with a Medical Assistance Income Trust and 8-E, Medical Assistance Income Trusts (MAIT). Special Needs Trust (Pooled Trust) Legal reference: 441 IAC 75.24(3)“c,” Iowa Code 633C.1, 633C.2 A special needs trust or pooled trust for persons under 65 years of age is a trust that meets the following conditions:  The trust is established after August 10, 1993, and provides that the state will receive the remainder of the trust principal and income upon the death of the beneficiary.  The trust contains the assets of a person who is disabled as defined by Social Security Administration.  The trust is established and managed by a nonprofit association.  The association maintains a separate account for each beneficiary of the trust, but pools these accounts for purposes of investment and management of funds.  Accounts in the trust are established solely for the benefit of people who are disabled (as defined by Social Security Administration).  Accounts are established by the parent, grandparent, or legal guardian of the beneficiary, by the beneficiary, or by a court.

Title 8: Medicaid Page 71 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established After August 10, 1993  Upon death of the beneficiary, all amounts remaining in the beneficiary’s account not retained by the trust are paid to the state of Iowa up to the amount of medical assistance paid on behalf of the beneficiary. For this policy to apply to a person who has not been determined disabled by the Social Security Administration, the Department must determine disability. See 8-C, When the Department Determines Disability. When a trust qualifies as a special needs trust, count the principal and income as available according to the terms of the trust. Any additions made to the trust after the trust beneficiary reaches age 65 will be considered a transfer of assets for less than fair market value. Resource Eligibility of Non-MAGI-Related Children Legal reference: 441 IAC 75 (Rules in Process) Disregard the resources of all household members when determining eligibility for children in certain coverage groups. Continue to count resources when determining eligibility for children in all other coverage groups according to the policies in this chapter. The age limit for determining if a person is a child or an adult is the age limit for the coverage group under which Medicaid is being received or under which eligibility is being explored or established. See 8-F, Coverage Groups for more information.

Title 8: Medicaid Page 72 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Resource Eligibility of Non-MAGI-Related… Revised September 13, 2024

The following chart lists all coverage groups under which children can establish eligibility and whether household resources are disregarded or counted in determining children’s eligibility.

Coverage Group Name Are Resources An Eligibility Factor For Children? SSI recipients in their own homes and recipients of mandatory supplements Yes SSI recipients in medical institutions Yes People eligible for SSI benefits but not receiving them No Essential persons Not applicable. A child cannot be an essential person. Ineligible for SSI or SSA due to requirements that do not apply to Medicaid Yes Ineligible for SSI or SSA due to Social Security COLAs (503 medical only) Yes Ineligible for SSI or SSA due to Social Security benefits paid from a parent’s account Yes Ineligible for SSI or SSA due to Social Security increase of October 1972 Yes Ineligible for SSI due to substantial gainful Activity (1619b) Yes Ineligible for SSI or SSA due to actuarial change for widowed persons Yes Ineligible for SSI or SSA due to receipt of widow’s social security benefits Yes Ineligible for SSI due to residence in a medical institution Yes People in medical institutions under 300% income level No Medicaid for Kids with Special Needs No Medically Needy No Qualified disabled and working persons (QDWP) Yes Qualified Medicare beneficiaries (QMB) Yes Specified low-income Medicare beneficiaries (SLMB) Yes Expanded specified low-income Medicare beneficiaries (expanded SLMB) Yes Medicaid for employed people with disabilities Yes

Title 8: Medicaid Page 73 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Resource Eligibility of Non-MAGI-Related… Revised September 13, 2024

1. The C family applies for the HCBS ID waiver for Child C. Child C is the grantor and beneficiary of a trust with a countable value of $197,345. Income produced by the trust is countable, not excluded. If all other eligibility factors are met, Child C is eligible under the 300% group, since household resources are disregarded in determining children’s eligibility under this group. 2. Child B, age 15, lives in an ICF/ID and is eligible for Medicaid and facility care under the coverage group for people who are ineligible for SSI due to residence in a medical institution. Child B has countable monthly income of $100 and countable resources of $1,800. At the annual review, the worker determines that Child B’s countable resources now total $2,100. Since Child B is no longer eligible under this coverage group, the worker completes an automatic redetermination. Child B can be determined eligible under the 300% group, since resources are not an eligibility factor for children in the 300% group and because Child B’s income exceeds the SSI maximum for a person in a medical institution ($30). General Non-MAGI-Related Resource Policies The following sections describe SSI-related policies on:  Resource limits.  What resources to count.  Joint ownership of real property.  Disputed ownership.  Determining the value of a resource.  Deeming resources from a spouse or parent.  Eligibility while trying to sell a nonliquid resource.  Long-term care asset protection.  Resources exempt for Medicaid for Employed People with Disabilities. Non-MAGI-Related Resource Limits Legal reference: 20 CFR 416.1205, 441 IAC 50.2(1), 75 (Rules in Process) For SSI-related Medicaid eligibility, the resource limit is:  $2,000 for an individual, and  $3,000 for a married couple living together.

Title 8: Medicaid Page 74 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised July 10, 2026 Non-MAGI-Related Resource Limits The resources of the ineligible spouse must be deemed to the eligible spouse. See Deeming from a Spouse. Determine which resource limit to use, based on whether or not the ineligible spouse has income to deem to the eligible spouse (according to procedures in 8-E).  Use the resource limit for an individual when no income is deemed from the ineligible spouse.  Use the resource limit for a couple when income is deemed from the ineligible spouse. EXCEPTIONS:  The resource limit is $4,000 for an individual eligible as a qualified disabled and working person.  The resource limit is $6,000 for a married couple living together who are eligible as qualified disabled and working persons.  The resource limit is $9,950 for an individual eligible under one of the following coverage groups: • Qualified Medicare beneficiaries • Specified low-income Medicare beneficiaries • Expanded specified low-income Medicare beneficiaries  The resource limit is $14,910 for a couple eligible under one of the following coverage groups: • Qualified Medicare beneficiaries • Specified low-income Medicare beneficiaries • Expanded specified low-income Medicare beneficiaries  The resource limit is $10,000 for an individual or couple in the SSI-related Medically Needy coverage group.  The resource limit is $12,000 for an individual in the Medicaid for employed people with disabilities coverage group.  The resource limit is $24,000 for a couple in the Medicaid for employed people with disabilities coverage group.  All household resources are disregarded in the eligibility determination of children in certain coverage groups. See Resource Eligibility of Children.

Title 8: Medicaid Page 75 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised July 10, 2026 What Resources to Count What Resources to Count Legal reference: 20 CFR 416.1201, 20 CFR 416.1208 “Resources” are liquid and nonliquid assets owned by a person that the person is not legally restricted from using for support and maintenance, and that could be converted to cash to use for support and maintenance. Unless specifically exempt, all resources are considered countable. Guardianship, conservatorship, and power of attorney are not legal restrictions on a resource. Continue to count an adult’s resources if the person has (or is waiting for) a guardian, conservator, or person with power of attorney. An applicant or a member is not required to start a lawsuit to access or sell a resource. However, a resource is counted if they (or their conservator) have to petition the court to request access, because this action is not a lawsuit. (See Trust Definitions for more information on conservatorships.) Include the self-attested resources of everyone who is considered part of the non- MAGI-related household. See 8-C, Nonfinancial Non-MAGI-Related Eligibility, when establishing the non-MAGI-related household. Determine countable resources and resource eligibility as of the first moment of the first day of each month, including the retroactive period if the individual meets a category of eligibility for the retroactive period as defined in 8-A, Definitions. If resource values change during the month, eligibility will not be affected until the next month. See NJA0068 Verifying Resources Nonliquid Resources “Nonliquid resources” are assets that cannot be converted to cash within 20 days. Examples are:  Homes and homesteads. See Property in a Homestead.  Nonhomestead property.  Personal property, such as household goods, personal effects, tractors, motor vehicles, machinery, and livestock.

Title 8: Medicaid Page 76 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 What Resources to Count Liquid Resources “Liquid resources” are assets that can be converted to cash within 20 days. Following are examples of liquid resources.  Annuities. Count the salable value of an annuity or the amount the company will pay back to the applicant or member if the annuity is cashed in. Ask the client to obtain a statement from the company regarding the lump sum and the cash-in amount. If the annuity cannot be cashed in but is assignable or can be transferred, ask three knowledgeable sources what its value is. Average the three values. Most annuities allow benefits to be assigned or ownership sold. An applicant or a member who claims that an annuity cannot be sold or transferred must obtain verification.  Bonds. The countable value of the bond is its redemptive value on the first moment of the first day of the month.  Cash, unless it was counted as income for the month or specifically excluded as a resource, such as a retroactive SSI lump sum.  Checking and savings accounts. Subtract verified outstanding checks and any funds included in the accounts that are specifically excluded as a resource. If funds intended for the following month are direct deposited or deposited by the applicant or member before the intended month, do not count the funds as a resource in the month they were intended to cover. Remember to count the funds as income.

Mrs. J has $2,000 in checking as of midnight on May 31. She receives her social security check of $700 June 1. This check is not a factor in determining resources, because $2,000 was countable as of the first moment of the first day of the month. For co-owned accounts, if two or more account holders are either Medicaid applicants or members or are people whose income and resources must be considered for Medicaid eligibility (such as spouses or parents of minor children), count an equal share of the account for each.

Title 8: Medicaid Page 77 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised July 10, 2026 What Resources to Count If only one of the account holders is a Medicaid applicant or member or a person whose income and resources must be considered for Medicaid eligibility, count the entire amount in a co-owned account unless the applicant or member can establish that they (or the deemer) cannot access the funds. See Disputed Ownership.

Ms. G has $3,000 in a joint checking account with her sister, Ms. H, and their mother, Mrs. I. Ms. G and Ms. H are both over the age of 21 and are both receiving non-MAGI-related Medicaid. Mrs. I has not applied for and does not receive Medicaid. Countable amounts are $1,500 for Ms. G and $1,500 for Ms. H, unless either can establish that they do not have access to the account.  Individual Retirement Accounts (IRA). Use the value of the IRA if cashed in minus any penalties for early withdrawal. NOTE: The 10% tax penalty for early withdrawal would not be allowed as a deduction, since it is an additional tax on the income portion of the withdrawal.  Mutual funds. Count the value for which the shares can be sold.  Oil leases. The value must be established by a knowledgeable source, such as a brokerage firm or bank. The lease value can be excluded if it is under $6,000 and the land earns a net income of 6% of equity, or if the land is being sold. The leasehold is the right to use the property for a specified period. It does not convey ownership of the property.  Promissory notes that can be sold or discounted.  Stocks. Use the closing price of the stock on the first moment of the first day of the month. Do not count resources that have no cash value, that cannot be liquidated, or that the applicant or member does not have the right to liquidate and use for support and maintenance. NOTE: Do not count property jointly owned by spouses involved in a divorce when the property is unavailable until a decision on distribution has been made. Do not consider the terms of a prenuptial agreement when determining Medicaid eligibility. Do not count a resource until ownership is known to the applicant or member. An applicant or a member who is not aware of owning a resource must prove that it was reasonable not to know about it. Forgetting a resource is not evidence. Count the value of the resource plus any interest as income in the month of discovery. Count it as a resource the next month.

Title 8: Medicaid Page 78 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 What Resources to Count

Mr. N’s grandfather had transferred land to Mr. N in October but had not told him. Mr. N was told the following May. Mr. N provides verification with a letter from his uncle establishing that there was no prior knowledge. The $5,000 value of the land is income to Mr. N in May. The land is a resource in June unless it is sold. If the applicant or member has the legal ability to convert a resource to cash, it is not necessary that they have possession of the resource for it to be counted. EXCEPTION: An applicant or a member must possess a savings bond for it to be counted. Savings bonds have no resource value for six months from the issue date. Joint Ownership of Real Property Legal reference: 20 CFR 416.1201, 20 CFR 416.1201(a), 20 CFR 416.1245(a) If real property is owned by more than one person, assume all persons have equal shares, unless you are able to determine differently. If a client does not own an equal share in a resource, count only the portion owned by the client. If the client jointly owns real property, evaluate the details of ownership and the particulars of the situation to determine how shared ownership affects the value of the property as a resource. In Iowa, people who jointly own property and wish to dispose of their interest in the property may do so. The refusal of one owner does not preclude any other owners from selling their ownership interest. (After the sale of the property, the new owners can petition the court for a partition action.) So, joint ownership does not preclude the property from being a countable resource, but it may affect the countable value of the seller’s interest. If a client jointly owns real property in another state, state law there may require the co-owner to move if the property is sold. If so, exclude it as a resource if the disposal of this property would cause undue hardship to the co-owner due to lack of housing. Obtain verification of the joint ownership and the applicable state law. The co-owner must use the property as the principal place of residence and have no other housing readily available.

Title 8: Medicaid Page 79 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Joint Ownership of Real Property

Mr. J owns 40% of a 100 acre farm as tenant in common with his brother. The interest is referred to as “undivided.” Specific acres are not identified as belonging to Mr. J, but he could sell his 40% interest. If Mr. J dies, his ownership passes to his heirs. “Joint tenancy” means that two or more persons own an interest in and possession of the entire property. An owner’s portion can be sold. If an owner dies, the ownership passes to the other owner.

Mr. J owns 40% of the 100 acre farm with Mr. T in joint tenancy. His interest is undivided but he could sell his 40% interest. If Mr. J dies, his ownership interest passes to Mr. T. “Leasehold” means the lessee has the right to the use of the property for a specified period of time. A lessee may sell that right. Verify the countable value with a statement from a knowledgeable source. Disputed Ownership Legal reference: 20 CFR 416.1201, 20 CFR 416.1208 Count jointly owned resources unless the client rebuts ownership. Allow the client to rebut ownership of all or part of jointly owned liquid and nonliquid resources. To do this, the client must establish:  That the client’s money is not deposited in the resource, or the proportion of money deposited by the client in relation to the total money deposited.  The reason for the joint ownership.  Whether the client made any withdrawals from the resource for the client’s own use, or made withdrawals proportional to the client’s share of the money.  Whether the resource was altered to reflect true ownership interest. If the client successfully shows either no ownership or partial ownership and changes the resource to reflect this, the ownership is then established at the beginning of the financial arrangement. Count only the part that the client could not prove belonged to another person. See Liquid Resources for countable amounts of co-owned checking and savings accounts.

Title 8: Medicaid Page 80 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Disputed Ownership

Mrs. N and Mr. F, who are brother and sister, jointly own a bank account. Mrs. N has her name on the account to handle Mr. F’s business, since he is not able to do so. Mr. F is not a Medicaid applicant or recipient. Mrs. N applies for Medicaid on October 11. She lists the account, which has $6,000 as of October 1. She proves that all the deposits were Mr. F’s and she did not use any of the withdrawals. She changes the name on the account to show the true ownership. This account is not countable to Mrs. N. Determining the Value of a Resource Legal reference: 20 CFR 416.1201 Policy: The countable value of a resource is the equity value. The equity value is the current fair market value minus any legal debt on the item. To be considered a debt against the resource, the debt must be legally recognized as binding on the resource’s owner. The current fair market value is the amount an item can be sold for on the open market. Procedure: If a client is trying to sell property:  The client should provide verification of the fair market value of the property.  If the client provides verification that the client has tried to sell the property at the fair market value and it did not sell, consider a lower amount to be fair market value as long as it seems reasonable.  Use the prudent-person concept when determining if the lesser fair market value amount is reasonable. When property is sold at an auction, the current fair market value is considered to be the highest bid, as long as the client has provided verification that both:  Attempts to sell the property at fair market value have been unsuccessful; and  The auction was advertised to the public. If either of these criteria has not been met, assess a transfer of assets penalty for the difference between the fair market value and what the property sold for.

Title 8: Medicaid Page 81 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Determining the Value of a Resource

1. Mr. M applies for nursing facility assistance. He has listed his home on the market in January at the assessed value of $125,000. By May, he has not had an offer. Mr. M then lowers the price of his home to $120,000. In July there are still no offers on the home. In August, he again lowers the asking price to $116, 000. In September, the home sells for $112,000. As long as Mr. M can provide verification of the listings, sale of the home is not considered to be a transfer of assets, because Mr. M tried to sell the home for fair market value. The fair market value is considered to be the amount that the home sold for. 2. Ms. J applies for Medicaid. She has a home with a current assessed value of $95,000. She lists her home for $95,000 and after two months has not yet had an offer. Ms. J drops the listing on her home to $45,000 and sells her home two weeks later. The sale is considered to be a transfer of assets for less than fair market value. When determining the equity value of a resource:  Deduct from the current market value only the principal amount of the debt and any prepayment penalties required. Do not consider any future interest owed.  Determine the ownership of jointly held resources, such as joint checking or savings accounts and jointly held real estate, according to the intent of the parties who created the joint interests upon the creation of the joint interest. If the document creating the joint interests, such as a deed to real estate or a bank account signature card, specifies the shares of the parties, divide the fair market value of the entire resource between the joint owners according to the shares specified. If the shares of the joint owners are not specified, assume equal shares for all joint owners, unless evidence of intent shows unequal shares. Examples of evidence of intent showing unequal shares include: • The source of the funds used to purchase or create the joint resource. • The use made of the joint resource. • The inclusion of one of the joint owners as a caretaker for the convenience of the other, etc.  If excluded funds are combined with countable resources, assume the countable resources are spent first.

Title 8: Medicaid Page 82 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised July 10, 2026 Determining the Value of a Resource  Consider the sale or transfer of a resource as a change in the form of the resource. Do not consider the transfer or sale of a resource as income.  A court restriction may make all or part of the resource unavailable to the client. Consult your supervisor if you have questions about the legal restrictions. Legal restrictions on resources can be included in: • Liens. • Qualified domestic orders. • Divorce decrees. • Probate matters. • Bankruptcy proceedings. Deeming Resources Legal reference: 20 CFR 416.1160, 20 CFR 416.1163, 20 CFR 416.1202 Deeming is the process of assigning a specified amount of resources of an ineligible spouse, parent, or sponsor when determining Medicaid eligibility. An “ineligible spouse” is a spouse who is not receiving non-MAGI-related Medicaid. See 8-L, Aliens when deeming resources from a sponsor to an alien. Do not apply deeming policies if the applicant’s or couple’s resources alone are over the resource limits after including all appropriate disregards and exclusions. Deem resources as of the first moment of the first day of the month of eligibility. Deeming From a Spouse Legal reference: 20 CFR 416.1202 To determine eligibility, include resources of an ineligible spouse when:  An eligible person was living in the same household with the ineligible spouse at any time during the month, or  An SSI eligible person was living with an SSI eligible spouse during the last six months unless: • The spouses have divorced, • One of them has died, or • One of them moved to a medical facility.

Title 8: Medicaid Page 83 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Determining the Value of a Resource When an applicant is living in the same household with an ineligible spouse, include the resources of the ineligible spouse in determining the application’s eligibility. Do not, however, deem pension funds controlled by an employer or union, or IRA or Keogh accounts. See 8-D, Non-MAGI-Related Resource Limits to determine which resource limit to apply. If spouses who are both eligible for Medicaid separate, including when one spouse enters a medical facility, discontinue deeming the month after the month of the separation. Separation means that the spouses are not expected to be living together for a full calendar month.

Before entering a nursing facility, Mrs. L was living at home with her spouse. She will be in the facility for less than 30 days. Their countable resources are as follows: $1,800 + 500 $2,300 - 3,000 $ .00 Savings account in Mr. L’s name only Vacant lot owned by Mr. L Total resources of Mr. and Mrs. L Limit for a couple Excess resources Since resources deemed to Mrs. L do not exceed the resource limit for a couple, eligibility exists. Deeming From a Parent to a Child Legal reference: 20 CFR 416.1856, 20 CFR 416.1202 Before deeming resources from a parent to a child, see 8-D, Resource Eligibility of Children. If the child’s eligibility is determined under a coverage group where resources are exempt, there is no need to deem resources from the parents. A “child” is a person who is:  Not married,  Not the head of the household, and  Either under age 18 or under age 22, if a student regularly attending a school, college, university, or course of vocational or technical training to prepare for gainful employment.

Title 8: Medicaid Page 84 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Determining the Value of a Resource When an eligible child is living in the household with an ineligible parent or stepparent, include the parent’s and stepparent’s resources when determining the child’s eligibility unless the stepparent is the only person living with the child. If the child lives with the stepparent and not the biological parent, there is no deeming. Do not deem a parent’s resources to other ineligible children. Do not count or deem resources of ineligible children to the eligible child. The child’s resources are any resources the child owns plus any resources deemed from the parents. Determine the child’s resources independently of the parents’ resources. Consider household goods and personal effects owned by the child separately from those owned by the parents. Do not exclude more than one home and one vehicle for the family. To deem the parents’ resources to a child: 1. Allow the parents all the exclusions for which they would be eligible if they were eligible for Medicaid. Do not deem an ineligible parent’s pension funds if they are controlled by the employer or by the union or are in an IRA or Keogh account. 2. Deduct $2,000 for an individual (if one parent) or $3,000 for a couple (if two parents) before deeming to the child. 3. Deem the remaining countable resources to the child. A child is not eligible if the child’s own resources plus the value of the resources deemed from the parents exceeds the $2,000 resource limit unless the child is eligible under QMB, SLMB, or Medically Needy. See 8-F.

Title 8: Medicaid Page 85 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Determining the Value of a Resource

Sam, age 17, was living with his parents and two brothers before entering a residential care facility (RCF). Sam has a $50 savings account in his own name. The parent’s resources are as follows: $ 30,000 $ 3,200 Value of home they live in Parent’s joint savings account The home is excluded. $200 resources are available for deeming. ($3,200 minus $3,000 SSI exclusion for a couple.) $ 200 + 50 $ 250 Deemed from parents Sam’s own resources Total resources Since resources deemed to Sam plus Sam’s own resources do not exceed the resource limit for an individual, Sam meets the resource standard. Do not deem parents’ income or resources to a child the month following the month of entry into a medical institution or RCF. Eligibility While Trying to Sell a Nonliquid Resource Legal reference: 20 CFR 416.1240-416.1245, 441 IAC 50.5(249A) Applicants or members who have countable nonliquid resources that exceed the applicable resource limit may not receive Medicaid under a “Medicaid only” coverage group while they are attempting to sell the resource. However, such applicants or members may be able to receive State Supplementary Assistance (SSA) or Supplemental Security Income (SSI) benefits until the resource is sold. These benefits are called “conditional benefits.” Persons who are conditionally eligible for SSI are not eligible for Medicaid but persons who are conditionally eligible for SSA may receive Medicaid in the same manner as any other SSA recipient. If the person has been approved for conditional SSI or federally administered State Supplementary Assistance benefits, there will be a “C” code in the COND PAY CODE field on the State Data Exchange (SDX).

Title 8: Medicaid Page 86 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Eligibility While Trying to Sell a Nonliquid Resource There is usually no retroactive Medicaid eligibility for a recipient who has been approved for conditional SSI or State Supplementary Assistance benefits. However, the recipient’s countable resources, including the excess resources, may have been under the Medically Needy limits. Also, some resources may not have been countable in the retroactive period, e.g., a house in which the recipient was living.

Ms. A, a six-month-old child, is approved for SSI effective August 1, 2018. Her parents receive 10 acres of land on August 6 as an anniversary gift. The land has a value of $6,000. In October, her parents sign an agreement to sell the land and repay SSI. The IM worker evaluates resources of Ms. A and her family for the Medicaid retroactive period of May, June, and July, to determine if resources were under the limit. Since they did not own the land before August, retroactive eligibility is not affected by the 10 acres. The conditional benefits period begins in November (the month after the agreement was signed). For the months of September and October, the land value of $6,000 is a countable asset. Long-Term Care Asset Preservation Legal reference: 441 IAC 75 (Rules in Process), Iowa Code Chapter 514H Policy: A person may be eligible for Medicaid when the person meets all of the following conditions:  The person is aged 65 or older.  The person: • Is the beneficiary of a qualified long-term-care insurance policy, or • Is enrolled in a prepaid health care delivery plan that provides long-term- care services.  The person is eligible for Medicaid under one of the following coverage groups except for excess resources: • Ineligible for SSI or SSA due to residence in a medical institution, • In the 300% group, or • Receiving home- and community-based waiver services.  The excess resources do not exceed the amount of long-term-care insurance benefits paid out under the person’s qualified long-term-care insurance policy. (This amount is called the asset adjustment.)

Title 8: Medicaid Page 87 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Long-Term Care Asset Preservation The asset adjustment is exempt from estate recovery for the member and the member’s spouse. Comment: The Long-Term Care (LTC) Partnership program is a cooperative effort between private insurers and state government to encourage people to plan ahead and provide for their long-term health needs. An LTC partnership policy:  Must meet the minimum standards established for long-term care insurance policies and certificates as established by the Iowa Insurance Division.  Has identifying information included in the policy or attached to the policy to indicate that it is a qualifying long-term insurance policy. The insurer provides the beneficiary a quarterly report which includes the amount paid in the last quarter and total amount paid on behalf of the insured. In addition, the insurer is required to report data on each partnership policy sold under the Long-Term Care Partnership program to a national database. The national database then reports this information to each state’s insurance department. The information reported includes:  Notice of when benefits are paid under the policy,  The amount of those benefits, and  Notice of termination of the policy. Iowa participates in a national reciprocity agreement with other states. If a person moves to Iowa and has a partnership policy that was purchased in another state, the policy can carry over to Iowa for the person to be eligible for an asset adjustment if the person applies for Medicaid in Iowa. Procedure: The amount of the disregard is equal to the amount of the insurance benefits paid to or on the behalf of the person. The insurance benefits do not have to be fully exhausted before the disregard can be applied. If the person is approved for Medicaid and the policy continues to pay benefits, the asset adjustment can continue to increase. Subtract the total amount the policy has paid on the person’s behalf from the person’s total resources. Compare the remaining resources to the resource limit to determine Medicaid resource eligibility. If the person’s remaining resources exceed the resource limit, issue a Notice of Decision denying or canceling Medicaid.

Title 8: Medicaid Page 88 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Long-Term Care Asset Preservation

1. Mr. J buys a long-term-care partnership policy. The policy provides for $100,000 in long-term-care coverage. Several years later, Mr. J needs nursing home care. His partnership policy covers most of the costs for three years before the $100,000 benefits are exhausted by payment for his care. Mr. J applies for Medicaid. He is able to protect $100,000 for his resources and still qualify for Medicaid to help pay for his long-term care if he meets the other eligibility criteria. 2. Mr. S buys a long-term care partnership policy that provides $100,000 in coverage. Several years later, Mr. S needs long-term care services and his policy begins to pay him a monthly benefit. Eventually, Mr. S applies for Medicaid home- and community-based waiver services. At the time of application, Mr. S has $90,000 in countable resources. His long-term care policy has paid out $88,000 in benefits with $12,000 remaining. The worker calculates his resources for Medicaid as: $ 90,000 Mr. S’s resources - 88,000 Benefits paid out under the LTC policy - 2,000 Medicaid resource limit $ 0 Remaining countable resources Mr. S is eligible for Medicaid because the amount paid under his partnership policy ($88,000) combined with the Medicaid resource limit ($2,000) equals his total countable resources ($90,000). If his partnership policy continues to pay benefits, Mr. S can protect additional resources. Exempt Resources for Medicaid for Employed People With Disabilities Legal reference: 441 IAC 75 (Rules in Process) Additional resources are exempt for persons who qualify for Medicaid eligibility under Medicaid for employed people with disabilities. They are:  Assistive technology accounts: Assistive technology accounts include funds in contracts, savings, trust or other financial accounts, financial instruments or other arrangements with a definite cash value that are set aside and designated for the purchase, lease or acquisition of assistive technology, assistive technology services or assistive technology devices. These accounts must be held separate from other accounts. Funds must be used to purchase, lease, or otherwise acquire assistive technology, assistive technology services, or assistive technology devices for the working person with a disability.

Title 8: Medicaid Page 89 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised September 13, 2024 Exempt Resources for Medicaid for Employed… “Assistive technology” is defined as the systematic application of technologies, engineering, methodologies, or scientific principles to meet the needs of and address the barriers confronted by people with disabilities in areas such as education, rehabilitation, technology devices, and assistive technology services. An “assistive technology device” is any item, piece of equipment, product system, or component part (whether acquired commercially, modified, or customized), that is used to increase, maintain, or improve functional capabilities or to address or eliminate architectural, communication, or other barriers confronted by people with disabilities. “Assistive technology service” means any service that directly assists a person with a disability in the selection, acquisition, or use of an assistive technology device or other assistive technology. It includes, but is not limited to, services referred to or described in the Assistive Technology Act of 1998, 29 U.S.C. 3002(4). Require the member to provide written verification from a physician, certified vocational rehabilitation counselor, licensed physical therapist, licensed speech therapist, or licensed occupational therapist that the technology being saved for is medically necessary and that the technology, device, or service can reasonably be expected to enhance the client’s employment. Also require verification of an estimated cost for the technology.  Medical savings accounts. These are accounts exempt from federal income taxation pursuant to Section 220 of the United States Internal Revenue Code (26 U.S.C. § 220). A person who has such an account will have documentation from the bank or other financial institution that set it up.  Retirement accounts. This includes any retirement or pension fund or account listed in Iowa Code section 627.6(8)“f” as exemption from execution, regardless of the amount of contribution, the interest generated, or the total amount in the fund or account. The following are exempt under this provision: • Pension or retirement plans authorized under federal law, as follows:  Retirement plans qualified under the Employee Retirement Income Security Act of 1974 (“ERISA-qualified plans”).  Simplified employee pension plans.  Self-employed pension plans.  Keogh plans (also known as “H.R. 10 plans”).  Individual retirement accounts.

Title 8: Medicaid Page 90 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources General Non-MAGI-Related Resource Policies Revised July 10, 2026 Exempt Resources for Medicaid for Employed…  Roth individual retirement accounts.  Savings incentive matched plans for employees.  Salary reduction simplified employee pension plans (also known as “SARSEPs”).  Similar plans for retirement investments authorized under federal law after May 17, 1999. • Retirement plans established pursuant to a “qualified domestic relations order” as defined by federal law (26 U.S.C. section 414). If the type of plan is unclear from the documentation provided, verify it with the plan administrator or send a clarification request to central office. Specific Non-MAGI-Related Resources This section lists specific types of resources that are countable or excluded, in total or in part, when determining initial or ongoing eligibility for non-MAGI-related coverage groups. Some countable resources require calculations to determine the countable value to the applicant or member. Some resources are excluded only up to a certain limit, after which the remainder is countable. And finally, some resources are exempt in the month of receipt and in some cases, the month following the month of receipt. Examples include:  Death benefits  Earned income credit  Income tax refunds  Retroactive cash payments  Social services expenses  Third party medical payments See individual items for more information. ABLE Account The Achieving a Better Life Experience (ABLE) Act of 2013 was signed into law in December 2014. The ABLE Act amends Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for individuals with disabilities. These savings accounts are called ABLE accounts

Title 8: Medicaid Page 91 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 ABLE Account ABLE Account (Cont.) Assets in an ABLE account and distributions from the account for qualified disability expenses would be disregarded when determining the designated beneficiary’s eligibility for Medicaid.

SSI excludes up to and including $100,000 of the balance of funds in an ABLE account from resources of the designated beneficiary. If an ABLE account exceeds $100,000, SSI will not terminate the recipient, however they will suspend them.

For Medicaid, a beneficiary will not lose eligibility for Medicaid based on the assets held in their ABLE account, even during the time that SSI benefits are suspended (as described above for the account with over $100,000).

A distribution from an ABLE account is not income but is a conversion of resource from one form to another. Do not count distributions from an ABLE account as income to the designated beneficiary. AIDS/HIV Settlement Payments Exempt settlement payments from any fund established pursuant to the class action settlement of Susan Walker v. Bayer Corporation et al, 96 C5024(N.D. Ill.), as a resource. Some settlement payments were made in lieu of the class action settlement. These payments are also exempt as a resource. These settlements were signed on or before December 31, 1997. These funds must be kept in a separate, identifiable account.

Payments from the original settlement or the Ricky Ray Hemophilia Relief Act of 1998 are exempt as a resource.

Title 8: Medicaid Page 92 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Annuities Annuities 20 CFR 416.1201 An annuity is a contract in which a person receives fixed payments for a specified time period. The person who receives the payments is referred to as the annuitant. The term of the annuity contract can be for either:

 The lifetime of the buyer;

 The lifetime of the buyer, with a minimum return of principal to a residual beneficiary if a specified portion of the principal is not returned before the buyer’s death; or

 A certain number of years, with a guaranteed payment amount if the annuitant dies before the specified period has expired.

Review a copy of each annuity to determine the terms of the contract. Annuity contracts may be assigned, transferred, or cashed in for a lump sum. Or the contract may state that once payments are being made to the annuitant, the contract cannot be assigned, transferred, or cashed in for a lump sum.

 If the annuity can be assigned, transferred, or cashed in for a lump sum, the loan value or the amount the company will pay back to the annuitant is a countable resource.

 If the annuity may be assigned or transferred, but not cashed in, the annuitant must verify the amount that the annuity can be assigned or transferred for. The annuitant should obtain three estimates from knowledgeable sources. Use the average of these to determine the countable resource value of the annuity.

 If the annuity is counted as a resource and the annuitant is eligible for Medicaid, obtain verification of the portion of the payment that is interest and the portion of the payment that is principal. Count the interest portion of the annuity payments as income to the annuitant when determining eligibility, spenddown, and client participation. Do not count the principal portion of the payment; this is already counted as a resource.

Title 8: Medicaid Page 93 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Annuities

Annuities (Cont.)  If the annuity cannot be assigned, transferred, or cashed in and the annuitant verifies that the annuity has no cash value, the annuity is not a countable resource. Count the total annuity payment as income to the annuitant when determining eligibility, spenddown, and client participation.

Annuities must also be reviewed to determine if the purchase of the annuity constitutes a transfer of assets for less than fair market value. See Transfers That Cause a Medicaid Penalty.

Request a copy of the contract and use the Annuity Release of Information, form 470-4699, to gather information on the annuity. If you need help interpreting the information provided on the form or the contract, send the form and contract to the DHS, SPIRS Help Desk. Burial Contracts 20 CFR 416.1201, 20 CFR 416.1231 (See also Transfer of Assets. 20 CFR 416.1246, 42 USC 1396p(d)) Exclude a prepaid burial contract as a resource if it meets one of the following conditions:  The contract is irrevocable and the applicant or member can’t access the funds.  Mutual consent of the applicant or member and the contract seller is required to revoke or access the contract, and the seller’s consent can’t be obtained.

 Liquidation of the contract would create a significant hardship to the applicant or member. Usually, the only hardship considered significant is requiring the applicant or member to move out of Iowa to access the funds.

Unless the contract clearly indicates that the burial contract is irrevocable, obtain a written statement from the contract seller that the funds committed to the contract are unavailable to the applicant or member.

Investigate a contract drawn up in another state to determine whether the law in that state permits irrevocable burial contracts and whether the contract is irrevocable under that law.

Title 8: Medicaid Page 94 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Contracts

Burial Contracts (Cont.) If a certificate of deposit or another form of funds is tied to the irrevocable contract, only the amount specified in the irrevocable contract is excluded.

If the burial contract is set up by purchasing a life insurance policy, check if the funeral home either owns the policy or is the irrevocable beneficiary.

If the funeral home owns the policy, both the whole cash value and the dividends are unavailable. However, if the funeral home is the beneficiary, only the cash value is unavailable. Count dividends that are available to the applicant or member.

Since there is no limit on the amount of money in the burial contract, some applicants or members may use prepaid burial contracts to protect assets. If the amount of the burial contract exceeds $13,125, which is the average cost of a funeral in Iowa, ask for an itemized list of funeral costs.

If the amount is less than or equal to the cost of the funeral, exclude the contract from resource consideration. If the amount in the burial contract exceeds the itemized listing, consider the excess deposits or payments as a transfer of assets for less than fair market value. See Transfer of Assets.

The amount of money considered transferred is the amount designated for the contract minus the specified cost of the burial. Determine whether transferring has occurred rather than determining how much of the irrevocable burial contract is a countable resource.

If a relative changes the selection of services in the burial contract at the time of the funeral, this is not a transfer of resources.

The following charts provide a guide to understanding burial contracts and how to count as a resource or consider as a transfer of asset.

Title 8: Medicaid Page 95 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Contracts

Burial Contracts (Cont.) Burial Contracts

If the client has… Countable resource? Transfer of asset?

Paid cash and burial contract is:

 Revocable Yes. See below on how to count. No

 Irrevocable No No

No burial contract and burial funds are:

 Revocable Yes No

 Irrevocable No Yes. See transfer of asset chart.

Revocable burial contract funded by:

 Revocable burial funds Yes. See below on how to count. No

 Irrevocable burial funds No Yes. See transfer of asset chart.

 Life insurance policy with funeral home as the beneficiary Yes, unless otherwise excluded. No

 Life insurance policy irrevocably assigned to funeral home No Yes. See transfer of asset chart.

Title 8: Medicaid Page 96 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Contracts

Burial Contracts (Cont.) Burial Contracts

If the client has… Countable resource? Transfer of asset?

Irrevocable burial contract funded by:

 Revocable burial funds Yes No

 Irrevocable burial funds No See transfer of asset chart.

 Life insurance policy with funeral home as the beneficiary Do not count cash value, but count any accessible dividends as a resource. See transfer of asset chart.

 Life insurance policy irrevocably assigned to funeral home No See transfer of asset chart.

Burial funds may include annuity proceeds, a certificate of deposit, a bank account, or a trust at a financial institution.

If a countable resource: Exclude up to $1,500 for the client and up to $1,500 for the client’s spouse when funds are held in a separate account designated for burial purposes.

Burial Contracts – Transfer of Assets

Transfer of Asset Penalty Amount

Irrevocable burial funds not in a burial contract Yes Penalty is the amount of the irrevocable burial funds. If the client sets up an irrevocable burial contract, the transfer of assets penalty can be expunged as of the first of the following month.

Title 8: Medicaid Page 97 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Contracts

Burial Contracts (Cont.) Burial Contracts – Transfer of Assets

Transfer of Asset Penalty Amount

Revocable burial contract funded by irrevocable burial funds Yes Penalty is the amount of the irrevocable burial funds. If client changes the revocable burial contract to irrevocable, the transfer of assets penalty can be expunged as of the first of the following month.

Revocable burial contract funded by life insurance policy irrevocably assigned to funeral home (either ownership or beneficiary) Yes Penalty is the amount of cash value and dividends of the life insurance policy. If client changes the revocable burial contract to irrevocable, the transfer of assets penalty can be expunged as of the first of the following month.

Irrevocable burial contract funded with irrevocable burial funds OR assigned life insurance policy (either ownership or beneficiary) If the amount of contract is:

 Less than average cost of funeral in Iowa. No None

Title 8: Medicaid Page 98 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Contracts

Burial Contracts (Cont.) Burial Contracts – Transfer of Assets

Transfer of Asset Penalty Amount

 More than the average Iowa funeral cost, ask for an itemized list of funeral costs.

• If burial contract amount is less than or equal to itemized list. No None

• If amount exceeds the itemized list. Yes Penalty is the amount in excess of the burial contract. Burial Funds 20 CFR 416.1231 (See also Transfer of Assets. 20 CFR 416.1246, 42 USC 1396p(d)) Exclude up to $1,500 for the client and up to $1,500 for the client’s spouse when funds are held in a separate account designated for burial purposes. Examples of funds set aside for burial are:  Revocable burial contracts.  Trusts.  Cash value of any life insurance policies.

 Any account or resource designated by the applicant or member for burial, cremation, or other funeral arrangements. An account or resource designated for burial could be bank accounts, CDs, etc.

Burial funds must be in separately identifiable accounts. If funds are combined with other funds that are not for burial purposes, the client must separate the funds.

The client must sign a statement designating the funds for burial purposes. File a copy of the statement in the case record and give a copy to the applicant or member. Exclude the fund as of the first of the month in which the fund is separated and designated as a burial fund.

Title 8: Medicaid Page 99 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Funds Burial Funds (Cont.) Reduce the amount the client set aside for burial by any excluded whole life, term life, and irrevocable burial contracts. For policies on burial space, see Burial Space. To determine the amount of burial funds that can be applied under this exclusion:

1. Obtain copies of irrevocable burial arrangements and life insurance policies to determine what burial funds the applicant or member owns.

2. If the irrevocable contract is over $1,500, no other burial funds can be excluded. (The irrevocable burial contract is an excluded resource, but it does have an effect on whether any other funds can be set aside for burial.)

3. If the burial contract is less than $1,500, determine the face value of any excluded whole life and term life insurance policies designated for burial funds. (Life insurance with a face value of $1,500 or less is excluded. Life insurance with a face value of more than $1,500 is not excluded.)

4. Add together the face value of excluded life insurance and the burial contract. Subtract this amount from the $1,500 set-aside amount. If there is no remainder, no additional funds can be set aside for burial.

If the total amount set aside in the burial contract and excluded life insurance is under $1,500, the client can designate additional funds for burial to make up the difference. The total cannot exceed $1,500.

1. Mr. N has $2,500 in a burial fund that is revocable. He has no other burial funds. The maximum excluded from resource consideration is $1,500. $1,000 is a countable resource.

2. Mrs. B has life insurance with a face value of $3,000. The cash value is $1,800. This policy is not exempt and she has no other funds set aside for burial. Mrs. B has no funds set aside for burial and provides a written statement designating this policy for burial. The worker excludes $1,500 of the $1,800 cash value for burial. $300 is a countable resource.

Title 8: Medicaid Page 100 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Burial Funds

Burial Funds (Cont.) 3. Mrs. H has a $2,000 burial fund that is revocable. She has life insurance with a face value of $800. $700 of the burial fund that can be excluded and the interest earned on this $700 are exempt as income and a resource.

The remaining $1,300 is countable as a resource. The interest on the $1,300 is also counted, subject to policies on infrequent and irregular income.

4. Mrs. P has $1,000 in a savings account that she has designated for burial. She also has a $1,000 face value life insurance policy.

$1,500

- 1,000

$ 500 Maximum exclusion Life insurance Can be excluded for burial

$1,000

- 500

$ 500 Designated burial account Remaining exclusion Countable resource

5. Mr. Q has a $1,600 life insurance policy and a $1,000 irrevocable burial contract. The cash value of the life insurance policy is $1,975. Mr. Q designated the cash surrender value of his life insurance as funds set aside for burial.

$1,500

- 1,000

$ 500 Maximum potential exemption Burial contract Remaining potential exemption

$1,975

- 500

$1,475 Cash surrender value of life insurance Remaining exemption Countable resource

Mr. Q’s worker informs him that he could irrevocably assign the life insurance ownership to the irrevocable burial contract, at which point it would no longer count as a resource.

If the client spends any of the burial fund, count the amount spent as income during the period it was spent.

Title 8: Medicaid Page 101 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Burial Funds

Burial Funds (Cont.) A client in a nursing home has $1,400 in a burial fund, but spends $1,000 in June. This $1,000 is used for June eligibility, and client participation is adjusted for June. Burial Funds’ Increase in Value 20 CFR 416.1124(9), 20 CFR 416.1231(7) Burial funds may increase in value due to interest income or to appreciation in the value of the burial arrangement. Do not count interest on or increases in the value of burial funds that are excluded as a resource.

Count interest on and increases in value of the countable portion of burial funds. To do this, determine the percentage of the burial funds that is countable based on the value of the burial funds at the time they were gathered and apply that percentage to the increase in value.

When a non-MAGI-related Medicaid member has excluded funds set aside for burial at the time of cancellation of SSI:

 Exclude increased funds at the time of cancellation if the member becomes eligible for non-MAGI-related Medicaid coverage within 12 months of cancellation.

 However, if the member loses SSI because the member is no longer disabled, allow the increased funds to be excluded only if the member becomes eligible for a non- MAGI-related Medicaid program within three months.

 Allow only the same percentage increase in funds that was allowed before cancellation if the burial fund account is only partially excluded because the member has other burial funds. This is subject to the same 12- month period.

Contact the SSI representative at the district Social Security office to determine the amount of funds excluded at the time of cancellation when an SSI person becomes ineligible and then goes to another non-MAGI-related Medicaid coverage group.

Title 8: Medicaid Page 102 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Burial Space Burial Space 20 CFR 416.1231(a) Do not count the value of a burial space that is owned by the client and is intended for the client, the client’s spouse, or any other member of the client’s immediate family.

The “immediate family” includes a client’s:  Children, stepchildren, adopted children  Brothers, sisters  Parents, adoptive parents, and  Spouses of the above

The “immediate family” does not include members of an ineligible spouse’s family. If a space is not intended for the use of an immediate family member, count it as a resource.

Exclude only one space for each person. Document in the case record for whom each space is intended.

A “burial space” includes:  A conventional grave site, including opening and closing the grave.  A crypt, vault, or mausoleum.  The casket, urn, burial containers, and items traditionally used for the remains of a deceased person.  Headstones, markers, or plaques.

A space can be all items that traditionally go with the burial space. For example, a space can include both a lot and a casket, but not an urn in addition to the lot and casket. Child Tax Credit 20 CFR 416.1235 Exclude the child tax credit as a resource for nine months following the month of receipt.

Title 8: Medicaid Page 103 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Continuing Care Retirement and Life… Continuing Care Retirement and Life Care Community Entrance Fees 441 IAC 75 (Rules in Process) Entrance fees paid by persons residing in continuing care retirement communities or life care communities that collect an entrance fee on admission are considered a resource available to the person if:  The person has the ability to use the entrance fee, or the contract between the person and the community provides that the entrance fee may be used to pay for care;

 The person is eligible for a refund of any remaining entrance fee when the person dies or terminates the community contract; and

 The entrance fee does not confer an ownership interest in the community. Dedicated Accounts 20 CFR 416.546, 20 CFR 416.640, 20 CFR 416.1247 Exclude the funds in a dedicated account as a resource for people receiving SSI. When past-due benefit payments are paid for an eligible person under age 18, the Social Security Administration requires the representative payee to establish a dedicated account.

The dedicated account may be used only for:

 Medical treatment, education, and job skills training.

 Personal needs assistance, special equipment, housing modification, and therapy or rehabilitation if related to the child’s impairment.

 Other items and services related to the child’s impairment approved by the Social Security Administration.

Stop excluding the funds in a dedicated account when the person loses SSI eligibility, even if the person later reapplies and is approved. Disaster Assistance 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1237; P. L. 101-508 Exclude disaster assistance from a state, federal or local programs as a resource.

Title 8: Medicaid Page 104 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Earned Income Credit Earned Income Credit Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P. L. 111-312) Exclude the earned income credit in the month it was received as well as in the following month. Funds remaining are countable resources after the end of the second month. NOTE: Exclude for 12 months from the date of receipt all EITC payments as part of a federal tax refund between January 1, 2010, and December 31, 2012. Educational Assistance 20 CFR 416.1236(7), 20 CFR 416.1236(14), 20 CFR 416.1250 All student financial assistance received under Higher Education Act (HEA) or under Bureau of Indian Affairs (BIA) student assistance programs is excluded as a resource, regardless of use and regardless of how long the assistance is held. Examples of HEA (Title IV) programs are:  PELL grants  State Student Incentives  Academic Achievement Incentive Scholarships

 Byrd Scholars  Federal Supplemental Educational Opportunities Grants (FSEOG)  Federal education loans (Federal PLUS Loans, Perkins Loans, Stafford Loans, Ford Loans, etc.)

 Upward Bound  Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs)  LEAP (Leveraging Educational Assistance Partnership)

 SLEAP (Special Leveraging Educational Assistance Partnership)  Work-study programs

Title 8: Medicaid Page 105 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Burial Funds Educational Assistance (Cont.)  Other grants, scholarships, fellowships, or gifts used or intended to be used to pay the cost of tuition, fees, or other necessary educational expenses at any educational institution, including vocational and technical education, are excluded from resources for nine months beginning the month after the month the assistance was received.

This exclusion does not apply to any portion set aside or actually used for food, clothing, or shelter.

“Necessary educational expenses” include the following:

 Laboratory fees  Student activity fees  Transportation  Stationery supplies  Books  Technology fees  Impairment-related expenses necessary to attend school or perform schoolwork (special transportation to and from classes, special prosthetic devices necessary to operate school machines or equipment, etc.)

Grants, scholarships, fellowships, and gifts that are retained after the nine-month exclusion are countable resources beginning the month after the exclusion period ends.

Excluded educational assistance becomes countable as income in the earliest of:

 The month any portion of the excluded assistance is used for something other than tuition, fees, or other necessary educational expenses, or

 The month the member no longer intends to use the funds to pay educational expenses. Emergency Energy Conservation Assistance 20 CFR 416.1124(b) Exclude any cash or in-kind assistance provided under the Emergency Energy Conservation Services Program or the Energy Crisis Assistance Program, including:  Winterization of old or substandard dwellings. (Neither the cost of the materials nor the cost of labor is counted.)

Title 8: Medicaid Page 106 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Emergency Energy Conservation… Emergency Energy Conservation Assistance (Cont.)  Insulation.  Emergency loans and grants to install energy conservation devices.

 Alternative fuel supplies and special fuel vouchers or stamps.  Alternative transportation activities designed to save fuel and guarantee continued access to training, education, and employment.

 Legal or technical training relating to the energy crisis.  Fuel to operate food preparation appliances, or meals provided because utilities have been shut off. Food Programs 20 CFR 416, Subpart K Appendix Exclude the value of:  Allotment paid under the Food Stamp Act  Food provided under WIC  School lunches or breakfasts  Congregate meals  Federally donated food

Verification is not required. Gifts Made Under Uniform Gift Act 20 CFR 416.1201 A gift given to a child under 21 is not considered an available resource under the Uniform Gift Act. When the child turns 21, the gift becomes a countable resource. Verify the amount of the gift before excluding it. See 8-E for how to treat all other types of gifts. Household Goods and Personal Effects 20 CFR 416.1216 Household goods and personal effects are excluded as a resource. “Household goods” are items used to maintain the home as well as to accommodate, comfort and entertain the occupants.

“Personal effects” are belongings of family members, including clothing, books, and grooming aids. Do not count one set of a client’s wedding and engagement rings.

Title 8: Medicaid Page 107 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Household Goods and Personal Effects Household Goods and Personal Effects (Cont.) Exclude items required by any household member because of the person’s medical or physical condition, regardless of value. For example, exclude prosthetic devices, dialysis machines, wheelchairs, and hospital beds.

Exclude household goods and personal effects that were excluded in the attribution of resources. In spousal impoverishment cases, the household goods and personal effects retained by the community spouse are excluded as resources to the institutionalized spouse when determining Medicaid eligibility. Housing Assistance Provided by HUD or FMHA 20 CFR 416.1124(b); U.S. Housing Act of 1937, Section 8; U.S. Housing Act of 1959, Section 202(h); National Housing Act; Housing Act of 1949, Title V; Housing and Urban Development Act of 1965, Section 101; (Section 1701 of 12 USC, section 1451 of 42 USC) Do not count rent subsidies, cash toward utilities, or indirect assistance (guaranteed loans, mortgages, and mortgage insurance) provided to homebuyers by the Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture/World Development. Do not count any rent reduction to a person in low-income housing when the assistance is under the U.S. Housing Act of 1937, as amended. Verify the authority for the client’s federal or federally assisted housing. If the client cannot get verification, contact the local public housing authority. If HUD and a private owner have entered into a contract directly, contact the owner or manager of the project to verify the nature and authority for the housing assistance payments. Record the findings in the client’s case record. Income Tax Refunds Public Law 111-312 Public Law 112-240 Federal income tax refunds are excluded for 12 months from the date of receipt. Exclude state income tax refunds as a resource for the month of receipt and the month following the month of receipt.

Title 8: Medicaid Page 108 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised April 11, 2025 Individual Development Accounts Individual Development Accounts 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1236; P. L. 105-285, Section 415, P. L. 106-554 Contributions that are deposited in a Demonstration Project IDA are excluded from resources. Any matching funds that are deposited in a Demonstration Project IDA and interest earned are excluded from resources. Indian Assistance 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1236; P. L. 101-508, P. L. 92-254, P. L. 94-114, P. L. 103-66 Exclude judgment funds distributed to members of Indian tribes and payments that were received from certain lands and subsurface mineral rights, then distributed to tribal members. Exclude up to $2,000 of income per year received by a Native American from interests of Indian trusts or restricted lands. Exclude any land that the client or spouse cannot dispose without the consent of the tribe, a federal government agency, or other persons. Insurance (Death Benefits) 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1230; P. L. 101-508 Exclude in the month of receipt and the following month life insurance or death benefits not spent on the insured’s last illness or burial. If the money is reimbursement for expenses of the last illness or burial, exclude it only for the month of receipt. Insurance (Life) 20 CFR 416.1230 Exclude the cash surrender value of life insurance policies with a combined face value totaling $1,500 or less per owner. If the total face value of life insurance owned by the applicant or member is more than $1,500, count the cash surrender value toward the resource limit.

Exclude the face value all life insurance that has no cash surrender value, such as term insurance.

For purposes of this comparison, the countable face value of a life insurance policy is the total face value minus any face value purchased with dividends from the policy.

Title 8: Medicaid Page 109 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised April 11, 2025 Insurance (Life) Insurance (Life) (Cont.) If the face value of the policy increases in other ways, use the adjusted face value. Do not include additional sums payable if the member dies in an accident. The cash surrender value is the amount that the insurance company will pay if the policy is canceled before death (this value usually increases with the age of the policy). The cash surrender value may include dividends and may decrease with loans.

Funds paid as accelerated payments from the policy do not change the value of the resource. These payments, called accelerated death benefits, are counted as income.

1. Mr. X owns two life insurance policies, one with a face value of $750 and the other with a face value of $500. Since the total face value of life insurance is $1,250, the policies are exempt from resource consideration.

2. Mr. Y owns three life insurance policies with face values of $1,000, $750, and $500, totaling $2,250. Mrs. Y owns one life insurance policy with a face value of $1,000.

Mrs. Y’s policy is ignored in the computation because its face value is less than $1,500 per owner. Since Mr. Y’s policies total $2,250, the cash surrender value of each policy must be determined.

3. Mr. and Mrs. Q and their child have life insurance with a face value of $4,000. Mr. Q owns the policy. The cash value is counted towards the resource limit.

Count accumulated dividends that are not used to purchase additional insurance as a resource in the same manner as money in a bank account. Count the accumulated dividends even if the countable face value of the policy is less than $1,500 and the cash value of the life insurance is excluded.

Do not include the face value of dividend additions in determining whether a policy is a countable or excludable resource. If the policy is a countable resource, include the cash surrender value of dividend additions in determining the resource value of the policy.

Title 8: Medicaid Page 110 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Insurance (Life)

Insurance (Life) (Cont.) Mr. B has a $1,000 whole life policy that he purchased in 1942. His dividends purchased an extra $3,000 in face value in 1976. Now, the total face value of the policy is $4,000, the cash value is $2,800, and dividends are $800.

Because the policy’s face value, (not including the face value due to insurance purchased with dividends) is less than $1,500, the cash value is excluded. However, the $800 in dividends that were not used to buy additional insurance are countable resources.

Dividend accumulations may be considered as cash set aside for burial if all burial fund criteria are met. Do not automatically assume that the dividends are set aside for burial because the cash value of the life insurance is designated for burial.

If the life insurance policy is assigned to the funeral home in an irrevocable burial contract, do not count the cash value or the dividends as a resource.

If the funeral home is the beneficiary, the cash value of the policy may still be counted as a resource unless otherwise excluded. If the funeral home is the beneficiary and the client has an irrevocable burial contract, do not count the cash value of the policy, but count any accessible dividends as a resource to the client.

At the time of application the cash value can be verified by obtaining the cash surrender value page of the policy or verification from the company. Accept the cash value table when the individual is under the resource limit and the surrender value is not questionable. If further verification is needed, 470-0444 Insurance report can be used to verify the:

 Total face value of the whole life insurance policy not including dividend additions.

 Amount of accumulated dividends not used to purchase additional insurance.  Interest earned on accumulated dividends.

Title 8: Medicaid Page 111 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Insurance (Life) Insurance (Life) (Cont.) At annual reviews, review previous cash surrender values of life insurance. Accept the cash value table when the individual is under the resource limit and the cash surrender value is not questionable. If resource eligibility is questionable obtain verification by obtaining a written statement from the insurance company or by sending 470- 0444 unless the total face value of all policies is $1,500 or less and the last report indicated that the face values will not change. See 6-Appendix for instructions on form 470-0444, Insurance Report. Insurance (VA Term Life) People who are age 70 or older and have National Service Life Insurance (VA) term policies earn cash value when the term policy lapses or is canceled at their request. When the policy lapses or is canceled, the cash value will be used to buy a limited amount of paid-up additional (PUA) insurance. With PUA insurance, the policyholder may:  Receive insurance coverage without paying premiums.  Borrow against the cash value.  Surrender it for cash.  Receive annual dividends that may be used to buy more PUA.

The VA term insurance policies will remain excluded as a resource after the policyholder reaches age 70, as long as the policyholder:  Continues to pay the policy premiums and does not allow the policy to lapse; and  Does not request cancellation of the policy.

If the policy lapses or if the policyholder requests cancellation, how the policy is subsequently treated depends on what the policyholder does with the PUA insurance. If the policyholder:

 Receives insurance coverage without a premium, the cash value of the insurance is countable as a resource the month after the change takes place.

Title 8: Medicaid Page 112 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Life Estates or Remainderman Interest Insurance (VA Term Life) (Cont.)  Surrenders the policy for cash, the cash is countable income in the month received. Life Estates or Remainderman Interest 20 CFR 416.1201, IAC 75 (Rules in Process) Policy: Property can be divided into two parts, the life estate and the remainder interest. This applies whether the property is real estate or personal property or is liquid or nonliquid. The value of a life estate or remainder interest depends on the value of the underlying property and the life expectancy of the person whose life controls it (the original holder of the life estate).

Comment: Life estates and remainder interests generally count as resources for eligibility purposes. However, if the underlying property would be exempt, the life estate or remainder interest is also exempt.

For example, exclude real property in a life estate as a homestead if the owner of the life estate lives in the dwelling, or if the other exclusion policies for a homestead apply. See Property in a Homestead.

People who receive or retain a life estate (“life tenants”) have the right to use the property during their lifetime, including the right to any income generated by the property during their life. Count income generated according to policy. See 8-E, Lump-Sum Income.

This right has a value and can be sold to someone else. If the original owner of the life estate transfers or sells the life estate to someone else, the recipient of the life estate gets the right to use the property during the life of the original holder. The “life” that determines the life estate does not change with the transfer.

The owner of a remainder interest, the remainderman, has the right to receive the property when the life estate ends. Before the life estate ends, the owner of the remainder interest has no right to use the property or to receive any income from it.

Title 8: Medicaid Page 113 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest Life Estates or Remainderman Interest (Cont.) The right to receive the property when the life estate ends also has value and can be sold. As with a transfer of the life estate, the transfer of the remainder interest does not change the life that controls the life estate. When the life estate ends, the remainderman then owns the entire property. It is no longer divided into a life estate and remainder interest.

Mrs. A, a nursing facility resident, has a life estate. She reports that the property held in the life estate was sold. Request documentation to determine if both the life estate and the remainder interest were sold, or if just the life estate or the remainder interest was sold.

If just the remainder interest was sold, Mrs. A continues to hold a life estate in the property. If both the life estate and the remainder interest were sold, Mrs. A is entitled to that portion of the sale proceeds that represent the value of the life estate. If only the life estate was sold, Mrs. A is entitled to all of the proceeds.

The owner of the entire, undivided property can divide the property into the two parts and can:

 Keep the life estate and transfer the remainder interest;  Transfer the life estate and keep the remainder interest;

 Transfer both the remainder interest and the life estate to two different people.

If the life controlling the life estate is likely to be short, the value of the life estate is smaller and the value of the remainder interest greater. Conversely, if the life controlling the life estate is likely to be long, the value of the life estate is greater and the value of the remainder interest smaller.

Procedure: Request verification of:  What portion of the life estate the client owns,  Which portion has been sold or transferred, and  The date of the transaction.

Title 8: Medicaid Page 114 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest Life Estates or Remainderman Interest (Cont.) To determine the value of a life estate or remainder interest, first determine the fair market value of the entire underlying property as if it was not divided into a life estate and remainder interest.

Obtain verification of the fair market value of the underlying property from a disinterested, knowledgeable source, in the same way as for any other undivided property. This could be an appraisal, a real estate fair market analysis, or an offer on the property from a disinterested knowledgeable source.

For real estate, the fair market value of the underlying property is the amount it could be sold for on the open market. A disinterested, knowledgeable source can be a real estate broker, Farmer’s Home Administration, bank, mortgage company, or other lending institution.

For farm land, obtain the average value of an acre of land in the area from the Iowa State University Extension office.

For liquid resources such as a certificate of deposit or bank account, the fair market value is the amount that would be received if the resource were cashed in.

To determine the value of the life estate when the applicant or member is the life estate holder:

1. Determine the fair market value of the entire underlying property (as if it was not divided into a life estate and a remainder interest).

2. Find the line on the life estate column corresponding with the age of the person whose life controls the life estate (the original holder of the life estate) as of the date for which a value is being determined. (If a couple owns the life estate, use the age of the younger spouse.)

3. Multiply the fair market value by the figure in the life estate column.

Title 8: Medicaid Page 115 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest Life Estates or Remainderman Interest (Cont.) To determine the value of the remainder interest when the client is the remainderman of a life estate:

1. Determine the fair market value the entire underlying property (as if it was not divided into a life estate and a remainder interest).

2. Find the line on the remainder column corresponding with age of the person whose life controls the life estate (the original holder of the life estate) as of the date for which a value is being determined.

3. Multiply the fair market value by the figure in the remainder column.

If the client maintains that the life estate or remainder interest cannot be sold for the amount determined using the table, the client must present other evidence to support this claim.

You may also use the table for mortality, life estates, and remainder published by the Iowa Department of Revenue at http://www.iowa.gov/tax/forms/60059.pdf. This table may be used as a second source in determining the fair market value of a life estate, along with the table in this chapter.

The client must obtain a statement from a disinterested, knowledgeable third party stating the value of the life estate or remainder interest.

A disinterested third party is someone who is free of bias and self-interest that can determine the value of the property. Use the “prudent person” concept in determining whether the party stating the value of the life estate has anything to gain by making the offer.

A disinterested, knowledgeable source may establish that a life estate or remainder interest has no value if it could not be sold at any price.

Title 8: Medicaid Page 116 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest

Life Estates or Remainderman Interest (Cont.) Age Life Estate Remainder

Age Life Estate Remainder

0 .97188 .02812

39 .92083 .07917

1 .98988 .01012

40 .91571 .08429

2 .99017 .00983

41 .91030 .08970

3 .99008 .00992

42 .90457 .09543

4 .98981 .01019

43 .89855 .10145

5 .98938 .01062

44 .89221 .10779

6 .98884 .01116

45 .88558 .11442

7 .98822 .01178

46 .87863 .12137

8 .98748 .01252

47 .87137 .12863

9 .98663 .01337

48 .86374 .13626

10 .98565 .01435

49 .85578 .14422

11 .98453 .01547

50 .84743 .15257

12 .98329 .01671

51 .83674 .16126

13 .98198 .01802

52 .82969 .17031

14 .98066 .01934

53 .82028 .17972

15 .97937 .02063

54 .81054 .18946

16 .97815 .02185

55 .80046 .19954

17 .97700 .02300

56 .79006 .20994

18 .97590 .02410

57 .77931 .22069

19 .97480 .02520

58 .76822 .23178

20 .97365 .02635

59 .75675 .24325

21 .97245 .02755

60 .74491 .25509

22 .97120 .02880

61 .73267 .26733

23 .96986 .03014

62 .72002 .27998

24 .96841 .03159

63 .70696 .29304

25 .96678 .03322

64 .69352 .30648

26 .96495 .03505

65 .67970 .32030

27 .96290 .03710

66 .66551 .33449

28 .96062 .03938

67 .65098 .34902

29 .95813 .04187

68 .63610 .36390

30 .95543 .04457

69 .62086 .37914

31 .95254 .04746

70 .60522 .39478

32 .94942 .05058

71 .58914 .41086

33 .94608 .05392

72 57261 .42739

34 .94250 .05750

73 .55571 .44429

35 .93868 .06132

74 .53862 .46138

36 .93460 .06540

75 .52149 .47851

37 .93026 .06974

76 .51441 .49559

38 .92567 .07433

77 .48742 .51258

Title 8: Medicaid Page 117 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest

Life Estates or Remainderman Interest (Cont.) Age Life Estate Remainder Age Life Estate Remainder

78 .47049 .52951

79 .45357 .54643

80 .43569 .56341

95 .22887 .77113

81 .41967 .58033

96 .22181 .77819

82 .40295 .59705

97 .21550 .78450

83 .38642 .61358

98 .21000 .79000

84 .36998 .63002

99 .20486 .79514

85 .35359 .64641

100 .19975 .80025

86 .33764 .66236

101 .19532 .80468

87 .32262 .67738

102 .19054 .80946

88 .30859 .69141

103 .18437 .81563

89 .29526 .70474

104 .17856 .82144

90 .28221 .71779

105 .16962 .83038

91 .26955 .73045

106 .15488 .84512

92 .25771 .74229

107 .13409 .86591

93 .24692 .75308

108 .10068 .89932

94 .23728 .76272

109 .04545 .95455

Source: 49 Federal Register/Vol. 49 No. 93/5-11-84 Table -- Unisex Life Estate or Remainder Table. Loans and Promissory Notes 20 CFR 416.1207 Any amount that is borrowed through a loan is a resource if it is retained into the month following the month the loan is received. When an applicant or member makes a loan to another person, determine the resource value of the loan or promissory note. The loan or promissory note can be sold or transferred from one person to another. The resource value is the amount a disinterested third party would pay to receive the balance of the payments on the loan or promissory note.

Loans and promissory notes must also be reviewed to determine if use of the funds to purchase or make the loan constitutes a transfer of assets for less than fair market value. See Transfers That Cause a Medicaid Penalty.

Title 8: Medicaid Page 118 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Mortgages and Contracts Mortgages and Contracts 20 CFR 416.1201 Count mortgages and contracts as resources. The countable value of a mortgage or contract is:  The remaining balance on the contract; or  The gross price for which it can be sold or discounted on the open market minus any legal debts, claims, or liens against the property.

Offer the applicant or member the opportunity to:  Show that a contract is not legally transferable; or  Establish the fair market value of the contract.

The fair market value of a mortgage or contract is the amount that the buyer would pay the seller for the mortgage or contract. To establish the fair market value of the contract, tell the applicant or member to obtain three written estimates of the mortgage or contract value.

Inform the applicant or member that obtaining outside estimates of the market value could increase or decrease the countable value of the resource. The institutions from which the estimates are obtained do not need to be in the area where the property is located.

The fair market value must be determined as the contract or mortgage stands, without any modification or conditions. However, the following conditions to a valuation are acceptable and do not prevent it from being a bona fide estimate of fair market value:

 Establishment of ownership.  Production of abstract.  Payment of filing fees. Deduct filing fees from the value of the contract.

Average the estimates provided by the applicant or member. If you receive only one unbiased estimate, use that value.

Title 8: Medicaid Page 119 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Mortgages and Contracts Mortgages and Contracts (Cont.) Make sure the financial institution is stating the actual worth of the contract and not an opinion on whether it wishes to buy the contract. Do not use the contract valuation to determine eligibility if it contains conditions such as:

 Credit approval of the buyer (unless there has been a recent credit approval of the buyer known to the client).

 Changes in the terms of the contract.

 Appraisal of the property at or above a particular value (unless there has been a recent appraisal at or above the stated value).

If a contract is jointly owned, the client’s interest may be sold without the consent of the other owner. In Iowa, real property mortgages and contracts are usually legally transferable, even if the terms of the contract or mortgage prevent it. Although such terms are not legally enforceable, a nontransferable clause or an uncooperative co-owner may affect the fair market value.

If the contract is a countable resource, the portion of a mortgage or contract payment that represents interest, minus any interest used to purchase the property, is counted as unearned income. The principal portion of the payment is treated as a resource.

Title 8: Medicaid Page 120 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Mortgages and Contracts Mortgages and Contracts (Cont.) If the contract is not a resource and the principal is not treated as a resource, count the total payment on the contract as income.

Mr. H bought a property on contract that he is selling on contract. The value of the second contract is established at $1,500. He has a checking account that had $100 the first moment of the first day of the month, and no other resources. Mr. H is within resource limits.

Mr. H receives $150 per month payment from the contract. Of this $150 payment, $40 a month is interest.

He pays $12 a month interest in his payment for the property. The countable interest income for eligibility and client participation is $28 per month. ($40-$12=$28) The remaining $110, if retained is counted as a resource.

Mortgages and contracts must be reviewed to determine if the purchase constitutes a transfer of assets for less than fair market value. See Purchases Considered Transfers for Less Than Fair Market Value. Other Excluded Federal Payments 20 CFR 416.1124, 20 CFR 416.1236, P. L. 101-239, P. L. 101-426, P. L. 101-510 P. L. 106-398 Exclude the following federal payments:  Compensation provided to volunteers by the Corporation for National and Community Services (CNCS) (previously referred to as ACTION), unless CNCS determines that the hourly rate is equal to or over the minimum wage. (So far, CNCS has never made this determination. Central Office will contact staff if that happens.) Programs under CNCS include:

• University Year of Action (UYA). • Volunteers in Service to America (VISTA). • Foster Grandparents. • Retired Senior Volunteer Program (RSVP). • Senior Companion Program. • Special and Demonstration Volunteer Program.

Title 8: Medicaid Page 121 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Other Excluded Federal Payments Other Excluded Federal Payments (Cont.)  Agent Orange Settlement Fund payments or payments from any other fund established because of the settlement in the In re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y). NOTE: This settlement fund is now closed as all funds have been distributed.

 Dividend payments on shares of the Alaska Native Fund, and other revenue originated from the fund. The Alaska Native Fund was created by the Alaska Native Claims Settlement Act (Public Law 92-203), enacted on December 19, 1971.

 Austrian Social Insurance payments based partly or completely on wage credits granted under paragraphs 500-506 of the Austrian General Social Insurance Act. Use the award letter to determine how to count the payments.

 Energy Employees’ Occupational Illness Compensation Program payments made to former employees or their families. Beneficiaries will receive one or two lump sum payments, which are excluded as income and as a resource. Award letters sent to the recipient from the Department of Labor should verify the amount and source of the payments.

 German Reparations payments made to survivors of the Holocaust under the Federal Republic of Germany’s Law for Compensation of National Socialist Persecution, whether they are paid periodically or in a lump sum.

 Japanese-American (or their survivors) and Aleut restitution payments made by the U.S. Government to people who were interned or relocated during World War II.

 Japanese-Canadian restitution payments from the Canadian Government to Japanese-Canadians who were interned or relocated during World War II. Use documents from the client to identify or verify the nature of the payments.

Title 8: Medicaid Page 122 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Other Excluded Federal Payments Other Excluded Federal Payments (Cont.) If the applicant or member has no documents, ask if they were imprisoned, relocated, deported, or deprived of other rights in Canada during the period of December 1941 to March 1949 because of Japanese ancestry. If yes, exclude the payment. If no, count the payment as a resource.

 Radiation Exposure Compensation Act payments that compensate persons for injuries or death resulting from exposure to radiation from nuclear testing and uranium mining. After the affected person’s death, payments are made to the surviving spouse, children, or grandchildren. Any interest on these funds is counted as income.

 Relocation Assistance payments provided to owners, tenants, or occupants who were displaced when property was acquired by a federal, state, or local government-assisted project. Plan for Achieving Self-Support (PASS) 20 CFR 416.1180, 20 CFR 416.1181, 20 CFR 416.1225, 20 CFR 416.1226 Exclude resources of a blind or disabled member under the age of 65 if they are needed to fulfill a plan for achieving self-support (PASS). People 65 or over get this exclusion only if they were receiving SSI payments because of blindness or disability in the month before they turned 65. Check the SDX when an SSI recipient states that a plan for achieving self-support exists. Property Necessary for Employment 20 CFR 416.1224 Exclude any tools, equipment, and uniforms necessary for a client’s employment. The applicant or member must give you a signed statement listing the items required. If necessary, contact the employer for verification. Property in a Homestead 20 CFR 416.1212 Exclude a homestead as a resource regardless of value. A homestead is any shelter used as the principal place of residence by the member, spouse, or dependent (including a child under age 18 or the disabled adult child of the member or spouse). It includes surrounding contiguous land and any buildings on this land. It may be fixed or mobile and located on land or water.

Title 8: Medicaid Page 123 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Property in a Homestead

Property in a Homestead (Cont.) Mr. K owns and operates the 80-acre farm on which he lives. The house, farm buildings, and farmland are exempt from consideration as a resource.

Mrs. Z owns 20 acres that is considered a homestead. Mrs. Z builds a second house and rents out the first house. Both houses are exempt as a resource because they sit on one contiguous homestead property.

Exclude the proceeds from the sale of the homestead (including homesteads sold on contract) for up to three months if the member intends to purchase another home. Ask the member to sign a statement such as the following:

“On ___(date)___ I received $___________ net proceeds from the sale of my home. I plan to use that money to replace that home with another home within three months, by ___(date)___.”

The member must report the date the new home is purchased and the purchase price. Count any excess proceeds from the sale of the old homestead that are not used to purchase the new homestead.

The homestead is sold for $45,000 on December 2. A new home is purchased on February 16 for $35,000. The $10,000 difference is a countable resource on March 1.

If the proceeds are not used within three months to buy another homestead, count the proceeds as a resource at the end of the three-month period.

Also exclude a homestead as a resource if:

 It is not occupied by the member due to a temporary absence, such as a trip, visit, or stay in a residential care facility or medical institution. To be excluded, the member must intend to return to the home. If the member does not intend to return, the home becomes a nonhomestead property, and is countable as a resource.

Title 8: Medicaid Page 124 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Property in a Homestead Property in a Homestead (Cont.) Obtain a signed statement from the member or the member’s representative that the member intends to return home. Place the statement in the case record.

If the statement contradicts previous statements by the member or the member’s representative regarding intent to return home, obtain additional verification from a knowledgeable source.

 It is occupied by the member’s spouse or dependent relative while the member is absent due to being institutionalized. “Dependent relative” includes:

• Child, grandchild, stepchild. • Mother, stepmother, father, stepfather. • Sister, stepsister, brother, stepbrother. • Aunt, uncle, niece, nephew. • Grandmother, grandfather. • In-laws.

The dependency can be emotional, financial, or medical. If the dependent receives FIP assistance, the person can still be considered financially dependent on the member. Accept the member’s statement that the relative is dependent unless you have reason to question it.

 It is not occupied by the member because the member is a victim of domestic abuse fleeing an abusive situation. Continue to exempt the home until the member establishes a new principal place of residence or otherwise takes action that makes the home no longer excludable.

Title 8: Medicaid Page 125 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Property in a Homestead for People Requesting… Property in a Homestead for People Requesting Long-Term Care 441 IAC 75 (Rules in Process) A person is not eligible for payment of nursing facility services or other long-term care services, if the person has substantial equity interest in their homestead. This limit does not apply:  If the spouse, or child who is under age 21, or the person’s child who is blind or disabled, as defined by Social Security, resides in the home; or  To people approved based on an application or request for payment of long-term care services filed before January 1, 2006.

 Use the following chart to determine the correct maximum equity amount based on the date of application.

Application filed on or after: January 1, 2014 January 1, 2015 January 1, 2017 January 1, 2018 January 1, 2019 January 1, 2020 January 1, 2021 January 1, 2022 January 1, 2023 January 1, 2024 January 1, 2025 January 1, 2026 Equity interest cannot exceed $543,000 $552,000 $560,000 $572,000 $585,000 $595,000 $603,000 $636,000 $688,000 $713,000 $730,000 $752,000 Property Earning Six Percent of Equity 20 CFR 416.1222 Exclude real property as a resource if its equity value does not exceed $6,000 and the net annual return earned on the property is at least 6% of the equity value. Equity is the current market value of the property minus any legal debt on the property. Market value is the amount an item can be sold for on the open market.

To determine if the property is earning 6% of equity, multiply the net monthly income by 12 months. This amount is the net annual return earned on the property. Then multiply the equity value by 6%. Compare the net annual return amount to the 6% of equity amount.

Title 8: Medicaid Page 126 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Property Earning Six Percent of Equity Property Earning Six Percent of Equity (Cont.) If the net annual return is higher than 6% of the client’s equity in the property, exclude the property if the equity value does not exceed $6,000.

If the client’s equity in the property exceeds $6,000 and the property is earning at least 6% of equity, count only the amount of equity over $6,000 as a resource.

Ms. T owns her home and rents it out for $700 a month. The fair market value of the home is $80,000 and she still owes $50,000 on it. Ms. T’s equity value is $30,000. She files an application for medical assistance. Determine if the property is earning 6% of equity as follows: $700 x 12 = $8,400 net annual return $30,000 x 6% = $1,800 Since Ms. T’s equity amount exceeds $6,000 and the property is earning at least 6% of equity, count only the amount of equity over $6,000 as a resource. $30,000 - $6,000 = $24,000 countable resource value

If a property is not producing 6% of equity due to a client’s illness, exclude the property as a resource for up to 24 months as long as the client plans to resume the business after the illness ends. Property Used for Self-Support 20 CFR 416.1224 Exclude equity in non-income-producing real property that is valued under $6,000 and produces goods and services necessary to the applicant’s or member’s daily living. Liquid resources used for self-support are not excluded. Resource Replacement 20 CFR 416.1232, P. L. 101-508 Exclude cash received for the replacement or repair of an excluded resource. Do not count the cash or the interest earned on the cash for nine months from the date it is received.

If the replacement or repair takes longer because of circumstances beyond the control of the member, exclude the cash for an additional nine-month period. Count it as a resource the first moment of the next month after the second nine-month period expires.

Title 8: Medicaid Page 127 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Retirement Funds Retirement Funds 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1244; P. L. 101-508 Exclude retirement funds if the member has to quit a job to withdraw the funds. If the retirement funds are not excluded:  Count the verified net proceeds after penalties in the attribution and the eligibility process if the fund is owned by the member.  Count the verified net proceeds after penalties in the attribution process if the fund is owned by the community spouse.  Do not count retirement funds owned by the ineligible spouse in the deeming process when spouses live together. NOTE: Taxes are not an allowable expense when determining net proceeds of retirement funds. The 10% early withdrawal penalty on an individual retirement account (IRA) is an additional tax.

A member who has a choice to withdraw retirement funds as a lump sum or as an annuity must choose the annuity.

Types of retirement plans include:

 Defined benefit plan: The employer promises the employee a specific monetary benefit at a specific age, based on factors such as salary and length of service. The employee cannot draw a pension until the employee meets certain requirements, such as being a certain age or being retired.

 Defined contribution plan: The employer and employee makes specific contributions to an employee’s pension fund. The amount of the benefit depends on the amount saved and how well the employee’s fund investments perform.

Most of these plans are 401(k) plans. Typically these plans can be accessed at age 59½ without a tax penalty or earlier with a tax penalty. Other withdrawal restrictions may apply depending on the plan.

Title 8: Medicaid Page 128 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Retirement Funds Retirement Funds (Cont.)  Individual Retirement Account (IRA): The employee establishes and funds these accounts. The employee can liquidate these funds at any time. Retroactive Cash Payments P. L. 101-508 Exclude any retroactive cash payments paid to ineligible spouses or parents for providing in-home supportive services to the applicant or member. Exclude the payments in the month of receipt and the following month. Retroactive SSI and Social Security Lump-Sum Payments 20 CFR 416.1233 Exclude SSI and Social Security retroactive lump-sum income as a resource for nine months after receipt, as long as the funds can be identified as the lump-sum funds. (See 8-E, Lump-Sum Income for income guidelines. Unspent money from a retroactive payment must be identifiable from other resources for this exclusion to apply. The money may be commingled with other funds but if this is done and the retroactive amount can no longer be separately identified, the amount will count towards the resource limit. Verify that the funds are separate and represent a retroactive lump sum. Before the ninth month, the member must again verify resources. If resources exceed the limit, cancel the member, giving timely notice.

An unmarried member receives a social security lump sum of $4,500 on October 12. The worker sets a reminder for June 1. On June 19, the worker verifies the resources are $2,600.

On July 30, the member is canceled and is ineligible for non-MAGI-related coverage groups that have a $2,000 resource limit. The worker completes a redetermination. Effective August 1, the member is eligible under Medically Needy.

Title 8: Medicaid Page 129 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Self-Employment Property and Resources Self-Employment Property and Resources 20 CFR 416.1220, P.L. 101-239 SEC 8014 Exclude self-employment resources of the applicant or member, spouse, parent, or alien sponsor. Examples of self-employment resources are:  Real property, buildings.  Inventory, tools, equipment, machinery.  Farm equipment and livestock.  Motor vehicles.

If the homestead is used as the place of self-employment, exclude it as a home, if applicable; otherwise exclude it as a self-employment resource.

If you question whether a resource is used for self- employment or is the client’s personal property, ask the client to sign a statement stating whether the resource is necessary for the self-employment. Allow the exclusion if client states the resource is necessary.

Exclude liquid resources that are essential for self-support and are used in the operation of self-employment. Obtain a signed statement that the liquid resources are used for self- employment.

Continue to allow the exclusion if:

 The business is operating at a loss.

 An illness or disability prevents the continuation of the self-employment business. This exclusion cannot exceed two years.

 The business is seasonal and the client is not currently working but is expected to return within one year after the last day of use.

1. Before Mrs. B entered a nursing facility, she and her husband farmed together. Mr. B continues to farm. Their animals, a truck, and farm machinery are necessary for farming and are not countable resources for attribution or eligibility determination. They are exempt as resources owned by the spouse necessary for self-employment.

Title 8: Medicaid Page 130 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Self-Employment Property and Resources

Self-Employment Property and Resources (Cont.) 2. Mr. and Mrs. W are farmers. They apply for Medically Needy and list livestock, a tractor, a combine, a car, two trucks, and a bank account as necessary for self- employment. All of the resources are determined to be necessary for self-employment, and are not counted. Social Services 20 CFR 416.1201, P. L. 101-508 Exclude payments for social service expenses for the month of receipt and the month after the month of receipt. If the funds are a reimbursement for bills previously paid by the applicant or member, count them as a resource in the month after receipt. Third-Party Medical Payments 20 CFR 416.1201, 20 CFR 416.1210, P. L. 101-508 Do not count funds received to pay for a medical service, such as Veterans unusual medical expense payments. These funds are exempt as a resource in the month of receipt and the month after the month of receipt. If the funds are repayment for bills the client already paid, count the funds as a resource the month after receipt. Vehicles 20 CFR 416.1218 A vehicle is any device used to provide transportation, such as cars, trucks, motorcycles, boats, animals, animal-drawn devices, mopeds, etc. Vehicles can be unregistered or in need of repair, as long as the vehicle is used for transportation. Treat vehicles as follows:

1. Exclude one vehicle as a resource regardless of value if it is used for transportation of the individual or a member of the individual’s household.

2. If the individual owns more than one automobile, apply the exclusion as follows:

a. Apply the exclusion in the manner most beneficial to the individual.

b. Apply the total exclusion to the vehicle with the greatest equity value if the eligible individual owns more than one vehicle used for transportation of the individual or a member of the individual’s household.

Title 8: Medicaid Page 131 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Vehicles Vehicles (Cont.) c. The equity value of any vehicle, other than the one wholly excluded, is a resource when it:  Is owned by the individual; and  Cannot be excluded under another reason (e.g., property essential to self-support, plan to achieve self-support).

3. Count the equity value of any other vehicles.

4. Count the equity value of any vehicles used solely for purposes other than transportation, such as racing cars or antiques toward the resource limit. These vehicles are personal property, not household goods.

Do not count any vehicle that the applicant or member sold, even if the buyer has not recorded the title transfer with the appropriate authority.

To determine the value of vehicles, use a “blue book,” such as the National Automobile Dealers Association (NADA) Used Car Guide Book.

Find the amount listed in the column for “average trade-in value.” To find the specific value of the vehicle, use the value corresponding to the options that the vehicle has. If the vehicle is not listed in the “blue book,” contact a motor vehicle dealer or knowledgeable source in the community. Victim’s Compensation Funds 20 CFR 416.1201, 20 CFR 416.1210, 20 CFR 416.1229 Exclude for nine months funds paid through the Crime Victim Reparation program. The Iowa Department of Justice administers this program, which compensates victims of crime for expenses incurred or losses suffered as a result of a crime. The funds should be separate and identifiable. Expenses paid by the Crime Victim Reparation Program include:

 Medical bills.  Lost wages.  Loss of support.  Clothing held in evidence.  Counseling.  Burial.

Title 8: Medicaid Page 132 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised July 10, 2026 Worker’s Compensation Medicare Set-Aside… Worker’s Compensation Medicare Set-Aside Arrangements Treat a worker’s compensation Medicare set-aside arrangement (WCMSA) as a trust created by a third party (the defendant in the worker’s compensation claim). Exclude it as a resource when determining eligibility if the member does not have a legal authority to revoke it or to direct the use of the assets for the member’s basic needs.

The funds in the WCMSA are available only to pay medical providers for future medical costs related to the work injury that would otherwise be paid by Medicaid. Therefore, the funds set aside in the account and any income generated by those funds are not available or countable as resources or income in determining non-MAGI-related Medicaid eligibility or benefits, unless they are actually used for basic needs.

If the trustee makes the trust principal or trust income available to the member for basic needs (in violation of the terms of the WCMSA), count the available funds as income in the month of receipt and as a resource the month after.

Refer the WCMSA to the Third Party Liability Unit.

Employees’ Manual Title 8, Chapter E Revised April 11, 2025 Medicaid Income

Title 8: Medicaid Table of Contents Chapter E: Income Revised May 22, 2026 Page 1 Page Iowa Department of Health and Human Services Employees’ Manual Overview .................................................................................................................................... 1 Verification of Income ......................................................................................................... 1 Non-MAGI-Related Income Limits ...................................................................................... 2 State Supplementary Assistance Income Limits ................................................................. 3 Income Policies for Non-MAGI-Related Coverage Groups ................................................... 3 What Is Income .................................................................................................................. 3 What Is Not Considered Income ......................................................................................... 4 Projecting Future Income ................................................................................................... 4 Determining Joint Ownership of Income ............................................................................. 5 Deeming Non-MAGI-Related Income ................................................................................. 6 Deeming from an Ineligible Spouse ............................................................................ 7 Deeming from an Ineligible Parent to an Eligible Child ............................................... 9 Types of Non-MAGI-Related Income ..................................................................................... 11 AIDS/HIV Settlement Payments ....................................................................................... 11 Adoption Assistance Subsidy ........................................................................................... 12 Annuities ........................................................................................................................... 12 AmeriCorps Payments ...................................................................................................... 13 Assistance Payments ....................................................................................................... 13 Benefit and Other Payments Made in Error ...................................................................... 13 Blood Plasma ................................................................................................................... 14 Census Income ................................................................................................................ 14 Child Student’s Earnings .................................................................................................. 14 Child Support .................................................................................................................... 15 Civil Service Annuity ......................................................................................................... 16 Dedicated Accounts .......................................................................................................... 16 Disaster Assistance .......................................................................................................... 17 Dividends .......................................................................................................................... 18 Earned Income Credit ....................................................................................................... 19 Educational Assistance .................................................................................................... 19 Emergency Energy Conservation Services Assistance .................................................... 21 Employer’s Benefits .......................................................................................................... 21 Expenses of Obtaining Income ......................................................................................... 21 Experience Works Income ................................................................................................ 22 Federal Department of Labor Payments ........................................................................... 22 Food and Shelter Received During a Medical Confinement ............................................. 23 Food Programs (Federal) ................................................................................................. 23 Foster Care Payments ...................................................................................................... 23 Garnishments and Other Withholdings ............................................................................. 23 General Assistance Payments ......................................................................................... 24 Gifts .................................................................................................................................. 24 Green Thumb Income ....................................................................................................... 24

Title 8: Medicaid Table of Contents Chapter E: Income Revised May 22, 2026 Page 2 Page Iowa Department of Health and Human Services Employees’ Manual Home Equity Conversion Plans ........................................................................................ 24 Home Produce for Personal Consumption ....................................................................... 26 Housing Assistance .......................................................................................................... 26 Income Replacement ........................................................................................................ 26 Income Tax Refunds ........................................................................................................ 27 Indian Assistance ............................................................................................................. 27 Infrequent or Irregular Income .......................................................................................... 28 Inheritance Income ........................................................................................................... 28 Insurance .......................................................................................................................... 29 Interest Income ................................................................................................................. 31 Jury Duty Pay ................................................................................................................... 32 Loans ................................................................................................................................ 32 Low-Income Home Energy Assistance Payments (LIHEAP) ............................................ 32 Lump-Sum Income ........................................................................................................... 33 Medical Assistance Income Trusts (MAIT) ....................................................................... 34 Military Pay ....................................................................................................................... 34 Noncash Items ................................................................................................................. 35 Other Excluded Federal Payments ................................................................................... 35 Personal Services ............................................................................................................. 37 Property Tax Refunds ....................................................................................................... 37 Rebates and Refunds ....................................................................................................... 38 Recouped Benefits Paid in Error ...................................................................................... 38 Relocation Assistance ...................................................................................................... 38 Rent Reimbursement Payments ....................................................................................... 39 Rental Property or Life Estate Income .............................................................................. 39 Resource Conversion or Sale ........................................................................................... 40 Resource Replacement .................................................................................................... 40 Retirement Funds ............................................................................................................. 41 Retroactive SSI Payments ................................................................................................ 41 Sheltered Workshop Earnings .......................................................................................... 42 Sick Pay ........................................................................................................................... 42 Social Security Payments ................................................................................................. 42 Social Services ................................................................................................................. 43 Strike Pay ......................................................................................................................... 43 Third-Party Payments ....................................................................................................... 44 Vacation Pay .................................................................................................................... 44 Victims’ Compensation Payments .................................................................................... 45 Wages .............................................................................................................................. 45 Winnings ........................................................................................................................... 45 Workers’ Compensation ................................................................................................... 45 Non-MAGI-Related In-Kind Income ....................................................................................... 46 In-Kind Earned Income ..................................................................................................... 46 In-Kind Unearned Income ................................................................................................. 47

Title 8: Medicaid Table of Contents Chapter E: Income Revised May 22, 2026 Page 3 Page Iowa Department of Health and Human Services Employees’ Manual In-Kind Support and Maintenance (ISM) .......................................................................... 48 Determining the Client’s Living Arrangement ........................................................... 48 When to Apply the Value of One-Third Reduction (VTR) Rule ................................. 50 When to Apply the Presumed Maximum Value Rule (PMV) ..................................... 51 Non-MAGI-Related Self-Employment Income ...................................................................... 53 Determining if a Client is Self-Employed .......................................................................... 53 Determining Income from Self-Employment ..................................................................... 54 Non-MAGI-Related Veterans Affairs Payments .................................................................... 57 Compensation Payment ................................................................................................... 58 Pension Payments............................................................................................................ 58 Aid and Attendance and Housebound Allowance ............................................................. 59 Clothing Allowance ........................................................................................................... 60 Payments for Dependents ................................................................................................ 60 Educational Benefits ......................................................................................................... 62 Payment Adjustment for Unusual Medical Expenses ....................................................... 62 Non-MAGI-Related Deductions ............................................................................................. 64 $20 General Income Deduction ........................................................................................ 64 $65 Plus One-Half Deduction ........................................................................................... 65 Deduction for Impairment-Related Work Expenses .......................................................... 65 Attendant Care Services ........................................................................................... 68 Routine Drugs and Medical Supplies and Services .................................................. 69 Durable Medical Equipment and Prostheses ............................................................ 69 Modified Vehicles ..................................................................................................... 70 Driver Assistance, Taxicab or Other Hired Vehicles ................................................. 71 Own Unmodified Vehicles ........................................................................................ 71 Deduction for Work Expenses for the Blind ...................................................................... 72 Deduction for Plan for Achieving Self-Support ................................................................. 73 Income Policies for MAGI-Related Coverage Groups ......................................................... 73 Definitions ......................................................................................................................... 73 MAGI-Related Income Limits ............................................................................................ 75 Self-Attested Income ........................................................................................................ 76 Income Considered .......................................................................................................... 78 MAGI-Related Household Member Income Exclusions .................................................... 79 Countable Income Under MAGI ....................................................................................... 79 Gross Countable Income .......................................................................................... 80 Income Types Excluded from Gross Income ............................................................ 81 Allowable Expenses ................................................................................................. 82 MAGI Income Deduction .......................................................................................... 83 MAGI-Related Self-Employment ............................................................................... 83 Income Verification ........................................................................................................... 84

Title 8: Medicaid Table of Contents Chapter E: Income Revised May 22, 2026 Page 4 Page Iowa Department of Health and Human Services Employees’ Manual UIB or SSA/SSI ........................................................................................................ 86 Client Self-Attests to Zero Income ............................................................................ 86 Other Income – Options 1-4 ..................................................................................... 87 MAGI-Related Budgeting Procedures for Determining Financial Eligibility ....................... 88 Current Monthly Household Income ......................................................................... 88 Change in Current Month’s income .......................................................................... 88 Unemployment Insurance Benefits (UIB) ................................................................. 89 Recurring Lump-Sum Income ................................................................................... 89 Projecting Future Income ......................................................................................... 90 Change in Circumstances ........................................................................................ 90 Self-Employment Income ......................................................................................... 90 Rounding Procedures ............................................................................................... 92 Shared Living Arrangements .................................................................................... 92 Flattening Income ..................................................................................................... 92

Title 8: Medicaid Page 1 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Overview Revised May 22, 2026 Verification of Income Overview This chapter contains income policy information for both non-MAGI-related and MAGI- related Medicaid coverage groups. General income policies regarding verification of income and income limits for non-MAGI follow this overview. Next, you will find the income policies for the non-MAGI-related coverage groups. This section begins with an explanation of projecting income, joint ownership, and deeming. The following section gives instructions on how to treat each type of income for non- MAGI-related coverage groups, alphabetized by types. In-kind income, self-employment income, and veteran’s affairs payments are described in separate sections because they are longer and more detailed. The last non-MAGI-related section covers deductions. The balance of the chapter contains the income policies for the MAGI-related coverage groups. This part begins with a section explaining the income limits and what income is considered. It also explains MAGI-related self-attested income, income exclusions, income verification, and budgeting procedures. Verification of Income Legal reference: 441 IAC 76 (Rules in Process) For non-MAGI-related Medicaid, any countable income received during the period of time for which income is being considered needs verified. See Projecting Future Income. The client must provide requested verification. A client who provides a signed release to a specific individual or organization for specific information has met the requirement for supplying requested information or verification. The general release does not meet this requirement unless the client asks for help. Verify all earned and unearned income. Require verification of income when it begins, changes, ends, is questionable, or when otherwise specifically required. A self-employed person must keep any records necessary to establish eligibility. For MAGI-related Medicaid, refer to Income Verification under Income Policies for MAGI-Related Coverage Groups, later in this chapter.

Title 8: Medicaid Page 2 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Overview Revised May 22, 2026 Non-MAGI-Related Income Limits Non-MAGI-Related Income Limits Legal reference: 42 CFR 435, 20 CFR 416 Subpart D; 441 IAC 75 (Rules in Process) The monthly countable income limits based on SSI are:

Single Person Couple 300% of SSI Maximum Benefit $994 $1,491 $2,982 Current poverty levels used for Medicaid coverage groups are:

Family Size 100% 120% 135% 200% Individual $1.305 $1,565 $1,761 $2,609 Couple $1,763 $2,115 $2,380 $3,525 These amounts apply to coverage groups as follows:  For qualified Medicare beneficiaries (QMB), the income limit is 100% of the poverty level.  For specified low-income Medicare beneficiaries (SLMB), the income range is over 100% of the poverty level but less than 120% of the poverty level.  For expanded specified low-income Medicare beneficiaries (E-SLMB), the income range is 120% of the poverty level but less than 135% of the poverty level.  For qualified disabled and working people (QDWP), the income limit is 200% of the poverty level. For Medicaid for Employed People with Disabilities (MEPD), net income for the family size is compared to 250% of poverty. (See 8-F, Medicaid for Employed People With Disabilities: Family Income Less Than 250% of Federal Poverty Level for extended listing of 250% levels and family size. See 8-C, Household Size for additional information about family size under MEPD.) The Medically Needy coverage group does not have an income limit, although the applicant may have to meet a spenddown before eligibility exists. See 8-J.

Title 8: Medicaid Page 3 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Overview Revised April 11, 2025 State Supplementary Assistance Income Limits State Supplementary Assistance Income Limits Legal reference: 441 IAC 50.2(1), 441 IAC 51.3(3), 441 IAC 51.4(1), 441 IAC 52.1(1), 441 IAC 177.4(7), 441 IAC 177.4(8) For State Supplementary Assistance, the person’s income after allowable deductions must fall within the payment schedule limits for the category under which the person qualifies:  Residential care facility. (See 6-B, Income (RCF).)  Dependent person. (See 6-B, Income (DP).)  Family-life home. (See 6-B, Income (FLH).)  In-home health-related care. (See 6-B, Income (IHHRC).)  Blind allowance. (See 6-B, Income (Blind Supplement).)  Medicare and Medicaid eligibles. (See 6-B, Income (SMME).) Income Policies for Non-MAGI-Related Coverage Groups The following sections explain:  What is defined as income for SSI.  What is not considered income for SSI.  How to project future income.  Determining joint ownership of income.  Deeming income from an ineligible spouse or parent. What Is Income Legal reference: 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123, and 20 CFR 416.1167 Under SSI, “income” is anything a person receives either in cash or in kind that can be used to meet the person’s basic needs of food or shelter. This includes any income deemed from a parent, spouse, or sponsor. See Deeming Non-MAGI- Related Income. Determine the countable amount of earned and unearned income prospectively. For the retroactive period, as defined in 8-A, Definitions, use actual income received. When determining eligibility, consider all gross income unless it is specifically excluded. See Recouped Benefits Paid in Error for an exception to this policy.

Title 8: Medicaid Page 4 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 What Is Income See Types of Non-MAGI-Related Income for a list of various types of income and information on whether the income is earned, unearned, counted, or not considered as income for non-MAGI-related coverage groups. What Is Not Considered Income Legal reference: 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Some types of payments do not meet the definition of income and are not considered income. Items that do not meet the definition of income include:  Income benefit payments made in error.  Employer’s benefits.  Tax refunds.  Third-party payments other than those for food or shelter.  Veterans $90 pension exclusion for certain residents of medical institutions. See Pension Payments.  Veterans aid and attendance and housebound allowance.  Veterans benefits attributable to unusual medical expenses, except as noted under Payment Adjustment for Unusual Medical Expenses. Each of these items, as well as other types of payments that are not considered income, are described under Types of Non-MAGI-Related Income, arranged alphabetically. Projecting Future Income Legal reference: 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; 42 CFR 435.725(e)(2) Except when determining eligibility for the retroactive period, as defined in 8-A, Definitions, consider the income received in the 30 days before the application or review month to project future income when that income is an accurate indicator of future income. If income fluctuates to the extent that a 30-day period alone cannot provide an accurate indicator, use an average over a longer past period if it will provide a more accurate indication of future income.

Title 8: Medicaid Page 5 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised April 11, 2025 Projecting Future Income If income has changed and previous months’ income is not an accurate indicator of future income, use the best information available to project future income. For example, the interest earned in the previous month on a savings account that has substantially increased or decreased would not be an indicator of future income. When projecting income for cases that have fluctuating income and client participation, reevaluate the income at least every six months. Set a reminder at the eligibility review to request verification of actual income received. This includes earnings and interest income. Update client participation to reflect actual income in the month it was received. Convert weekly income to monthly income by multiplying by 4.3. Convert biweekly income to monthly income by multiplying by 2.15. See Determining Income from Self-Employment when projecting income for a self- employed client. Determining Joint Ownership of Income Legal reference: 441 IAC 75 (Rules in Process), P.L. 100-360 When there is income from property other than a trust, consider income paid in the name of one person as available only to that person, unless the document providing income states otherwise. If the income-producing property is in the name of several people, consider each person’s income to be in proportion to that person’s ownership interest in the resource. If the income is in the name of two people, count half to each person. If the income is a joint payment to both spouses, count half to each person. If the client or the client’s spouse can prove different ownership by a preponderance of evidence, divide the income in proportion to the ownership. If there is trust property, follow the provisions of the trust regarding ownership. See 8-D, Joint Ownership for information about determining ownership of a resource.

Title 8: Medicaid Page 6 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Determining Joint Ownership of Income

1. Mr. and Mrs. P jointly own a CD. One-half of the interest is income to each spouse. 2. Mr. and Mrs. W jointly own a farm. One-half of the earnings is income to each spouse. Deeming Non-MAGI-Related Income Legal reference: 20 CFR 416.1160, 20 CFR 416.1163, 20 CFR 416.1202, 441 IAC 75 (Rules in Process) Deeming of income is the determination of a specific portion of an ineligible parent’s or ineligible spouse’s income used to calculate the benefits of the eligible spouse or child. Determine deemed income for non-MAGI-related Medicaid and State Supplementary Assistance coverage groups according to SSI policies except for the following coverage groups:  Medically Needy. See 8-J, Households with Ineligible Spouse or Children.  In-home health-related care. See 6-B, Eligibility for Children.  Dependent person. See 6-B, Ineligible Spouse.  Medicaid for employed people with disabilities (MEPD). See 8-F, Family Income Less Than 250% of Federal Poverty Level. When determining eligibility, apply deeming policies to the income of an ineligible spouse or parent if either:  An eligible person was living for any part of a month in the same household with an ineligible spouse, or  The eligible person was a child living in the same household with a parent (or the spouse of a parent). For all coverage groups except Medically Needy, do not apply the deeming procedure if the applicant’s income alone, after appropriate exclusions and deductions, is over income limits. Allow the ineligible parent to deem income to an ineligible child in the household until the ineligible child reaches age 18 (or 21, if the child is a student). However, do not allow deeming to a child receiving FIP. When determining the income of the ineligible spouse, parent, spouse of a parent, or ineligible children, do not include:  Any excluded income.  FIP payments or Veteran Affairs payments based on need.  Any income that was counted in calculating the amounts of those payments.

Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income  Court-ordered support or alimony payments. Deduct support payments from the income of the ineligible spouse or parent before determining the amount of income deemed. Deduct support payments first from unearned income. Any balance remaining then reduces gross earned income. For income not based on need, allow the $20 general income deduction and the $65 plus one-half deduction per household. For example, apply the $20 general income deduction to veteran’s compensation income, but not to a veteran’s pension that is based on need. The following sections explain:  Deeming from an ineligible spouse.  Deeming from an ineligible parent to an eligible child. Deeming from an Ineligible Spouse Legal reference: 20 CFR 416.1160, 20 CFR 416.1163 If the applicant’s income is within program guidelines and an ineligible spouse lives in the same household, also consider the ineligible spouse’s income to determine eligibility through the deeming process. An ineligible spouse is a spouse who is not eligible for SSI or non-MAGI-related Medicaid, or State Supplementary Assistance. When deeming income from an ineligible spouse: 1. Verify the ineligible spouse’s unearned income. Subtract from the ineligible spouse’s unearned income an allocation for each ineligible child. The allocation is $497 (the difference between the payment standard for a couple and the payment standard for one person), minus the child’s income. 2. Verify the ineligible spouse’s earned income. Subtract from the ineligible spouse’s earned income any remaining balance of the ineligible child’s allocation not subtracted from the ineligible spouse’s unearned income. 3. Add the remaining unearned income and the remaining earned income of the ineligible spouse. If the total of the ineligible spouse’s income is equal to or less than $497, there is no income available to be deemed to the applicant. Process as a one-person household. If the ineligible spouse’s total remaining income is over $497, continue as follows.

Title 8: Medicaid Page 8 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised April 11, 2025 Deeming Non-MAGI-Related Income 4. Combine the applicant’s unearned income and the ineligible spouse’s remaining unearned income. 5. Combine the applicant’s earned income and the ineligible spouse’s remaining earned income. 6. If a $20 general income deduction is applicable to the coverage group being examined, subtract it first from the total countable unearned income. If the total countable unearned income is less than $20, subtract any unused portion of the $20 deduction from the total countable earned income, if any. 7. From the remaining earned income, subtract the impairment-related work expenses, the $65 work expense, and one-half of the remainder. 8. Add the earned and unearned income together to get the total countable income. If the total countable income is less than the payment standard for a couple when at home, the applicant is eligible. The applicant’s SSI benefit will be the lesser of:  The SSI benefit rate for an individual minus the applicant’s own income, or  The SSI benefit rate for a couple minus the couple’s income.

Title 8: Medicaid Page 9 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income

Mr. M has applied for Medicaid. He receives $1,200 in Social Security disability benefits and Medicare. Mrs. M receives a Social Security benefit of $400. They have two children, Y and Z. Each child receives $150 Social Security benefits. If Mr. M’s own income makes him ineligible for SSI, it’s not necessary to consider Mrs. M’s income, except for Medically Needy, QMB, SLMB, E- SLMB, or QDWP. $1,200.00 - 20.00 $1,180.00 Mr. M’s unearned income General income deduction

$ 994.00 - 1,180.00 $ .00 SSI benefit for one person Mr. M’s countable income

Mr. M’s income creates ineligibility for SSI. The worker moves to the deeming process for SSI-related Medically Needy: $ 400.00 - 347.00 - 347.00 $ .00 Mrs. M’s unearned income Allocation for ineligible child X ($497 - $150 = $347) Allocation for ineligible child Y ($497 - $150 = $347) Mrs. M’s countable unearned income $0 does not exceed $497. There is no income available to deem to Mr. M. Mr. M’s countable income of $1,180 ($1,200 - 20) is compared to the Medically Needy income level (MNIL) for a household size of one to determine the spenddown amount, and to 100% of the federal poverty level for a household size of one to determine QMB eligibility. Deeming from an Ineligible Parent to an Eligible Child Legal reference: 20 CFR 416.1160, 20 CFR 416.1165 When a child applicant is living in the same household with an ineligible parent, deem the ineligible parent’s income when determining eligibility. Deem a stepparent’s income to the child if the natural parent lives in the house with the stepparent and child. If the child lives with a stepparent only, do not deem the stepparent’s income to the child, but consider any food and shelter the stepparent provides to the child as in-kind support and maintenance. See In-Kind Support and Maintenance (ISM).

Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income When deeming income from an ineligible parent or the spouse of an ineligible parent to a child: 1. Verify the ineligible person’s unearned income. Subtract from the ineligible person’s unearned income an allocation for each ineligible child. The allocation is $497 (the difference between the payment standard for a couple and the payment standard for one person), minus the child’s income. 2. Subtract the $20 general income deduction from the unearned income. 3. Verify the ineligible person’s earned income. Subtract from the ineligible person’s earned income any remaining portion of the ineligible child’s allocation that was not used to offset the ineligible person’s unearned income. 4. Subtract from the earned income any balance of the $20 general income deduction that was not used to offset the unearned income. 5. Subtract the $65 standard work expense deduction and one-half of the remainder from the balance. 6. Combine the remaining earned income with the remaining unearned income. 7. Subtract an allocation for the ineligible parents or stepparent in the household. The remaining amount is the income available for deeming to the child.  For one ineligible parent, the allocation is equal to the SSI payment standard for one person.  For two ineligible parents or an ineligible parent with a spouse, the allocation is equal to the SSI payment standard for a couple. 8. Treat the income as unearned income for the child and, if applicable to the coverage group being examined, apply the $20 general income deduction. 9. Add any remaining countable earned income of the child. 10. Compare this amount with the payment standard for an individual to determine eligibility for the child. NOTE: If there is more than one applicant child in the household, divide the parental income to be deemed equally among the children.

Title 8: Medicaid Page 11 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income

Client S, age 17, was living with her parents and two brothers before entering an RCF. She has no income of her own. Her father has earnings of $1,270 per month. Her brothers and mother have no income. The computation is as follows:

$1,270.00

- 994.00

$ 276.00

- 20.00

$ 256.00

- 65.00

$ 191.00

- 95.50

$ 95.50

- 1,491.00

$ .00 Father’s earned income Allocation for ineligible children (2 x 497)

General income deduction

Work expense deduction

1/2 remainder

Parental exclusion Deemed income to Client S Countable income of zero is less than the SSI payment standard for one person. As Client S has no income of her own, income eligibility exists for the retroactive period if she meets a category of eligibility for the retroactive period, as defined in 8-A, Definitions. Types of Non-MAGI-Related Income Income is either countable or excluded from consideration. “Countable income,” which is the gross income expected to be received for the month under consideration, is either earned or unearned. The following section is an alphabetical listing of various types of payments that explains how these payments are used in determining eligibility for non-MAGI-related coverage groups. AIDS/HIV Settlement Payments Exempt settlement payments from any fund established pursuant to the class action settlement of Susan Walker v. Bayer Corporation, et. al., 96 C5024(N.D. Ill.) as income.

Some settlement payments were made in lieu of the class action settlement. These payments are also exempt as income. These settlements were made on or before December 31, 1997. These funds must be kept in a separate, identifiable account.

Title 8: Medicaid Page 12 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Adoption Assistance Subsidy Adoption Assistance Subsidy

There isn't a single policy that covers subsidized adoption payments. It will depend on the source, type, and purpose of the subsidized adoption payment and how those circumstance fit under other income policies.  Count as income to the child any payments for the maintenance needs of the child that are IV-E funded. (See federally funded assistance payments under Assistance Payments later in this chapter).  Exempt payments that are for social services and involve funds provided under title IV-B of the Social Security Act. (See Social Services later in this chapter).  Exempt payments that are completely state or privately funded, are for the maintenance needs of the child, and are based on need. (See state assistance based on need under Assistance Payments later in this chapter). If the payments are state or privately funded assistance that isn't based on need, then the payments are counted as income.  Exempt payments that are completely state or privately funded and aren't intended to meet the child's maintenance needs at all (e.g. if they are being made to the parents to cover travel expenses and lodging). In this situation, the payment would be reimbursement to the parents and not considered income at all.

(NOTE: Refer to NJA0094, Income for the process to enter this type of income in ELIAS.) Annuities 20 CFR 416.1121 An annuity is a contract in which a person receives fixed payments for a specified period. See 8-D, Annuities, for information on how to count the annuity payments.

Title 8: Medicaid Page 13 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 AmeriCorps Payments AmeriCorps Payments POMS SI00830.537 Effective with benefits payable on or after September 1, 2008, cash or in-kind payments provided by AmeriCorps State and National or AmeriCorps NCCC are excluded from income even if they meet the definition of wages. Such payments include, but are not limited to:  Living allowance payments  Stipends  Food and shelter  Clothing allowance  Educational awards  Payments in lieu of educational awards Assistance Payments 20 CFR 416.1124(c)(2) Exclude state or local general assistance cash payments to the recipient that are based on the need of the recipient (e.g., State Supplementary Assistance, General Relief, Rent Reimbursement, Energy Assistance).

Unless specifically excluded, count assistance payments that are funded in whole or in part from federal monies. For exceptions to this policy, see Indian Assistance and Third- Party Payments. Verify the amount and source of the payment either with evidence provided by the client or by contacting the paying agency. Benefit and Other Payments Made in Error 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 If the person receives a benefit or other payment in error and returns it by the end of the following month, the payment is not considered income. If the person has a valid reason for not returning the payment by the end of the following month (such as a lengthy hospital stay), the payment is still not considered income. However, if the payment is not returned and the client has no good reason for not returning it, count the payment as income in the month of receipt.

Title 8: Medicaid Page 14 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised May 22, 2026 Benefit and Other Payments Made…

Benefit and Other Payments Made in Error (Cont.) An SSI eligible person enters a nursing home and informs the Social Security Administration. Social Security continues to make SSI payments, even though the person should not be eligible for SSI after entry to the nursing home. The client returns the checks when they are received. The erroneous SSI payments are not considered income. Blood Plasma 20 CFR 416.1102 Count income from selling blood plasma as unearned income. Census Income 20 CFR 416.1110 Count as earned income any wages from either temporary or permanent census employment, including wages received while in training. See Wages for more information. Child Student’s Earnings 20 CFR 416.1112(c)(3), 20 CFR 416.1861 Exclude up to $2,410 per month of a student child’s earnings, but not more than $9,730 per calendar year. When the income exceeds $2,410 per month or $9,730 per calendar year, count the excess, subject to the work expense deduction of $65 + 1/2. See $65 Plus One-Half Deduction for coverage groups that do not receive the work expense deduction. To qualify, the student must meet all of the following criteria:  Under age 22.  Not married.  Not the head of the household.  Regularly attending a school, college, or university or taking a course of technical training designed to prepare the student for employment. “Regularly attending school” means: • 12 hours a week for grades 7-12. • 8 hours a week for college or university studies. • 12 hours a week for technical training courses. • 15 hours a week for technical training courses with shop practice.

Title 8: Medicaid Page 15 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised May 22, 2026 Child Student’s Earnings

Child Student’s Earnings (Cont.) A child can attend school less than the amount of time indicated above if reasons beyond the child’s control justify the child’s reduced credit load or attendance.

Client M, a disabled child, is forced to limit vocational school attendance to one day a week due to the unavailability of transportation. Although he is enrolled for attendance of less than 12 hours per week, Client M qualifies as regularly attending school because the lack of transportation is a circumstance beyond his control.

Consider that a child who is a homebound student because of a disability is regularly attending school if the child is studying a course or courses given by a school (grades 7-12), college, university, or government agency at home, and a home visitor or tutor directs the studies.

Consider a child to be attending school during periods when school is not in session (such as summer vacation) when the child was regularly attending school before the break and intends on regularly attending when classes resume. Count payments from Neighborhood Youth Corps, work- study, and similar programs as earned income. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS. Child Support 20 CFR 416.1124(c)(11) The annual $35 child support collection fee withheld by Child Support Services (CSS) is not considered income. Exclude one-third of support payments for minor children. Count the remainder as unearned income. Count the full amount of child support payments for a child aged 18 or older.

The following are income to the child whether or not the child lives with the parent receiving the money or receives the money from the parent:

Title 8: Medicaid Page 16 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Child Support Child Support (Cont.)  Child support payments received by a member of the child’s family on behalf of a minor child, including back child support.  Current child support payments received by a member of the child’s family on behalf of a child age 18 or older.

Back child support payments received by a member of the child’s family on behalf of a child aged 18 or older are income to the child when the child:  Lives with the person who receives the money, or  Receives the money from the person (when the child does not live with the person).

Back child support payments received by a member of the child’s family on behalf of a child aged 18 or older are income to the person receiving the payment if the child does not live with that person and does not receive the money.

When the client receives irregular child support payments, use an estimated amount based on the absent parent’s payment history for the last three quarters. Verify the amount using court records, canceled checks, IRS records, or CSS. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS.

Civil Service Annuity

Count the gross amount of Civil Service Annuity whether the payment is taxable or not taxable. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS.

Dedicated Accounts 20 CFR 416.546, 20 CFR 416.640(e), 20 CFR 416.1247 Exclude the interest and other income earned on funds in a dedicated account as countable income for SSI participants. When past-due benefits are paid for eligible people under age 18, the representative payee is required to establish a dedicated account. The dedicated account may be used only for:

Title 8: Medicaid Page 17 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Dedicated Accounts Dedicated Accounts (Cont.)  Medical treatment, education, and job skills training.  Personal needs assistance, special equipment, housing modification and therapy or rehabilitation that is related to the child’s impairment.  Other items and services related to the child’s impairment approved by the Social Security Administration.

Do not exclude the funds in a dedicated account when the person is terminated from the SSI program or is terminated and later reapplies and is approved.

Make a referral using form 470-2826, Insurance Questionnaire and send to Iowa Medicaid Enterprise (IME) Revenue Collection Unit. Disaster Assistance 20 CFR 416.1124(c)(5), 20 CFR 416.1150 Exclude:  Assistance provided under any federal statute when the United States President declares a catastrophe to be a major disaster.

 Interest earned on the assistance.

 Unemployment benefits from FEMA that Iowa Workforce Development has identified as paid because of the disaster.

 In-kind support and maintenance if the client’s circumstances meet the following conditions:

• The client was living in a household maintained as the client’s home when the disaster occurred.

• The President declared the catastrophe to be a major disaster for the purposes of the Disaster Relief Act of 1974 and the Emergency Assistance Act.

• The client stops living in the home because of the catastrophe and begins to receive support and maintenance within 30 days after the catastrophe.

• The client receives support and maintenance while living in a residential facility (including a private household) maintained by another person.

Title 8: Medicaid Page 18 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Disaster Assistance Disaster Assistance (Cont.) Record the date the disaster occurred and the date assistance is received (or support and maintenance begins) in the case record. Dividends 20 CFR 416.1103, 20 CFR 416.1121(c), and 20 CFR 416.1124(c)(22) Dividends earned on countable resources are excluded income when determining eligibility. Dividends earned on excluded resources are excluded income except for the following:

 Dividends earned on unspent tax refunds related to an Earned Income Tax Credit or a Child Tax Credit are countable unearned income.

 Dividends earned on gifts to children under age 18 who have a life-threatening condition are countable unearned income. The gift must be from an organization that is described in Section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from taxation under Section 501(a).

 Dividends earned on the proceeds from the sale of a homestead that was excluded for up to three months when the client intends to purchase another home are countable unearned income.

 Dividends earned on unspent relocation assistance payments are countable unearned income.

 Dividends earned by funds that are SSI or Social Security Disability benefits excluded from resources for nine calendar months after receipt are countable unearned income.

 Dividends earned on unspent victims’ compensation payments are countable unearned income.

 Dividends earned as a retirement benefit, such as IPERS, are countable if the resource is no longer available after the recipient chooses to receive monthly benefits instead of a lump sum. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS.

Title 8: Medicaid Page 19 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Earned Income Earned Income Credit P.L. 101-508 Exclude a federal or state earned income credit whether received as a part of earned income included with regular paychecks or as a lump sum included with the income tax refund. Also see 8-D, Resources. Educational Assistance 20 CFR 416.1124“c”(3) Exclude the following educational assistance except for any part the recipient uses for general living expenses (food or shelter):

 Any impairment-related expenses necessary for school.

 Any portion of a grant, scholarship, fellowship, or gift received by or for a recipient to pay for tuition, transportation to and from school, books, or fees at any educational institution. Exclude only the amounts billed by the institution. Count any excess funds as income and prorate them over the period of intended use.

Any portion of such educational assistance that is not used to pay current tuition, fees, or other necessary educational expenses but will be used for paying this type of educational expense at a future date is excluded from income in the month of receipt. This exclusion does not apply to any portion set aside or actually used for food or shelter. Count as income any portion of grants, scholarships, fellowships, and gifts that is excluded from resources because it is set aside to pay for tuition, fees, or other necessary educational expenses but is used for some other purpose. The funds are income in the month that they are spent or in the month when the person no longer intends to use the funds to pay tuition, fees, or other necessary educational expenses.  If funds are not spent after the ninth month, they are countable resources as of the tenth month following the month of receipt.

 Veterans educational benefits such as:

• Any VA educational grants or scholarships for tuition, transportation to and from school, books, and fees at any educational institution.

Title 8: Medicaid Page 20 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Disaster Assistance Educational Assistance (Cont.) • Payments made as part of the veterans vocational rehabilitation program.

• Any portion of a VA educational benefit that is a withdrawal of the veteran’s own contribution. This is a conversion of a resource and is not income.

 Grants made or insured under a program administered by the Secretary of Education under Title IV, such as:

• PELL or Basic Educational Opportunity Grants (BEOG).

• Presidential Access Scholarships (Super PELL).

• Federal Family Education Loan Program (formerly GSL).

• Perkins Loans (formerly NDSL).

• Federal Work Study funds.

• Robert C. Byrd Honors Scholarship Program. • College Assistance Migrant Program (CAMP). • High School Equivalency Program (HEP). • TRIO Grants for disadvantaged students such as Upward Bound, Student Support Services, Robert E. McNair Post-Baccalaureate Achievement.

Count as unearned income any part that the recipient uses for general living, or any purpose other than education. Prorate it over the period of time it was intended to cover.

Count payments and allowances that are not grants, such as:  Any amount received as a gift from a relative, friend, or other individual.  Allowances to members of the United States armed forces.  Allowances or retainer payments to students under ROTC.  Grants with a requirement that work must be performed during or after study before receiving the grant, unless received under Title IV program which is listed previously.

Title 8: Medicaid Page 21 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Emergency Energy Conservation… Emergency Energy Conservation Services Assistance 20 CFR 416.1124(b) Exclude any cash or in-kind assistance provided under the Emergency Energy Conservation Services Program or the Energy Crisis Assistance Program, including:  Winterization of old or substandard dwellings (neither the cost of the materials, nor the cost of labor is counted).  Insulation.  Emergency loans or grants to install energy conservation devices.  Alternative fuel supplies and special fuel vouchers or stamps.  Alternative transportation activities designed to save fuel and guarantee continued access to training, education, and employment.  Legal or technical training relating to the energy crisis.  Fuel to operate food preparation appliances, or meals provided because utilities have been shut off. Employer’s Benefits 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Employer payments made on behalf of employees are not considered income when the payments are not earnings, and not available to meet the employee’s needs of food or shelter. For example, the contributions by an employer in a health insurance fund and an employer’s payment of FICA and unemployment compensation taxes are not income to the employee. Expenses of Obtaining Income 20 CFR 416.1123(b)(3) When a client incurred expenses that were essential in obtaining an unearned income payment, deduct the amount of the expenses to determine the amount of the payment to consider as income. The amount deducted is not considered income.

Essential expenses of obtaining unearned income may include legal, medical, and other expenses connected with an accident settlement or legal expenses connected with a claim for a benefit program such as Social Security benefits.

Title 8: Medicaid Page 22 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Expenses of Obtaining Income Expenses of Obtaining Income (Cont.) When a client receives payment for damages in connection with an accident settlement, subtract legal fees, unmet medical expenses that will not be reimbursed, and other essential expenses connected with the accident.

When a client receives a retroactive check from a benefit program such as Social Security, subtract legal fees connected with the claim.

Deduct essential expenses from the first and subsequent payments received until the expenses are completely offset.

A guardianship or conservatorship fee is an essential expense only if the presence of a guardian is a requirement for receiving the income. Guardianship fees are never an essential expense for obtaining Social Security or SSI benefits because the Social Security Administration never requires appointment of a legal guardian. Experience Works Income 20 CFR 416.1124(b) Exclude assistance, except wages or salaries, provided under the Experience Works program (formerly Green Thumb). Count wages and salaries as earned income. Experience Works is funded through Chapter 35 of Title 42 U.S. Code, Programs for Older Americans. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS. Federal Department of Labor Payments 20 CFR 416.1103 and 20 CFR 416.1104 Exclude cash or in-kind support service payments made by the U.S. Department of Labor payments. Support services are payments such as child care, transportation, medical care, and meals. Count cash or in-kind financial payments made by the U.S. Department of Labor payments for training. Financial payments include payments for tuition, on-the-job training, stipends, and work experience.

Title 8: Medicaid Page 23 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Food and Shelter Received During… Food and Shelter Received During a Medical Confinement 20 CFR 416.1102, 20 CFR 416.1103; P. L. 103-60 Food and shelter received during a medical confinement are not considered income. Medical confinement occurs when a person receives inpatient medical services in a medical facility. Food Programs (Federal) 20 CFR 416, Subpart K Appendix Exclude the value of:  Food Assistance benefits.  Food provided under the WIC program.  Free school lunches or breakfasts.  Congregate meals.  Federally donated food. Verification is not required. Foster Care Payments 20 CFR 416.1124 Exclude foster care payments from a public or private nonprofit child-placing agency to a foster family. Garnishments and Other Withholdings 20 CFR 416.1102, 20 CFR 416.1110, 20 CFR 416.1123(b)(1) A debt that a client is required to pay or that is withheld from the client’s income (such as child support, alimony or garnishment) continues to be considered income received by the client. Use the gross amount of income before these deductions.

1. Mr. S, who has Social Security income of $700, is ordered by the court to pay alimony of $200 per month to his former spouse. His countable monthly income continues to be $700, regardless of his legal obligation.

2. Mr. Q has Social Security income of $300 and earnings of $400 per month. However, $100 per month of Mr. Q’s earnings is garnished to pay a debt. Mr. Q’s total earnings of $400 are considered to be received and are considered as income.

Title 8: Medicaid Page 24 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 General Assistance Payments General Assistance Payments 20 CFR 416.1124(c)(2) Exclude county general assistance cash payments based on the need of the recipient. See Assistance Payments for information about other types of state or federal assistance payments. Do not count assistance that is lent to the client. Gifts 20 CFR 416.1124(c)(6) and 20 CFR 416.1121(g) Count cash gifts as income in the month received. Exclude gifts that qualify as infrequent or irregular income. See Infrequent or Irregular Income. For gifts used to pay educational expenses, see Educational Assistance.

Count noncash gifts as income in the month received. Determine the value according to the amount the client would get if the gift were sold. Refer to In-Kind Unearned Income.

Exception: The value of any noncash item (other than food or shelter) is not considered income if it will be partially or totally excluded as a resource the month after it is received. Green Thumb Income 20 CFR 416.1124(6) See Experience Works Income. Home Equity Conversion Plans 20 CFR 416.1103(f) Home equity conversion plans are arrangements designed to allow homeowners (commonly elderly people) to convert the equity value of their homes into cash without having to leave the home. Under these plans, the home is either mortgaged or sold to a financial institution or an individual in exchange for a regular cash payment or a line of credit, which the homeowner receives as long as the homeowner lives in the home. Common arrangements and the income policies that apply are explained below. The actual terms of specific contracts may vary.

Title 8: Medicaid Page 25 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Home Equity Conversion Plans Home Equity Conversion Plans If you need help to understand the contract or the correct income policy to apply, submit your questions, along with the contract, through the DHS, SPIRS Help Desk.

 Reverse Mortgage Reverse mortgages allow a homeowner to borrow some percentage of the appraised value of the home. The homeowner then receives regular periodic payments (or a line of credit), which commonly does not have to be repaid as long as the borrower lives in the home.

The payments the homeowner receives from the arrangement are considered as loan proceeds and are not considered income. However, if the loan proceeds are retained into the following month, they become a countable resource.

 Sale-Leaseback Under a sale-leaseback arrangement, the homeowner transfers the title of the home to a buyer in exchange for regular periodic payments. The buyer then allows the former homeowner to remain in the home for life (or some other agreed-upon time period) in exchange for rent. In some instances, the payment made to the former homeowner includes interest.

Consider the noninterest portion of the payments the former homeowner receives as a conversion of a resource, not as income. Consider any portion of the payment that is due to interest as unearned income. If the interest portion of the payment is retained into the following month, it becomes a countable resource.

 Time Sale Under a time sale arrangement, the homeowner signs a contract to sell the home at death but maintains the title and continues to live in the home. The buyer then pays a monthly cash payment to the homeowner.

Title 8: Medicaid Page 26 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Home Equity Conversion Plans Home Equity Conversion Plans (Cont.) The payments the homeowner receives from a time sale contract are considered as a conversion of a resource and are not considered income. If the payments are retained into the following month, they become a countable resource. Home Produce for Personal Consumption Section 1612(b)(8) of the Social Security Act; 20 CFR 416.1124(c)(4) Exclude home produce used for personal consumption and produce that is traded. When produce is sold, consider net earnings as earned income. When the client is engaged in commercial farming, see Non-MAGI-Related Self- Employment Income. Housing Assistance 20 CFR 416.1124(b); U.S. Housing Act of 1937, Section 8; U.S. Housing Act of 1959, Section 202(h); National Housing Act; Housing Act of 1949, Title V; Housing and Urban Development Act of 1965, Section 101 (12 USC Section 1701, 42 USC Section 1451) Exclude rent subsidies, cash toward utilities, and indirect assistance (guaranteed loans, mortgages, and mortgage insurance) provided to home buyers by the Department of Housing and Urban Development (HUD) and the Farmer’s Home Administration (FMHA). Exclude any rent reduction to a person in low-income housing when the assistance is under the U.S. Housing Act of 1937, as amended. Verify the authority for the client’s federal or federally assisted housing. If the client cannot get verification, contact the local public housing authority. If HUD and a private owner have entered into a contract directly, contact the owner or manager of the project to verify the nature and authority for the housing assistance payments. Document the findings in the client’s case record. Income Replacement 20 CFR 416.1102, 20 CFR 416.1103; P. L. 130-60 If a person’s income is lost, stolen, or destroyed, then is replaced, the replacement is not considered income. For example, if the person loses a January paycheck and receives a replacement check in March, the pay is considered as income only for January.

Title 8: Medicaid Page 27 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Income Tax Refunds Income Tax Refunds 20 CFR 416.1102, 20 CFR 416.1103; P. L. 130-60 Income tax refunds are not considered income. An Earned Income Tax Credit is not a refund and is considered income but is excluded as income. See Earned Income Credit in this chapter. Indian Assistance 20 CFR 416.1124(b) and (c)(2), 20 CFR 416.1102, 20 CFR 416.1103; P.L. 103-66 Count as unearned income payments made through the Bureau of Indian Affairs (BIA) General Assistance program. These payments are federally funded and administered by the BIA through its local agency (usually the tribe). Payments made by the BIA for adult custodial care are excluded. Some Native Americans may receive other types of funds, such as distribution payments from judgment funds, mineral rights, or tribal trust funds. Numerous types of payments may be made and numerous exclusions may apply to these payments.

If the client has a tribal distribution payment, find out as much as you can about the payment and send the information to the DHS, SPIRS Help Desk for instructions on how to count it. Applicable information might include:  The name of the Indian tribe or group.  The name and location of the reservation.  The reason for the payment.  A description and location of land if payment involves land conveyance.

Up to $2,000 per year of income received by a Native American from interests of individual trusts or restricted lands is not considered income. Note: Refer to NJA0094, Income under Native American Payments for the process to enter this type of income in ELIAS.

Title 8: Medicaid Page 28 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Infrequent or Irregular Income Infrequent or Irregular Income 20 CFR 416.1112(c)(2), 20 CFR 416.1124(c)(6) Exclude infrequent or irregular income if the quarterly amount does not exceed $30 for earned income or $60 for unearned income. “Infrequent income” is income that is received (or available on demand) no more than once in a calendar quarter.

“Irregular income” is income that the client cannot reasonably expect to receive. “Irregular income” is unpredictable and cannot be scheduled, so that the client cannot count on it or budget for it.

Income from work performed on an “as-needed” basis for the same employer (not the same as regular part-time work) meets the definition of irregularly received income.

However, if the person works on one or more days each week for the same employer, count the income as regular and frequent, even when that income is less than $30 per month.

If both members of a couple have infrequent or irregular income, add all the income together before applying this exclusion. See Projecting Future Income for determining the amount of income to project. Inheritance Income 20 CFR 416.1121 Exclude the part of a cash inheritance that is spent on the deceased’s last illness and burial. Count any remaining cash inheritances as income in the month of receipt. Refer to Lump-Sum Income.

Count inheritances not received in the form of cash, as in kind income. See In-Kind Unearned Income.

The value of an asset that is not owned, in part, by the client and is received as inheritance is income in the month of receipt. If there is an estate opened, the asset may be available before the estate is closed. Count the inheritance as a resource the month after the month of receipt.

Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Inheritance Income Inheritance Income (Cont.) Do not count as income inherited items that were a result of the death of a spouse and that were already counted as a resource.

In Iowa, real and personal property passes to the person who inherits it immediately at the time of death and is not dependent on settlement of the estate unless the terms of the will are being contested. Insurance 20 CFR 416.1102  Accelerated Life Insurance Payments Count as income any payments made by a life insurance company or privately owned and operated business that are an early payout of some of the proceeds of a life insurance policy.

Under this arrangement, the life insurance company or private business pays the owner of a life insurance policy money that would ordinarily go to the beneficiary after the owner’s death (e.g., during a terminal illness).

The payments may be in one lump sum or monthly. (Any payments not spent in the month of receipt become a resource in the following month.) 20 CFR 416.1103(e)  Credit Life or Credit Disability Insurance Payments Payments issued to or on behalf of borrowers to cover payments on loans or mortgages in case of death or disability are not considered income.

The payments are made directly to the loan or mortgage company, so the money is not available to the person. Although a payment might be used for food or shelter (for example, when an insurance company makes a mortgage payment), do not count the payment as income.

Title 8: Medicaid Page 30 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Insurance Insurance (Cont.) 20 CFR 416.1123(a), Youngberg vs. Iowa DHS, Polk Co. District Court No. AA3294 (June 12, 2000)  Income Insurance Policy Count the proceeds from income insurance policies as income in the month that proceeds are received, regardless of the period they were meant to cover. An income insurance policy is one that pays a flat-rate benefit without regard to the actual charges or expenses incurred. Examples are:

• Indemnity policies that pay a per diem amount without regard to charges or expenses.

• Disability insurance that pays a flat-rate benefit intended to replace lost income.

• Cancer or dismemberment policies that pay a flat benefit.

NOTE: Benefits from insurance policies that pay a flat rate to an individual are not considered income if:

• The policy was purchased to pay for medical care and with regard to anticipated charges,

• The benefit is payable only if the policy holder actually receives the type of medical care for which the policy was purchased, and

• The benefit is actually used to pay for medical care for which the policy was purchased.

See Third-Party Payments. 20 CFR 416.1121  Death Benefits The part of life insurance and death benefits from Social Security, Veterans Administration, or Railroad Retirement that the beneficiary spends to pay expenses of the insured’s last illness and burial that will not be reimbursed by a third party is not considered income. Count any remaining proceeds as income. Examples of last illness and burial expenses include:

• Hospital and medical expenses remaining after health insurance payments.

• Funeral expenses.

Title 8: Medicaid Page 31 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Insurance Insurance (Cont.) • Funeral-related expenses, such as clothing to wear to the funeral or food for relatives.

• Burial plot.

• Interment.

If death benefits are received in more than one month, assume that the funds first received are the first spent on the deceased’s last illness and burial. Note: Amounts not spent in the month of receipt become countable resources in the next month.

Mr. B receives death benefits of $1,000 in April and $1,000 in May. Funeral expenses are $1,500. $500 is counted as income in May. Interest Income 20 CFR 416.1103, 20 CFR 416.1121(c), and 20 CFR 416.1124(c)(9) Interest earned on countable resources is excluded income when determining eligibility. Interest earned on excluded resources is excluded income except for the following, which are countable unearned income:  Interest earned on unspent tax refunds related to an Earned Income Tax Credit or a Child Tax Credit.

 Interest earned on gifts to children under age 18 who have a life-threatening condition. The gift must be from an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 and be exempt from taxation under Section 501(a).

 Interest earned on the proceeds from the sale of the homestead that was excluded for up to three months when the client intends to purchase another home.

 Interest earned on unspent relocation assistance payments.

 Interest earned by SSI or Social Security Disability benefits that are excluded from resources for nine months after receipt.

 Interest earned on unspent victim’s compensation payments.

Title 8: Medicaid Page 32 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Interest Income Interest Income (Cont.) Consider interest income when the interest becomes available to the account holder. Interest on bank accounts (savings, CDs, etc.) is available to the account holder when the interest is actually recorded on the account. The frequency with which interest is computed is immaterial. Do not deduct bank service charges when determining countable income.

Interest recorded on an account monthly is countable. Interest that is computed daily but recorded on the account only quarterly is excluded, unless the total amount exceeds $60 per month.

See Projecting Future Income for determining the amount of interest to project. If there has been a permanent change in the balance, compute the interest using the current account balance. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS. Jury Duty Pay 20 CFR 416.1102 Count jury duty pay as unearned income. Loans 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Money that is borrowed is not considered income. If a client has loaned another person money and receives repayment, the principal repayment on the loan is not considered income. However, any interest received is considered income. Low-Income Home Energy Assistance Payments (LIHEAP) 20 CFR 416.1124 Exempt as income and as a resource energy assistance benefits paid to eligible households under the Low-Income Home Energy Assistance Act of 1981. This program is administered through the Department of Human Rights, Division of Community Action Agencies, and covers costs such as:

 Insulation.

 Home energy assistance.

 Emergency lodging because utilities have been shut off.

Title 8: Medicaid Page 33 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Low-Income Home Energy Assistance…

Low-Income Home Energy Assistance Payments (LIHEAP) (Cont.)  Winterizing old or substandard dwellings (neither the cost of the materials nor the cost of labor is counted as income). Lump-Sum Income 20 CFR 416.1121, Do not count any lump-sum income received before the month Medicaid eligibility is granted. Exception: A lump sum that is self-employment income must be annualized.

 Nonrecurring Lump Sum Lump-sum payments received on a one-time basis include inheritance and retroactive benefits from Social Security, SSI, certain types of Veterans Administration income (see Non-MAGI-Related Veterans Affairs Payments), and Railroad Retirement.

If the client receives a lump-sum payment, count it as income in the month of receipt, unless the lump sum is a retroactive SSI payment made while the Medicaid application is pending. If the application is pending the SSI decision, then see Retroactive SSI Payments.

For retroactive lump-sum payments of Social Security or SSI, see 8-D, Retroactive SSI and Social Security Lump- Sum Payments, for treatment as a resource. For all other nonrecurring lump sums, count the lump sum as a resource after the month of receipt.

Note: If the lump sum is unearned and is less than $60 or is earned and is less than $30, it may be excluded as infrequent or irregular income. See Infrequent or Irregular Income.

Do not count corrective social security payments as income when the income was previously considered for eligibility and client participation. Count lump sums received in the retroactive period as income.

 Recurring Lump Sum Count recurring lump-sum payments as income and prorate them over the period of time they cover. The prorated amount may be excluded if the exclusion for infrequent or irregular income applies.

Title 8: Medicaid Page 34 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Lump-Sum Income Lump-Sum Income (Cont.) Lump-sum payments received annually, semiannually, or quarterly on a recurring basis include annual crop- sharing payments and quarterly Medicare reimbursements from a former employer. Medical Assistance Income Trusts (MAIT) 441 IAC 75.24(3)“b” A medical assistance income trust or MAIT is an irrevocable trust established for the benefit of an individual on or after August 10, 1993. It is a trust where:  Only the beneficiary’s income (both earned and unearned) is assigned to and deposited into the trust, and  The state is the residuary beneficiary of the trust and will receive all amounts remaining in the trust at the beneficiary’s death, up to the amount of Medicaid paid for the beneficiary.

If the trust meets these requirements, exempt the gross monthly income paid into the trust when determining eligibility and client participation. Count only the income to be paid from the trust or otherwise made available to the client.

Do not count the direct payments to the nursing facility or other medical provider as income to the client when determining eligibility. See 8-I, Trust Payments for payments to be made from medical assistance income trusts. Military Pay 20 CFR 416.1111 The service branches issue a single pay slip each month on or after the first of the month. That pay slip shows the gross amount due for the full calendar month and the net amount issued on each payday of the month. Military personnel can access pay slips using the Internet.

Only basic pay and Continental United States (CONUS) cost of living allowance (COLA) constitute wages. All special pay and allowances, except hostile fire pay, imminent danger pay, and, in deeming situations, other kinds of additional pay that may be received by military personnel serving in a combat zone are chargeable unearned income to the service member.

Title 8: Medicaid Page 35 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Lump-Sum Income Military Pay (Cont.) Whenever possible, use the Leave and Earnings Statement to verify the gross pay for a month, including both earned and unearned income. The total base pay shown is earned income for that month. The total allowances shown are unearned income for that month (unless otherwise excluded, such as hostile fire pay). Noncash Items 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 The value of any noncash item (other than food or shelter) is not considered income if it will be partially or totally excluded as a resource the month after the month of receipt.

Mr. A receives a car worth $6,000 as a gift from his daughter. He had no car before the gift. Because $4,500 of value of the car is excluded the month after receipt, the car will be an excluded resource in the month following the month of receipt. Therefore, the gift of the car is not income to Mr. A. Other Excluded Federal Payments 20 CFR 416.1124, P. L. 92-203, P. L. 106-398  Exclude income from any of the programs established under Public Law 93-103 through the Corporation for National and Community Service (CNCS), unless the director of CNCS determines that the hourly rate is equal to or over the minimum wage.

(The director has never yet made this determination. Central Office will contact workers if that determination is ever made.)

Programs under CNCS include University Year of Action (UYA), Volunteers in Service to America (VISTA), Foster Grandparents, Retired Senior Volunteer Program (RSVP), Senior Companion Program, and the Special and Demonstration Volunteer Program.

 Exclude dividend payments on shares of the Alaska Native Fund, and other revenue that originated with the fund. This fund was created by the Alaska Native Claims Settlement Act (Public Law 92-203), enacted on December 19, 1971.

Title 8: Medicaid Page 36 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Other Excluded Federal Payments

 Exclude Austrian Social Insurance payments based partly or completely on wage credits granted under paragraphs 500-506 of the Austrian General Social Insurance Act. Use the award letter to determine how to count the payments.

 Exclude Department of Defense (DOD) payments to certain persons captured and interned by North Vietnam as a result of participating in DOD operations (known as OPLAN 34A (or its predecessor) or OPLAN35). Do not exclude interest earned on unspent payments.

 Exclude Department of Defense (DOD) payments made to or on behalf of certain Vietnam veterans’ children, regardless of their age or marital status, for any disability resulting from spina bifida suffered by such children. Do not exclude interest earned on unspent payments.

 Exclude Energy Employees Occupational Illness Compensation Program payments made to former employees or their families. Beneficiaries will receive one or two lump-sum payments, which are excluded as income and as a resource.

Award letters sent to the recipient from the Department of Labor should verify the amount and source of the payments.

 Exclude German Reparations payments made to survivors of the Holocaust under the Federal Republic of Germany’s Law for Compensation of National Socialist Persecution, whether they are paid periodically or in a lump sum.

 Exclude Japanese-American and Aleutian restitution payments made by the U.S. Government to individual Japanese-Americans (or their survivors) and Aleuts who were interned or relocated during World War II.

Title 8: Medicaid Page 37 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Other Excluded Federal Payments

 Exclude Japanese-Canadian restitution payments from the Canadian Government to individual Japanese- Canadians who were interned or relocated during World War II. Use documents from the client to identify or verify the nature of the payments.

If the client has no documents, ask if the client was imprisoned, relocated, deported, or deprived of other rights in Canada during the period of December 1941 to March 1949 because of Japanese ancestry. If yes, exclude the payment. If no, count the payment as income.

 Exclude assistance except wages or salaries provided under Chapter 35 of Title 42 U.S. Code, Programs for Older Americans. Count wages and salaries as earned income. Examples of programs offered include community service employment and the Green Thumb employment services program.

 Exclude as income and as a resource payments made under the Radiation Exposure Compensation Act Trust Fund payment. This program compensates people for injuries or death resulting from exposure to radiation from nuclear testing and uranium mining.

After the affected person’s death, payments are made to the surviving spouse, children, or grandchildren. Any interest on these funds is counted as income. Personal Services 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Personal services performed for a client, such as lawn mowing, house cleaning, and grocery shopping, are not considered income. Property Tax Refunds 20 CFR 416.1124(c)(1) Exclude any amount a client receives from any public agency as a return or refund of taxes paid on real property. Verify the amount using the tax statement, or contact the state or local taxing authority. File the statement or a copy of the statement in the case record.

Title 8: Medicaid Page 38 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Rebates and Refunds Rebates and Refunds 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 If a person gets back money the person has already paid (e.g., a property tax rebate), the returned money is not considered income. If a rebate is not returning the person’s own money, however, it is income. Recouped Benefits Paid in Error 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123 Do not count the portion of an unearned benefit that is being recouped if:  The client received Medicaid under Medically Needy, Medicaid for Employed People with Disabilities (MEPD), HCBS waiver, or nursing facility assistance or received State Supplementary Assistance payments when the overpayment occurred, and

 The income that created the overpayment was included in figuring the amount of the Medicaid or State Supplementary Assistance benefit at the time it was incorrectly paid. Relocation Assistance 20 CFR 416.1124(b) Exclude relocation assistance provided to owners, tenants, or occupants who were displaced when real property was acquired by a federal, state, or local government-assisted project. Do not count:

 Moving expenses.

 Losses of tangible property.

 Expenses of looking for replacement business or farm.

 Displacement allowances.

 Amounts required to replace a dwelling.

 Compensation for increased interest costs.

 Closing costs on a replacement dwelling.

 Rental expenses for displaced tenants.

 Amounts for down payments on replacement housing.

 Mortgage insurance through federal programs, waiving requirements such as age, physical condition, or personal characteristics that borrowers must usually meet.

Title 8: Medicaid Page 39 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Rent Reimbursement Payments Rent Reimbursement Payments 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Payments received under the Department’s Rent Reimbursement Program under Iowa Code Chapter 425 are not considered income. These payments are considered a refund of money the client has already paid. The Department may also make rent reimbursement payments to residents of residential care facilities and nursing facilities. Do not consider the payments for either eligibility or client participation. Rental Property or Life Estate Income 20 CFR 416.1110(b), 20 CFR 416.1121(d) Count as unearned income the net income from a life estate, or rental of real property (including a homestead) unless the client has a business of renting properties. If the client is in the business of renting property, see Non- MAGI-Related Self-Employment Income.

If more than one person owns the property, count the income based on the ownership interest.

Use the most recent income tax return to determine net income from real property. Appropriate tax forms are:

 Schedule C, Profit or Loss Statement.

 Schedule E, Supplemental Income and Loss.

 Form 4562, Depreciation and Amortization.

 Form 1065, Partnership Return on Income.

Deduct from the gross income any necessary and reasonable expenses needed to produce the income. Examples of deductible expenses are real estate taxes, repairs and maintenance, the cost of advertising for tenants, and interest paid on a mortgage.

Do not deduct:

 The cost of capital equipment.

 Depreciation.  Any portion of a mortgage payment that is attributed to the principal.

Title 8: Medicaid Page 40 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Rental Property or Life Estate Income Rental Property or Life Estate Income (Cont.)  Any purely personal expenses not associated with production of the income. If the expenses are both personal expenses and business expenses, prorate the expense following IRS policies used on the tax return.

If a tax return is not available, deduct the same expenses that would be used on the tax return, as long as the expenses are reasonable as defined by IRS. The expenses of income are reasonable as long as the expense is ordinary and necessary as defined in the industry. You may need to contact a disinterested real estate agent, banker, farm manager, or other knowledgeable person in the particular industry.

Examples of allowable expenses: Examples of expenses that are not allowed:

Repair of roof shingles Replacement of the roof

Replacement of broken light Replacement of wiring

Replacement of faucet Replacement of plumbing

NOTE: Refer to NJA0094, Income under Rental Income or Losses for the process to enter this type of income in ELIAS. Resource Conversion or Sale 20 CFR 416.1102, 20 CFR 416.1103; P. L. 103-60 Consider the conversion or sale to be a change in the form of a resource. The increase in value of a resource is not considered income. An example of a resource value increasing when the value of stock increases from $100 to $110 in a six- month period. Resource Replacement 20 CFR 416.1102, 20 CFR 416.1103; P. L. 103-60 Any payment to a client to replace a resource that was lost, damaged, or stolen is not considered income. Examples include insurance payments and private or public fund payments.

Title 8: Medicaid Page 41 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Retirement Funds Retirement Funds 20 CFR 416.1121 Retirement funds are annuities or work-related plans for providing income when employment ends (e.g., pension, disability, or retirement plans administered by an employer or union).

A retirement fund owned by an eligible person is a resource if the person has the option of withdrawing a lump sum, even though the person is not eligible for periodic payments. See 8-D, Retirement Funds.

If the person can’t withdraw the funds but is eligible for periodic payments, the payments are considered income. Note: Refer to NJA0094, Income under Pension for the process to enter pension income in ELIAS. Retroactive SSI Payments 20 CFR 416.1123 When the application is held pending a Social Security determination for SSI benefits, count the retroactive SSI benefits for the period that the payments are intended to cover.

When calculating client participation, do not count any part of a retroactive SSI payment that covers a period before the month of eligibility for State Supplementary Assistance or medical institution care, or that is withheld for interim assistance.

January 3 Client applies for SSI.

February 3 Client enters RCF.

June 5 Client applies for State Supplementary Assistance.

August 16 Client approved for SSI. Receives SSI payment for the months of January through August.

August 17 Client approved for State Supplementary Assistance effective June 5.

The amount of the SSI lump sum intended for January through May is not considered in computing client participation for June through August. The amounts for June, July, and August are considered income in determining client participation for each of those months.

Title 8: Medicaid Page 42 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Retroactive SSI Payments Retroactive SSI Payments (Cont.) When a lump sum of retroactive SSI benefits is received on an ongoing Medicaid case, see Lump-Sum Income for treatment of income and see 8-D, Retroactive SSI and Social Security Lump-Sum Payments, for treatment as a resource. Sheltered Workshop Earnings 20 CFR 416.1110 Count the income a handicapped person earns at a sheltered workshop as earned income. Sick Pay 20 CFR 416.1110 Sick pay is payment made to an employee by an employer or third party for sickness or accident disability. (Payments to an employee under a workers’ compensation law are not sick pay.)

Verify the period of time that sick pay has been paid.

Count sick pay as earned income in the first six months of receipt unless the employer considers the income as unearned income. Contact the employer to determine how to consider sick pay. After six months, count sick pay as unearned income. Social Security Payments Count the gross amount of Social Security as unearned income. If the person is paying for Medicare Part B, the gross amount of the Social Security payment has been adjusted to allow for an even dollar net amount.

For eligibility, count the gross amount of the Social Security that will be received when Medicare buy-in takes place. Round up to the next dollar amount only when buy-in would affect eligibility for a program.

For client participation, Medically Needy spenddown calculation, and MEPD premium calculations, count the gross amount of the Social Security as verified by the Social Security Administration. (Do not round.)

Title 8: Medicaid Page 43 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised May 22, 2026 Social Security Payments

Social Security Payments (Cont.) Mr. A is an applicant for Medicaid. His gross Social Security benefit is $1,182.00. His Medicare premium is $202.90, so Mr. A’s net check is $979.10. If Mr. A is approved, the state will “buy in” and pay his Medicare premium. Once buy-in occurs, Mr. A’s check will increase to $1,182.00. ($979.10 + $202.90 = $1,182.00). In determining Medicaid eligibility for Mr. A, the worker considers income of $1,182.00, so that Mr. A’s eligibility is determined based on the amount of income he will receive once buy-in occurs. In determining client participation, Medically Needy spenddown, or an MEPD premium, the worker uses Mr. A’s income of $1,182.00 to calculate his benefits until after buy- in takes place. Social Services 20 CFR 416.1102, 20 CFR 416.1103, 20 CFR 416.1123; P. L. 103-60 Social services are not considered income. They include services to assist handicapped or disadvantaged people to function in society to the level of a person without the handicap, e.g., vocational rehabilitation. The training allowance issued by the Department of the Blind is considered a social service and is not counted as income.

The following items are not social services:

 Income from a sheltered workshop (see Sheltered Workshop Earnings).

 Financial aid for education and training (see Educational Assistance).

 FIP, SSI, Veterans assistance, or general assistance payments (see Assistance Payments). Strike Pay 20 CFR 416.1102 Count strike pay as earned income if a union member is involved in the strike and the duties involve strike activity. Count all other strike pay as unearned income.

Title 8: Medicaid Page 44 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Third-Party Payments Third-Party Payments 20 CFR 416.1102, 20 CFR 416.1103; P. L. 103-60; Youngberg vs. Iowa DHS, Polk Co. District Court No. AA3294 (June 12, 2000) Direct payment of a person’s bills by a third party is not considered income, unless the bills are for food or shelter. (See Non-MAGI-Related In-Kind Income for how to treat third-party payments for food or shelter.) Third-party payments include medical services payments, such as:  Medical insurance premiums paid directly to the insurance company by someone other than the client.  Insurance company payments for medical care if the payments are equal to or less than the actual cost of the care.  Room and board paid by a third party to a medical institution while a person is institutionalized.  Accident settlement payments to cover medical expenses.

 Benefits from insurance policies that pay a flat rate to an individual if:

• The policy was purchased to pay for medical care and with regard to anticipated charges,

• The benefit is payable only if the policy holder actually receives the type of medical care of which the policy was purchased, and

• The benefit is actually used to pay for the medical care for which the policy was purchased.

When the reason the third party is making a payment is for a cost that SSA or Medicaid may be meeting (i.e., nursing facility or in-home health related care), deduct the third party payment before the Medicaid or SSA payment. Vacation Pay 20 CFR 416.1110(a) Count vacation pay as earned income.

Title 8: Medicaid Page 45 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Types of Non-MAGI-Related Income Revised April 11, 2025 Victims’ Compensation Payments Victims’ Compensation Payments 20 CFR 416.1124, P. L. 101-508 Exclude assistance paid through the Crime Victim Reparation Program. The Iowa Department of Justice administers this program, which compensates victims of crime for expenses incurred or losses suffered as a result of a crime. Expenses paid by the Crime Victim Reparation Program include:

 Medical bills.

 Lost wages.

 Loss of support.

 Clothing held in evidence.

 Counseling.

 Burial. Wages 20 CFR 416.1110 Count the gross amount of wages prospectively. See Projecting Future Income. See also Non-MAGI-Related Deductions for deductions that are applied to wages. Note: Consider vacation pay as wages, even if paid in a lump sum after the client’s employment has terminated. Winnings SI 0830.525 Count as unearned income any winnings from a contest, lottery, or game of chance. Note: Gambling losses are not subtracted from gambling winnings to determine countable income. Workers’ Compensation 20 CFR 416.1121 Count as unearned income any workers’ compensation from state or federal employment that is paid to disabled workers. Exclude any portion of the income that was paid or deducted for legal or related expenses, if the recipient did not have control of the money before distribution. This information is given in the award letter. Note: Refer to NJA0094, Income for the process to enter this type of income in ELIAS.

Mr. O is injured at work in March. He begins receiving workers’ compensation of $500 per month in August. This income is considered unearned and is counted for the time it is intended to cover.

Title 8: Medicaid Page 46 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised April 11, 2025 In-Kind Earned Income Non-MAGI-Related In-Kind Income Legal reference: 20 CFR 416.1102 In-kind income is not cash, but is food or shelter, or the receipt of something that can be sold or converted to obtain food, or shelter. EXCEPTION: Food is not included in the calculations of in-kind support and maintenance (ISM), which is a type of unearned income that we have special rules for valuing. If the noncash item is given to the person by that person’s spouse, minor child, or parent (if the recipient is a minor child), do not consider it in-kind income to the person. The three types of in-kind income are:  In-Kind Earned Income.  In-Kind Unearned Income Other Than Food or Shelter.  In-Kind Support and Maintenance (Unearned Income Received In the Form of Shelter). In-Kind Earned Income Legal reference: 20 CFR 416.1110-416.1111 In-kind earned income is a noncash payment a person receives in place of wages or money from self-employment. In-kind earned income can be food or shelter, or noncash items that could be sold or converted to obtain food or shelter. An SSI recipient’s in-kind earned income is reflected on the SDX in the same way as cash earned income. Count the full market value of in-kind earned income in the same way as earned income received as cash. If the person is in a coverage group where the $65 or $65 and one-half work expense deductions apply for earned income, apply the deduction to the in-kind earned income as well. Exception: If an in-kind item that is not in the form of food or shelter will be partially or totally excluded as a resource in the month after the month it is received, do not count it as income.

Title 8: Medicaid Page 47 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised April 11, 2025 In-Kind Earned Income

1. Mr. A receives a monthly wage of $500 to manage an apartment complex and also is provided an apartment to live in at no cost. The apartment that Mr. A lives in would otherwise rent for $300 per month. Mr. A receives a noncash item in the form of shelter (free rent) and therefore, receives in-kind income. Because Mr. A receives this in-kind income in place of wages, it is considered earned income. The market value of Mr. A’s in-kind earned income ($300) is considered in the same manner as if Mr. A had been paid $300 in the form of cash (i.e., if applicable for the coverage group, $65 plus one-half is deducted). Mr. A’s total earned income is $800 ($500 + $300). 2. Mr. B is an employee of an auto dealer. In lieu of wages, Mr. B is given a car worth $4,000. Mr. B has no other car. Because the car he receives is an excluded resource in the month following the month of receipt, the value of the car is not considered as income to Mr. B. In-Kind Unearned Income Legal reference: 20 CFR 416.1123 In-kind unearned income is in-kind income that a person receives that is not in place of wages or self-employment monies. In-kind unearned income can be either:  Food or shelter. See In-Kind Support and Maintenance (ISM).  Any item that can be sold or converted to buy food or shelter. Count the full market value of in-kind unearned income that is not in the form of food or shelter in the same way as unearned cash income. Market value is how much money the item can be sold for, not the retail purchase price. Accept the recipient’s estimate of the market value of the gift, unless you have reason to doubt the estimate. Exception: If a client receives a noncash item (not food or shelter) and that item will be a partially or totally excluded resource in the month after the month it was received, do not consider it as income.

Title 8: Medicaid Page 48 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised April 11, 2025 In-Kind Unearned Income

Mr. T received a gift of a boat with a value of $1,000. The boat may be sold or converted to cash that may then be used to obtain food or shelter. It will not be an excluded resource in the month following receipt. Therefore, the receipt of the boat is in-kind unearned income. The boat’s market value of $1,000 is considered as unearned income to Mr. T. The income exclusion for infrequent or irregular income may apply to in-kind income. See Infrequent or Irregular Income. An SSI recipient’s in-kind unearned income that is not in the form of food or shelter is reflected on the SDX as unearned income type “S” (other income). In-Kind Support and Maintenance (ISM) Legal reference: 20 CFR 416.1130, 20 CFR 416.1132-416.1133 In-kind support and maintenance is in-kind unearned income in the form of shelter. Shelter includes:  Room rent and mortgage payments.  Real property taxes.  Heating fuel, gas, electricity, water, and sewage.  Garbage collection service. ISM is valued according to either the value of one-third reduction (VTR) or presumed maximum value (PMV) rule. The VTR rule applies only when a client lives in another person’s household. Note: Food expenses are omitted from ISM calculations. Food expenses would not be included in the actual calculation; they will only be considered in determining whether to apply the VTR or PMV rule. Determining the Client’s Living Arrangement To determine which rule to use, first establish if the client is living in the client’s own household or in the household of another. See Living in Another Person’s Household. If a client is living in the household of another, then decide if the person is paying a pro rata share. See Paying a Pro Rata Share.

Title 8: Medicaid Page 49 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised April 11, 2025 In-Kind Support and Maintenance (ISM) Living in Another Person’s Household Legal reference: 20 CFR 416.1132-416.1133 A client is not living in another person’s household if:  The client has an ownership interest or a life estate interest in the home.  The client (or any person in the household who could have income deemed to the client) is liable to the landlord for paying any part of the rent. In this context, a landlord and tenant cannot be members of the same household.  The client pays at least a pro rata share of household and operating expenses.  All members of the household receive public assistance income- maintenance payments, such as FIP or SSI.  The client lives in an institution (an establishment which provides food, shelter, and some treatment or services to four or more people). An institution is not a household, and a household cannot exist within an institution.  The client lives in a noninstitutional care situation, such as a family- life home or a foster care home. A household must be a personal place of residence. A commercial establishment, such as a hotel or boarding house, is not a household. However, a household can exist within a commercial establishment if the client lives in the household as a roomer or boarder within the hotel or boarding house.

1. Mr. A lives in a boarding house and pays $200 per month to the owner for room and board. Several other people also live in the boarding house. Mr. A is not considered to be living in another person’s household. 2. Mr. B lives with Mr. A. Mr. B does not have rental liability to the boarding household owner and does not pay a pro rata share of the expenses. Mr. B is considered to be living in the household of another (Mr. A).

Title 8: Medicaid Page 50 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised May 22, 2026 In-Kind Support and Maintenance (ISM) Paying a Pro Rata Share Legal reference: 20 CFR 416.1132-416.1133 If the client pays a pro rata share of household operating expenses, consider the client to be living in his or her own home and not receiving in-kind support and maintenance from anyone else in the household. The pro rata share of household operating expenses is the average monthly household operating expenses (based on a reasonable estimate, if exact figures are not available) divided by the number of people in the household, regardless of age. The household operating expenses are the total monthly expenditures for rent, mortgage, property taxes, heating fuel, gas, electricity, water, sewage, and garbage collection service. When to Apply the Value of One-Third Reduction (VTR) Rule Legal reference: 20 CFR 416.1131 Apply the “value of one-third reduction” (VTR) rule to in-kind support and maintenance received when a client lives the whole month in another person’s household and others within the household pay for or provide them with all their meals. If the client is living in the client’s own household, use the “presumed maximum value rule.” Under the VTR rule, the value of in-kind support and maintenance is one-third of the SSI benefit rate (currently $331.33). If a married couple lives in another person’s household, use one-third of the SSI benefit rate for a couple ($497.00). The VTR amount always applies in full. Count this amount in the same way as if it were unearned income received in cash. Do not apply the $20 general income exclusion to in-kind support and maintenance valued according to the VTR rule. An SSI recipient who receives in-kind support and maintenance valued according to the VTR method will have that income reflected on the SDX as income type “J.”

Title 8: Medicaid Page 51 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised May 22, 2026 In-Kind Support and Maintenance (ISM)

1. Mr. G, a Medicaid member, lives with his friend, Mr. F, in a home owned by Mr. F. Mr. G has Social Security income of $500 but does not contribute any of his income towards the household’s operating expenses. Mr. F provides Mr. G with all of his meals. Mr. G is not paying a pro rata share of the monthly household operating expenses, so he is considered to be living in the home of another. Since Mr. F provides all Mr. G’s meals, he is receiving ISM income that should be valued according to the VTR method. The IM worker determines that Mr. G has countable in-kind support and maintenance income of $331.33 (one-third of the SSI benefit rate). 2. Mr. S, a Medicaid member, lives with his adult son in a home owned by his son. Mr. S’s pro rata share of the household’s operating expenses is $200. However, Mr. S contributes only $100 per month towards the household’s operating expenses. Although Mr. S is contributing towards the household expenses, he is not paying a pro rata share. Therefore, he is considered to be living in another person’s household. His son also provides Mr. S’s meals. Mr. S is receiving the in-kind support and maintenance that is valued according to the VTR method. This means that he has countable in- kind support and maintenance income of $331.33. 3. Same as Example 2, except that Mr. S’s son does not provide his meals Because his son is not providing his meals, the VTR method does not apply. Mr. S’s in-kind support and maintenance is valued according to the PMV method. When to Apply the Presumed Maximum Value Rule (PMV) Legal reference: 20 CFR 416.1140 Whenever a person receives in-kind support and maintenance that must be counted, but the one-third-reduction rule does not apply, use the presumed maximum value (PMV) rule. Under the PMV method, the maximum in-kind support and maintenance amount is presumed to be $351.33 (one-third of the SSI benefit rate plus $20).

Title 8: Medicaid Page 52 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised May 22, 2026 In-Kind Support and Maintenance (ISM) Situations in which the PMV method is used include:  A client living in another person’s household, but the household does not pay for or provide all their meals.  A client living in the client’s own household and receiving in-kind support and maintenance. Give clients an opportunity to show that the actual market value of their support and maintenance is less than the presumed maximum value. The actual market value is the client’s pro rata share of household expenses minus the client’s actual contribution. If the client verifies that the actual market value is less than $351.33, use the actual market value as the monthly income. In-kind support and maintenance received by an SSI recipient that is valued according to the PMV rule is reflected under unearned income as income type “H.”

1. Mr. G, a Medicaid member, lives with his friend, Mr. F. Mr. G has Social Security income of $700 but does not contribute any of his income towards the household’s operating expenses. Mr. F provides Mr. G with shelter, but Mr. G provides his own food. The household’s expenses, other than food, total $800. Because Mr. F does not pay for or provide all of Mr. G’s meals, the in-kind support and maintenance income received is valued according to the PMV method and not the VTR method. (Mr. G’s pro rata share of the household’s operating expenses (not including food) is $400.) The difference between Mr. G’s pro rata share ($400) and his contribution ($0) is greater than the presumed maximum value amount of $351.33. The IM worker uses countable in-kind support and maintenance income of $351.33 (one-third of the SSI benefit rate + $20) to determine Mr. G’s Medicaid eligibility.

Title 8: Medicaid Page 53 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related In-Kind Income Revised April 11, 2025 In-Kind Support and Maintenance (ISM)

2. Mr. S, a Medicaid member, lives with his adult son in a home owned by his son. Mr. S purchases and eats his meals separately from his son. Mr. S’s pro rata share of the household’s $400 operating expenses is $200. Mr. S’s actual contribution towards the household’s operating expenses is $75 per month. Although Mr. S is not paying a pro rata share of the household expenses, his son is not paying for or providing his meals. Therefore, Mr. S’s ISM is valued according to the PMV method. The actual value of Mr. S’s ISM is $125 ($200 minus $75). Because this is less than the presumed maximum value, the countable ISM income is $125. 3. Ms. L, a Medicaid member, lives alone in her own home. Her father helps her by paying her gas and electric bill of $80 per month. (Payments are made directly to the utility company.) Because Ms. L lives in her own home, the PMV method of determining in-kind income (for the payment of utilities) is used. Because the actual value of the in-kind support and maintenance received is less than the presumed maximum value, the countable in- kind support and maintenance income is $80. Non-MAGI-Related Self-Employment Income This section describes:  How to determine whether a client’s employment is self-employment.  How to consider income from self-employment. Determining if a Client is Self-Employed Legal reference: 20 CFR 416.1110, 20 CFR 416.1111 “Self-employment” is defined as providing income directly from one’s own business, trade, or profession. If it is unclear whether a person’s employment is self-employment, ask if the person files an income tax return as a self-employed person on form SE, Social Security Self-Employment Tax or if the person is subject to a self-employment tax. If the person files form SE or is subject to self-employment tax, consider the person’s self-employment verified, unless the situation has changed.

Title 8: Medicaid Page 54 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Self-Employment Revised April 11, 2025 Determining if a Client is Self-Employed If the person does not file form SE, but claims to be self-employed, determine if the person would be subject to the self-employment tax if the person filed an income tax return. Consult the IRS or another knowledgeable source to determine if the person is self-employed. Ask if the person materially participates in the management decisions. If the person does, this may be self-employment. Renting out one or two properties or leasing farmland to someone is not necessarily self-employment. In such cases, determine whether the person’s business is renting those properties by requesting a complete copy of the person’s federal tax return. See also Rental Property or Life Estate Income.

1. Mr. X rents out his life estate on the farm that he previously owned. He does not manage a business. Therefore, Mr. X does not engage in self- employment. 2. Mr. J files a Medicaid application for his daughter. He states that he is a self-employed salesman. The IM worker gets a release of information and contacts his distributor, who confirms that Mr. J is self-employed. 3. Ms. E babysits in her home. She does not file an income tax return. She is responsible for all expenses and makes her own management decisions. She is self-employed. Determining Income from Self-Employment Legal reference: 20 CFR 416.1110, 20 CFR 416.1111 “Self-employment income” is the gross income from a trade or business minus allowable deductions for that trade or business. Annualize self-employment income on a taxable year basis by totaling all self- employment income received or projected to be received in the calendar year, then dividing the total by 12 to determine the monthly amount. Divide the entire taxable year’s self-employment income equally among the number of months in the taxable year, even if the business:  Is seasonal.  Starts during the year.  Stops operating before the end of the taxable year.  Stops operating before the application for assistance.

Title 8: Medicaid Page 55 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Self-Employment Revised April 11, 2025 Determining Income from Self-Employment Use the person’s federal income tax return from the previous year to project self- employment earnings in the following tax year. The following schedules may be used:  Schedule SE, Computation of Social Security Self-Employment. For net earnings, use Section A, line 4 or Section B, line 4.C. For net loss, use Section A, line 3, or Section B, line 4.C.  Schedule C, Profit or Loss from Business or Profession. Use the line entitled “Net Profit or Loss.”  Schedule F, Farm Income and Expenses. Use the line entitled “Net Profit or Loss.” If the client indicates that the last tax return is not an accurate indicator of future income, or if a change occurs, project self-employment income for the taxable year based on the best available information. If the business has not been in operation long enough to have income tax records, project income based on the client’s records. If the client’s records are not available and no other evidence can be obtained, ask the client to provide a signed statement of projected self-employment earnings. Make a new determination of net income when a more accurate projection can be made, but no later than six months from the determination of eligibility. Apply a 15.3% deduction to net profit to determine countable self-employment earnings if:  The net profit exceeds or is expected to exceed $400, and  The client has filed or expects to file a federal income tax return and therefore will pay the self-employed social security tax. This deduction recognizes a portion of the additional Social Security taxes that a self-employed person must pay as a business expense. If the Social Security tax will be paid, multiply the net profit by 15.3% then subtract this amount from the net profit to determine countable self-employment income. If the profit is expected to be less the $400, or the client does not anticipate filing a federal income tax return, do not allow the 15.3% deduction.

Title 8: Medicaid Page 56 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Self-Employment Revised April 11, 2025 Determining Income from Self-Employment If you are making a self-employment income projection based on a client’s business records, assume that any deductions taken on the business records are allowable by the IRS, absent evidence to the contrary. However, do not allow the following:  Deduction for purchases of capital equipment. Capital equipment usually has a life span in excess of one year.  Payment for a mortgage to buy capital resources used in self-employment. The portion of the payment applied toward the principal is not an allowable deduction, but the portion that is interest is an allowable deduction. When an expense is for both personal and self-employment purposes, such as expenses of a home that is also used for self-employment, divide the expense according to the percentage that the client uses the item for self-employment.

Mr. O operates a self-employment business from his home. He deducts one- third of the home rent and one-third of the utilities on his income tax return as a business expense. One-third of the rent and utilities is an allowable deduction from gross self-employment income. Calculate self-employment income as follows: Divide any verified loss from self-employment over the taxable year in the same way as net earnings. Deduct a verified loss from self-employment from income of other self-employment businesses or from earnings of the client or the client’s spouse. Consider changes in self-employment income when they occur. Continue annualized income from self-employment throughout the year, even if the person does not expect to earn any more income from self-employment.

Gross self-employment earnings - Allowable business expenses = Net profit - 15.3% Social Security deduction (net profit x 0.153) if applicable = Countable self-employment income

Title 8: Medicaid Page 57 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Self-Employment Revised April 11, 2025 Determining Income from Self-Employment

Mr. A earned $3,000 in self-employment income from January through June. Mr. A does not expect to earn any self-employment income from July through December. Mr. A’s countable self-employment income for July through December is $250 per month ($3,000 divided by 12 months). Note: Refer to NJA0094, Income under Rental Income or Losses for the process to enter this type of income in ELIAS. Non-MAGI-Related Veterans Affairs Payments Legal reference: 20 CFR 416.1121 The Veterans Administration (VA) makes many types of payments to clients and their families. The chart that follows is a summary of VA benefits and treatment of benefits. After the chart is a more detailed explanation of each type of benefit.

Type of VA Benefits Treatment of VA Benefit Compensation Countable unearned income. Pension Countable unearned income. Aid and Attendance Third-party medical payment, count for client participation only. Do not divert to community spouse. Housebound Allowance Third-party medical payment, count for client participation only. Do not divert to community spouse. Clothing Allowance Not considered income. Dependent Allowance (Augmented Benefit) Countable income to the dependent unless the exception under Payments for Dependents applies. Educational Benefit Countable unearned income. Exception: Do not count the portion that is the veteran’s contribution or the portion for social services such as vocational rehabilitation. Exclude the cost of tuition and educational expenses and fees. Adjustments for Unusual Medical Expenses Not considered income. Do not divert to community spouse. Use Authorization for Release of Information, form 470-0461 or 470-0461(S) to request income verification from the VA. Include the following on the form:  What type(s) of benefits is the person receiving?  What is the gross monthly amount?

Title 8: Medicaid Page 58 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Compensation Payment  What is the net monthly amount?  Are there any deductions? If so, list type and amount.  Are dependent benefits included? If so, how much?  What portion is attributed to Aid and Attendance?  What would the benefit be with Unusual Medical Expenses (UME)?  What would the benefit be without UME? Note: Refer to NJA0094, Income for the process to enter VA income in ELIAS. Compensation Payment Legal reference: 20 CFR 416.1121 A VA compensation payment is based on a service-connected disability or death and may be based on need. Count as unearned income any portion not attributable to aid and attendance or unusual medical expenses. The portion of a VA compensation payment that is for VA aid and attendance and housebound allowance or is attributable to unusual medical expenses is not considered income. See Aid and Attendance and Housebound Allowance and Payment Adjustment for Unusual Medical Expenses. The portion of VA compensation that is due to a dependent’s needs is called an augmented payment and is usually counted as income to the dependent. See Payments for Dependents. A VA compensation or pension payment may also contain any of the other VA benefit types. Make sure to verify what is included in the VA compensation or pension payment. Verify what types of benefits are included in the VA payment. Pension Payments Legal reference: 20 CFR 416.1121 A Veterans Affairs (VA) pension payment is a combination of service and non- service-connected disability or death payment and is commonly based on need. Count as unearned income any portion of the VA pension payment that is not attributable to aid and attendance or unusual medical expenses. Exception: A veteran (or the surviving spouse of a veteran) who does not have a spouse or dependent and is entitled to a VA pension may receive a $90 income exclusion after entering a medical institution.

Title 8: Medicaid Page 59 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Pension Payments Exclude $90 of the VA pension as income when determining eligibility and client participation, beginning the month after the month of entry into the institution. See 8-I, Veterans or Surviving Spouses of Veterans and Residents of Iowa Veterans Home. Any portion of the pension attributable to aid and attendance or housebound allowance is not considered income. In most cases, the portion of the VA pension attributable to unusual medical expenses is not considered income. See Aid and Attendance and Housebound Allowance and Payment Adjustment for Unusual Medical Expenses. The portion of a VA pension that is attributable to a dependent’s needs is called augmented payment and is usually counted as income to the dependent. See Payments for Dependents. A VA compensation or pension payment may also contain any of the other VA benefit types. Make sure to verify what is included in the VA compensation or pension payment. Aid and Attendance and Housebound Allowance Legal reference: 20 CFR 416.1103, 20 CFR 416.1121 VA pays an allowance to some veterans, spouses of disabled veterans, and surviving spouses who are in regular need of the aid and attendance of another person or who are housebound. This allowance is combined with the person’s pension or compensation payment and is paid while the person is at home, in a medical institution, or (in rare circumstance) in a residential care facility. A payment for aid and attendance or housebound allowance is not income but is a third-party medical resource. When the reason an applicant receives aid and attendance or housebound allowance is for costs which the Medicaid program or State Supplementary Assistance program will be meeting (such as nursing facility or in-home health related care), deduct the aid and attendance or housebound allowance to determine the amount of the Medicaid or State Supplementary Assistance payment.

Title 8: Medicaid Page 60 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Aid and Attendance and Housebound Allowance If a member is in a nursing facility, add the aid and attendance or housebound allowance to the client participation to determine the total client participation owed. If a member receives in-home health-related care to meet the same need for which the member gets aid and attendance or housebound allowance, add the aid and attendance or housebound allowance to the client participation to determine the total client participation owed. If a member is on two or more programs where aid and attendance is considered, such as waiver and in-home health-related care, allow the member to choose the program to which the VA aid and attendance payment would be applied. If the client cannot verify the amount for aid and attendance or housebound allowance, request verification from the Department of Veterans Affairs. A client who provides a signed release to the Department of Veterans Affairs has met the requirement for supplying requested information or verification. The general release does not meet this requirement unless the client asks for help. Add the VA file number to a specific release. Clothing Allowance Legal reference: 20 CFR 416.1103, 20 CFR 416.1121 A lump-sum allowance is payable in August of each year to a veteran with a service connected disability who has a prosthetic or orthopedic appliance, including a wheelchair. This VA clothing allowance is to defray the increased cost of clothing due to wear and tear caused by these appliances and is not income. Payments for Dependents Legal reference: 20 CFR 416.1121 In some instances, the VA considers the number of dependents to determine the amount of the veteran’s or surviving spouse’s benefit. Payments for dependents are augmented payments. The augmented payment may be included in the same payment made to the veteran or widow or may be made in a separate payment to the dependent.

Title 8: Medicaid Page 61 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Payments for Dependents The portion of a VA payment that is augmented because of a dependent is income to the dependent, not the veteran. Exception: Count an augmented payment as income of the veteran or surviving spouse if all the following criteria are met:  The dependent lives apart from the veteran or surviving spouse, and  The dependent applies to have the augmented payment paid to the dependent separately from the veterans payment (apportionment), and  The VA denies the dependent’s request for separate payment, and  The veteran or surviving spouse does not send the augmented benefit to the dependent. If the VA denies apportionment and the veteran makes no payment to the dependent, count the augmented benefit as the veteran’s income the month following the month of the VA’s response. If the client is a veteran or surviving spouse receiving a VA payment, and the client has a living spouse, dependent parent, child, or disabled adult child, verify whether any of the VA benefit is augmented. If the client indicates that the VA payment is not augmented (or does not know) and alleges no living spouse, dependent parent, child, or disabled adult child, assume that the benefit is not augmented. If the client is a child or spouse living with a veteran receiving a VA payment, determine whether any of the VA payment is augmented and is income to the client. If the client is a child or spouse living apart from a veteran who receives VA payments, determine whether any of the VA payment is augmented and is income to the client. Ask if the client receives any payments directly from the VA (i.e., by apportionment) or through the veteran. If a surviving spouse or a child or spouse living apart from the veteran alleges that the augmentation amount was not given, ask if apportionment has been requested. If the dependent has already requested apportionment, obtain a copy of the VA response. If the dependent has not applied for apportionment, refer the dependent to the appropriate VA office. Explain that the augmentation amount will continue to be considered the dependent’s income unless the VA refuses to make the payment to the dependent by apportionment.

Title 8: Medicaid Page 62 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Payments for Dependents If the VA denies apportionment and the veteran makes no payment to the client, do not consider the augmentation amount as the client’s income in the month following the month of the VA’s response date. Educational Benefits Legal reference: 20 CFR 416.1121 Count a VA educational benefit as unearned income, unless it is for a rehabilitation payment or a withdrawal of the veteran’s own contribution. The portion of a VA educational benefit that is a withdrawal of the veteran’s contribution is a conversion of a resource and is not income. Some VA educational benefits are for vocational rehabilitation, which is considered a social service and not counted as income. Training for a specific job skill or trade (vocational training) is not a social service; however if it is part of the vocational rehabilitation, treat it as a social service and do not count as income. VA educational benefits that are counted as unearned income can be excluded if they are used to pay the cost of tuition, fees, or other necessary educational expenses. See Educational Assistance. Payment Adjustment for Unusual Medical Expenses Legal reference: 20 CFR 416.1103(a)(7) VA defines “unusual medical expense” as unreimbursed medical expenditures that exceed five percent of the person’s annual applicable maximum VA payment rate. If the person receives a needs-based VA pension or compensation payment, the unusual medical expenses are deducted from the countable income used to compute the VA benefit amount. This may result in a higher VA payment amount. The portion of a VA payment that is attributable to unusual medical expenses (UME) is not considered as income in determining eligibility or client participation. EXCEPTION: The portion of a VA payment that is attributable to UME is considered as income in determining client participation for veterans or surviving spouses of veterans who do not have a spouse or dependents and reside in the Iowa Veteran’s Home.

Title 8: Medicaid Page 63 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Payment Adjustment for Unusual Medical Expenses A person with no countable income for VA purposes is already receiving the maximum VA benefit, so none of that person’s VA benefit is attributable to unusual medical expenses. To determine the amount of VA benefits attributable to UME, contact the Department of Veterans Affairs or use the VA award letter. When sending a release to the VA, specify on the release that the information needed is the amount of the VA benefit that is attributable to UME (difference in what the benefit would be with and without UME) and not merely the amount of UME. To determine the amount of VA benefits attributable to UME from an award letter, calculate the benefit amount with and without consideration of the UME deduction.

1. Mr. A receives a veteran’s pension of $500 and has social security income of $300. The IM worker sends a release form to the Department of Veterans Affairs. The VA indicates that $100 of the $500 VA benefit is attributable to UME. Only $400 of the VA benefit is considered to determine SSA and Medicaid benefits. 2. Mr. B receives a monthly veteran’s pension of $698.00. Mr. B provides the IM worker with a copy of his VA benefit award letter. The letter indicates that the computation of Mr. B’s VA benefit amount used the annual social security income of $5,497, annual “other” income of $353.00, and annual medical expenses of $9,700.00. The IM worker determines that $488.00 of the $698.00 VA pension is attributable to UME. Only $210.00 of the VA pension is considered to determine SSA and Medicaid benefits.

$

8,376.00

- 5,497.00

- 353.00

$

2,526.00 Maximum annual VA payment rate for Mr. B’s pension type Annual Social Security income used to compute VA benefit Annual “other” income used to compute VA benefit Annual VA benefit without UME deduction $2,526 divided by 12 months = $210.00 monthly benefit (rounded down to the nearest dollar) without UME deduction. This is the countable VA benefit amount for Medicaid and SSA purposes.

$ 698.00

- 210.00

$ 488.00 Monthly VA benefit with UME income deduction (actual benefit amount) Monthly VA benefit without UME income deduction Monthly VA benefit attributable to UME

Title 8: Medicaid Page 64 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 $20 General Income Deduction Non-MAGI-Related Deductions Legal reference: 20 CFR 416.1112, 20 CFR 416.1124 After determining countable nonexcludable income, apply the following deductions (except as noted) in the order listed. Some deductions do not apply for all coverage groups and all income types. See the corresponding subsection for a complete explanation of when to apply the deduction. 1. From unearned income, subtract a general income deduction of up to $20. See $20 General Income Deduction. 2. From earned income, subtract any remaining balance of the $20 general income deduction that was not used for unearned income. See $20 General Income Deduction. 3. From earned income, subtract a work expense deduction of $65. See $65 Plus One- Half Deduction. 4. From earned income, subtract any impairment-related work expenses. See Deduction for Impairment-Related Work Expenses. 5. From remaining earned income (after the $65 deduction), subtract one-half. See $65 Plus One-Half Deduction. 6. From earned income, subtract any work expenses of the blind. See Deduction for Work Expenses for the Blind. 7. From earned or unearned income, subtract any income that is to be used for the Plan for Achieving Self Support. See Deduction for Plan for Achieving Self-Support. $20 General Income Deduction Legal reference: 20 CFR 416.1124(c)(12) and 20 CFR 416.1112(c)(4) When determining eligibility for SSI-related programs, allow a $20 general income deduction per eligible unit, except as listed below. Apply the deduction first to unearned income, then to earned income if unearned income is less than $20.

Mr. and Mrs. W live at home with total unearned income of $800. Countable income is: $800 - $20 deduction = $780 countable income

Title 8: Medicaid Page 65 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 $20 General Income Deduction Do not apply the $20 general income deduction for the following coverage groups:  300% group.  State Supplementary Assistance recipients applying for or receiving in-home health-related care, or residential care facility services.  Home- and community-based services waiver recipients. Do not apply the $20 deduction to:  Income based on need, such as unearned income for support and maintenance (veteran’s compensation, for example).  Income of an applicant in a medical institution. Exception: Allow the $20 deduction when determining eligibility for QMB, SLMB, or Medically Needy.  In-kind support and maintenance valued according to the value of one-third reduction rule. $65 Plus One-Half Deduction Legal reference: 20 CFR 416.1112 Deduct $65 plus one-half of the balance from a person’s earned income, except as listed below. Apply the deduction of impairment-related work expenses before deducting the one-half of the balance. When both spouses are employed, add together their total earned income then subtract the earned income deduction of $65 plus one-half from the total. If the recipient is a child who has earned income, give the $65 plus one-half deduction to the child’s earnings also. Do not apply the $65 plus one-half deduction for the following coverage groups:  300% group in a facility or home- and community-based waivers.  Dependent person. Deduct only $65 for the dependent. The aged, blind, or disabled client gets $65 plus one-half. Deduction for Impairment-Related Work Expenses Legal reference: P.L. 100-508, 20 CFR 416.976 Deduct impairment-related work expenses from the earned income of clients who are disabled (but not blind) and under age 65, or were determined to be disabled before age 65. If the client is blind, see Deduction for Work Expenses for the Blind.

Title 8: Medicaid Page 66 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work… Deduct expenses for items or services that enable the impaired person to work, and that are incurred by the person because of a physical or mental impairment. Examples include a one-handed typewriter, typing aids such as page-turning devices, and telecommunications devices for the deaf. Deduct payments for residential modifications for a person employed outside the home that permit the person to get to work. This deduction also applies to residential modifications for a person who works at home to create a work space that accommodates the person’s impairment and to provide access to that work space. Other changes in the home are not deductible as impairment-related work expenses. Expenses may involve payment for the purchase, installation, maintenance, and repair of an impairment-related item or payment for an impairment-related service. In order for an impairment-related expense to be deducted, the following criteria must be met:  The type of expense and the charge must be verified.  The client must pay for the item. Payment can be cash, check or credit card, installment payments, or rentals or leases.  The item cannot be reimbursable or payable through another source.  The cost of the expense must be the reasonable cost based on going rates in the community.  The cost cannot be a deductible self-employment expense.  The expense would not be incurred by someone without the impairment. For example, everyone must have clothing but the client may need a certain type of shoes solely because of employment and the client’s disability. Impairment-related work expenses are not deductible in determining client participation for people in medical facilities. Deduct impairment-related payments according to one of the following methods:  Down payment. A person may make a down payment on an impairment- related item or service, then make regular monthly payments. Either deduct the down payment entirely in one month, or allocate it over a 12-consecutive-month period beginning with the month of purchase. The client chooses the method.

Title 8: Medicaid Page 67 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work…  Annualized payment. The down payment and the monthly payment must be divided into uniform monthly payments if: • The monthly payments do not begin immediately after the month in which the down payment is made, or • The regular monthly payments extend for less than 12 months. To calculate uniform monthly payments: • Establish the 12-month proration period beginning with the month of purchase. • Add together the down payment and all the monthly payments that will be paid in the 12-month proration period. • Divide the sum by 12.

Mr. G purchases a deductible item in July 1994, paying $1,450 down. However, the first monthly payment of $125 is not due until September. The worker calculates a uniform monthly deduction as follows: Step 1. Establish the 12-month proration period as July 1994 through June 1995 (12-months beginning with month of purchase) Step 2. Add the down payment and monthly payments $ 1,450 + 1,250 $ 2,700 Down payment in 7/94 ($125 x 10) Sum of monthly payments during proration period (July 1994 - July 1995) Step 3. Divides $2,700 by 12 = $225 In this situation, a $225 monthly deduction, the down payment prorated amount plus the regular monthly payment, is allowed beginning in July 1994, and ending in June 1995. After June 1995, the deduction amount would be the regular monthly payment of $125.  Nonrecurring payment. If the impaired person pays the full amount all at once, either deduct it entirely in one month, or prorate it over a 12-consecutive- month period, beginning with the month of purchase. The client chooses the method.  Recurring payments. Some impairment-related work expenses are paid on a recurring basis. When durable equipment is purchased by installment over a period of time, the cost of the item, interest, and sales tax are deductible. Prorate the payments over the time period between payments.

Title 8: Medicaid Page 68 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised May 22, 2026 Deduction for Impairment-Related Work…  Rentals or leases. Deduct the actual monthly rental or lease charge. Attendant Care Services Legal reference: 20 CFR 416.976(c)(1) Deduct payments made for attendant care services if those services are needed in the work setting or to help the impaired person travel to and from work. “Attendant care services” are types of physical assistance that help an impaired person meet essential personal needs at home or at work. Deduct the payments made for attendant care services in the home only when the services relate to preparations for going to or returning from work. Examples include services relating to bathing, dressing, cooking, eating, administering medications, or arranging medical devices right before or after the impaired person’s workday. The services generally require no more than one or two hours each morning or evening. Do not deduct payments made to family members for attendant care services unless:  The client can show that the family member has suffered economic loss by reducing or terminating employment to provide the care, and  The payment to the family member is made in cash. A family member is anyone related by blood, marriage, or adoption, whether or not the person lives with the impaired person. An attendant assists a client in getting ready and traveling to work for approximately one hour per day and assists the client with laundry, housecleaning, and other non-work-related services for approximately three hours per day. The worker deducts only one-fourth of the total payment to the attendant as an impairment-related work expense.

Title 8: Medicaid Page 69 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work… Routine Drugs and Medical Supplies and Services Legal reference: 20 CFR 416.976(c)(5) Deduct payments for routine drugs, medical supplies, and services if they are necessary for controlling the disabling condition and are not payable by Medicaid or another source. Examples include payments for physical therapy and medical supplies such as incontinence pads, catheter, bandages, elastic stockings, face masks, irrigating kits, and disposable sheets and bags. Durable Medical Equipment and Prostheses Legal reference: 20 CFR 416.976(c)(2) and (3) Deduct the costs of durable medical equipment and prostheses that are not payable by Medicaid or another source. The prostheses must be used primarily for functional, rather than cosmetic purposes in order to be a deduction. “Durable” medical equipment is medical equipment that:  Can withstand repeated use.  Is primarily used to serve a medical purpose.  Is generally not useful to a person who does not have the illness or injury. The following types of equipment are not deductible unless a physician verifies that the equipment is necessary to control the disabling condition:  Portable room heater.  Air conditioner.  Humidifier or dehumidifier.  Electric air cleaner.  Posture chair.  Physical fitness equipment, such as an exercise bicycle. If the expense was incurred within 11 months before receiving the earned income (i.e., because of a different job) and has not already been deducted as an impairment-related work expense, the client can choose either to:  Prorate the expense over 12 months after receiving earned income, or  Use the deduction in the first month of earned income.

Title 8: Medicaid Page 70 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work… Modified Vehicles Legal reference: 20 CFR 416.976(c)(6) Deduct the cost of modifying an impaired person’s vehicle. A physician must verify that the person is unable to use public transportation and requires the special modifications in order to get to and from work. Also, the person must pay the cost of the modification before it can be deducted. Deduct the actual cost paid to make structural or operational modifications to a vehicle in order to drive it, or be driven in it, to work. Do not deduct the cost of the vehicle. Deduct mileage allowance for operating costs based on the weight of the empty vehicle according to the chart below. Operating cost includes gas and oil, maintenance, parts, tires, tolls, parking, insurance, and state and federal taxes. Cost of Owning and Operating Automobiles, Vans, and Light Trucks - 2001 Cents Per Mile * Size Cost ** Characteristics *** Subcompact 32.2 4 cylinder, Avg MPG = 32 Compact 42.3 4 cylinder, Avg MPG = 23 Intermediate 46.9 6 cylinder, Avg MPG = 20 Full-Size Vehicle 51.1 6 cylinder, Avg MPG = 19 Compact Pickup 40.2 4 cylinder, Avg MPG = 18 Full-Size Pickup 47.7 8 cylinder, Avg MPG = 13 Compact Utility 45.6 4 cylinder, Avg MPG = 15 Intermediate Utility 51.4 6 cylinder, Avg MPG = 15 Full-size Utility 52.9 8 cylinder, Avg MPG = 13 Mini-Van 50.7 6 cylinder, Avg MPG = 17 Full-Size Van 52.0 6 cylinder, Avg MPG = 13 * Total costs over 5 years, based on 70,000 miles. ** Includes depreciation, financing, insurance, registration fees, taxes, fuel maintenance, and repairs. *** Average MPG reflect city, excluding highway. Source: Federal Highway Administration estimates based on the 2001 editions of The Complete Car Cost Guide and Complete Small Truck Guide from Intellichoice, Inc., and sales figures from Automotive News.

Title 8: Medicaid Page 71 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work… Multiply the number of round trip miles to work by the rate per mile. Multiply that times the number of trips per month to determine the monthly deduction. A person who uses a modified vehicle to get to work may be entitled to a mileage allowance and modification cost allowance even if the person is able to use public transportation to get to work. Driver Assistance, Taxicab or Other Hired Vehicles Legal reference: 20 CFR 416.976(c)(6) If a person’s impairment requires the person to use driver assistance, taxicabs, or other hired vehicles in order to get to and from work, deduct the fee paid to the driver. If the impaired person’s own vehicle is used, allow a deduction for both the driver cost and the vehicle operating costs. Use the same mileage allowance rates for vehicles operating costs that are used for Modified Vehicles. A deduction for driver assistance, taxicabs, or other hired vehicles is allowable only if:  Public transportation is not available in the person’s community or if  Public transportation is available but the person is unable to use it because of the person’s impairment.

Ms. S is employed as a computer technician. She cannot take public transportation. The cost of a driver of $70 per month and the rate allowed for her type of vehicle are deducted. The rate is $.295 per mile because her car is a 1989 compact. The worker allows the charge for the driver and the mileage to and from Ms. S’s home. The round-trip mileage is 5 miles per day. In a month with 20 working days, Ms. S is allowed $99.50 in transportation expenses [$70 for the driver and $29.50 for mileage ($.295 x 5 x 20)]. Own Unmodified Vehicles Legal reference: 20 CFR 416.976(6) Allow a deduction for vehicle operating costs if:  The impaired person drives the person’s own unmodified vehicles to and from work and

Title 8: Medicaid Page 72 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work…  Public transportation is unavailable in the person’s community or the impaired person is unable to use public transportation because of the person’s impairment. Use the same mileage allowance rates for vehicle operating costs that are used for Modified Vehicles. Deduction for Work Expenses for the Blind Legal reference: 20 CFR 415.1112(c)(8) A person who qualifies for SSI because of blindness is not eligible for the deduction for impairment-related expenses but may deduct the ordinary and necessary expenses of earning income. If the blind person’s spouse is also eligible because of blindness, each spouse is eligible for this deduction. Blind people who are 65 or over are not eligible for this exclusion unless they were either:  Receiving SSI payments because of blindness in the month before they turned 65, or  Converted to SSI from the Aid to the Blind program in effect in 1974. Examples of ordinary and necessary work expenses include those related to:  Transportation to and from work such as the actual cost of bus or cab fare, cane travel instructions, a seeing eye dog and the dog’s expenses, or private automobile (15¢ per mile).  Actual cost of job improvement training such as computer programming training.  Job performance items such as: • Braille instruction and translation of material into Braille, readers. • Child care costs (if not otherwise provided). • Equipment needed on the job or tools used in the trade (e.g., for homebound work) due to blindness. • Instructions in grammar. • Meals. • Professional association dues that are work-related, licenses, union dues. • Prostheses needed for work even though not related to blindness. • Optical aids.

Title 8: Medicaid Page 73 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Work Expenses for the Blind • Safety shoes and uniforms and the care of them. • Income taxes (federal, state, local) and FICA self-employment taxes. • A wheelchair if necessary due to other disabilities. The amount deducted cannot be more than the amount of earned income for the period. Do not carry unused deductions over to another quarter. The client must keep records of work expenses and verify the expenses. If transportation and meal expenses appear reasonable, accept them without verification. Deduction for Plan for Achieving Self-Support Legal reference: 20 CFR 416.1112, 20 CFR 416.1180, 20 CFR 416.1181, Deduct the income of a blind or disabled client under the age of 65 if that income is needed to fulfill a Plan for Achieving Self-Support (PASS). People 65 or over get this deduction only if they were receiving SSI-related eligibility because of blindness or disability in the month before they turned 65. Check the SDX when a client states that a plan for achieving self-support exists. When other clients have a plan, it is verified by the social worker. Subtract the income deduction for a PASS from a client’s countable income after all other applicable deductions, such as the $20 general income deduction and the $65 and 1/2 deduction. Income Policies for MAGI-Related Coverage Groups Legal reference: 42 CFR 435.603, 441 IAC 75 (Rules in Process) Definitions Legal reference: 441 IAC 75 (Rules in Process) “Modified Adjusted Gross Income” means the tax-based methodology to determine income eligibility and household size for family-related and other coverage groups. It is also known under the acronym “MAGI.”

Title 8: Medicaid Page 74 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Definitions “Reasonable Compatibility” means the standard by which the total attested countable income for each person’s household size is compared with the total amount from available Electronic Data Sources used by DHS. In order for attested income to meet the standards for ‘reasonable compatibility’ it must meet one of three criteria:  Both the total attested income and the total income from the Electronic Data Sources are above, at, or below the applicable income limit for Medicaid or HAWK-I, or  The total attested income is within 10% of the total income from Electronic Data Sources, or  The total attested income exceeds the total income from electronic data sources. If the attested income meets any of the reasonable compatibility criteria, the income is considered to be verified. “Reasonably compatible” is another term used in place of “reasonable compatibility” and carries the same meaning as “reasonable compatibility”.

Title 8: Medicaid Page 75 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Income Limits MAGI-Related Income Limits Legal reference: 441 IAC 75 (Rules in Process) Effective January 1, 2014, the following income limits apply to the MAGI-related Medicaid coverage groups specified below, as identified by the legal references provided:

Coverage Group Legal Reference Household Size (persons) Income Limit (per month) Family Medical Assistance Program 441 IAC 75.3(1); 42 C.F.R. Part 435.110 and 435.118; Title XIX of the Social Security Act, Section 1931 1 $447 2 $716 3 $872 4 $1,033 5 $1,177 6 $1,330 7 $1,481 8 $1,633 9 $1,784 10 $1,950 over 10 $1,950 plus $178 for each additional person Mothers and Children, for pregnant women 441 IAC 75.3(2); 42 C.F.R. Part 435.116 and 435.118; Title XIX of the Social Security Act, Section 1902 215% of the federal poverty level for the household Mothers and Children, for infants under one year of age

300% of the federal poverty level for the household Mothers and Children, for children aged 1 through 18 year 441 IAC 75.3(2); 42 C.F.R. Part 435.118; Title XIX of the Social Security Act, Section 1902 167% of the federal poverty level for the household

Title 8: Medicaid Page 76 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised May 22, 2026 MAGI-Related Income Limits

Coverage Group Legal Reference Household Size (persons) Income Limit (per month) Medicaid for Independent Young Adults 441 IAC 75.3(13); Title XIX of the Social Security Act, Section 1902(a)(10)(A)(ii)(VII) 254% of the federal poverty level for the household Iowa Health and Wellness Plan (IHAWP) 441 IAC 74.4 133% of the federal poverty level for the household size, as of the date of a decision on initial or ongoing eligibility Self-Attested Income Legal reference: 42 CFR 435.603(h)(3), 42 CFR 435.945 Enter all self-attested income, earned and unearned, using the amount and frequency as reported by the client, unless otherwise directed. Deductions that are not allowed: Add back the following income to determine countable income:  Non-taxable Social Security benefits  Tax-exempt interest  Foreign earned income & housing expenses for Americans living abroad View the Income Verification Detail page to see if Title II income verification results were returned from EDS. The worker will need to enter the amount of Title II income returned from EDS, if different then the self-attested amount. The Title II income from EDS is considered verified. Title II income must be entered on a separate income record for each person receiving it. Do not combine multiple individual’s Title II income amounts under one person. If one person receives more than one type of Title II income, they should be combined and entered on one income record. For long term disability, the income that is equal to the percentage of the premium paid by the employer is countable for MAGI and non-MAGI. The income equal to the percentage of the premium paid by the employee is not countable for MAGI but will be counted for non-MAGI.

Title 8: Medicaid Page 77 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Self-Attested Income Income verification received that was not requested by the IM worker needs to be processed as a reported change. After running EDBC for all available eligibility months and an over income denial is received for any applicant or household member for the month of application or the first month of a new review period, workers need to review the entered income for subsequent months. If eligibility may potentially occur due to a lower income amount, rescind the first month as ineligible and run EDBC. When income verification is received in a frequency other than monthly, add all income in the time period being used together and divide by the number of pay periods in the time period For both applications and reviews:  If the client does not complete any part of an income section, assume there is no income of that type.  When the client provides a monthly amount but the rest of this section is left blank, you can use this as the self-attested amount.  When the client states they work a certain number of hours a week at a certain rate of pay, they have provided a self-attested amount.  If the client leaves the income section blank and provides verification of that income type, you can use the verification provided as a self-attested amount. When information provided at application, review or when a change is reported is not enough to reasonably determine a self–attested amount, clarification is needed. Clarification will need to be requested when:  The client states they work a range of hours a week (e.g. 20-30 hours per week) and make a certain rate of pay per hour and does not provide a gross amount.  The client states they work a certain number or a range of hours a week and the hourly rate varies based on job type (e.g. $7.50 an hour when hosting, $4.50 an hour when serving) and does not provide a gross amount.  The client reports beginning employment and is unsure of the hours and rate of pay.  The client provides the employers name and does not complete the rest of the income section.

Title 8: Medicaid Page 78 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Self-Attested Income  The client states they are receiving a type of unearned income (e.g. Unemployment, Social Security etc.) and does not list an amount. When self-attested income cannot be determined based on information provided at application, review, or when a change is reported and the requested information is not provided, a non-compliance of ‘failure to provide information’ will be used to complete the negative action. For clients attesting to Tips/Commissions via an e-App, assume the amount provided is consistent with the pay frequency listed for earnings, unless questionable. When self-attested income is questionable and prudent person concept does not apply, reach out to the client for verification. Clearly document if prudent person was used. When an application from the FFM lists an income frequency as irregular or infrequent, the worker must contact the household to obtain a self-attested income. When the client has filled out the income/employment section on an application or review, or has submitted a change report and has self-attested income that cannot be determined, attempt to call the client to resolve/clarify a self-attested income amount that is indicative of future months. Document in WISE the reason for the call and the outcome. If the self-attested income is not indicative of future income, the income may need to be flattened. (See Flattening Income later in this chapter.) Income Considered Legal reference: 441 IAC 75.70, 441 IAC 75 (Rules in Process) Income eligibility under MAGI-related Medicaid shall be determined using “modified adjusted gross income” (MAGI) for a coverage group that is subject to MAGI methodology, including the imposition of any premiums or cost sharing. The total countable earned and unearned income of the applicant or member household shall be considered when determining initial and ongoing Medicaid eligibility for coverage groups that are subject to MAGI methodology. For eligibility to exist, the total countable monthly income of the applicant’s or member’s household must be at or below the income limit for the applicable coverage group.

Title 8: Medicaid Page 79 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Household Member Income… MAGI-Related Household Member Income Exclusions Legal reference: 441 IAC 75 (Rules in Process) The income of a household member that meets the requirements of paragraph (a) or (b) below is excluded from the household’s total countable income. a. Income of children under age 19. (1) The income of a child under age 19 who are:  Included in the household of his or her parent (natural, adopted or step), and  Not expected to be required to file a federal tax return for the taxable year in which Medicaid is being determined, whether or not the child files a tax return. (2) Income of a child under age 19 with income of less than the threshold determined annually by the Internal Revenue Service is considered not to be expected to file. b. Income of tax dependent other than spouse or child. (1) The income of a tax dependent other than a spouse or a child (natural, adopted or step) who is not expected to be required to file a federal tax return for the taxable year in which Medicaid is being determined is not included whether or not the dependent files a tax return. (2) A dependent with income of less than the threshold determined annually by the Internal Revenue Service is considered not to be expected to file. (3) Any cash support provided to the claimed dependent by the tax-filer. Countable Income Under MAGI Legal reference: 441 IAC 75 (Rules in Process) For the purpose of determining initial and ongoing MAGI-related Medicaid eligibility, countable income is the amount that remains after allowable expenses and deductions have been subtracted from gross countable income. The worker will not make this calculation outside of the system. When the self- attested income, allowable expenses, and deductions are entered into the system, the system will calculate the countable income.

Title 8: Medicaid Page 80 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised May 22, 2026 Countable Income Under MAGI Gross Countable Income Gross countable income under MAGI includes income types that are considered as gross income for federal tax purposes except as specified under Income Types Excluded from Gross Income below. Gross income for the purpose of Medicaid eligibility under MAGI includes but is not limited to the following income types:  Earned income, including salaries, wages, tips and other compensation for services, including fees, bonuses, commissions, fringe benefits such as sick pay, vacation pay, severance pay, and similar items. Also includes AmeriCorps income used for living expenses*, census earnings, child student earnings*, foreign earned income and housing expenses of a U.S. citizen or resident who lives abroad even though these types of income may not be taxable.  Gross profit derived from a self-employment trade or business;  Capital gains derived from dealings in assets or property;  Interest (taxable and non-taxable);  Rental income*, including room and board;  Royalties, residuals;  Taxable Dividends;  Alimony* and separate maintenance payments;  Taxable annuities, pensions*, IRA distributions or withdrawals;  Income from life insurance and endowment contracts;  Retirement – Military, IPERS;  Income from discharge of indebtedness;  Distributive share of partnership or S-corporation gross income;  Income in respect of a deceased person;  Income from an interest in an estate or trust;  Deemed sponsor income;  Social security benefits (taxable and non-taxable);  Disability payments, including government, private, temporary and permanent payments;  Unemployment Insurance Benefits (UIB);  Gambling winnings;

Title 8: Medicaid Page 81 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Countable Income Under MAGI  Survivor’s benefits;  Strike pay;  Blood/Plasma;  Educational assistance used for general living expenses;  Deferred comp;  Court awards;  Job Corps;  Jury duty;  Railroad retirement, disability, or survivors benefits;  Senior Community Service Employment Program (SCSEP);  Tribal gaming distributions;  College work study;  Youth Corps;  Civil Service annuity or pension.* *Refer to NJA0094, Income for additional process information. Income Types Excluded from Gross Income Income that meets the following criteria is not considered when determining countable gross income under MAGI-related Medicaid despite the fact that the income may be considered for federal tax purposes.  An amount received as a non-recurring lump sum from a source that is considered in determining adjusted gross income for federal tax purposes (See Countable Gross Income above) is counted only in the month received for determining MAGI-related Medicaid eligibility. A non-recurring lump sum received from a source that is not considered in determining adjusted gross income for federal tax purposes is entirely excluded.  Scholarships, awards, or fellowship grants used for education purposes and not for living expenses are excluded from income.  American Indian/Alaska Native distributions.  Student financial assistance provided under the Bureau of Indian Affairs education programs are excluded from income.  Any other type of income that is not identified as countable (See Gross Countable Income above) and is not otherwise included in “adjusted gross income” for federal tax purposes.

Title 8: Medicaid Page 82 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Countable Income Under MAGI Allowable Expenses Expenses that are allowed as deductions from gross income when determining a person’s adjusted gross income for federal tax purposes are subtracted from gross income as defined in Gross Countable Income and Income Types Excluded From Gross Income when determining countable income under MAGI-related Medicaid. These expenses can be claimed by individuals whether or not they plan to file a tax return. Allowable expenses include:  Educator expenses;  Certain business expenses of reservists, performing artists, and fee-based government officials;  Health savings account contributions;  Moving expenses;  Deductible part of self-employment tax;  Contributions to self-employed Simplified Employee Pension (SEP), Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) and Qualified Plans;  Self-employed health insurance contributions;  Amount of penalty for early withdrawal of savings;  Alimony payments;  Certain Individual Retirement Account (IRA) contributions;  Student loan interest expense;  Qualified domestic production activities deduction;  Expenses directly related with the conduct of a self-employment trade or business, including but not limited to depreciation and capital losses;  Pre-tax contributions.

Title 8: Medicaid Page 83 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Countable Income Under MAGI MAGI Income Deduction An amount equal to 5 percent of the federal poverty level for the applicable household size shall be subtracted from the total monthly countable MAGI income amount when:  An applicant’s monthly MAGI income exceeds the highest income limit of all of the MAGI-related Medicaid coverage groups for which the applicant meets the categorical requirements, and  Deducting the 5 percent results in the applicant’s income being within the income limit of this MAGI-related Medicaid coverage group. MAGI-Related Self-Employment A person is considered self-employed if:  The person carries on a trade or business with the goal of making a profit and the person is the sole proprietor of the trade or business, or  The person is an independent contractor and the person paying for the work has the right to control or to direct only the result of the work and not how the work will be done. Reported income losses allowable by the IRS must be subtracted from other income if indicative of current income. These losses can be used to offset any other type of income such as wages or pensions. Self-employment losses are allowable for both tax filers and non-filers. ELIAS will not accept a negative amount on the Income page. If there is a loss, enter the self-employment amount as zero on the Income page and enter the loss on the Expense page as MAGI Moving Expenses. Make a Journal entry stating that the client has an allowable income loss of $XX.XX from (allowable type of loss). If tax forms are provided, enter the business income or loss found on the tax form. Note: Also consider capital gains or losses and other gains or losses. If using ledgers to determine the business income or loss, use the net amount of income or losses provided. If the self-employment has been in existence for less than a year, the net profit shall be averaged over the period of time the self-employment has been in existence and the monthly amount projected for ongoing eligibility.

Title 8: Medicaid Page 84 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Countable Income Under MAGI If the self-employment has been in existence for such a short time that there is very little income information, the worker shall work with the household to establish a reasonable estimate that will be projected for ongoing eligibility. When there is a change in the nature of the self-employment business or a permanent change in operating expenses, net profit must be recalculated based on the change. Income Verification Legal reference: 441 IAC 75 (Rules in Process) The department shall consider an applicant’s or member’s attestation of their income as verified and use the attested income to determine eligibility when the attested amount is reasonably compatible with electronic data sources. The department will not require the applicant or member to provide verification when attested income is reasonably compatible with electronic data sources or verification is available to the department from other sources. When attested income is not reasonably compatible with electronic data sources, the applicant or member must provide verification of the income or provide a statement that reasonably explains the discrepancy between the attested income and electronic data sources. Whether the income is self-employment or another income source, an attempt to verify self-attested through Electronic Data Sources is always done before using documentation provided by the applicant/member to verify income. When Eligibility Determination and Benefits Calculation (EDBC) results require verification of income or expenses follow the applicable income verification process:  No aid code verifications means the individual’s self-attested income did not result in eligibility when running EDBC. The income must be worker verified.  Deferred verifications means the individuals reported change in income or expenses did not result in eligibility when running EDBC. The income must be worker verified.  When EDBC results in all household members being ‘Denied Over Income’ and there are NO expenses with a Not Verified status, accept the EDBC results and Save & Continue.

Title 8: Medicaid Page 85 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Income Verification  When EDBC results in all household members being ‘Denied Over Income’ and there are expenses with a Not Verified Status, do not accept the EDBC results and cancel out prior to attempting to verify the expenses.  Complete WAGE/DBRO/WISE Look Ups to assist you in determining what income sources require verification when an individual on the case is denied/discontinued for No Aid Code - Verification or Deferred Verifications. A look up is not to be completed before EDS and EDBC is completed.  Electronic Data Look Up functionality available in ELIAS is only to be used as listed below under WAGE, DBRO, and WISE-SSA/SSI benefits when attempting to verify income for Medicaid ONLY.  When an individual self-attests to zero income and income is found when completing WAGE/DBRO/WISE Look Ups, follow up with the individual to clear up the discrepancy. If the individual continues to self-attest to zero income the worker must verify and run EDBC. If the individual self-attests to an amount other than zero income, attempt to verify the new amount by running electronic data sources (EDS).  When requesting self-employment income information, provide the client with examples of acceptable types of verification. Some examples are ledgers or income statements. A Federal Tax Return may be suggested along with another type of acceptable verification. Since providing a Federal Tax Return is only a suggestion, a client cannot be denied or discontinued if the form is not returned.  When EDBC results require verification of income or expenses, complete the following look ups to complete the MAGI Income Verification process:  WAGE – earned income. WAGE provides gross wages for an individual. The information found on this screen is not considered verified information. The information should be used only as an indicator that an individual may have wages that may require verification.  DBRO – unemployment insurance benefits (UIB). DBRO provides information on unemployment insurance benefits. The information found on this screen is considered verified information. The countable monthly amount is determined by taking the remaining balance as of the 1st day of the month of application and new certification period or the first day of the month that the change can be acted on, if reported timely and acted on timely, and dividing by 12.

Title 8: Medicaid Page 86 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Income Verification When UIB is received in retroactive months, the remaining balance as of the first month of application is considered indicative for all months when UIB is received. Use it as of the month UIB began if in the retroactive period. Request actual income for retroactive months where UIB was not received. Review payments to determine issued UIB payments that should be included in the remaining balance. To determine the date of receipt of a UIB payment for the individual, if the Pay Code column displays an issuance code of: • W – Warrant; add 2 workdays to the number of calendar days listed in the ‘P’ • D – Direct Deposit; add 4 workdays to the Issue Date • DC – Debit Card; add 3 workdays to the Issue Date When UIB ends in the month of application, the first month of a new certification period, or in the month of change, use the balance divided by 12 for the first month of the application, new certification period, or the month the change becomes effective (i.e. The first month change can be acted on if reported timely and acted on timely) and $0 UIB for ongoing months.  WISE – SSA/SSI benefits. Completing a look up in WISE provides SSA/SSI information, if available, for an individual and includes the amount of disability or retirement benefits or Supplemental Security Income. The SSA/SSI benefit amount information returned from a WISE look up is considered verified. Refer to the WISE User Guide found on the Field IM SharePoint for more information on completing look ups. UIB or SSA/SSI Use this option when UIB or SSA/SSI has been worker verified using DBRO or completing a WISE look up. Client Self-Attests to Zero Income Use this option whenever zero income is self-attested.

Title 8: Medicaid Page 87 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Income Verification Other Income – Options 1-4 Other Income – Option 1 Use this option only if acceptable income verification is submitted with the application, review, or change report.  “Acceptable” means it is consistent with other information provided by the client and indicative of future income.  Use the prudent person concept to determine if the verification is acceptable. Other Income – Option 2 Use this option only if income verification is not submitted with the application, review, or change report or is not acceptable and a Generic Release is on file. NOTE: The Generic Release is not required when completing an Electronic Data Look Up in WISE. If the Generic Release is not on file, see Other Income - Option 3. Other Income – Option 3 Use this option only if income verification is not submitted with the application, review, or change report, or submitted information is not acceptable, or a Generic Release is not on file, or Electronic Data Look Up was not successful, or 3rd party did not verify. Other Income – Option 4 If none of the three previous Other Income options result in verification of income or apply to your situation, as a last resort, request income verification from the individual as follows:  Create and send a request for information using WISE Forms. Prior to creating the request for information, determine if expenses need to be included in the request.  Upload the request for information to catalog.  Narrate and track in WISE.

Title 8: Medicaid Page 88 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 Income Verification  Reassign case in ELIAS, if applicable.  Upload and catalog any documents.  End. Refer to NJA0069, Verifying Income and Expenses for the steps on how to enter each source of Other Income. MAGI-Related Budgeting Procedures for Determining Financial Eligibility Legal reference: 441 IAC 75 (Rules in Process) Initial and ongoing financial eligibility under MAGI-related Medicaid is based on current monthly household income and family size with consideration given to any anticipated changes or fluctuation in income or expenses. Total countable earned and unearned income of all persons in the applicant or member household after applicable expenses and deductions is considered in determining financial eligibility under MAGI-related Medicaid. Current Monthly Household Income Both initial and ongoing eligibility shall be based on current monthly income when current income and any applicable expenses is a good indicator of future income except when the income is unemployment insurance benefits as described below. Change in Current Month’s income If the household indicates that current countable income is not indicative of future income due to a change that is reasonably expected to occur in the current or next month, the amount of monthly income used for initial and ongoing eligibility shall be calculated based on the change. When the anticipated change is with unemployment insurance benefits, income shall be budgeted as described below.

Title 8: Medicaid Page 89 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Budgeting Procedures… Unemployment Insurance Benefits (UIB) When current income includes unemployment insurance benefits (UIB), the monthly amount of UIB income used for initial and ongoing eligibility shall be determined by annualizing the remaining balance according to the applicable item below:  For applicants, the monthly amount is determined by using the remaining balance as of the 1st day of the month in which the application was filed and dividing the balance by 12. If the UIB will end in the application month, the annualized amount will be used for the application month only and no UIB income will be used for months thereafter.  For members in the review process, the monthly amount is determined by using the remaining balance as of the 1st day of the month of the new certification period and dividing the balance by 12. If the UIB will end in the first month of the new certification period, the annualized amount will be used for the first month and no UIB income will be used for months thereafter.  For members reporting a change and not due for review, the monthly amount is determined by using the remaining balance as of the 1st day of the month in which the change can be acted upon. Recurring Lump-Sum Income Recurring lump-sum earned and unearned income, except for the income of the self-employed, shall be prorated over the number of months for which the income was received and applied to the eligibility determination for the same number of months.  Income received by an individual employed under a contract shall be prorated over the period of the contract.  Income received at periodic intervals or intermittently shall be prorated over the period covered by the income and applied to the eligibility determination for the same number of months. EXCEPTION: Periodic or intermittent income from self-employment shall be treated as described in Self-employment income below.  Applicable expenses and deductions shall be applied to the monthly prorated income. Income is prorated when a recurring lump sum is received at any time.

Title 8: Medicaid Page 90 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Budgeting Procedures… Projecting Future Income When income received weekly or biweekly (once every two weeks) is projected for future months, it shall be projected by adding all income received in the time period being used and dividing the result by the number of instances of income received in that time period. The result shall be multiplied by four if the income is received weekly, or by two if the income is received biweekly, regardless of the number of weekly or biweekly payments to be made in future months. Change in Circumstances When a change in circumstances that is required to be timely reported by the client is not reported as required, eligibility shall be re-determined beginning with the month following the month in which the change occurred. All other changes shall be acted upon when they are reported or otherwise become known to the department, allowing for a ten-day notice of adverse action, if required. Adding/Removing a Person In any month for which a person is determined eligible to be added to a currently active MAGI-related Medicaid household, the person’s needs and income shall be considered as of the date the change is reported. When it is reported that a person is anticipated to enter the home, the date to add the person shall be no earlier than the date the person actually begins to live in the household or the date of report, whichever is later. A person who is a member of a Medicaid household and who is determined to be ineligible for Medicaid shall be discontinued prospectively effective the first of the next month in which the timely notice requirements can be met. Self-Employment Income Countable self-employment income is the gross income less allowable expenses. Apply the policies in the following paragraphs when self- employment income is received before the month of decision and is expected to continue after Medical assistance is approved.

Title 8: Medicaid Page 91 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Budgeting Procedures… Countable income from self-employment not received on a regular weekly, biweekly, semimonthly or monthly basis that represents a person’s annual income shall be annualized to arrive at the monthly amount to be used to determine eligibility. Countable self-employment income is the gross income less allowable expenses. When a self-employment enterprise which does not produce a regular weekly, biweekly, semimonthly or monthly income has been in existence for less than a year, income shall be averaged over the period of time the enterprise has been in existence to arrive at a projected monthly amount to be used to determine eligibility. If the enterprise has been in existence for such a short time that there is very little income information or income in the period of time is not a good indicator of future income, the worker shall establish, with the cooperation of the applicant or member, a reasonable estimate of the projected monthly income to be used for eligibility. Self-employment income and/or the cost of producing self-employment income (expenses) may change. A change in self-employment income and expenses are defined as follows:  Change in self-employment income is a change that will result in a significant change in the person’s annual income.  Change in self-employment expenses is an established, permanent, ongoing change in the operating expenses of a self-employment enterprise that will result in a significant change in the person’s annual net income. When an applicant or member reports that a change in self-employment income or expenses has occurred and the person’s self-employment income has been annualized, the department shall recalculate the countable self- employment income on the basis of the change. A change in operating expenses or income that occurs as a result of seasonal business fluctuations is not considered a change for this purpose.

Title 8: Medicaid Page 92 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Budgeting Procedures… Rounding Procedures The following rounding procedures apply when determining countable MAGI income.  In any calculation of income, drop to the nearest cent.  When the monthly countable income is converted to a percentage of the federal poverty level and the resulting percentage is not a whole number, the federal poverty level percentage is always rounded up to the nearest percentage if the remainder is greater than zero. Shared Living Arrangements When an applicant or member shares living arrangements with another family or person, funds combined to meet mutual obligations for shelter and other basic needs are not income. Funds made available to the applicant or member exclusively for the applicant’s or member’s needs are considered income except any cash support provided to the claimed dependent by the tax-filer. Flattening Income When point-in-time income is not a good indicator of future income due to fluctuations in income or expenses, adjust the monthly self-attested income to a flattened/annualized amount. This would include any countable income such as self-employment, wages, etc. Handle fluctuating income and expenses as follows:  Annual income shall be prorated over 12 months.  Income that fluctuates, such as income that is seasonal, shall be flattened by averaging the anticipated annual amount over 12 months.  Self-employment income may be annualized using the flattening income process.  In order to use an anticipated tax expense for self-employment to determine MAGI countable income, the applicant/participant will need to provide verification of the anticipated expense.

Title 8: Medicaid Page 93 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for MAGI-Related Coverage… Revised April 11, 2025 MAGI-Related Budgeting Procedures… Prudent person can be used to determine if the verification is sufficient. Tax expenses can be claimed by individuals whether or not they plan to file a tax return. • Allowable tax expenses include:  Car and truck expenses (for travel during workday, not commuting)  Depreciation  Employee wage and fringe benefits  Property, liability, or business interruption insurance  Interest (including mortgage paid to bank, etc.)  Legal and professional services  Rent or lease of business property or utilities  Commissions, licenses, taxes, and fees  Advertising  Contract labor  Repairs and maintenance  Certain business travel and meals  Deductible self-employment taxes  Cost of self-employed health insurance  Contributions to self-employed SEP, SIMPLE, or qualified retirement plan Give the client the opportunity to clarify why income is not a good indicator of future income. Document in WISE the reason for the call and the response. Send a request for information if no response from the client. The request should also inform the client that they may also provide verification of anticipated income. However, verification cannot be required at this point. If clarification of income is requested but not provided a non-compliance of ‘failure to provide information’ will be used to complete the negative action.

Employees’ Manual Title 8, Chapter F Revised February 28, 2025 Medicaid Coverage Groups

Title 8: Medicaid Table of Contents Chapter F: Coverage Groups Revised October 10, 2025 Page 1 Page Iowa Department of Health and Human Services Employees’ Manual Overview .................................................................................................................................... 1 Summary of Aid Types and Fund Codes ............................................................................ 1 Presumptive Eligibility ............................................................................................................. 5 Pregnant or Postpartum Women and Deemed Newborns .................................................... 6 Continuous Eligibility for Pregnant and Postpartum Women .............................................. 6 Postpartum Eligibility .......................................................................................................... 8 Deemed Newborn Children of Medicaid-Eligible Mothers ................................................ 11 Duration of Coverage ............................................................................................... 13 When the Deemed Newborn Reaches Age One ...................................................... 14 Breast and Cervical Cancer Treatment ................................................................................. 15 Responsibilities of the Screening Program ....................................................................... 16 Referrals to a BCCEDP .................................................................................................... 17 Application Processing ..................................................................................................... 17 Mandatory Medicaid Coverage Groups .................................................................... 18 Eligibility Period ................................................................................................................ 19 Retroactive Coverage Under BCCT ......................................................................... 20 Length of Treatment ................................................................................................. 21 Responsibilities of the Client ............................................................................................ 22 Annual Review ................................................................................................................. 23 Notice of Decision ..................................................................................................... 24 Case Maintenance ............................................................................................................ 24 Health Insurance Changes ....................................................................................... 24 Automatic Redetermination for BCCT ...................................................................... 25 MAGI-Related Coverage Groups ........................................................................................... 26 Family Medical Assistance Program (FMAP) ................................................................... 27 People Who Are Ineligible for FMAP ................................................................................ 28 Ineligible Due to Receipt of Support (Extended Medicaid) ....................................... 28 Transitional Medicaid ................................................................................................ 30 Iowa Health and Wellness Plan (IHAWP) ......................................................................... 43 IHAWP Household With a Child Under 21 ................................................................ 44 Monthly Contributions ............................................................................................... 44 Change Reporting Requirements Specific to IHAWP Members ............................... 45 Mothers and Children (MAC) Program ............................................................................. 45 Eligibility Requirements ............................................................................................ 46 MAC Income Limits .................................................................................................. 48 Express-Lane Eligibility for MAC .............................................................................. 49 Composite MAGI Households .................................................................................. 56 Continued MAC Coverage of Children Receiving Inpatient Care ............................. 57 Medicaid/Hawki Composite Families ................................................................................ 59 People in a Medical Institution Within the 300% Income Limit .......................................... 60

Title 8: Medicaid Table of Contents Chapter F: Coverage Groups Revised October 10, 2025 Page 2 Page Iowa Department of Health and Human Services Employees’ Manual Medicaid for Independent Young Adults (MIYA) ............................................................... 61 Eligibility Requirements ............................................................................................ 61 Household Size ........................................................................................................ 62 MIYA Income Limits .................................................................................................. 63 Reporting Requirements ........................................................................................... 64 Expanded Medicaid For Independent Young Adults (EMIYA) .......................................... 65 Eligibility Requirements for youth who aged out of foster care prior to December 31, 2022 .................................................................................................................... 65 Eligibility Requirements for youth who aged out of foster care on or after January 1, 2023 .................................................................................................................... 65 Continuous Eligibility For Children .................................................................................... 66 Continuous Eligibility Does Not End Until Next Annual Review is Due ..................... 67 Transitional Medicaid ................................................................................................ 68 Continuous Eligibility Ends Before Next Annual Review ........................................... 68 Continuous Eligibility Ends At Annual Review .......................................................... 68 New Continuous Eligibility After Eligibility Reestablished At Annual Review ............ 69 Non-MAGI-Related Coverage Groups ................................................................................... 69 SSI Recipients .................................................................................................................. 70 Continuous Eligibility for Non-MAGI-Related Children...................................................... 71 Essential Persons ............................................................................................................. 71 People Eligible for SSI Benefits But Not Receiving Them ................................................ 72 SSA Recipients ................................................................................................................ 72 People Ineligible for SSI (or SSA) .................................................................................... 73 Due to Requirements That Do Not Apply to Medicaid .............................................. 73 Due to Social Security COLAs (503 Medical Only) ................................................... 74 Due to Social Security Benefits Paid From Parent’s Account ................................... 82 Due to Social Security Increase of October 1972 ..................................................... 83 Due to Earnings Too High for an SSI Cash Payment (1619b Group) ....................... 84 Due to Actuarial Change for Widowed Persons........................................................ 85 Due to Receipt of Widow’s Social Security Benefits ................................................. 86 People in Medical Institutions ........................................................................................... 87 Ineligible for SSI Due to Residence in a Medical Institution ...................................... 88 300% Income Level .................................................................................................. 89 People in Medicare Savings Programs ............................................................................. 92 Qualified Disabled and Working People (QDWPs) ................................................... 92 Qualified Medicare Beneficiaries (QMBs) ................................................................. 96 Specified Low-Income Medicare Beneficiaries (SLMBs) ........................................ 103 Expanded Specified Low-Income Medicare Beneficiaries (QI-1) ............................ 106 Medicaid for Employed People With Disabilities ............................................................. 108 Age ......................................................................................................................... 109 Disability ................................................................................................................. 109 Income From Employment ..................................................................................... 110 Resources .............................................................................................................. 114

Title 8: Medicaid Table of Contents Chapter F: Coverage Groups Revised October 10, 2025 Page 3 Page Iowa Department of Health and Human Services Employees’ Manual Family Income Less Than 250% of Federal Poverty Level ..................................... 116 Premiums ............................................................................................................... 117 Relationship to Medically Needy ............................................................................. 128 Relationship to QMB and SLMB Coverage ............................................................ 130 Medicaid for Kids With Special Needs (MKSN) .............................................................. 130 Age ......................................................................................................................... 131 Disability ................................................................................................................. 131 Family Income Limits .............................................................................................. 132 Health Insurance Enrollment .................................................................................. 132 MKSN Case Examples ........................................................................................... 135

Title 8: Medicaid Page 1 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Overview Revised October 10, 2025 Summary of Aid Types and Fund Codes Overview This chapter provides the Medicaid eligibility standards for MAGI-related and non- MAGI-related coverage groups. For additional coverage groups available to some children, see 8-H, Foster Care, Adoption and Guardianship Subsidy. The first part of the chapter explains coverage groups for pregnant and postpartum women and for deemed newborns, which apply to both MAGI-related and non-MAGI- related people. The next sections explain the coverage groups for women who need treatment for breast or cervical cancer. MAGI-related and non-MAGI-related policies do not apply to these coverage groups. The fourth section describes coverage groups for families and children that derive most of their eligibility requirements from the MAGI-related groups, followed by a similar section for coverage groups that are based on the general policies of the non-MAGI- related groups. Summary of Aid Types and Fund Codes This chart includes aid types for the coverage groups discussed in this chapter. See 14-B-Appendix for a complete list of aid types, including those reflecting Refugee Resettlement funding for these coverage groups. The medical aid type reflects the coverage group under which Medicaid eligibility is being granted. The case aid type reflects the type of cash assistance benefits the person receives or the type of medical facility in which the person resides. If the person does not receive cash assistance and does not live in a medical institution, the case aid type and the medical aid type are the same. This is also true if the person receives Medicaid and Food Assistance. For cases in ELIAS, ELIAS uses an ELIAS aid code. Currently, all ELIAS aid codes are mapped back to the corresponding ABC aid type as listed in SSNI and MMIS. See EDBC Roles, Statuses, and Aid Codes for a list of ELIAS aid codes.

Title 8: Medicaid Page 2 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Overview Revised February 28, 2025 Summary of Aid Types and Fund Codes

Coverage Group Medical Aid Type Fund Code* Facility Case Aid Type Family Medical Assistance Program (FMAP) 30-8 A, C

Transitional Medicaid (TM) 37-0 A, C

Extended Medicaid due to receipt of support 37-0 A, C

Child Medical Assistance Program (CMAP) 37-2 R

Mothers and Children (MAC) 92-0 A, C

Breast and Cervical Cancer Treatment (BCCT) 37-3 A

Ineligible for FMAP due to residence in a medical institution 30-8 A, C 37-7

39-0 73-1 People under 21 in PMIC or MHI Nursing facility care Skilled nursing care SSI recipient in own home; recipient of mandatory supplements 14-0 64-0 1 1, 2

SSI recipient in medical institutions 13-1 13-7 14-0 63-1 64-0 63-3 14-0 63-8 64-0 1 1 1 1, 2 1, 2 1, 2 1 1, 2 1, 2 13-1 13-7

63-1

63-3

63-8 Aged, nursing facility Aged, MHI

Disabled, nursing facility State resource center ICF/MR Community-based ICF/MR Eligible for SSI but not receiving SSI benefits 14-3 64-3 A A, C

Essential person 14-2 64-2 A A, C

Ineligible for SSI or SSA due to requirements that do not apply to Medicaid 14-2 64-2 A A, C

Title 8: Medicaid Page 3 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Overview Revised February 28, 2025 Summary of Aid Types and Fund Codes

Coverage Group Medical Aid Type Fund Code* Facility Case Aid Type Ineligible for SSI or SSA due to Social Security COLAs (503 medical only) 14-2 64-2 A A, C

Ineligible for SSI or SSA due to Social Security benefits paid from parent’s account 14-2 64-2 A A, C

Ineligible for SSI or SSA due to Social Security increase of October 1972 14-2 64-2 A A, C

Ineligible for SSI due to substantial gainful activity (1619b) 14-0 64-0 1 1, 2

Ineligible for SSI or SSA due to actuarial change for widowed persons 14-2 64-2 A A, C

Ineligible for SSI or SSA due to receipt of widow’s social security benefits 14-2 64-2 A A, C

Ineligible for SSI due to residence in a medical institution 13-0 13-8 63-0

63-2

63-7 73-1 A A A, C

A, C

A, C A, C 13-0 13-8 63-0

63-2

63-7 73-1 Aged, nursing facility Aged, MHI Disabled, nursing facility Resource center ICF/MR Community ICF/MR Skilled nursing care

Title 8: Medicaid Page 4 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Overview Revised February 28, 2025 Summary of Aid Types and Fund Codes

Coverage Group Medical Aid Type Fund Code* Facility Case Aid Type In a medical institution and under the 300% income level 13-6 37-7 63-6

73-1 73-2

73-3 73-4 73-5 A C A, C

A, C A ,C

A, C A, C A 13-6 37-7 63-6

73-1 73-2

73-3 73-4 73-5 Aged, nursing facility Child, MHI or PMIC Disabled, nursing facility Skilled nursing care Resource center ICF/MR Community ICF/MR Hospital MHI Qualified disabled and working people (QDWPs) 90-2 QMB indicator W 9

Qualified Medicare beneficiaries 90-0 90-2 QMB indicator Q 9 9

Specified low-income Medicare beneficiaries 90-0 90-2 QMB indicator L 9 9

Expanded specified low- income Medicare beneficiaries 90-0 90-2 QMB indicator E 9 9

Medically Needy 37-E A, C, P, S, R

Medicaid for employed people with disabilities 60-M A, C, P

Medicaid for kids with special needs 64-7 C

Presumptive eligibility for pregnant women 88-8 A

Title 8: Medicaid Page 5 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Overview Revised February 28, 2025 Summary of Aid Types and Fund Codes

Coverage Group Medical Aid Type Fund Code* Facility Case Aid Type Presumptive eligibility for breast and cervical cancer treatment (BCCT) 88-9 A

Presumptive eligibility for children 88-5 C

* Explanation of fund codes: A = Adult, Medicaid only C = Child, Medicaid only P = Conditionally eligible R = CMAP S = Considered person 1 = Adult, receives cash assistance 2 = Child, receives cash assistance 3 = Adult, state funding only 4 = Child, state funding only 9 = Limited benefits Presumptive Eligibility Legal reference: 42 CFR 435.1100-1103, 435.1110, 441 IAC 75 (Rules in Process), 76.1, 76.7 Medicaid shall be temporarily available to persons who are determined to be presumptively eligible for Medicaid. Presumptive eligibility shall be determined by a qualified entity (QE) and is based solely on the applicant’s attested circumstances as provided to the QE and entered by the QE directly online into the Medicaid Presumptive Eligibility Portal (MPEP) system. There are no verification requirements for a presumptive eligibility determination. Refer to the Medicaid Provider Manual, All Providers, II. Member Eligibility for policies and procedures related to presumptive eligibility determinations. Both approved and denied applications will automatically be sent to the Department for a formal Medicaid or Hawki eligibility determination, unless the applicant specifically opts out of receiving a full determination in writing. Refer to NJA0067, Presumptive Eligibility for the link to the Business Process for bringing the presumptive eligibility determination into ELIAS and processing the ongoing medical application, if applicable.

Title 8: Medicaid Page 6 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Continuous Eligibility for Pregnant and… Pregnant or Postpartum Women and Deemed Newborns Three conditions for Medicaid eligibility cross all coverage groups:  Once a pregnant woman establishes Medicaid eligibility (except for Medically Needy when a spenddown has not been met), she remains eligible throughout the pregnancy with a few exceptions.  A woman who is eligible and enrolled in Medicaid on the date her pregnancy ends may remain eligible for Medicaid for the 12-month postpartum period with a few exceptions.  A child born to a Medicaid-eligible mother shall receive Medicaid without an application through the child’s first year of life as long as the child remains an Iowa resident. This includes children born to women who are eligible for emergency services. Continuous Eligibility for Pregnant and Postpartum Women Legal reference: 42 CFR 435.170, 441 IAC 75.18(249A) A pregnant woman who was eligible and enrolled in Medicaid while still pregnant remains continuously eligible for Medicaid throughout the pregnancy and postpartum period without regard to changes in circumstances, with a few exceptions. Exceptions to CE during pregnancy and postpartum:  The individual requests voluntary termination  The individual ceases to be a state resident  The agency determines that the eligibility was determined incorrectly at the most recent determination or redetermination of eligibility because of agency error or fraud, abuse, or perjury attributed to the individual  The individual dies Continuous eligibility does not apply if the pregnant woman was only enrolled under Medically Needy with a spenddown that has not been met, under state-only funding, or during a presumptive eligibility (PE) period. The woman must continue to meet all other eligibility requirements during the rest of her pregnancy. (See also Postpartum Eligibility.) NOTE: A woman who is eligible and enrolled in Medicaid while still pregnant whose benefits are limited to emergency services is continuously eligible without regard to changes in income during the pregnancy and/or postpartum period.

Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Continuous Eligibility for Pregnant and… A pregnant woman eligible and enrolled in Medicaid who meets all eligibility criteria (including income) for any month of the retroactive period is continuously eligible for Medicaid beginning with the first month of the retroactive period in which eligibility is established. The woman must meet the following retroactive Medicaid eligibility requirements:  The woman would have been eligible in the retroactive period had she applied.  The woman has medical claims she has incurred for services that are payable under the Medicaid program for the retroactive month in which she would have been eligible had she applied. The bill can be paid or unpaid.  The woman was pregnant in that retroactive month. A pregnant woman who is determined eligible and is enrolled for a retroactive month while she is still pregnant continues to be eligible This policy does not apply to women who would have been eligible or potentially eligible only under Medically Needy with a spenddown that has not been met or state-only in the retroactive period. NOTE: While a pregnant woman remains continuously eligible during her pregnancy, with limited exceptions, it is possible for a pregnant woman to change coverage groups during her pregnancy unless she is eligible as a Hawki member or chose to remain on IHAWP during her pregnancy and postpartum period.

1. Mrs. K, aged 25 and pregnant, receives Medicaid under FMAP. On August 15, she reports that her husband started receiving Social Security disability in the amount of $1,200 per month. The worker determines that the household’s income now exceeds FMAP limits for a four-member household (Mr. K, Mrs. K, their three-year-old son, and one unborn child). Mrs. K is continuously eligible. She would move to transitional Medicaid and may remain eligible through her 12-month postpartum period. 2. Ms. T, age 37, is six months pregnant when she applies for Medicaid on August 5. The worker determines that Ms. T’s countable income exceeds Medicaid limits for a two-member household under any program except Medically Needy with a spenddown. Ms. T also requests Medicaid benefits for the retroactive months of May, June, and July. She has bills for Medicaid-covered services for June. The worker determines that Ms. T was eligible under the MAC coverage group for the month of June.

Title 8: Medicaid Page 8 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Continuous Eligibility for Pregnant and…

Ms. T is granted eligibility effective June 1 because (1) she would have been eligible in June as a pregnant woman had she applied; (2) she has bills for covered Medicaid services in June; and (3) increased income is the only reason that she is currently ineligible. Ms. T is placed in the MAC coverage group beginning with the month of June. Eligibility continues throughout the pregnancy. If Ms. T is eligible and enrolled in Medicaid on the last day of her pregnancy, she will be eligible for the 12- month postpartum period beginning the month following the last day of her pregnancy. Ms. T is also potentially eligible for Medically Needy for the month of May if she had Medicaid-covered bills and if her excess income is the only reason that she is ineligible for another Medicaid coverage group during the month. 3. Ms. Z’s baby was born July 23. Ms. Z applies for Medicaid July 30 and requests retroactive eligibility for April, May, and June. She is over income for July. Ms. Z is eligible for the retroactive months. Ms. Z is continuously eligible because she was both eligible and enrolled in Medicaid while pregnant. 4. Ms. G is a pregnant undocumented alien who applied for Medicaid in October. She verified an emergency medical condition with dates of service in October only and met all other eligibility requirements in that month, so she was approved for limited Medicaid for emergency services coverage for the month of October. Ms. G is continuously eligible through her pregnancy and postpartum period. A claim is submitted for Ms. G for December for non- emergency services. The claim is denied as Ms. G is only continuously eligible for limited emergency services. On January 10, Ms. G submits a Verification for Emergency Health Care Services (VEHCS) Form 470-4299 for services received on January 2nd and 3rd. She also reports an increase in income. Her income exceeds program limits for January, but she meets all other eligibility requirements that month. Since she was previously eligible and enrolled in Medicaid while pregnant and Ms. G is continuously eligible, and has provided a new VEHCS, Ms. G’s emergency services rendered on January 2nd and 3rd are covered. Postpartum Eligibility Legal reference: 441 IAC 75 (Rules in Process) Medicaid continues to be available during the 12-month postpartum period to a woman who was eligible and enrolled in Medicaid on the date her pregnancy ends.

Title 8: Medicaid Page 9 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Continuous Eligibility for Pregnant and… The postpartum period begins the month following the last day of pregnancy and continues through the last day of the month in which the 12-month period ends. An application is not required, unless the woman is a Medically Needy member and their spenddown has not been met. If a Medically Needy member’s certification period expires during the postpartum eligibility period and their spenddown has not been met, she must file an application. Continuously eligible MAGI pregnant/postpartum women retain their eligibility even if they move into a different household. When the pregnancy terminates (for any reason), the woman is still entitled to postpartum coverage. NOTE: While a postpartum woman remains continuously eligible during her postpartum period, with limited exceptions, it is possible for a postpartum woman to change coverage groups during her pregnancy and postpartum period unless she is eligible as a Hawki member or chose to remain on IHAWP during her pregnancy and postpartum period. At the end of the 12-month postpartum period, a review form will be sent and eligibility is redetermined. If there are other individuals in the home, the review will align with the other individuals.

1. The household consists of Mr. U, age 40, who works full time, and Mrs. U, age 32, who is pregnant. Mrs. U currently receives Medicaid under the MAC coverage group. On April 15, the baby is born. Mrs. U is eligible for postpartum coverage regardless of any changes that occur in her income. After the postpartum period ends, a redetermination of Mrs. U’s eligibility is completed. Countable income now exceeds the MAC income limits. Since there is no other coverage group under which Medicaid eligibility can be established other than Medically Needy with a spenddown, Medicaid eligibility for Mrs. U is timely canceled effective May 1. Medicaid eligibility for the baby as a deemed newborn will continue through the month of the first birthday.

Title 8: Medicaid Page 10 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Continuous Eligibility for Pregnant and…

2. The household consists of Mr. W, age 29, who works full time, and Mrs. W, age 26, who is pregnant. Mrs. W applies for Medicaid on June 20. On June 27, the baby is born. The application is processed on June 29. Mrs. W met all eligibility criteria including income for the month of June and for the retroactive coverage month of May. She was over the income limit beginning in July. Mrs. W is approved for May, June and ongoing coverage. Mrs. W is continuously eligible for postpartum coverage because she was both eligible and enrolled in Medicaid while still pregnant. 3. Ms. J, age 18, is pregnant and receives Medical Assistance under the Hawki coverage group. Ms. J turns 19 in May. Even though Ms. J is 19, she will remain on Hawki as a pregnant woman through her pregnancy and postpartum period. On July 12, the baby is born. Ms. J remains on Hawki coverage for her postpartum period even though she is over 18 years old. She will remain on Hawki through the remainder of her postpartum period. The baby will be approved for deemed newborn coverage. 4. The household consists of Mr. F, age 29, who works full time, and Mrs. F, age 25, who is pregnant. Mrs. F is currently receiving Medicaid under the IHAWP coverage group. Mrs. F chooses to remain on IHAWP when she reports her pregnancy and will remain on IHAWP coverage for the remainder of her pregnancy and postpartum period. The baby is born October 15. Mrs. F will remain on IHAWP for the remainer of her postpartum period and the baby will be approved for deemed newborn coverage. 5. The household consists of Ms. L, age 35, who works full-time and is pregnant. Ms. L is currently receiving Medicaid under the Medically Needy program for a certification period of August-September. Ms. L does not meet her spenddown during the months of her certification period. Ms. L must reapply for Medically Needy if she wants to continue to receive Medicaid eligibility because her certification has expired. She must meet the spenddown obligation for the new certification period to obtain CE eligibility as a pregnant/postpartum woman.

Title 8: Medicaid Page 11 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised October 10, 2025 Deemed Newborn Children of Medicaid… Deemed Newborn Children of Medicaid-Eligible Mothers Legal reference: 42 CFR 435.117, 441 IAC 75 (Rules in Process); Public Law 111-3 Policy: Medicaid is available to deemed newborn children if the mother establishes Medicaid eligibility for the month of the child’s birth under a MAGI- related or non-MAGI-related coverage group, including eligibility for limited emergency services. The mother can establish eligibility before the birth or retroactively, after the birth. An application is not required to add the deemed newborn child to Medicaid. The deemed newborn is eligible for Medicaid as a deemed newborn child of a Medicaid eligible woman beginning with the month of birth through month of the infant’s first birthday. See Duration of Coverage. Procedure: Add the deemed newborn to the Medicaid case no later than ten days after the birth is reported to the local office. Do not delay adding the deemed newborn for Medicaid even if there is a delay adding the child for other programs. When establishing the 12-month eligibility period for the deemed newborn status, accept a verbal or written statement from the following as verification of the birth date, unless questionable:  Responsible household member.  Representative of the facility where the birth took place.  Any other person or publication deemed to be a valid authority. If the statement is questionable, request written verification and allow the household until:  The first day of the second month after the mother was discharged from the hospital (e.g., if the mother is discharged September 2, the due date is November 1), or  Ten calendar days, if that due date is later, based on the date of application. Cancel the deemed newborn’s Medicaid with timely notice if verification is not received. Reopen Medicaid for the deemed newborn retroactively if verification is received before the deemed newborn’s first birthday and the deemed newborn is otherwise eligible.

Title 8: Medicaid Page 12 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised February 28, 2025 Deemed Newborn Children of Medicaid…

1. Ms. R is pregnant and receives Medicaid under the MAC coverage group. On May 19, the billing clerk of the hospital calls Ms. R’s worker and reports that Ms. R’s child was born on May 18. Based on this report, the baby is added to Ms. R’s case as the deemed newborn child of a Medicaid-eligible mother. 2. Ms. L reports to the local office on June 15 that her child was born on June 7. The worker adds the deemed newborn to Ms. L’s case effective June 1. The local newspaper reports the birth date as May 17. Since there is an inconsistency in the birth date, the worker requests written verification of the birth date from the member. The information is not received by the August 1 due date, and the deemed newborn’s Medicaid is canceled effective September 30, with timely notice. On December 15, Ms. L provides verification of the child’s birth date and it matches Ms. L’s original report. The worker reopens the child’s Medicaid eligibility as a deemed newborn effective October 1. No application is required for the reopening. If the deemed newborn’s name is not immediately known, make the first name entry using “Baby Boy” or “Baby Girl” and the last name entry using the mother’s last name, unless a different last name is known. Correct the deemed newborn’s name on the system when the name becomes known. NOTE: If the mother receives SSI, do not add the deemed newborn to the mother’s SSI case. Add the deemed newborn to an existing MAGI-related case or open a new MAC case for the deemed newborn. Comment: The deemed newborn is not required to have a social security number in order to be added for Medicaid. This verification is required when the child is no longer eligible as a deemed newborn. See 8-C, Social Security Number. The deemed newborn is not required to verify citizenship and identity, because children born to Medicaid-eligible mothers are permanently exempt from verifying citizenship and identity. See 8-C, Verifying Citizenship and Identity.

Title 8: Medicaid Page 13 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised February 28, 2025 Deemed Newborn Children of Medicaid…

1. Household composition: Mr. K, age 30, Mrs. K, age 25 and pregnant, and Child K, age 2. Mr. and Mrs. K have no income and receive Medicaid under FMAP. On July 20, the hospital informs the local office that Mrs. K gave birth to her baby on July 18. Policy requires that the baby be added to the eligible group. The day the birth of the child is reported becomes the application date. Add the baby to the existing Medicaid case within ten days, effective July 1. 2. Ms. T, age 19, is pregnant and receives Medicaid under the MAC coverage group. On May 2, she reports to the local office that her baby was born in April. The worker adds the baby to Ms. T’s case as the deemed newborn child of a Medicaid-eligible mother for the months of April and ongoing. On May 11, Ms. T reports she relinquished custody of the child to an adoption agency on May 4. Eligibility under “deemed newborn status” continues as long as we know where the baby lives and the infant is an Iowa resident. 3. Ms. A is an undocumented immigrant living in Iowa. She delivered a baby at a local hospital in June. Ms. A applies for Medicaid in August and requests retroactive Medicaid back to June. If Medicaid eligibility is approved for the birth under limited Medicaid for emergency services, the child is eligible for “deemed newborn status.” The following sections give more information on:  The duration of deemed newborn coverage  Procedure when the child reaches age one Duration of Coverage Legal reference: 441 IAC 75 (Rules in Process) Policy: Deemed newborn coverage begins with the month of the birth and extends through the month of the first birthday, if the child remains an Iowa resident. Deemed newborn status is available only to infants born to women who received Iowa Medicaid at birth. “Deemed newborn” status is not available to a child under age one whose mother received Medicaid when the child was born, then moved to Iowa and applied for Medicaid. The deemed newborn must maintain Iowa residence.

Title 8: Medicaid Page 14 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Pregnant or Postpartum Women and... Revised February 28, 2025 Deemed Newborn Children of Medicaid…

Ms. G, age 19, receives Medicaid as an SSI recipient. On April 10, she reports the birth of her child on April 2. The child is not added to Ms. G’s SSI case. A MAC case is opened up for the infant because the deemed newborn is a child of a Medicaid-eligible mother. On May 3, Ms. G reports she is moving to Illinois. The worker cancels her assistance June 1. Ms. G applies for and receives Medicaid in Illinois for the month of June. On July 4, Ms. G returns to Iowa. Even though Ms. G has continuously received Medicaid, and her child is under one year of age, Ms. G must file an application and meet all program requirements if she wishes to receive Medicaid for the child. Her child is no longer eligible for the deemed newborn coverage group. Coverage of a deemed newborn child under another coverage group in Iowa does not preclude the child from attaining or reattaining deemed newborn eligibility within the one-year period. When the Deemed Newborn Reaches Age One Legal reference: 441 IAC 75 (Rules in Process) Policy: A child who has remained eligible because of deemed newborn status during the first year must be found eligible for Medicaid under another coverage group to continue Medicaid eligibility past the child’s first birthday. Eligibility under the deemed newborn status ends on the last day of the month in which the child in deemed newborn status turns age one. An application or review form is not required. If additional information is needed in order to complete a redetermination, request this information in writing before the month of the first birthday. NOTE: System-generated review forms will not be issued when the only active person on the case is in deemed newborn status.

Ms. K, age 17, receives Medicaid under MAC. Her child is eligible for Medicaid as a deemed newborn child of a Medicaid-eligible mother. This child turns one on June 4. In June, the system completes an automatic redetermination. Eligibility is redetermined to MAC for the child and MAC eligibility continues for Ms. K.

Title 8: Medicaid Page 15 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025

Breast and Cervical Cancer Treatment Legal reference: Breast and Cervical Cancer Prevention and Treatment Act of 2000; 42 CFR 435.213; 441 IAC 75 (Rules in Process); 42 USC 1396a(aa); Public Law 107-121 Medicaid is available under the breast and cervical cancer treatment (BCCT) coverage group to an individual under the age of 65 who meets the following eligibility requirements:  Does not have creditable health insurance coverage;  Is not eligible for Medicaid in one of the mandatory coverage groups;  Was screened and diagnosed: • Through the National Breast and Cervical Cancer Early Detection Program (BCCEDP), or • through funds from family planning centers, community health centers, or non- profit organizations;  Needs treatment for cancerous or precancerous condition of the breast or cervix; and  Must be one of the following: • A citizen of the United States, • A United States national, or • A qualified alien. See 8-L, Aliens for more information on eligibility criteria. The following sections explain:  Responsibilities of the screening program  Referrals to the Breast and Cervical Cancer Early Detection Program  Application processing  The BCCT eligibility period  Responsibilities of the BCCT client  Annual reviews  Case maintenance

Title 8: Medicaid Page 16 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Responsibilities of the Screening Program Responsibilities of the Screening Program The National Breast and Cervical Cancer Early Detection Program (BCCEDP) is responsible for determining that the individual:  Is in need of treatment for cancerous or precancerous condition of the breast or cervix.  Is under age 65.  Meets income guidelines.  Does not have creditable health insurance coverage, except when the individual: • Has exhausted their lifetime benefits for breast or cervical cancer treatment, or • Has an exclusion clause in their health insurance coverage for breast or cervical cancer treatment. “Creditable coverage” is defined in the Health Insurance Portability and Accountability Act. Most health insurance is considered creditable coverage, including insurance that has limits on benefits or high deductibles. For the purposes of this coverage group, the Indian Health Services tribal organization, or Urban Indian organization available to Native Americans is not creditable coverage. An individual who has been screened and diagnosed through the BCCEDP and is in need of treatment will be referred to DHS to apply for Medicaid.  The individual will be instructed to present verification of the screening and diagnosis through the BCCEDP, to the DHS office.  The individual will usually complete an Application for Health Coverage and Help Paying Costs, form 470-5170 or 470-5170(S), at the program office. The program will attach the proof of screening form to the application. However, if you are aware that an individual is eligible but the verification is not attached to the application, either:  Make a written request for the individual to obtain it and provide it to you, or  Ask the individual to sign a specific release, if needed, so you can request verification from the program.

Title 8: Medicaid Page 17 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Responsibilities of the Screening Program The individuals that receive screening or services must meet eligibility requirements established by the Iowa Care For Yourself Program. If the BCCEDP is a qualified provider, the provider may also determine presumptive Medicaid eligibility for the BCCT coverage group. For requirements to be a presumptive eligibility provider, refer to the Medicaid Provider Manual, All Providers, II. Member Eligibility for policies and procedures related to presumptive eligibility determinations. Referrals to a BCCEDP Only coordinators that receive DHS training and are approved by the Iowa Department of Public Health can be qualified entities for BCCT. If an individual with a breast or cervical condition contacts DHS and someone other than the individual paid for a mammogram to be done, but they have no verification form from BCCEDP and is not eligible for a mandatory Medicaid coverage group, you may refer them to the nearest BCCEDP. Referrals to a local BCCEDP may be made for:  Breast and cervical cancer screening services  Verification of breast and cervical cancer screening services Call 1-866-339-7909 or 1-515-242-6200 to identify the nearest program and contact information. Do not suggest that the individual is eligible or make any determination. Simply refer them by saying, “There is a program I suggest you call. Their staff should be able to determine if you are eligible for any services or assistance.” Application Processing DHS income maintenance is responsible for determining that the applicant:  Is not eligible for Medicaid under a mandatory coverage group, and  Has supplied proof of BCCT eligibility.

Title 8: Medicaid Page 18 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Application Processing The following are required before determining eligibility under BCCT:  A completed application, except in an automatic redetermination.  A determination the individual is not eligible under a mandatory coverage group.  Verification of screening and diagnosis from the Iowa Department of Public Health (IDPH). After approval, request verification of when treatment will end. If the applicant needs assistance, have them sign form 470-3951 or 470-3951(S), Authorization to Obtain or Release Health Care Information. There are no resource tests for this group. Income eligibility is determined by the BCCEDP. Collect financial information only to the extent necessary to determine if the applicant is eligible for Medicaid under a mandatory coverage group. See Mandatory Medicaid Coverage Groups. Accept the statement on the verification form regarding the absence of creditable health insurance coverage. If you have reason to believe that the applicant has creditable coverage, request a statement from the insurance company documenting the scope of coverage or that coverage has been dropped or exhausted. If you verify that the applicant does have creditable coverage, report this to the local BCCEDP. Mandatory Medicaid Coverage Groups The individual must not be eligible for Medicaid under any of the mandatory Medicaid coverage groups. The mandatory Medicaid coverage groups are:  Family Medical Assistance Program (FMAP)  People ineligible for FMAP due to the receipt of alimony or other spousal support  Transitional Medicaid  Mothers and children (MAC)  Postpartum eligibility  Children receiving IV-E foster care, IV-E subsidized adoption, or IV-E Subsidized Guardianship  Iowa Health and Wellness Plan (IHAWP)

Title 8: Medicaid Page 19 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Application Processing  Expanded Medicaid for Independent Young Adults (EMIYA)  Mandatory State Supplementary Assistance recipients  Essential persons  SSI recipients  People ineligible for SSI (or SSA) due to: • Requirements that do not apply to Medicaid • The October 1972 social security COLA • Social security COLAs (also referred to as the 503 Group) • Receipt of widow’s social security benefits • Actuarial change for widowed persons • Social security benefits paid from a parent’s account If the individual is eligible under a mandatory coverage group, establish Medicaid eligibility under that group, even if they are eligible under the Breast and Cervical Cancer Prevention and Treatment Act of 2000.

Ms. A has been diagnosed with breast cancer by a health care provider authorized by the BCCEDP and is in need of treatment. She applies for Medicaid and provides proof of diagnosis from the BCCEDP. The worker determines that Ms. A is eligible for MAGI-related Medicaid coverage. Her 16-year-old son lives with her and she meets all of the other eligibility criteria. Medicaid eligibility for Ms. A is established under MAGI-related. Eligibility Period Legal reference: 441 IAC 75 (Rules in Process) The effective date of BCCT coverage is the first of the month the individual applied for Medicaid. Receiving presumptive eligibility does not change this effective date. If the individual was diagnosed in an earlier month and incurred medical bills, examine retroactive BCCT eligibility if they meet a category of eligibility for the retroactive period as defined in 8-A, Definitions. See Retroactive Coverage Under BCCT. Eligibility under the BCCT coverage group continues until the individual:  Is covered under creditable insurance coverage; or  Is eligible under a mandatory coverage group; or

Title 8: Medicaid Page 20 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Eligibility Period  No longer receives treatment for breast or cervical cancer or precancerous condition; or  Reaches age 65. NOTE: If the individual turns 65 on the first day of the month, their eligibility ends as of the last day of the previous month. If the individual turns 65 on any day other than the first of the month, eligibility ends on the last day of the birth month. An individual is not limited to one period of eligibility. A new verification form is not required unless treatment has stopped and started again. The following sections give more information on:  Determining retroactive eligibility under BCCT  Determining the length of treatment Retroactive Coverage Under BCCT BCCT eligibility can cover the retroactive period if the individual has met all relevant BCCT eligibility requirements and meets a category of eligibility for the retroactive period as defined in 8-A, Definitions. An individual isn’t eligible for Medicaid until they are diagnosed and in need of treatment. Eligibility before being screened, diagnosed, and having a need for treatment would require an eligibility determination under another coverage group. See 8-B, Determining Eligibility for the Retroactive Period.

1. Ms. A applies for Medicaid May 4. The verification form showing that she was diagnosed with cervical cancer April 28 accompanies her application form. Residing with Ms. A is her 16-year-old son. After all verification is submitted, the IM worker determines that Ms. A would be eligible only for Medically Needy with a spenddown, so eligibility under the BCCT coverage group is established effective May 1. Ms. A requests retroactive coverage to cover her screening costs. If Ms. A would not have been eligible under any mandatory Medicaid coverage group in April, the worker can establish Medicaid eligibility for April under the BCCT coverage group because she was diagnosed in April, as long as she meets a category of eligibility for the retroactive period as defined in 8-A, Definitions.

Title 8: Medicaid Page 21 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Eligibility Period

The IM worker cannot establish Medicaid eligibility for March under the BCCT coverage group since Ms. A had not been diagnosed in March. The worker explores eligibility for March (and February) under all other coverage groups. 2. Same as Example 1, except that Ms. A was diagnosed on May 4, the same day as the application date. The IM worker cannot establish Medicaid eligibility for any retroactive month under BCCT. Ms. A had not been diagnosed in any of the months in the retroactive period. Length of Treatment The length of treatment is not a condition of initial Medicaid eligibility under BCCT. Verification of when treatment will end is generally due by the end of the month following the month of the eligibility decision. Request the individual provide proof of when treatment will end. If they need assistance, have them sign form 470-3951, Authorization to Obtain or Release Health Care Information. An individual who fails to provide proof of when treatment will end or to sign and return the release of information loses BCCT eligibility. You must:  Complete an automatic redetermination, since the date treatment will end pertains only to the BCCT coverage group.  Cancel Medicaid under the BCCT group.  Issue a Notice of Action unless the individual is eligible under another coverage group (except for Medically Needy with a spenddown). The BCCEDP will not be treating the individual. Accept the statement of the medical professional providing the individual’s treatment as to when treatment is expected to end. Set a reminder for the first working day of the month in which treatment is expected to end. Do not recoup Medicaid under BCCT if the individual fails to:  Provide proof of when treatment will end after application approval, or  Report that treatment ended before the predicted date.

Title 8: Medicaid Page 22 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Eligibility Period

1. Ms. E begins receiving Medicaid under BCCT in March. The provider treating her provides a statement saying that treatment will continue into July. The worker sets a reminder for the first working day in July. Early in July, the worker sends a release to Ms. E, asking her to sign and return it. Ms. E complies, and the provider reports that Ms. E’s treatment ended in June. Since Ms. E is no longer eligible under the BCCT coverage group, the worker completes an automatic redetermination. Medicaid for the month of July is not subject to recoupment, since the worker acted on the best information available. 2. Mrs. D begins receiving Medicaid under the BCCT coverage group in March. In April, the provider treating her provides a statement saying that treatment will continue into July. The worker sets a reminder for the first working day in July. Early in July, the worker sends a release to Mrs. D asking her to sign and return it. Mrs. D complies, and the provider now states that Mrs. D’s treatment did end in July. Since Mrs. D will no longer be eligible under the BCCT coverage group, the worker completes an automatic redetermination. 3. Mrs. F begins receiving Medicaid under the BCCT coverage group in August. The provider treating Mrs. F provides a statement, in September, saying treatment will continue into the month of February. The worker sets a reminder for the first working day in February. Early in February, the worker sends a release to Mrs. F that she signs and returns. The provider now states that Mrs. F’s treatment will continue into the month of April. The worker sets a reminder for the first working day in April. Responsibilities of the Client An individual eligible for Medicaid under the BCCT is required to report only when:  Creditable health insurance coverage begins, or  Their living or mailing address changes. The individual is asked but not required to report when their treatment ends. Accept the medical professional’s statement as to when treatment will end. Act on the individual’s report of when treatment has ended. For more information, see Length of Treatment.

Title 8: Medicaid Page 23 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Responsibilities of the Client An individual eligible for Medicaid under BCCT is not required to report:  Income changes  Resource changes  Household composition changes  Turning age 65 (It is the responsibility of DHS to track this and act on it.) Annual Review Legal reference: 42 CFR 435.916; 441 IAC 76.7(249A) At the annual review, determine whether the individual continues to:  Be in need of treatment. (Verify through the treating physician.)  Be ineligible for a mandatory coverage group.  Lack creditable health insurance coverage. (See Health Insurance Changes.)  Be under age 65. An individual remains eligible the entire month of the individual’s birthday, unless the birthday is on the first day of the month.

1. Ms. K is diagnosed with breast cancer and applies for Medicaid in June 2009. Ms. K’s 16-year-old son lives with her. The worker determines that, due to family income, Ms. K would only be conditionally eligible for Medically Needy with a spenddown. Medicaid eligibility for Ms. K is established under BCCT effective June 1, 2009. When conducting the annual review in May 2010, the worker requests information about family income and household composition. The worker determines that the household composition is the same and the family income continues to make Ms. K only conditionally eligible for Medically Needy with a spenddown. Since Ms. K is under age 65, does not have creditable health insurance coverage, and continues to receive treatment, her eligibility under BCCT continues.

Title 8: Medicaid Page 24 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Responsibilities of the Client

2. Mrs. R is diagnosed with cervical cancer and applies for Medicaid in September 2001. Also living with Mrs. R is her husband and two children, ages 18 and 22. The worker determined that due to family income, Mrs. R would only be eligible for Medically Needy with zero spenddown. Medicaid eligibility for Mrs. R is established under BCCT effective September 1, 2003. The worker conducts the annual review in August 2004. Since Mrs. R’s youngest child is over age 19, the worker simply confirms with Mrs. R that she does not have a child under the age of 19 living with her. No income information is requested, since Mrs. R is not eligible for a mandatory coverage group. Since Mrs. R is under age 65, continues to not have creditable health insurance coverage, and continues to receive treatment, eligibility under BCCT continues. Notice of Decision Legal reference: 42 CFR 435.917, 441 IAC 76 (Rules in Process), 7.7(1) No notice of decision needs to be issued if BCCT eligibility:  Continues, or  Ends but Medicaid eligibility is continuing under another coverage group, other than Medically Needy with a spenddown. Adequate and timely notice is required when Medicaid eligibility is ending, including when the individual fails to comply with the annual review process. Case Maintenance The following sections address procedures for:  Handling changes in health insurance  Conducting an automatic redetermination Health Insurance Changes Determine if an individual has creditable health insurance coverage when:  They report a change in their health insurance coverage, or  They report that health insurance coverage has begun. The following types of coverage are considered creditable coverage:  Medicare Part A or Part B  A group health plan

Title 8: Medicaid Page 25 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Case Maintenance  Armed forces insurance  A state health risk pool  Medical care provided directly, through insurance, or by reimbursement  Medicaid, including meeting spenddown during a Medically Needy certification period An individual is ineligible for BCCT if they have creditable health insurance coverage. An individual does not have creditable health insurance coverage if:  Their coverage is limited, such as dental, vision, or long-term care, or coverage only for a specified disease or illness.  Their policy does not cover treatment of breast or cervical cancer.  They are in a period of exclusion for treatment of breast or cervical cancer (such as a pre-existing condition).  They have exhausted their lifetime limit on all benefits under their plan.  They have a waiting period of uninsurance. Automatic Redetermination for BCCT Legal reference: 42 CFR 435.930; 441 IAC 76.17(249A) Policy: Complete an automatic redetermination when:  Eligibility under another coverage group ends.  Eligibility under BCCT ends. Procedure: When an individual is no longer eligible under another coverage group, determine if treatment under BCCT is continuing. If treatment continues, eligibility under BCCT exists based on the initial verification of screening and diagnosis.

Title 8: Medicaid Page 26 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups Breast and Cervical Cancer Treatment Revised February 28, 2025 Case Maintenance

Mrs. C applies for Medicaid in April. She provides the verification that shows she is in need of treatment for breast cancer. However, the worker determines that Mrs. C is eligible for Medicaid under MAGI- related, because her 12-year-old son lives with her and she meets all other MAGI-related Medicaid eligibility criteria. In May, Mrs. C reports beginning income that results in her countable income exceeding the MAGI-related Medicaid limit for two people. The only coverage group other than BCCT under which Mrs. C can establish eligibility is Medically Needy with a spenddown. The worker asks Mrs. C to either provide verification that she is still under treatment for breast cancer or sign a release of information so that the worker can contact the medical provider. If Mrs. C is still under treatment, the worker establishes Medicaid eligibility under the BCCT coverage group. If Mrs. C is no longer receiving treatment for the breast cancer, eligibility should be considered under another coverage group. MAGI-Related Coverage Groups Legal reference: P. L. 104-193; 441 IAC 75 (Rules in Process) Medicaid eligibility policy for pregnant women, parents and other caretakers, and children is based on family-related medical assistance under MAGI. MAGI-related coverage groups include:  Family Medical Assistance Program (FMAP).  Ineligible for FMAP due to the receipt of support.  Transitional Medicaid.  Mothers and Children (MAC) program.  Medical institution 300% group.  Pregnant and postpartum women. See Pregnant or Postpartum Women and Deemed Newborns.  Deemed newborn children of Medicaid-eligible mothers. See Deemed Newborn Children of Medicaid-Eligible Mothers.  Iowa Health and Wellness Plan (IHAWP). NOTE: Refer to 8-H, Foster Care, Adoption and Guardianship Subsidy for specialized children coverage groups.

Title 8: Medicaid Page 27 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 Family Medical Assistance Program (FMAP) Medicaid is also available to most children under age 21 who are placed in subsidized adoption, subsidized guardianship, or foster care living arrangements. See 8-H, Foster Care, Adoption and Guardianship Subsidy for more information. Family Medical Assistance Program (FMAP) Legal reference: 441 IAC 75 (Rules in Process) Medicaid may be available under the Family Medical Assistance Program (FMAP) to children and their parents or other caretakers who meet financial and nonfinancial eligibility requirements. Parents or other caretakers must live with a child for whom they assume primary responsibility for that child’s care in order to be eligible. FMAP is available to a child under age 18 regardless of school attendance, including the month the child turns 18 unless the birthday falls on the first of the month. FMAP is also available to an 18 year old child who is a full-time student in a secondary school, or the equivalent level of vocational or technical training, and reasonably expected to complete the program before age 19.

1. Mr. S applies for Medicaid for himself. Also in the home is Mr. S’s son who receives SSI. Mr. S’s son receives Medicaid as an SSI recipient. Mr. S is categorically eligible for Medicaid under FMAP because he has a child in his care. 2. Ms. F applies for Medicaid for herself. Also in the home is Ms. F’s daughter who receives Medicaid under an HCBS waiver. The child is considered institutionalized only for the child’s eligibility. In determining Medicaid eligibility for Ms. F, the daughter shall be considered under Ms. F’s care. Therefore, Ms. F is categorically eligible for Medicaid under FMAP. To determine eligibility for this coverage group, use the policies and procedures in:  8-C, Nonfinancial MAGI-Related Eligibility.  8-E, Income Policies for MAGI-Related Coverage Groups. Also see Continuous Eligibility for Children for more information on handling an increase in household income that affects a child’s eligibility.

Title 8: Medicaid Page 28 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 Family Medical Assistance Program (FMAP) NOTE: Medicaid is not linked to FIP. Therefore, it is possible to be ineligible for FIP and still be eligible for Medicaid benefits or to be eligible for FIP and ineligible for Medicaid. Do not consider this coverage group for:  Children who do not live with a parent or other caretaker.  Children age 18 (unless they are attending school).  Adults who are not a parent or other caretaker.  Pregnant women with no children other than the unborn child.  Adults who do not live with a child and assume primary responsibility for the care of a child.

1. Ms. L applies for Medicaid for herself and her two-year-old son. She has no income. Since Ms. L and her son meet the financial eligibility factors, both are eligible for Medicaid under the FMAP coverage group. 2. Mr. and Mrs. Z and their two children apply for Medicaid. Mr. and Mrs. Z are filing taxes jointly and claiming both children. Both Mr. and Mrs. Z are employed, but their countable income is less than the FMAP limit for a four- member household. The Z family is eligible for FMAP if all other eligibility factors are met. 3. Mr. P is a caretaker of his five-year old neighbor who is currently living with him. If all other eligibility factors are met, Mr. P and his five-year-old neighbor are eligible for FMAP. People Who are Ineligible for FMAP Medicaid benefits are available to people who are ineligible for FMAP due to:  Receipt of alimony or other spousal support (extended Medicaid), or  Increased income from employment (transitional Medicaid), or  Being a resident in a medical institution. Ineligible Due to Receipt of Support (Extended Medicaid) Legal reference: 42 CFR 435.115; 441 IAC 75 (Rules in Process) Medicaid continues up to four months to persons and families ineligible for FMAP in whole or in part because of alimony or other spousal support.

Title 8: Medicaid Page 29 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP To qualify, at least one member must have received FMAP in three of the six months immediately before the month of cancellation. Do not consider any month in which the assistance is subject to recoupment in this three-month calculation.

1. Mrs. K and her three children are canceled from FMAP effective June 1 due to receipt of alimony. They are eligible for extended Medicaid if they received FMAP in three of the previous six months. 2. Mrs. B and her two children are canceled from FMAP effective February 1, 2009, due to increased spousal support. The family received FMAP in August and September of 2008 and in January 2009. Mrs. B and her two children are eligible for the four months of extended Medicaid. Members may request cancellation of FMAP because they are receiving alimony or other spousal support directly. However, grant extended Medicaid only if the alimony or other spousal support exceeds the FMAP income limit.

A family receiving Medicaid under FMAP starts receiving spousal support directly on March 22 but does not report this to the IM worker until April 25. The spousal support is enough to cancel FMAP. Since the receipt of spousal support was not timely reported, extended Medicaid begins April 1. Had the spousal support been reported timely, FMAP cancellation would not be effective until May 1, allowing a ten-day notice. Extended Medicaid would begin May 1. Begin the four months of extended Medicaid with the month following the month the family became ineligible for FMAP due to receipt of alimony or other spousal support. During these four months, the family must continue to meet all FMAP eligibility requirements except income. If FMAP is reinstated but later lost again due to the receipt of alimony or other spousal support, begin a new four-month period if the family qualifies. Adding People to the Eligible Group Legal reference: 441 IAC 75 (Rules in Process) The extended Medicaid eligible group includes:  Every person who was in the FMAP eligible group in the last month FMAP was received.

Title 8: Medicaid Page 30 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP  Every person whose needs and income were included in determining the household’s eligibility when FMAP benefits were terminated. Also add the following people to the eligible extended Medicaid group:  People returning to the home whose needs and income would be taken into account in determining the FMAP eligibility if the household were applying in the current month.  Dependent children returning home from foster care, if they would have been included if at home while the household was on FMAP.  People who were not included in the FMAP eligible group because they were receiving SSI, if they have since lost SSI.  People who were not included in the eligible group, such as a child in deemed newborn status. If an adult is a mandatory member of the eligible group and is not eligible for Medicaid (ineligible adult alien, sanctioned adult, etc.), the adult remains a member of the eligible group as a “considered” person. Transitional Medicaid Legal reference: P. L. 100-485, 441 IAC 75 (Rules in Process) Transitional Medicaid is available to individuals who receive FMAP and who are no longer eligible due to:  Increased earned income of the dependent child, parent, or other caretaker, or  A combination of increased earned income and other factors that create ineligibility. A Medicaid member is a person who has been successfully approved on the system. Transitional Medicaid is not available to applicants.

1. The M family has been receiving Medicaid under FMAP for the past six months. They are canceled effective June 1 for failure to provide information. They reapply for Medicaid July 5. On July 7, Mrs. M reports beginning a job July 5. The worker processes the application July 27. The Ms are eligible for Medicaid under FMAP for July, but they are over income for August. Because they are considered members at the point they are successfully entered on the system, they are eligible for transitional Medicaid effective August 1.

Title 8: Medicaid Page 31 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

2. Same as Example 1, except the worker processes the application August 2. The Ms have Medicaid eligibility under FMAP for July, but they are over income for August. Because they were members in July, they are eligible for transitional Medicaid. 3. Same as Example 1, except the family is over income for July and ongoing. There is no transitional Medicaid eligibility, because they are not members and they were canceled for failure to provide information. Individuals of the transitional Medicaid group may consist of:  The people living in the household whose needs and income were included in determining the FMAP eligibility when the FMAP benefits were terminated.  Ineligible people who were included in the eligible group and whose income was counted in the FMAP eligibility determination.  Children, parents, or other caretakers who reside or begin to reside in the household during the transitional period.  Children who lose deemed newborn status. The earned income must be the earnings of the dependent child, parent, or other caretaker. The parent or other caretaker must either:  Be in the eligible group, or  Have returned to the home and be a person whose income and needs must be considered in the eligibility determination.

1. Ms. T reports the return of the father of the children. Ms. T’s income and the returning parent’s income create ineligibility for FMAP. Therefore, the family (Ms. T, the returning parent, and children) is eligible for transitional Medicaid. 2. Mrs. O reports the return of her husband, the father of her children. Mrs. O is not employed. Mr. O’s income makes the family ineligible for FMAP. Therefore, the family (Mrs. O, Mr. O, and children) is eligible for transitional Medicaid. A member of the FMAP household must have received FMAP in Iowa at least three of the previous six months in order to be eligible for transitional Medicaid.

Title 8: Medicaid Page 32 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP Do not consider any month in which Medicaid was received under FMAP incorrectly and the individual should have received Medicaid under another coverage group. The other caretaker who is canceled from FMAP due to an increase in earned income is eligible to receive transitional Medicaid. The child will receive transitional Medicaid with the other caretaker. When transitional Medicaid ends, do an automatic redetermination to another coverage group for the other caretaker and for the children. Transitional Medicaid begins with the effective date of termination of FMAP. When ineligibility occurred in a prior month, the first month of transitional Medicaid is the first month that FMAP was erroneously granted, unless it is determined that FMAP was received through fraud, according to the transitional Medicaid definition of fraud. See Determining Eligibility for more information on determining if fraud exists.

1. Mrs. M timely reports an increase in earned income May 23. Timely notice cannot be given for June 1. FMAP is canceled July 1. Transitional Medicaid begins July 1. There is no overpayment for June. 2. Mr. J and his two children are receiving FMAP. He starts work but fails to report this to his worker until two months later. When the worker receives the verification of his new job, it shows Mr. J and his children are not eligible for transitional Medicaid because, according to the transitional Medicaid definition of fraud, Mr. J fraudulently received FMAP. Eligibility for Mr. J and the children is explored under other coverage groups. Transitional Medicaid coverage lasts for up to 12 months. Procedure: When an increase in income has been reported timely, transitional Medicaid shall be available for a period of up to 12 months. When at least one person on a case becomes transitional Medicaid eligible, the system will set the review month to 12 months from the start of transitional Medicaid.

Title 8: Medicaid Page 33 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP When an increase in income has not been reported timely, transitional Medicaid shall be available for up to 12 months from the month the change occurred, allowing for timely notice. When at least one person on a case becomes transitional Medicaid eligible, the RE Due Month will need to be manually changed to 12 months from the month transitional Medicaid would have begun had the change been reported timely. The following sections give more information on:  Determining eligibility.  Requirements after eligibility is established.  Notices.  Effective date of changes.  Adding people to the eligible group.  Review requirements. Determining Eligibility Legal reference: 441 IAC 75 (Rules in Process) When the only change in circumstances being considered is an increase in earned income, the FMAP eligible group is eligible for transitional Medicaid if the increase in earned income creates ineligibility for FMAP and all other eligibility factors are met. When other changes in circumstances are being considered at the same time as the increase in earned income, use the following steps to determine if the FMAP eligible group is eligible for transitional Medicaid. 1. Would the increase in earned income have resulted in FMAP ineligibility if the other changes in circumstances hadn’t happened?  Yes. The FMAP eligible group is eligible for transitional Medicaid, if all other eligibility factors are met.  No. Go to question 2. 2. Would the other changes in circumstances have resulted in FMAP ineligibility if the earned income hadn’t increased?  Yes. The FMAP eligible group is not eligible for transitional Medicaid. Explore eligibility under other coverage groups.  No. Go to question 3.

Title 8: Medicaid Page 34 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP 3. Does the increase in earned income combined with the other changes in circumstances result in FMAP ineligibility?  Yes. The FMAP eligible group is eligible for transitional Medicaid, if all other eligibility factors are met.  No. FMAP eligibility continues.

1. Mrs. K begins employment in the same month in which her child begins to receive Social Security benefits. The earned income alone is sufficient to create FMAP ineligibility. The household is eligible for transitional Medicaid. 2. Mrs. M is working, and her earnings increase. She has one child. In March, the child begins receiving Social Security benefits. Mrs. M’s increase in earnings alone is not enough to create ineligibility. The increased unearned income is enough to create ineligibility. The household is not eligible for transitional Medicaid, since the unearned income alone is enough to result to ineligibility. An automatic redetermination is completed. 3. The house hold consists of Mrs. J and her two children. On June 10, Mrs. J reports that she received a pay raise on June 1 and that her daughter moved out of the household on June 7. Ignoring the change in household size, Mrs. J’s increased earnings are compared to the FMAP limit for a three-person eligible group. The countable income exceeds limits. Therefore, Mrs. J and the remaining child are eligible for transitional Medicaid if all other eligibility factors are met. 4. Mrs. E and her child receive Medicaid under FMAP. On January 10, Mrs. E reports that her child received her first social security check on January 3 and that Mrs. E began working on January 8. First, ignoring the social security, Mrs. E’s new earnings are compared to the FMAP limits for a two-person eligible group. The countable income does not exceed limits. Then, ignoring the new earnings, the new social security benefits are compared to the FMAP limits for a two-person eligible group. The countable income does not exceed limits.

Title 8: Medicaid Page 35 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

Finally, the combined new earnings and new social security benefits are compared to the FMAP limits for a two-person eligible group. The countable income exceeds limits. Mrs. E and her child are eligible for transitional Medicaid if all other eligibility factors are met. 5. Mrs. M and her child receive Medicaid under FMAP. In March, Mrs. M’s earnings increase and her child begins receiving social security benefits. First, ignoring the social security income, Mrs. M’s increased earnings are compared to FMAP limits for a two-person eligible group. The countable income does not exceed FMAP limits. Then, ignoring the increase in earnings, Mrs. M’s earnings before the increase and the new social security income are compared to FMAP limits for a two-person eligible group. The countable income does exceed limits. Mrs. M and her child are not eligible for transitional Medicaid, since the increased earnings alone did not create FMAP ineligibility, and the other change in circumstances alone did create FMAP ineligibility. 6. The household consists of Ms. L and two children. The family receives FMAP. Ms. L’s countable earned income is $380 per month. She receives an increase in earned income. Her countable earned income is now $420. When she reports her raise, she also reports that one of her children has moved out of the home. Step 1. Does the increase in earned income result in FMAP ineligibility if the other changes in circumstances had not happened? No ($420<$426). Go to step 2. Step 2. Does the loss of a household member result in FMAP ineligibility if the earned income had not increased? Yes ($380>$361). There is no transitional Medicaid eligibility, since the loss of a household member alone causes ineligibility for FMAP. FMAP is canceled for income exceeding the two-person FMAP limit, not due to the increased earned income.

Title 8: Medicaid Page 36 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP A household is not eligible for transitional Medicaid if:  The income of a stepparent who is not a member of the FMAP eligible group makes the household ineligible for FMAP.  The income of a stepparent who is a member of the eligible group but has not assumed the role of caretaker (e.g., incapacitated) makes the household ineligible for FMAP.  The member received FMAP in any of the last six months immediately preceding the month of discontinuance as a result of fraud. Fraud is defined as: • an individual who obtains, by means of a willfully false statement or representation, by knowingly failing to disclose a material fact, any assistance or benefits to which the individual is not entitled, or • an individual who has knowingly withheld information by willfully providing false statement in order to qualify for benefits for which they were not entitled. If it is determined that fraud has occurred, an EDBC Override will need to be completed in ELIAS. Send an email to the DHS, SPIRS Help Desk to get the correct Aid Code and household composition. The following information will need to be provided to SPIRS:  Case Number  Date of Birth  Pregnancy, if applicable  Deemed newborn status, if applicable  Refugee Status, if applicable

Title 8: Medicaid Page 37 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

1. Ms. M and her family receive Medicaid under FMAP. On April 15, Ms. M turns in her annual review form indicating she does not have any income. The worker contacts Ms. M to confirm this information since she previously had some income. On June 15, the IM worker receives an IEVS report indicating that Ms. M has unreported earned income. Ms. M provides an employer’s statement verifying that she began employment in March. Had the earnings been reported, Ms. M would have been determined prospectively ineligible for FMAP as of April 1. April would have been the first month of the transitional Medicaid period. However, since Ms. M knowingly provided false information and was ineligible to receive FMAP for the months of April, May, and June, Ms. M is not entitled to receive transitional Medicaid coverage. FMAP ineligibility occurred on April 1, and an automatic redetermination is completed. 2. Same as Example 1, except that after Ms. M verifies her earnings, the worker determines that Ms. M would have remained eligible for FMAP. In July, Ms. M reports that she got a better job. Prospectively, Ms. M’s new increased earnings create ineligibility for FMAP as of August 1. Ms. M’s previous failure to report her earnings does not disqualify her from transitional Medicaid, since her failure to report did not result in FMAP ineligibility. Therefore, August is the first month of the transitional Medicaid period. When ineligibility for FMAP has already been determined based on a change other than increased earned income, a subsequent increase in earned income in the same month as the change that caused ineligibility does not make the family eligible for transitional Medicaid.

Title 8: Medicaid Page 38 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

Mr. A and his two children receive Medicaid under FMAP. He receives unemployment compensation. On April 10, Mr. A reports that one of his children permanently moved out on April 5 to live with relatives. Countable income of Mr. A and the remaining child exceeds FMAP limits for a two-person eligible group. Effective May 1, eligibility for the child is established under MAC and conditional eligibility for Mr. A is established under IHAWP. A notice of decision is issued April 12. On April 15, Mr. A reports that he will begin working April 20 and his first check will be received April 30. Although his earned income would exceed the FMAP limits for a two-person eligible group, eligibility has already been established under another coverage group for May based on the earlier reported change. Therefore, Mr. A and his child are not eligible for transitional Medicaid. Requirements After Eligibility Is Established Legal reference: 441 IAC 75 (Rules in Process) During all 12 months of the transitional Medicaid period, the household must continue to cooperate with Quality Control, DIAL, CSS Third-Party Liability, and the Health Insurance Premium Payment Unit. If a person fails to cooperate, sanctions are applied. The eligible group must:  Continue to include a parent or other caretaker whose income is used or an ineligible parent or other caretaker whose income is used, and  Continue to include a child, as defined by FMAP policy, and  Timely report any changes in the household composition. The requirement of the eligible group to include a child is met if:  A child is absent, as described in 8-C, Absence, or  The only child in the home is an SSI recipient, or  The only child in the home is a “considered” person.

Title 8: Medicaid Page 39 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP A family receiving transitional Medicaid is not required to report income changes except at review time. If you receive a report of change in income, take no action until the review. If the family income decreases to within the FMAP limit, explain the benefits to the family so they can make an informed decision. If the family applies for or requests another coverage group, complete a redetermination of eligibility. Notices When a person moves from FMAP to transitional Medicaid, a Notice of Action is not generated. There may be situations when a household has individuals in different coverage groups. When at least one FMAP member becomes eligible for transitional Medicaid, the other household members may join the transitional Medicaid group. In this situation, the ELIAS system automatically generates a Notice of Action to an IHAWP or Hawki individual to inform them they no longer owe a premium. Effective Date of Change Legal reference: 441 IAC 75 (Rules in Process) When a transitional Medicaid eligible group reports a change in circumstances, the effective day of the change depends on the type of change. When the change is reported timely, determined the effective date as follows:

Change Effective Date Child who is not in school or will not finish school before reaching age 19:

 Turns 18 on the first day of the month Remove child from TM effective the first day of the birthday month. If child is the only child in the TM group, cancel TM effective the first day of the birthday month.

Title 8: Medicaid Page 40 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

Change Effective Date  Turns 18 on a day other than the first day of the month Remove child from TM effective the first day of the month after the birthday month. If child is the only child in the TM group, cancel TM effective the first day of the month after the birthday month. Child who is 18 and in school completes school Remove child from TM effective the first day of the month after the month in which child completed school. TM group no longer contains a child or no longer contains a parent or other caretaker Cancel TM effective the first day of the month after a ten-day timely notice period. Timely and adequate notice is required Other TM eligible group composition changes Remove people allowing for adequate and timely notice. Add people according to 8-G, Adding a New Member to an Existing MAGI-Related Case. Changes in income The first day of the month following the month of change. When a change other than income is not reported timely, redetermine eligibility for all months beginning with the month following the month in which the change occurred. When a change in income is not reported timely under the TM coverage group, the effective date of the change is the month in which the change would have been effective if it had been reported timely. Adding People to the Eligible Group Legal reference: 441 IAC 75 (Rules in Process) The transitional Medicaid eligible group includes:  Every person who was in the FMAP eligible group in the last month FMAP was received.  Every person whose needs and income were included in determining the FMAP eligibility of the household when FMAP benefits were terminated.

Title 8: Medicaid Page 41 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP Also add the following people to the eligible transitional Medicaid group:  People returning to the home whose needs and income would be taken into account in determining the FMAP eligibility if the household were applying in the current month.  Dependent children returning to the home from foster care, if they would have been included if they were at home while the household was on FMAP.  People who were not included in the FMAP eligible group because they were receiving SSI, if they have since lost SSI.  People who were not included in the eligible group, such as a child in deemed newborn status or other MAGI-related coverage groups.

1. Ms. M receives FMAP for herself and Child A. Child B receives SSI and is not included in the FMAP eligible group. Ms. M becomes employed and her earnings create FMAP ineligibility. Ms. M and Child A are placed on transitional Medicaid. Due to Ms. M’s increased income, Child B also loses SSI eligibility.

Since Child B would have been included in the FMAP eligible group except for the receipt of SSI, Child B is added to the transitional Medicaid group effective the first day of the month following the last month in which Child B received SSI. 2. Ms. A and her two children are receiving FMAP. Ms. A’s earned income creates FMAP ineligibility, and Ms. A and her children begin receiving transitional Medicaid March 1. On May 7, Ms. A reports that one of her children has left the home and is residing with the father. The child is removed from the transitional Medicaid eligible group effective June 1.

On July 28, Ms. A reports the child returns home. Because the child would be part of the FMAP group if applying in the current month, the child is added to the transitional Medicaid group effective July 1. 3. Mr. and Mrs. B and their three children begin receiving transitional Medicaid August 1. On January 20, Mrs. B gives birth. The baby may be added to the transitional Medicaid group effective January 1 or be eligible for Medicaid as the deemed newborn child of a Medicaid-eligible mother effective January 1.

Title 8: Medicaid Page 42 Iowa Department of Health and Human Services Employees’ Manual Chapter F: Coverage Groups MAGI-Related Coverage Groups Revised February 28, 2025 People Who are Ineligible for FMAP

4. Mrs. C and her three children begin receiving transitional Medicaid May 1. In July, Mrs. C reports that the father of the children returned to the home. He has no income. Mr. C’s needs and income would be considered in determining Medicaid eligibility if they were applying in the current month. Mr. C is added to the transitional Medicaid group effective July 1. 5. Mr. and Mrs. D and their child begin receiving transitional Medicaid June 1. In September, Mrs. D reports and verifies she is pregnant with twins. The transitional Medicaid eligible group household size is increased. The unborn twins would be members of the FMAP group if applying in the current month. 6. Ms. F and her two children begin receiving transitional Medicaid April 1. In May, Ms. F reports her third child returned to the home after a six-month foster care placement. The child is added to the transitional Medicaid group effective the first day of the month following the month in which the child left the foster care placement. 7. Mrs. G and her child begin receiving transitional Medicaid May 1. Also in the household is Mr. G, an SSI recipient, who is disabled. Mr. G loses SSI eligibility effective August 1 due to the receipt of social security disability payments. Mr. G is added to the transitional Medicaid group effective August 1. 8. Mr. L begins receiving transitional Medicaid for himself and his son, John, on July 1. Mr. L reports on October 5 that his 15-year-old son, Adam, moved in with the family October 2. Adam is added to transitional Medicaid group effective October 1. 9. Ms. K and her son, James, have received transitional Medicaid for three months (January - March). Ms. K reports to her worker on April 21 that her son, Ken, aged 15, returned to her home on April 14. Ken receives $500 per month Social Security.

The worker adds Ken to the transitional Medicaid group April 1. The Social Security Ken receives does not affect transitional Medicaid eligbility.