1805.030.20.15 Allowable Deductions – DSS Manuals

IM-146 December 16, 2022 ; IM-96 July 11, 2022 ; IM-14 March 8, 2021 ; IM-92 June 18, 2020 ; IM-147 September 27, 2019 ; IM-103 July 22, 2019 ; IM-164 December 27, 2017 ; IM-94 July 13, 2017 ; IM-50 May 12, 2017 ; IM-97 November 9, 2015

Deductions are expenses that lower taxable income. Because MAGI MO HealthNet (MHN) is based on taxable income, deductions must be incorporated in the calculation of the MAGI-based income.

Accept self-attestation for deductions allowed in the calculation of MAGI income. Enter deductions as attested by the participant. The self-attested income and deductions must be found Reasonably Compatible (RC) with electronic data sources. If the self-attested amount is not RC, request additional information. If the additional information is not provided, do not deny or reject the application or case. Determine eligibility without including the deductions.

EXAMPLE : John applied for benefits on his 10-year-old son, Brad. John claims Brad as a tax dependent and is the custodial parent. John attests to gross wages of $1038 bi-weekly. John does not attest to pre-taxed deductions . However, John provided three paystubs with his application showing pre-taxed deductions of: health insurance of $250 semi-monthly, contributions to a Health Savings Account of $47 semi-monthly and contributions to a 401(k) of $55 semi-monthly. John’s pre-taxed deductions are added to the eligibility system . All other eligibility factors were met. The application is approved with the allowable pre-taxed deductions using the frequency of semi-monthly. Eligibility determination is made on John’s gross wages minus the pre-taxed deductions.

NOTE: When the participant’s eligibility is reviewed again, the attestation of pre-taxed deductions needs to be reconsidered, unless, auto renewed.

EXAMPLE : Bill’s daughter, Mary, is currently receiving coverage under MO HealthNet for Kids non-premium (MHK). Bill claims Mary as a tax dependent and is the custodial parent. Bill is now attesting to gross wages of $1300 per month. Bill also now attesting to pre-taxed deductions : health insurance for himself of $250 per month and contributions to a 401(k) of $1,300 per year. Electronic data sources confirm and are reasonably compatible with Bill’s attestation of gross wages minus pre-taxed deductions. Therefore, Bill does NOT need to provide verification of his deductions . All other eligibility factors were met and Mary remains eligible for MHK (no change in level of care). The change is finalized. The eligibility system will determine Mary’s eligibility based on Bill’s attestation of gross wages minus his attestation of pre-taxed deductions.

NOTE: When the participant’s eligibility is reviewed again, the attestation of pre-taxed deductions needs to be reconsidered, unless, auto renewed.

EXAMPLE : Bob applied for benefits on his 11-year-old son, Steven. Bob claims Steven as a tax dependent and is the custodial parent. Bob attests to gross wages of $2,300 semi-monthly. Bob does attest to pre-taxed deductions of : health insurance of $250 semi-monthly (employee only), contributions to a Health Savings Account of $47 semi-monthly and contributions to a 401(k) of $55 semi-monthly. Electronic data sources confirms Bob’s attestation of gross wages, however, the EOI is not reasonably compatible when the pre-taxed deductions are subtracted from his gross wages. Therefore, Bob does need to provide verification of his deductions . Bob is sent an IM-31A requesting verification of his pre-taxed deductions (paystubs or employer statement). Bob fails to return the requested verification in the allotted time, therefore, his deductions are NOT allowed. All other eligibility factors were met. Steven was found ineligible for all MO HealthNet programs under MAGI because Bob’s attestation of pre-taxed deductions are not allowed and his attestation of gross wages is over the income maximum for a household of two.

NOTE: Depending on the pay frequency and the frequency of the pre-taxed deductions, the participant may have pay periods without pre-taxed deductions.