Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 11/22/2024
06000 >>> 06100
06000
06100 Budgeting of Income - A prospective (income estimate or conversion) or income average method of budgeting shall be used to determine eligibility and the amount of assistance. All income shall be counted in the calendar month received except when received on a twice a month or monthly basis. In such instances, income shall be viewed as being received by the client on the day that the payment is ordinarily scheduled.
NOTE: For teachers or other school employees, income shall normally be budgeted on a prospective basis as received unless the teacher has opted to receive their yearly contract salary over fewer than 12 months (such as only over 9 months during the school year). In such instances, the total year's income is to be averaged over 12 months so that a monthly amount of income is considered in determining eligibility and amount of assistance.
6110 Prospective Budgeting - Prospective Budgeting is based on an estimate reflecting the income received and/or expected to be received going forward from the month of application. The basis for any estimate (including tips) must be documented. For self-employment, income shall be budgeted as outlined in 6200. For intermittent income, the income shall be budgeted as outlined in 6113. A prospectively estimated budget may be recalculated if information is received that the estimate is no longer correct (e.g., income that was estimated to be received in a month is reduced or terminated). The client must report their change of income, and the change shall be applied in accordance with provisions in 7000.
Earned income information, including pre-tax income deductions, must be analyzed to accurately prospect income. Past information must be evaluated to determine if it represents the future. Paystubs provided must be evaluated before they are determined appropriate to be used in the calculation of income.
If bonuses, tips, or commissions are on the pay stub, even when only included as part of Year to Date totals, these must be evaluated to determine whether this income is recurring. If the person is employed where tips are paid, it must be determined if tips are actual or allocated. (Certain employers must allocate tips if the percentage of tips reported by employees falls below a required minimum percentage of gross sales. To "allocate tips" means to assign an additional amount as tips to each employee whose reported tips are below the required percentage.)
Pay information provided must be evaluated to determine if there was a recent pay raise that will impact future earnings. Paystubs should also be evaluated to determine if there are any discrepancies in the year-to-date amounts. If so, the missing information must be clarified.
When using paystubs, the most recent should be used. Paychecks are deemed acceptable as proof of income when they are dated within the three months prior to the month of application through the final application processing date. Any paycheck received prior to this timeframe will be excluded from income budgeting. Budgeting methods take into consideration the variance that could occur between paystubs and the consumer’s self-attestation. Therefore, regardless of which budgeting method used, no paystub shall be excluded based on not quite matching other stubs submitted or the self-attestation of income.
When income is from a new source, the pay rate has increased (or decreased) or when the numbers or hours to be worked has increased or decreased, the income shall be budgeting using the income which is expected to continue in the future.
Weekly and biweekly income must be converted to a monthly amount.
Budgeting rules are also dependent upon frequency and regularity of income. The case record is to be documented as the method of computation. The following rules apply:
6111 Regular Earned or Unearned Income - Once the full monthly amount is determined, that same amount of income shall be budgeted providing the individual anticipates continued regular income. A new budget is required prior to redetermination only if regular income becomes irregular, there is no longer any income (not applicable to a job change if earnings remain regular), or there is a change in the monthly amount of regular income.
6112 Irregular Earned or Unearned Income - For income and expenses received or billed more frequently than on a monthly basis (i.e., weekly, biweekly, etc.), the amount to be budgeted shall be based on converting the amount to a standard amount of anticipated monthly income.
6112.01 - Income in the same weekly amount are to be multiplied by 4.3. If the income amount received is in differing weekly amounts, an average amount shall be determined and then multiplied by 4.3.
6112.02 - Income in the same amount every 2 weeks are to be multiplied by 2.15. If the income amount received is in differing amounts every 2 weeks, an average amount shall be determined and then multiplied by 2.15.
6112.03 - Income in the same amount twice per month are to be added together to obtain a monthly amount. If the income is in differing amounts twice per month, an average amount shall be determined and then multiplied by 2.
NOTE: To prospectively estimate semi-monthly income from a new job, (when paychecks are not available to average) pay periods with varying hours must be taken into account. The easiest and most accurate way to make this determination is to calculate a weekly estimate, times 2.15 times 2. Multiplying the weekly amount time 2.15 will take into account pay periods that have fluctuating hours. For example, a person working 40 hours a week will have more than 80 hours in a pay period when paid semi-monthly. Taking 40 X the hourly rate X 2.15 X 2 will get a closer anticipation of projected income than taking 40 X the hourly rate X 2 X 2.
6113 Irregular and Intermittent Income - Irregular and Intermittent Income received on a monthly basis in differing amounts shall be averaged. The monthly amount shall be established by dividing the income by the proper number of months for the period that the income is intended (e.g., 3 months for quarterly, etc.). A fair estimate for the time period used for averaging shall be established with the client. The case record shall clearly indicate that the income is being treated as intermittent income.
6113.01 - Once a standard monthly amount is established, it may continue to be budgeted through the redetermination period. However, a new budget is required:
(1) - for medical assistance when income terminates and there continues to be a spenddown in place;
(2) - for CHIP when income decreases and results in elimination or reduction of a premium requirement.
For redetermination of eligibility in medical assistance spenddown cases based on a change or termination in income, use the income amounts established for the case through the month the change is reported. In addition, if income continues, establish a new converted monthly amount to be used beginning the month after the change is reported through the end of the base period.
6120 Current Month Budgeting Methods - When budgeting income for the current eligibility month, there are four methods that may be used. These are: Using the Payer Source, Reasonable Compatibility, Full month budgeting method, and Partial Month budgeting method.
6121 Using a Confirmed/Payer Source - When using income which has been verified through an interface through Tier 1, the amount of income is used despite what the client reports. See 1330.01 for more information about Tier 1 sources.
6122 Reasonable Compatibility - This budgeting method is used as verification of earnings and the lack of earnings. It is used to determine if wages reported by the consumer are generally consistent with information received through a recognized data exchange or other source. If information from the source is reasonably compatible with the customer’s statement, additional information cannot be requested. Income amounts from both the customer and the source are converted to a monthly amount for the reasonable compatibility test; and the amounts are compared.
The reasonable compatibility test only applies to Tier 2 verification and is used for earnings and when no earned income has been reported. When verifying earnings, the applicant must have provided enough information to determine the reported monthly income in order to do the reasonable compatibility test. In situations where the consumer has reported an hourly wage but failed to report the number of hours worked per week, the self-attestation can be determined using an assumed 40 hours per week. When an hourly wage is provided along with a range of hours, the average of the range of hours is used.
Applicable data sources are The Work Number and the wage records on KDOL (BASI). The reasonable compatibility test is performed in KEES. When the Work Number (TALX) is used, the income from the most recent 30 days will be compared to the reported income.
Note: In most cases the income will be calculated prospectively as an average; however, in instances where the employer does not provide a complete income record – specifically, the employer indicates the frequency as ‘hourly’ – actual income received during the 30-day period starting with the anchor date will be used and should be similar to the average. For a consumer paid bi-weekly who received three paychecks within the 30-day period and is negatively impacted when actual income is used, a new prospective amount must be determined for accurate processing.
When KDOL (BASI) is used, the income from the most recent quarter of the two prior quarters is used to determine an average monthly amount and then compared to the reported income to determine if it can be accepted as verification.
There are two reasonable compatibility tests that are conducted; an individual test and a household-level test. Initially each individual has their income tested to determine if their income is reasonably compatible.
6122.01 Individual Reasonable Compatibility Test - KEES evaluates reasonable compatibility in the order specified below. Reported information is considered reasonably compatible when one of the following is applicable:
a) No earnings were reported and both data sources do not return any earned income, or
b) The amount of earnings reported by the consumer is greater than the amount received from at least one data source for the applicable time frame, or
c) The difference between the self-attested amount and one data source is no greater than 20% of the self-attested amount.
6122.02 Household Reasonable Compatibility Test – Both Below - After the completion of the individual test, each individual will have a reasonable compatibility test conducted against their entire IBU.
The Household RC Test determines if both the amount reported by the consumer and the amount received from one data source are below Medicaid income limits for the applicant. This is known as ‘Both Below’; BOTH self-attestation and income from the data source are BELOW Medicaid. For this RC test, all income in an individual’s IBU is used to determine if it is below the applicable income limit for that person. When the applicant is determined to be Reasonably Compatibility due to Both Below – no income verification is required to complete their determination. They are eligible to receive Medicaid without asking the consumer to provide additional verification of income.
6123 Full Month Budgeting Method - Full-Month budgeting method is used when the income has been determined to NOT be reasonably compatible and a full month of income verification is available. A prospective amount shall be determined and used in place of reported income. The client attestation is not used. A full month of income verification exists when the agency has verification of 30 days of consecutive earnings received by the wage earner within the period beginning 30 days prior to the application date and ending on the date the application is processed for new applications. When processing a review or case change, the pay verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run.
This “full month” of income is what is used to determine the prospective amount. 30 days’ worth of income is represented by 4 weekly checks, 2 biweekly checks, 2 semi-monthly checks or 1 monthly check. If an additional weekly or bi-weekly check is received within the 30-day period, it shall be included in the prospective determination if available but is not required to meet the definition of full-month budgeting. Additional checks submitted outside of the 30-day window are not used.
6124 Partial Month Budgeting Method - Partial Month budgeting method is used when sufficient information has not been provided to complete Full-Month budgeting. If less than 30 days of income is provided or in situations where you do not know if it represents a full month, determine a prospective amount based on what is on file. This amount is then compared to the reported income. Use whichever is greater between the amount reported by the applicant and the prospective monthly amount.
For Partial Month budgeting, income verification is acceptable as long as it is dated within three months prior to the month of application. Similarly, when processing a review or case change, the pay verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run.
6125 Pre-tax and Federal Income Deductions - Pre-tax and federal deductions are amounts that are excluded from the gross income amount used for a MAGI determination. They include pre-tax amounts reported to the IRS by an employer via wage information or by a consumer through filing taxes. For MAGI-based determinations, they may be reported by the consumer at application or review or identified through paystubs or tax forms received. When a consumer reports overall household deductions of $300.00 or less per month, the attested amount may be used in the determination with no further verification needed. For reported amounts in excess of $300.00 per month, verification will be required in most cases. See 1330.05.
6130 Prior Medical Budgeting Method - The budgeting method used for prior medical months is based on whether or not there has been a change reported by the applicant that occurs in the prior period. The applicant is asked a series of questions on the application to determine if changes in household members or income has occurred in the prior medical period.
Despite the client report, there may be instances where the agency is able to determine that no actual change has occurred. These situations shall be treated as though the applicant has not reported a change. In order to be considered a change for purposes of this policy, the change must fundamentally alter the expected income to be received. The reported change must be in the rate of pay (i.e. received a raise or a pay cut) or the regularly scheduled hours of work (i.e. weekly hours were increased or decreased). Missing a few days of work due to sickness or working some occasional extra hours of overtime does not trigger this policy change. If determined that no actual change has occurred, use the ‘No Change’ income budgeting rules. The amount verified and budgeted for the current month is used in each of the prior months. No further verification is required. If the agency or the individual is unable to verify current income, eligibility for the current and prior months shall be denied for failure to provide information.
NOTE: The applicant must answer ‘yes’ or ‘no’ to the prior medical questions. These answers cannot be assumed. If responses are not provided, the prior medical determination cannot be completed.
6131 No Reported Changes - If the applicant reports there has been no change in income for the prior period, the prior months are budgeted using the amount that is verified and budgeted for the current month.
6132 Reported Changes: Income - If the applicant reports a change in income for the prior months, the change shall be evaluated to determine if the income change will fundamentally alter the income that is being received. The reported change must be in the rate of pay or the regularly scheduled hours of work. Missing a few days of work to sickness or working some occasionally extra hours of overtime does not trigger this policy. If it is determined that no actual change has occurred, use policies in 6131. When a change of income has occurred, one of the following budgeting methods will be used.
6132.01 Use of KDOL Wages - If the Reasonable Compatibility test returns a result of ‘Both Below’ with KDOL wages being used, this monthly amount shall be used to determine prior medical eligibility, and no further verification is required. This is regardless of how many sources of employment have been reported. However, if only a Work Number (TALX) amount has been returned, or if KDOL is not below the Medicaid or M-CHIP income limits, actual income must be used to verify prior medical income.
6132.02 Actual Income - In situations where 6132.01 is not applicable, actual verified income shall be budgeted for each month of the prior period. Although the agency must attempt to verify using Tiers 1-3, it is most likely verification through Tier 4 will be necessary.
If the information provided by the applicant is incomplete, but eligibility staff are able to determine the actual income received in each prior month, verification shall be considered complete. For example, using year-to-date information on pay stubs to determine the missing checks.
If verification for the prior period is not provided, but income for the current period is verified the prior period shall be denied for failure to provide information and the current period approved.
6133 Reported Changes: Household - If the applicant reports a household change in the prior months, the change is evaluated to determine the type of change that has occurred and the potential impact on eligibility. If there were different individuals residing in the home during prior months, then those individuals must be considered when determining budgeting units and income used in the calculations. If the change involves an individual moving in or out of the household who has income, then staff shall refer to 6132.
Note: Verification of household changes is not required, unless necessary to determine custody of a child.
6134 Discrepant or Inconsistent Information - If no change in income or household has been reported, but the agency has information indicating a change has occurred, guidelines in 6132 and 6133 shall be used.
Note: It is not necessary to search for additional information/verification when the applicant reports there has been no change. However, when contradictory information exists at the time of the applicant report, the agency must take action on the known information to reconcile the discrepancy.