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b) However, cash received as reimbursement for qualified-benefit expenses, such a child care, is not income.

c) Example: ABC, Inc., contributes $50 per week to fund basic benefits under a cafeteria plan. Mr. White selects insurance that costs $35 per week and opts for a weekly cash payment of $15 in lieu of additional coverage. The $15 cash payment is part of Mr. Brown’s countable wages.

C. When a cafeteria plan is involved, countable wages for Medicaid purposes can be less than the gross amount on the check stub. It can be difficult to tell whether paystubs represent payroll deductions, which are part of gross wages, or cafeteria-plan itemizations, which are not.

1. One indicator is when the deduction for Social Security and Medicare taxes is less than the tax rate times the gross wages shown on the checkstub.

2. Example: The June 2010 monthly pay stub reflects gross wages of $999.94, a deduction for FICA/Medicare taxes of $68.85 (does not equal 7.65 percent of the gross wages) and a $160 voluntary deduction for health insurance. The employer confirms the company contributes $100 per month to fund basic benefit levels under a cafeteria plan that offers a variety of insurance coverages. The $100 that the employer contributes toward benefits under a cafeteria plan is not wages. Also, the employer confirms the employee voluntarily pays $60 for additional benefits. The employee’s contribution is wages.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 9.4: Wage Advances and Deferred Wages.

A. These payments are defined as follows:

1. Wage advances are payments by an employer to an individual for work to be done in the future.

2. Wages are considered “deferred” if they are received later than their normal payment date.

a) Types of wage payments that may be deferred include vacation pay, dismissal and severance pay, back pay and bonuses.

B. These payments are treated as follows:

1. An advance is wages in the month received.

2. Wages that are deferred due to circumstances beyond the control of the employee are considered earned income when actually received;

3. Wages that are deferred at the employee’s request or by mutual agreement with the

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b) However, cash received as reimbursement for qualified-benefit expenses, such a child care, is not income.

1. One indicator is when the deduction for Social Security and Medicare taxes is less than the tax rate times the gross wages shown on the checkstub.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 9.4: Wage Advances and Deferred Wages.

A. These payments are defined as follows:

1. Wage advances are payments by an employer to an individual for work to be done in the future.

2. Wages are considered “deferred” if they are received later than their normal payment date.

a) Types of wage payments that may be deferred include vacation pay, dismissal and severance pay, back pay and bonuses.

B. These payments are treated as follows:

1. An advance is wages in the month received.

2. Wages that are deferred due to circumstances beyond the control of the employee are considered earned income when actually received;

3. Wages that are deferred at the employee’s request or by mutual agreement with the