8. Mandatory Exceptions

States must deem applicable individuals as having demonstrated community engagement for a month if, for all or part of a month, they fall into a mandatory exception specified in ( printed page 33409) section 1902(xx)(3)(A) of the Act and implemented at § 435.553.

Mandatorily excepted individuals are: specified excluded individuals as defined at § 435.554 and discussed in section II.E. of this IFC, individuals under age 19, individuals entitled to or enrolled in Medicare part A or enrolled in Medicare part B, individuals described in a mandatory eligibility group under section 1902(a)(10)(A)(i)(I) through (VII) of the Act, and individuals who were an inmate of a public institution at any point during the prior 3 months ending on the first day of a month in which the individual is otherwise subject to the requirement to demonstrate community engagement.

Many of the mandatory exceptions include individuals for whom the State's eligibility system is likely to have existing information on which the State must rely to verify that an applicable individual qualifies for a mandatory exception. For example, as part of the eligibility determination, a State would generally screen for and have information on individuals who were under the age of 19, entitled to or enrolled for Medicare benefits under part A or B, or described in any mandatory eligibility group in section 1902(a)(10)(A)(i)(I) through (VII) of the Act. Because States are already required to obtain this information as a part of the eligibility determination, we believe the verification of these elements should be straightforward based on information already contained and readily available in the State's enrollment and eligibility system. In addition, States must establish connections with other State or local agencies that provide reliable information relevant to an individual's status as an inmate of a public institution at any point during the 3-month period before any month for which the applicable individual otherwise would be required to demonstrate community engagement, as discussed in preamble section II.I.7.h. of this IFC.

When verifying an applicable individual qualifies for a mandatory exception, the requirement to use reliable information available to the State applies, as implemented at § 435.557(g)(1). Section 1902(xx)(3)(A) of the Act permits the State to deem an individual to have demonstrated community engagement for a month without further verification “of the information resulting in such deeming” if the individual meets the criteria for a mandatory exception for all or part of that month. We interpret this requirement to allow a State to deem an applicable individual to have demonstrated community engagement without requiring documentation or other information in the absence of reasonably available documentation only if the individual provided information on an application, renewal or other State form, or when reporting a change in circumstances in accordance with § 435.557(b)(4) indicating they qualify for an exception and there is no reliable information available to the State to verify the information the individual provided. If reliable information available to the State is inconsistent with information provided by the applicable individual, beginning on January 1, 2028, the State must require documentation or other information if documentation is not reasonably available. This documentation or other information is not required for the purpose of verifying the underlying information resulting in the deeming of compliance but rather to resolve the inconsistency. We also stress that not requiring documentation or other information to verify an applicable individual meets the criteria for an exception is a State option under the statute but States may require documentation (if it is reasonably available) in the absence of reliable information available to the State and are encouraged to do so in the interest of program integrity.