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Example 1 The agency is processing Fred’s MAPP renewal. During the previous 12-month certification period, Fred earned $5,000 from his job and received $12,000 in unearned income. During that same period, he deposited $3,000 into his Independence Account. At one point he withdrew $500 from his Independence Account to pay for car repairs.

The penalty is based solely on total deposits in excess of 50% of gross earnings over the twelve-month period. Withdrawals are not counted when determining the penalty. In this example, 50% of Fred’s $5,000 earned income = $2,500. The $3,000 in deposits - $2,500 = $500 penalty Independence Account Registration To qualify as an Independence Account, an account must be: 1. Registered with the IM Agency. To register an Independence Account, the member must submit a completed Medicaid Purchase Plan (MAPP) Independence Account Registration (F-10121) form to the IM agency. The IM agency must save a copy of the completed form in the member’s case file and provide a copy to the member. 2. A separate financial account owned solely by the MAPP member (Cash, escrow accounts for a home sale, money owed, prepaid debit cards, and tax refunds may not be registered as Independence Accounts.) 3. Opened with a financial institution after MAPP eligibility is confirmed, with the following exceptions: a. Pension and retirement accounts b. Non-retirement accounts that were registered as Independence Accounts before August 1, 2020 There are different rules for retirement and non-retirement accounts regarding how they may be registered as Independence Accounts and when funds may be deposited. Retirement Accounts MAPP members may register their existing retirement or pension accounts as Independence Accounts. The amount that was already accumulated in the retirement or pension account before it was registered as an Independence Account is called the “Pre-Independence Account Balance.” The Pre-Independence Account Balance is a countable asset. Funds may be deposited in a retirement or pension account that has been registered as an Independence Account during periods of MAPP ineligibility. However, with the exception of account interest, any funds deposited during a period of MAPP ineligibility must be added to the account’s Pre-Independence Account Balance and considered a countable asset. Example 2 Sheila is approved for MAPP. She has an established retirement account through her employer that currently has a $5,000 balance. The $5,000 was a countable asset for her eligibility determination. Sheila registers the retirement account as an Independence Account with the IM agency. The money deposited into this retirement account while Sheila is a MAPP member will be considered an exempt asset as a part of an Independence Account. The $5,000 Pre-Independence Account Balance remains a countable asset.

Example 3 Tom is approved for MAPP. After he receives his Notice of Decision, he registers his existing IRA as an Independence Account. This IRA has a balance of $1,000 prior to registration as an Independence Account, so that $1,000 is a countable asset. Tom is eligible for MAPP from July to October, eligible for