Illinois Department of Healthcare and Family ServicesIllinois Department of Human Services

09/26/13

Summary:

  • The Affordable Care Act (ACA) requires the use of a new budgeting methodology based on Modified Adjusted Gross Income (MAGI) for certain medical assistance applicants and recipients.
  • MAGI is a budgeting methodology used to determine who to include in each person's income standard or 'Eligibility Determination Group' (EDG), and how to count income.
    • Who to include in each person's EDG is determined by one of two sets of rules: Tax Filer rules or Relationship rules.
    • How to count income is based on IRS taxable income rules with some modifications.
  • The MAGI methodology will be used for Family Health Plans (FHP) and the new ACA Adult group for initial applications received on or after 10/01/13.
  • Effective 4/1/14, MAGI will apply to FHP redeterminations/renewals.
  • Under MAGI, to be considered for FamilyCare, a person must be the Parent or Caretaker Relative of a child under the age of 18.

  1. Who is subject to MAGI?
  2. MAGI Eligibility Determination Group (EDG)
    1. Tax Filer or Relationship Rules? - 3 Step Process
      1. MAGI EDG Examples
    2. Income of a Child or Tax Dependent
      1. Child and Tax Dependent Income Counting Examples
    3. Policy Changes Regarding Parent/Caretaker Relatives and 18 Year Old Children
  3. MAGI Income and Deductions
    1. Income Counted Under MAGI
      1. Earned Income
      2. Unearned Income
      3. MAGI Income Deductions
      4. Income Deductions Not Considered Under MAGI
    2. Income Not Counted Under MAGI
  4. MAGI Budgeting for Medicaid/CHIP and Marketplace Differences
  5. MAGI Income Standards and the 5% FPL Disregard
    1. More Income Counting Examples
  6. Forms referenced:

The Affordable Care Act (ACA), requires that all states apply a new budget methodology based on Modified Adjusted Gross Income (MAGI) to determine eligibility for certain households requesting/receiving medical assistance. The MAGI-based methodology is used to determine how to count income and who to include in the income standard, or Eligibility Determination Group (EDG) for each applicant or recipient.

The purpose of using the MAGI methodology is to align financial eligibility rules for MAGI groups with the Health Insurance Marketplace rules across all states. Illinois is applying MAGI rules to all FHP cases, including state only programs.

See HealthCare.gov for information about the Health Insurance Marketplace.

Who is subject to MAGI?

MAGI methodology applies to the following groups:

  • Family Health Plans
    • Parents and Caretaker Relatives (Family Assist, FamilyCare),
    • Children under 19 (All Kids Assist, Share, Premium),
    • Pregnant Women (Assist, Moms & Babies),
    • Family Health Spenddown for Children and Pregnant Women, and
  • New ACA Adult Group, age 19-64.

MAGI methodology does not apply to:

  • Aged, Blind or Disabled (AABD) program, including spenddown,
  • Long Term Care (Nursing Home, Supported Living Facility, DoA-Aging Community Care Waiver),
  • Health Benefits for Workers with Disabilities (HBWD),
  • Medicare Savings Program (QMB, SLIB, QI-1),
  • Foster Care (category 98), and
  • Former Foster Care (a new eligibility group under ACA for whom all income is exempt).

Although the budgeting methodology for AABD will remain unchanged, individuals with disabilities who are not on Medicare may qualify under the ACA Adult group which is subject to MAGI methodology. Under the ACA Adult group, resources (assets) are not considered and applicants do not need a Client Assessment Unit (CAU) disability determination to get coverage. For more information about the new ACA Adult group see the upcoming policy memo,The New ACA Adult Group.

MAGI Eligibility Determination Group (EDG)

To determine who to include in each person's income standard, or EDG, we must use either Tax Filer or Relationship rules. The following new information will be gathered at initial application starting October 2013 and for redeterminations effective April 2014 and later:

  • Are you expected to file taxes?
    • If yes, are you going to be claimed as a tax dependent by another tax filer?
  • Are you married?
    • If yes, are you expecting to file a joint tax return? If so, with whom?
    • Who are you expecting to claim as tax dependents on your tax return?

The Application for Benefits Eligibility (ABE) system is programmed to ask these questions of applicants. The new tax filer related questions are also being added to paper applications (Request for Cash, Medical and SNAP, form 2378B, and the new Application for Health Coverage. If the applicant or recipient does not know whether they will file taxes for the current year, Relationship Rules will apply. The eligibility worker enters the responses in the worker portal and the Integrated Eligibility System (IES) will apply the answers to determine eligibility.

Tax Filer or Relationship Rules? - 3 Step Process

The determination of tax filer status is based on the applicant or recipient's report and what can be reasonably determined based on the individual's current monthly income at the time of application or renewal. Use Relationship Rules in situations where tax filer or tax dependent status is unknown or cannot be reasonably determined.

Each EDG is formed around an individual. For each individual apply the following rules in order from Step 1 to Step 3, stopping at the first rule that applies to the individual:

Step 1

Is individual a tax filer, and

is NOT claimed as a dependent of someone else?

Step 2

Is individual claimed as a tax dependent?

Step 3

Individual is neither a tax payer nor a tax dependent, or

is a tax dependent who meets one of the exceptions in Step 2, or

is an individual whose tax filing status is unknown.

If yes, apply Tax Filer Rule:

EDG = Tax payer

+ all their claimed dependents

+ spouse if living with tax payer

If yes, apply Tax Filer Rule unless one of the following exceptions apply:
  1. Individual is claimed as dependent by someone who is not their spouse or parent/step-parent, or
  2. Individual is a child under 19 living with both parents and expects to be claimed by one parent as a tax dependent but whose parents do not expect to file a joint return, or
  3. Individual is a child under 19 who is claimed as a tax dependent by a non-custodial parent.

Apply Relationship Rule:

EDG = Individual + if living with individual:

  1. individual's spouse +
  2. individual's children/step-children under age 19.
  3. For children under 19, their parents/stepparents + siblings/step siblings under 19

If one of the exceptions apply go to Step 3, otherwise, under Tax Filer Rule:

EDG = EDG of tax payer claiming this tax dependent.

  • NOTE: For pregnant women, continue to count the number of babies expected toward any EDG in which the pregnant woman is counted.

MAGI EDG Examples

In many cases, the EDG will be the same size whether Tax Filer or Relationship rules apply, as the first two examples below show.

Example 1: Brad applies for himself, his wife, Angie, and their two children, 10 year old Phil and 5 year old Lisa. Brad and Angie plan to file a joint return claiming both their children as dependents.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Brad Tax Filer Brad, Angie, and their tax dependents, Phil and Lisa 4
Angie Tax Filer Angie, Brad, and their tax dependents, Phil and Lisa 4
Phil Tax Filer Phil, the tax payers, Brad and Angie, and their other tax dependent, Lisa 4
Lisa Tax Filer Lisa, the tax payers, Brad and Angie, and their other tax dependent, Phil 4

Results: Brad and Angie are tax payers, so Tax Filer rules apply to them. Phil and Lisa are tax dependents for whom none of the exemptions listed in Step 2 apply, so tax filer rules apply to them as well. The result is that for all four individuals, the EDG includes the tax payers and their two dependents.

Example 2: The scenario is the same as in Example 1, except that neither Brad nor Angie expect to file taxes.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Brad Relationship Brad, his spouse, Angie, and their children, Phil and Lisa 4
Angie Relationship Angie, her spouse, Brad, and their children, Phil and Lisa 4
Phil Relationship Phil, his parents Brad and Angie, and his sibling Lisa 4
Lisa Relationship Lisa, her parents, Brad and Angie, and her sibling, Phil 4

Results: Since no one in the case is a tax filer or dependent, relationship rules apply. Spouses, parents, children and siblings are considered for each individual.

In examples #1 and #2, the same four family members are in each individual's EDG whether tax filer or relationship rules are used.

Example 3: Beth, age 60, applies for herself and her grandson, Ben, age 10. She states that she will file taxes and claim her grandson as a dependent.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Beth Tax Filer Beth and her dependent, Ben 2
Ben Relationship Ben 1

Results: Since Beth is a tax filer, her EDG includes herself and her grandson who is her tax dependent. Ben is a tax dependent who is claimed by a person who is not his parent or spouse (Step 2, exception #1), therefore relationship rules apply for him and he has an EDG of one.

Example 4: Bob, age 30, applies for himself, his son John, age 7, his girlfriend Mary, age 30, and their daughter in common, Jane, 9 months. Bob is not a tax payer. Mary is a tax payer and plans to claim John and Jane as her dependents.

Determine EDG for: Tax Filer or Relationship? Who to include? EDG size
Bob Relationship Bob and his children, John and Jane 3
Mary Tax Filer Mary and her tax dependents, John and Jane 3
John Relationship John, his father, Bob, and sibling, Jane 3
Jane Relationship Jane, her parents, Bob and Mary, and sibling, John 4

Results: Since Bob is a non-filer, use relationship rules. His EDG includes himself and his 2 children. Mary is a tax payer, so her EDG includes herself and her 2 dependents. John is a tax dependent who is claimed by Mary. Since Mary is not his parent (exception #1), relationship rules apply for John. His EDG includes his father and sibling.

Jane is a tax dependent who is claimed by one parent, but lives with both parents who are not filing a joint return (exception #2). Relationship rules apply for Jane, so her EDG includes herself, both parents and her sibling.

Example 5: Samantha, age 19, applies for herself and her younger brother Tim, age 8. She states that she is a tax filer and will claim Tim as a dependent. Samantha is pregnant and is expecting twins.

Determine EDG for: Tax Filer or Relationship? Who to include? EDG size
Samantha Tax Filer Samantha + 2 fetuses, and Tim 4

Tim, Samantha's tax dependent

(exception #1)

Relationship Tim 1

Results: Since Samantha is a tax filer, her EDG includes herself, her brother who is her tax dependent, and her 2 unborn fetuses. Tim is a tax dependent who is claimed by a person who is not his parent or spouse (exception #1), therefore relationship rules apply for him and he has an EDG of one.

Income of a Child or Tax Dependent

For each EDG, IES will use the total countable income of each person included in the EDG, except that there are special rules concerning whether to count the income of a child or tax dependent. The system will first determine if the child or tax dependent is expected to be required to file a tax return for the taxable year.

  • If yes, and the person is the child/stepchild of another person in the EDG, their income is counted for all persons included in his EDG.
  • If no, and the person is the child/stepchild of another person in the EDG, their income is not counted toward any person who is included in the EDG.
  • If yes, and the person is the tax dependent of another person in the household, their income is counted in the EDG of the taxpayer.
  • If no, the tax dependent's income is not counted toward the EDG of the taxpayer. If the dependent is in a separate EDG from the taxpayer the income is counted toward the dependent's EDG whether or not he is expected to be required to file.

Generally, individuals claimed as dependents on someone else's return who earn at least $6,100 per year or receive at least $1,000 per year in countable unearned income (such as interest income) are required to file. IES is programmed to budget the income of a child or tax dependent when monthly earned income exceeds $508 per month ($6,100/12 = $508), and when countable unearned income exceeds $83 ($1,000/12 = $83).

  • Note: SSI and SSA income is not counted for purposes of determining whether a child or dependent will be required to file a tax return.

Child and Tax Dependent Income Counting Examples

Example 6: Meg applies for herself, her husband, Dan, and their child, Finn, age 3, and Meg's niece, Emma, age 17. Dan is a tax filer and plans to claim Finn as a dependent. Meg plans to file separately from Dan, and will claim her niece, Emma. Emma is employed, earns $600 per month and expects to be required to file. Finn has no income.

Determine EDG for: Tax Filer or Relationship? Who to Include? Who's income to count? EDG size
Meg Tax Filer Meg, Dan, Emma Meg, Dan, Emma 3
Dan Tax Filer Dan, Meg, Finn Dan, Meg 3
Finn(child/dependent) Relationship Finn, Meg, Dan Meg, Dan 3
Emma (child/dependent) Relationship Emma Emma 1

Results: Since Emma is expected to be required to file, her income is counted in the tax payer's (Meg's) EDG. Emma's income is also counted in her own EDG.

Example 7: Alice applies for herself, her 17 year old daughter, Hope, and Hope's baby, Lola, 1 year old. Alice expects to file taxes and will claim her daughter and grandchild as dependents. Hope works part time, earns $200 per months and is not expected to be required to file. Lola has no income.

Determine EDG for: Tax filer or Relationship Rule? Who to Include? Who's income to count? EDG size
Alice Tax Filer Alice, Hope, Lola Alice 3
Hope (child/dependent) Tax Filer Hope, Alice, Lola Alice 3
Lola (child/dependent) Relationship Lola, Hope Hope 2

Results: Do not count Hope's income in Alice's EDG since Hope is her child and is not expected to be required to file. Do not count Hope's income in her own EDG since she is not expected to be required to file and she is the child of another person in her EDG. Hope's income is counted in Lola's EDG since Hope is not the child of another person in this EDG, and the tax payer who is claiming Hope is in a separate EDG.

Policy Changes Regarding Parent/Caretaker Relatives and 18 Year Old Children

Under MAGI, the Caretaker Relative is a person who lives with and assumes primary responsibility for a dependent child's care and is related to the dependent child by blood, adoption or marriage. A dependent child is defined as a child less than 18 years old. For example, a parent whose only child is 18 years old would not qualify for the FamilyCare program as a parent/caretaker relative. Rather, that parent may qualify for the ACA Adult program.

Also under MAGI, when an 18 year old lives with their parents, their parents are included in the 18 year old's EDG and their income is counted toward the 18 year old's eligibility.

MAGI Income and Deductions

Although MAGI income is a methodology and not a number on a tax form, the general rule is that the income that counts is the same as the Adjusted Gross Income on the 1040 tax form, with some additions.

IES will determine countable income by:

  1. adding the types of income that are considered in lines 7-22 of the 1040 for tax year 2012,
  2. subtracting the deductions that are considered in lines 23-36 on the 1040 for tax year 2012 to get Adjusted Gross Income, and
  3. adding the following non-taxable income back to get Modified Adjusted Gross Income: tax exempt Social Security income, foreign earned income, tax-exempt interest and the portion of scholarships, awards or fellowship grants used for living expenses.

Income Counted Under MAGI

Earned Income

  • Wages, salaries, tips
  • Self-employment, business and farm income after deduction of business expenses (including depreciation and capital losses)

Unearned Income

  • Interest (taxable and non taxable)
  • Social Security (SSA) income
  • Dividends
  • Taxable state income tax refunds and credits
  • Portion of scholarships, awards or fellowship grants used for living expenses
  • Alimony received
  • Capital/other gain
  • IRA distributions (taxable amount only)
  • Pensions and annuities
  • Rental real estate income and royalties
  • Unemployment Compensation
  • Other income if taxable (such as, prizes, jury duty pay not given to employer, etc.)

MAGI Income Deductions

  • Business/Self-employment expenses, include:
    • farm expenses,
    • depreciation,
    • capital losses (limit of $3,000, or $1,500 if married filing separately, in a tax year),
    • rental/real estate losses,
    • partnership and S Corporations losses, and
    • royalties loss
  • Estate and trust loss
  • Educator expenses (limit of $250 per educator in a tax year)
  • Real estate mortgage investment loss
  • Business expenses of Reservists, Performing Artists, and Fee-Basis Government Officials
  • Health Savings Account Deduction (limit of $271/month for single filer, and $538/month for a family)
  • Moving Expenses (if moved in connection with new job)
  • Tax deductible part of self-employment tax
  • Self-employed SEP, SIMPLE and qualified plans
  • Self-employed health insurance deduction
  • Penalty on early withdrawal of savings
  • Alimony paid
  • IRA deduction
  • Student loan interest (limit of $2,500 in a tax year)
  • Tuition and fees (limit of $4,000 in a tax year)
  • Domestic production activities deduction (up to 9% of qualified production activities)

Note: For MAGI, alimony paid must be entered under the Miscellaneous Expense screen in the IES Worker Portal (for non-MAGI, enter alimony paid on Support Expenses screen). IES does not track annual caps for MAGI income deductions. Workers must ensure that deductions that exceed the annual caps are not entered. For example, if a teacher reports $50 per month in educator expenses from January through June, the cap of $250 will have been reached by May. Do not allow the expense for the remaining months in the calendar year.

Income Deductions Not Considered Under MAGI

The following income deductions will no longer apply to MAGI groups:

  • $90 employment deduction for employed persons
  • the $30 plus 1/3 earned income exemption (EIE)
  • child care expenses
  • child support that was actually paid to someone not in the household

Income Not Counted Under MAGI

  • Child support income received
  • Worker's Compensation
  • Veteran's Benefits
  • Supplemental Security Income (SSI)
  • Portion of scholarships, awards or fellowship grants used for education purposes
  • American Indian and Alaska Native (AI/AN) income derived from distributions, payments, ownership interests, real property usage rights, and student financial assistance provided under the Bureau of Indian Affairs education programs

Note: For Family Health Spenddown, income of a non-responsible relative is not counted when determining the spenddown obligation.

MAGI Budgeting for Medicaid/CHIP and Marketplace Differences

Although eligibility determinations for FHPs and the ACA Adult group, and eligibility determinations for financial assistance to buy insurance on the Health Insurance Marketplace, are both based on MAGI methodology, there are two important differences.

The first difference is that the Marketplace only uses tax filer rules to determine the household size. Relationship rules are not used by the Marketplace. This is because the financial help is in the form of tax credits, so only tax filers can receive the help.

The second difference is the time period that is used to project income. Eligibility determinations for FHPs and ACA Adults are based on current monthly income. Income is considered for the months in which the income is actually received or anticipated to be received. Income deductions are considered for the months in which the expense is paid or anticipated to be paid. Deductions that are based on one-time expenses or losses can only be considered in the month in which the expense is paid, or the loss occurs.

In contrast, the Marketplace determines eligibility based on the applicant's projected annual income for the tax year, rather than on current monthly income. This difference in budgeting methodology could in some situations result in an applicant who was found ineligible for Medicaid (due to excess income) to also be found ineligible for financial help on the Marketplace. This is because, to qualify for financial help on the Marketplace, most applicants must have income between 100% and 400% of the FPL.

The worker must do a second determination of eligibility using projected annual income when:

  • the household income of the applicant (using current monthly income) results in financial ineligibility for Medicaid/CHIP, and
  • the Marketplace determines that the applicant is ineligible for help because projected annual income is under 100% FPL.

Example 8: Tom, a seasonal worker, applies in June and is determined ineligible for the ACA Adult group because his current monthly income is over 138% of the FPL. His application is forwarded to the Marketplace. Tom expects to work only from June through September. The Marketplace determines that Tom's projected annual income will be less than 100% of the FPL. His application is returned for another Medicaid determination. The worker uses Tom's projected annual income, divided by 12, to determine his countable monthly income. The worker completes case notes in IES to record the reason projected annual income is used.

Visit HealthCare.gov for more information about the Marketplace. Proof of income and deductions for all medical programs is required. More information about ACA related verification changes can be found in the upcoming policy memo, Verifications for Medical Programs.

MAGI Income Standards and the 5% FPL Disregard

Income standards are revised due to the ACA requirement that the standards be converted to MAGI equivalent standards. For more information about the MAGI income standards, see the upcoming manual release, MAGI Equivalent Income Standards for Family Health Plans and ACA Adults.

Additionally, under ACA a standard income disregard of 5% of the FPL applies for the following MAGI groups: FamilyCare Assist, Moms & Babies, All Kids Assist, All Kids Premium Level 2 and ACA Adults. The 5% disregard will be built into the applicable group's income standards in IES.

The updated income standards for MAGI groups are:

  • FamilyCare (Parents and Caretaker Relatives): 138% of the FPL (133% plus 5%)
  • All Kids Assist (Children under age 19): 147% of the FPL (142% plus 5%)
  • All Kids Share (Children under age 19):148% to 157% of the FPL
  • All Kids Premium Level 1 (Children under age 19): 158% to 209% of the FPL
  • All Kids Premium Level 2 (Children under age 19): 210% to 318% of the FPL
  • Moms & Babies (Pregnant Women, deemed newborns): 209% of the FPL (204% plus 5%)
  • ACA Adults (persons age 19-64): 138% of the FPL (133% plus 5%)

More Income Counting Examples

Example 9: Omar applies for himself, his wife, Leila, their daughter, Jade, age 8, and Leila's nephew Tony, age 20. Omar and Leila expect to file jointly and plan to claim Jade and Tony as dependents.

Person/Income Tax filer or Relationship Rule? Who's Income to count? Total countable income EDG Size Income Standard Income eligible?
Omar - Earned Income $1250/month Tax Filer Omar, Leila

$2498

(1250 + 1248)

4

$2,708

(FamilyCare, 138%)

pass
Leila - Unemployment $1248/month Tax Filer Omar, Leila

$2498

(1250 + 1248)

4

$2,708

(FamilyCare, 138%)

pass
Jade - none Tax Filer Omar, Leila

$2498

(1250 + 1248)

4

$2,885

(All Kids Assist, 147%)

pass
Tony - SSA $450/month (not expected to be required to file) Relationship Tony $450 1

$1,321

(ACA Adult, 138%)

pass

Results: Tax filer status is used for Omar, Leila and Jade, so their EDGs include the tax payers and all their dependents. Since Tony is a dependent who is not expected to be required to file, his income is not counted in the EDGs that include the tax payers.

Tony is a dependent who is not being claimed by a parent or spouse, so relationship rules apply for him. He is in a separate EDG from the tax payer, so his income is counted in his own EDG.

Example 10: Katla applies for herself, her spouse, Joe, Katla's son, Sam, age 18, and their adopted daughter, Vera, age 15. Katla and Joe file jointly and claim both children as dependents. Sam is attending college out-of-state. He meets 'living with' requirements per PM 03-05-05 and Illinois residency requirements per PM 03-02-01. Sam is employed part-time.

Person/Income Tax filer or Relationship Rule? Who's Income to count? Total countable income EDG Size Income Standard Income eligible?
Katla - Earned Income $2,500/month Tax Filer Katla, Joe

$5,000

(2,500 + 2,500)

4

$2,708

(FamilyCare, 138%)

fail
Joe - Earned Income $2,500/month Tax Filer Katla, Joe

$5,000

(2,500 + 2,500)

4 $2,708 (FamilyCare, 138%) fail
Sam - Earned Income $200/month (not expected to be required to file) Tax Filer Katla, Joe

$5,000

(2,500 + 2,500)

4

$6,241

(All Kids Prem Level 2, 318%)

pass
Vera Tax Filer Katla, Joe

$5,000

(2,500 + 2,500)

4

$6,241

(All Kids Prem Level 2, 318%)

pass

Example 11: Jerry, a 20 year old college student who is an Illinois resident applies for himself. He has earned income of $200 per month and does not expect to be required to file. His parents, Jim and Dora, live in another state, file taxes jointly and claim Jerry as their dependent. They also claim their 5 year old niece, Flora. They receive child support for Flora of $300 per month.

Person/Income Tax filer or Relationship Rule? Who's Income to count? Total countable income EDG Size Income Standard Income eligible?

Jerry - Earned Income $200/month

(not expected to be required to file)

Tax Filer Jim, Dora $4,000 4

$2,708

(ACA Adult, 138%)

fail
Jim - SSA $1,000/month N/A - not an applicant N/A N/A N/A N/A N/A
Dora - Earned Income $3,000/month N/A - not an applicant N/A N/A N/A N/A N/A
Flora - Child Support $300/month N/A - not an applicant N/A N/A N/A N/A N/A

Results: Since Joe is a dependent who does not meet any of the exceptions in Step #2, tax filer rules apply. His EDG includes the tax payers and all their dependents. Since Joe is not expected to be required to file, and he is the child of another person in his EDG (Jim and Dora), his income is not counted.

Example 12: Aman applies for himself, his wife, Helen, and their 2 year old daughter, Isabel. Aman is an ineligible non-citizen (a legal permanent resident who has not met the 5 year bar). Helen is an eligible non-citizen and Isabel is a U.S. citizen. Aman has earned income of $2,000 per month, Helen receives $500 a month in unemployment benefits, and the couple will file a joint tax return claiming Isabel as their dependent. Helen is pregnant, expecting one child.

Person/Income Tax filer or Relationship Rule? Who's Income to count? Total countable income EDG Size Income Standard Income eligible?
Aman N/A N/A N/A N/A N/A N/A
Helen Tax Filer Aman, Helen

$2,500

($2,000 + $500)

4

$4,102

(Moms & Babies, 209%)

pass
Isabel Tax Filer Aman, Helen

$2,500

($2,000 + $500)

4

$2,885

(All Kids Assist, 147%)

pass

Results: Aman fails for a non-financial reason due to not meeting the citizen/immigration criteria. However, he is included in the EDGs of the other household members.

Example 13 (Family Health Spenddown Calculation): On March 1st, Joyce applies for herself, her husband, Fred, and her 10 year old daughter, Maria. Fred is Maria's stepfather. Joyce and Fred file taxes jointly and claim Maria as a dependent.

Joyce provides a $5,000 hospital bill for Maria that was incurred on February 10th, the month before her application date, and requests medical backdating.

Person/Income Tax filer or Relationship Rule? Who's Income to count? Total countable income EDG Size Income Standard Income eligible?
Joyce - Earned Income $800/month Tax Filer Joyce, Fred

$3,800

($800 + $3,000)

3

$2,246

(FamilyCare, 138%)

fail
Fred - Earned Income $3,000/month Tax Filer Joyce, Fred

$3,800

($800 + $3,000)

3

$2,246

(FamilyCare, 138%)

fail
Maria Tax Filer Joyce, Fred

$3,800

($800 + $3,000)

3

$3,401

(All Kids Prem Level 1, 209%)

pass

The worker completes a spenddown calculation in IES for Maria for the month of February.

Person Who's Income to count? Family Health Income Standard Spenddown Amount
Maria Joyce - $800 $508 for EDG size of 3 $292 ($800 - 508 = $292)

Results: Eligibility determination is made on March 20th for the regular roll month of May. Maria qualifies for All Kids Premium Level 1 effective May. She qualifies for Family Health Spenddown from February through April, and spenddown is met with a split bill on February 10th.

[signed copy on file]

Michelle R. B. Saddler

Secretary, Illinois Department of Human Services

Julie Hamos

Director, Illinois Department of Healthcare and Family Services

Forms referenced:

  • 2378B
  • Application for Health Coverage