Information About Household Income

To help streamline the application process for the citizen prior to having to enter income for the household, the application attempts to use income data from existing state and federal sources. For annual income, this could typically mean retrieving tax return income from the IRS. For current income this could retrieve wage and salary income from a state wage system. A number of conditions are executed as part of a check to determine if it is worthwhile displaying the IRS income for an individual. The check involves:

• running household composition rules to see whether there is more than one financial household within the overall household
• checking whether there are any American Indian/Alaska Native (AI/AN) individuals in the household
• checking whether the household income indicated by the tax returns is below the Medicaid/CHIP threshold for any of the applicants in the household

The application script for income loops through each member of the household to determine:

1. If tax return information is available, there is only one financial unit required and the estimated household income is above the Medicaid/CHIP income levels for all applicants, and there is no AI/AN individual, then the most recent tax return information is presented to the applicant for this member and they are asked whether this is an accurate representation of their expected annual income
2. If they have tax return income but they say its not accurate, or if they have no tax return income, then the current income service is polled to see if they have any records. If they do, they are presented to the applicant and given the chance to add, change or remove any of them
3. If neither the tax return page nor the current income page have been presented to the user, they will be asked whether they have any income and given a chance to add any if they do
4. If the member has income other than just what is on their tax return, they are asked whether they have any adjustments they need to make to it and given an option to provide details on them
5. If the member has income other than their tax return, they are presented with a summary of what we think their projected annual income for the following year will be, and given a chance to enter a new amount if they expect it to be something different

Step 3, which we call manual income capture is where an applicant would enter wages and other income information for household members if this has not been retrieved from tax return income, or from income via the current income service. The benefits of using these information sources mean that these income records are verified. If an applicant modifies information that has been retrieved from other systems, or enters income manually, this may require verification by a case worker.

Tax return income is returned as MAGI income. If the income is entered manually it must be built up to a MAGI income total per individual. For each member income is summed to a Gross Income (GI) total, and a page is displayed to capture a few allowable deductions to determine an Adjusted Gross Income (AGI) total for each member. The MAGI calculation involves adding in the tax-exempt income portions for interest, foreign earnings and social security income.

The MAGI income for an individual is what is used when adding up the household income which is necessary for eligibility determination for insurance assistance. However for Medicaid/CHIP determinations the rules must determine eligibility using a MAGI-based income total. Essentially there are a few income types that are counted as part of a MAGI income determination but are excluded as part of a MAGI-based income determination. Certain types of American Indian/Alaska Native income, and income from scholarships or awards that are used for education purposes are not counted in MAGI-based income. Similarly, lump sum income is only counted in the month it is received for MAGI-based income, otherwise it is not counted. It is important therefore that these income types are identified as part of the application process, for example, if an AI/AN individual has income derived from distributions or ownership interests, then this income is not counted in their eligibility determination for Medicaid.