Healthcare and Family ServicesDepartment of Human Services

10/03/13

Obsoletes Action Memo, Verifying Income - Family Health Plans, dated 12/23/03 

Summary

  • This memorandum clarifies that, as required under the Affordable Care Act (ACA), electronic data matches are the preferred means of verifying factors of eligibility for medical programs;
  • Introduces the Federal Data Hub as a source for electronic verification; 
  • Introduces the reasonable compatibility standard when certain conditions exist between income reported by an applicant and income found through data matches;
  • Changes verification policy for medical programs;
    • Verify a full 30 days' worth of income for all medical programs (including Family Health Plans);
    • Verify age for non-pregnant adults for all medical programs;
    • Income may be used from the most recent quarterly AWVS amounts when monthly amounts are not available;
    • Income may be documented with federal or state tax returns when no other verification is available; and
    • Accept applicant's statement regarding pregnancy and the number of babies expected.

  1. Acceptable Electronic Verification
    1. Use of Quarterly AWVS and Tax Returns
    2. Step 1-Age of the Electronic Data
    3. Step 2-Determine the Correct Amount of the Income to Use
    4. Step 3-Review the Difference Between the Reported Income and the Income Obtained Electronically
  2. Reasonable Compatibility
    1. Determination of 5%
  3. Full 30 Days' Worth of Income Verification
  4. Verification of Age for Adults
  5. Pregnancy Verification

Effective with applications dated 10/1/13, the changes in this memorandum apply unless otherwise noted.  This policy change coincides with the implementation of the first phase of the Integrated Eligibility System (IES).  Follow existing policy for renewals and other case maintenance activities processed in ACM and IPACS until further notice.

To streamline the eligibility process, ACA requires the use of electronic verification of various factors of eligibility and makes other changes. An electronic federal data connection, known as the Federal Data Hub, will be available to electronically verify:

  • U.S. citizenship from the Social Security Administration; and
  • Immigration status from the U.S. Citizenship and Immigration Services (USCIS).

IES will connect with the electronic data sources shown below.

Data Source Factor of Eligibility
Federal Data Hub U.S. citizenship, immigration status
State Online Query (SOLQ) SSA, SSI income; Medicare; Social Security Number; age/date of birth, date of death
Automated Wage Verification System (AWVS) Earnings reported to Illinois Department of Employment Security; unemployment benefits
Secretary of State (SoS) Illinois residency
Client Data Base (PACIS) Cash assistance, SNAP and medical benefits, TPL

The existing electronic sources described in PM 22-08-00 will continue to be available through the Illinois Healthcare and Family Services Communications System (IPACS) Inquiry.  The Work Number will also continue to be available.

Acceptable Electronic Verification

Use of Quarterly AWVS and Tax Returns

Effective immediately, quarterly AWVS wage information may be used to verify income. Not all employers found in AWVS are reporting earnings on a monthly basis yet. If monthly earned income information is not available through AWVS or The Work Number, the quarterly AWVS amount divided by 3 may be used. Only use the quarterly amount from the most recent AWVS reporting quarter.

If no other verification is available, a federal or state tax return may be used to verify income for medical programs.

The end of the tax year must be within 16 months of the application date. Divide the income on the tax return by 12 to obtain the monthly amount. The monthly amount from the tax return must be reasonably compatible with the current monthly income reported on the application.

Note: because an AABD client with earned income is entitled to a deduction of employment expenses per PM 15-04-03, the quarterly AWVS or tax return may only be used to verify the earnings of an AABD client if the total earned and unearned income is below the medical standard. If the income without deductions would put the client in spenddown, request proof of 30 days' worth of income and expenses.

Step 1-Age of the Electronic Data

Determine if the electronic data is acceptable due to its age. Acceptable electronic data may not be older than 12 months or 16 months depending on the source of the data:

  • Tax returns (state or federal) may not be older than 16 months from the date of application; and
  • All other electronic verification may not be older than 12 months from the date of application.

If data available from electronic matching is not available or is too old, request proof from the applicant. Proof provided by the applicant must be for income and expenses within 30 days of the date of the application.

Example 1: On 10/2/13, Ms. A applies for ACA Adult for herself.  Her earnings from last year are available electronically from her 2012 Illinois state tax return.  Accept the state tax return as current verification of income.

Example 2: On 10/2/13, Mr. B applies for ACA Adult for himself.  Because he recently returned to Illinois after living in Kentucky for a year, his earnings are available electronically from two years ago from his 2011 Illinois state tax return. Because the electronic verification is 22 months old, request proof of income for the past 30 days.

Step 2-Determine the Correct Amount of the Income to Use

Determine the correct amount to use from the electronic data. When comparing income to the standard, use the 'income-averaged' amount when appropriate. See PM 15-04-02 for Family Health Plans and PM 15-04-03 for AABD. Income averaging is only appropriate when the amount of income is for a one or two-week period. 

Step 3-Review the Difference Between the Reported Income and the Income Obtained Electronically

Because information reported by the applicant may vary from the information available electronically, staff will need to determine when the income obtained from electronic data matching is sufficient and when additional information is necessary.

Use the situations listed in the table below to determine the correct action needed.

Reported Income Income Obtained from Electronic Data Matching Worker Action
Below the Standard Below the standard Use the reported income. No further proof is needed.
Below the standard Above the standard Refer to the Reasonable Compatibility section below.
Above the standard  Below or above the standard Use the reported income. No further proof is needed.

Example 3:  Ms. B applies for All Kids/FamilyCare for herself and her family.  She reported that she is paid weekly.  When income-averaged, the monthly income she reported is less than the standard.  Her income as obtained from The Work Number is also less than the standard.  Because the reported income and the income obtained electronically are both below the standard, her income is verified. Determine eligibility based on the amount Ms. B reported on her application.  No further proof is required from Ms. B.

Example 4: Mr. D, applies for ACA Adult for himself.  His reported income-averaged monthly income is more than the standard.  His income obtained from The Work Number is more than the standard. Because his reported income is above the standard, use the income he reported. No further proof is needed from Mr. D.

Reasonable Compatibility

Reasonable compatibility is a new standard for determining if the electronic verification of income is acceptable in some cases.

When the reported income is less than the standard and the income obtained electronically is more than the standard, apply the reasonable compatibility standard to determine if additional information is needed.

Consider income to be reasonably compatible when the Federal Poverty Level (FPL) of the income reported on the application is within 5% of the income the caseworker obtains from a source other than the applicant.

The determination of reasonable compatibility is valid for both electronic sources as well as hard copy proof of income.

Determination of 5%

To determine if the difference between the reported income and the income from another source is within 5%, follow the steps below. For the income reported on the application, use the income averaged amount. Use common rounding to determine each percentage amount.

  1. Determine the percentage of the FPL of the reported income.
  2. Determine the percentage of the FPL of the income from another source.
  3. Subtract the lower result from the higher result from steps 1 & 2 to determine if they are within 5% of each other.

Staff may also use the Reasonable Compatibility Calculator (pdf) to determine the percentage amounts.

Example 5: Mr. H lives by himself and requests ACA Adult coverage. He reports his monthly earned income after income averaging is $1,315. An electronic data match shows his earned income is $1,360. The income standard is $1,321. 100% of the FPL is $958. 

Each income amount is divided by the dollar value of 100% FPL for Mr. H's family size 1.

$1,315/$958=1.372 or 137%

$1,360/$958=1.419 or 142%

142%-137%=5%

When the lower result is subtracted from the higher result, the remainder is 5%. The reasonable compatibility standard is met.

Mr. H's reported income is reasonably compatible with the income obtained electronically.

Reported Income Income Obtained through Data Match Difference Between the Reported Income and Income Obtained through Data Match Worker Action
Below the income standard  Above the income standard Less than 5% Use the reported income.  No further proof is needed.
Below the income standard Above the income standard Greater than 5% Contact the applicant to request an explanation.  Additional proof of income may be required.

Full 30 Days' Worth of Income Verification

Family Health Plans income verification policy is updated to be the same as AABD income verification policy.  For Family Health Plans, when income cannot be verified electronically and additional proof is needed, request a full 30 days' worth of proof of income for both earned and unearned income.

Verification of Age for Adults

Verify the age of all non-pregnant adults who apply for medical benefits.  An adult is age 19 or older. Compare the date of birth reported by the applicant for all adults in the request to the date of birth listed in the State Online Query (SOLQ) system. If the query validates the date of birth, consider age verified. 

If the query in SOLQ does not validate the date of birth, request proof of birth per WAG 03-04-00. If a non-pregnant adult's date of birth is not verified, the adult is not eligible. Deny the request for medical. 

Pregnancy Verification

Effective immediately, accept the applicant's statement regarding pregnancy.  Accept the applicant's statement for the number of babies expected. Proof of pregnancy is no longer required unless there is conflicting information. 

[Signed]

Michelle R. B. Saddler, Secretary

Illinois Department of Human Services

Julie Hamos, Director

Illinois Department of Healthcare and Family Services