F. Mandatory Exceptions vs. Specified Excluded Individuals

In describing individuals who are not required to meet the community engagement requirement at section 1902(xx)(2), section 1902(xx)(3)(A) of the Act establishes the term “mandatory exceptions for certain individuals” and section 1902(xx)(9)(A)(ii) of the Act establishes the term “specified excluded individual.” The difference between these terms stems from the definition of “applicable individual” at section 1902(xx)(9)(A)(i) of the Act, which defines applicable individual as individuals “other than specified excluded individuals (as defined in clause (ii)).” As discussed in section II.B. of this IFC, section 1902(xx)(1) of the Act establishes community engagement as a condition of eligibility for “applicable individuals,” and section 1902(xx)(9)(A)(i) of the Act expressly excludes “specified excluded individuals” from the definition of “applicable individuals.” Therefore, community engagement is not a condition of eligibility for specified excluded individuals. Conversely, the mandatory exceptions described at section 1902(xx)(3)(A) of the Act apply to “applicable individuals” who are otherwise subject to the community engagement requirement in a given month, but who meet criteria for a mandatory exception for part or all of that month, which results in the State deeming them compliant. Therefore, individuals who meet the criteria for a mandatory exception are still, by definition, considered applicable individuals, while specified excluded individuals are not.

This distinction becomes important when determining whether someone is subject to the community engagement requirement. The threshold question for States when they begin to process an application or a renewal is whether someone is an applicable individual or a specified excluded individual. If the State determines that the individual is a specified excluded individual in the month of application or when the State processes the renewal, it must not determine whether the individual met the community engagement requirement or met criteria for one of the mandatory exceptions in the prior month(s), as required at § 435.556(c); accordingly, States are prohibited from requiring specified excluded individuals to demonstrate community engagement or be deemed to have demonstrated community engagement as a condition of eligibility. If the individual is an applicable individual in the month of application or when the State processes the renewal, the State would need to continue to analyze whether the individual meets criteria for any of the mandatory exceptions and deem compliance, or, if they are not excepted, determine whether the individual is compliant with the community engagement requirement during the appropriate timeframe. We further describe how States assess compliance, including when they determine if someone is a specified excluded individual or applicable individual, in section II.H. of this IFC.

We explain the distinction between mandatory exceptions and specified excluded individuals because of the reference to “specified excluded individuals” in the list of mandatory exceptions at section 1902(xx)(3)(A)(i)(I) of the Act. A State that is assessing compliance in a review period, as defined in section II.H.3. of this IFC, must have first determined that the individual is not a specified excluded individual. However, a State may find that this individual, although no longer a specified excluded individual, previously was a specified excluded individual in part or all of 1 or more months during the review period. If so, the individual would meet the criteria for the mandatory exception in those months.

For example, for a renewal that is due in September, a State that requires individuals to demonstrate community engagement in 2 months considers whether an individual met any of the mandatory exception criteria during the review period of April through September (the individual's 6-month eligibility period in this example). For part of this review period, the State's records show that the individual met the exclusion criteria as a parent of a dependent child 13 years of age or under. However, their child (who does not have a disability) turned 14 years old in June. Thus, at the time of the renewal due in September, the parent is no longer a specified excluded individual but is now an applicable individual subject to the community engagement requirement. In this scenario, the parent would be “deemed” to demonstrate community engagement in 3 of the 6 months in the review period (April, May, and June), because the individual met the exclusion criteria as a parent of a dependent child who was under age 14 for part or all of those months; this meets the State's requirement for the individual to be compliant for 2 months since their last renewal.

As previously discussed, community engagement is not a condition of eligibility for specified excluded individuals, so such individuals are not subject to the community engagement requirement. Conversely, compliance with the community engagement requirement is a condition of eligibility for applicable individuals. Applicable individuals who meet a mandatory exception are subject to the community engagement requirement, but they are deemed to demonstrate community engagement for any month the exception applies during the review period.