Effective Date: November 1, 2021

No Previous Policy

A. Introduction

1. In the MAGI-based methodology, choose the method to determine the best estimate of each source of income an individual expects to receive during the certification period.

Income may be averaged, anticipated, or annualized depending on the type of income, the history of receiving it, or expected future changes.

a. Stable Income: If an individual receives stable, ongoing income, prorate the expected amount over the 12 month certification period to arrive at a monthly amount.

o If the individual is paid monthly, bi-monthly, every week or every other week, determine the average income to be received each pay period.

o Multiply the average by the number of pay periods in the certification period.

o Then divide the total by 12 months to arrive at a monthly amount.

b. New Income :

o If an individual has started a new job during the application month, request verification of the income and pay schedule. An employer statement may be the best way to request verification. Determine the pay schedule and the average income per pay period.

o If the individual has a job offer, but has not started, find out when the job is expected to begin. If income will not be received before the application processing deadline, make an eligibility determination based on the current situation.

· Set a task to request income verification after the new job is expected to begin.

· Adjust eligibility accordingly for the remainder of the certification period upon receiving verification of the new source of income.

o An individual reports receiving a new job offer. He does not have a start date.

· Set a task to request income verification after the new job is expected to begin.

o If a new income source is reported or discovered at review, request the needed verifications. Base the estimate on when the new income source starts (if the individual has not already started to receive income from the new source) following similar process as with an applicant who will have new income.

o Once you have sufficient verification, determine the best estimate as follows:

· If the individual will be paid monthly, bi-monthly, every week or every other week, determine the average income to be received each pay period.

· Multiply the average by the number of pay periods remaining in the certification period based on when the first check is received.

· Then divide the total by 12 months to arrive at a monthly amount.

Example- James applied on March 30 for himself and his family for benefits to start in March. He reports he will start a new job on April 1. He is paid every two weeks on Fridays. He will receive his first check on April 19th. He will only receive 1 check in April. He works 40 hrs/wk, earning $11.00/hr. He will receive 23 checks in the certification period because he had no income in March and only 1 check in April.

· Best estimate of income = $880 x 23 = $20,240/12 = $1,686.67/month

· Monthly countable new income = $1,686.67

c. Anticipating Infrequent Income: Anticipate infrequent income only when there is a history of the payments, and the individual expects to continue receiving the income. Prorate the income over the certification period, and add the prorated amount to the monthly income. An example is taxable interest income. It may be received monthly, quarterly or annually. Prorate the amount over the 12-month certification period and count 1/12 in each month.

d. Terminated Income: If an individual will receive income during the certification period that has terminated , determine the total expected terminated income and divide by 12 months to arrive at the monthly average amount to be received during the certification period.

Example- John has been laid off from his employment. He says he can't afford his COBRA coverage and wants to see if he can qualify his family for Medicaid. His company gave him a severance check for $5,000, and he received only one pay check of $1,500 in the application month, which is his last check. There is no other income.

o Best estimate of income = $6,500/12 = $541.67

o Monthly countable terminated income = $541.67

o John's HH size is 3 and so he qualifies for PCR coverage. His children qualify for Child Medicaid.

e. Seasonal Income: If an individual expects to receive temporary, seasonal, contract or other infrequent income, prorate the income over the certification period.

When prorating temporary, seasonal or infrequent income, total the amount expected to be received during the certification period. Then divide it by 12 to determine the monthly amount.

Example (seasonal) - For the past 5 years, John has worked as a ski instructor for 6 months of the year at $1000/month. He also works for a landscaping company during the other 6 months and earns $2000/month wages.

· Best estimate Ski Instructor = 6 months x $1000/month = $6000/12 months = $500/month

· Best estimate Landscaping = 6 months x $2000/month = $12,000/12 months = $1000/month

· Total countable income: $500 + $1000 = $1500/month

Example (temporary) - Jack was laid off and is now receiving unemployment. His weekly checks are $350 and he has 15 weeks of unemployment remaining as of the first day of the application month. Since this income will end, prorate it over the certification period. This will factor in the zero income months. Add the monthly amount to any other income the individual or household has.

· Best estimate Unemployment = $350/week x 15 weeks = $5250/12 months = $437.50/month

· Total countable Unemployment income $437.50/month.

f. Self-employment . If an individual is self-employed, determine the expected annual income the individual expects to receive from the self-employment work. Divide the annual amount by 12 to determine the average monthly income.

· Find out expected gross income and expected expenses when calculating the expected net income. See 419-2 and 419-3 for self-employment policy.

· If the self-employment is new, make the most reasonable estimate of what the individual expects to receive during the certification period.

2. Use the total monthly amount of income expected to be received to conduct a reasonable compatibility test and to determine eligibility for the certification period.

3. Reasonable compatibility : Determine if the reported income is reasonably compatible with electronic verification sources. The reasonable compatibility test compares the best estimate of countable income the agency derives based on the client's statement with the best estimate of countable income derived from available electronic income sources. Compare those amounts against the income limit for CHIP. Deduct any allowed expenses from both the client statement of income and the electronic source of income before doing the reasonable compatibility test.

a. If both the client's statement and the electronic income match are at or below the CHIP income limit, the individual is eligible.

b. If both the client statement and the electronic income match are above the CHIP income limit, the individual is ineligible for CHIP.

c. If one income amount is above and one income amount is below the CHIP income limit, request additional verification from the individual. Sec. 705 .

d. Eligibility for CHIP group C allows a 5% of FPL disregard when determining eligibility. Refer to 440-5 .

e. If electronic income information is unavailable, use other methods to verify the individual's income.

If an individual claims no income, or income is insufficient to meet basic needs, ask the individual how she is meeting basic living expenses (shelter, food, utilities, etc.)

B. Documentation and Changes

Document the method of determining the best estimate.

Refer to Section 804-5 when a change has occurred that results in the best estimate needing to be changed.