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For MAGI AGs, Military Allotments may or may not be taxable income depending on the purpose of the allotment. For example, if the Military Allotment is for child support, it is not considered taxable income for the individual receiving the allotment. Therefore, the purpose of the Military Allotment must be determined. If such purpose results in taxable income to the individual receiving the Military Allotment, then the income is counted in the calculation of MAGI for household income. 2840.45.00 DISABILITY PAYMENTS An individual may have insurance coverage that pays a specified amount for a specific period during which he is unable to work because of a disabling condition. 2840.45.05 DISABILITY PAYMENTS (MED 1, 2, 4) Disability Payments are counted as unearned income. 2840.45.10 DISABILITY PAYMENTS (MED 3) For MAGI, Disability Payments may or may not be taxable income depending on who paid for the disability insurance. Disability Payments are fully taxable if the individual did not contribute to the disability insurance premium payments, or the employer did not withhold premium payments from the individual’s salary. Such Disability Payments are counted in the calculation of MAGI for household income. Disability Payments are not taxable if the individual paid for the premium payments with after tax dollars, and such payments will not be counted in the calculation of MAGI for household income. Disability Payments may also be partially taxable depending on who paid for the premium payments and whether such payments were with pre- tax or after-tax dollars. Generally, any payments made by the individual with after tax dollars toward the disability insurance premium will not be considered taxable income and will not be considered in the calculation of MAGI for household income. 2840.45.15 INDEMNITY HEALTH INSURANCE PAYMENTS Indemnity health insurance plans pay a specified benefit to a person based on the number of days the individual is hospitalized. There are other variations to this type of insurance, including accident and cancer policies. For eligibility purposes, an indemnity policy means one in which the terms of the plan do not in any way limit the way the applicant/recipient can use the benefits. 2840.45.20 INDEMNITY HEALTH INSURANCE PAYMENTS (MED 1, 2, 4)