Many individuals with disabilities who are enrolled in Illinois's Medical Assistance programs wish to work. With appropriate services and supports, some are able not only to work, but to maintain employment at a level where their income approaches or exceeds the income limit for Medicaid eligibility.
Concerns about losing Medicaid eligibility (including home and community-based waiver services) due to exceeding income standards can discourage individuals with disabilities from working. The purpose of this Fact Sheet is to describe how Medicaid-covered services are essential for employment, to review basic financial eligibility criteria for Medicaid, and to highlight programs that provide continuity of coverage while also allowing enrollees with disabilities to work and earn to their full potential.
Importance of Medicaid Coverage
Medicaid provides a broad range of services that enable people with disabilities to live and work in the community. Standard services, such as doctor visits, hospital care, and prescription drug benefits are crucial for maintaining health. In addition to standard benefits, long term services and supports available through Home and Community Based Services waivers, such as personal assistance and adaptive equipment, can play an important role in obtaining and maintaining gainful employment.
Overview of Financial Eligibility1
Affordable Care Act Adults
In Illinois, persons age 19-64 years with disabilities may be eligible for Medicaid through the Affordable Care Act (ACA) based solely on their low income, as long as they meet all other Medicaid eligibility criteria. Individuals with income at or below 138% of the federal poverty level (monthly income of $1,396 for an individual) can be covered, and resources (assets) are exempt. People with disabilities may receive Medicaid services as ACA adults as long as they are not receiving Medicare, are between the ages of 19 and 64, and are not a parent or caretaker of a minor child. Note that disability status is not a criterion for eligibility as an ACA Adult.
1Medicaid eligibility is complex, multi-faceted, and varies from program to program. This fact sheet is not a definitive guide to eligibility for Illinois's medical assistance programs. For additional information about eligibility, please visit https://www.illinois.gov/hfs/MedicalClients/Pages/medicalprograms.aspx .
People with disabilities may qualify for Family Care if they are a parent or caretaker relative of a minor child in the home with income at or below 138% of the federal poverty level for their family size. There is no resource (asset) test for Family Care. For a family of four, the monthly income limit is $2,887. Having a disability is not an eligibility factor for Family Care.
Aid to Aged, Blind and Disabled (AABD)
Individuals under the age of 65 who are enrolled in Medicare by virtue of a disability may qualify for Medicaid based on both their disability status and low income. Illinois offers Medicaid coverage for people with disabilities with income up to 100% of the federal poverty level (monthly income of $1,012 for an individual) and non-exempt resources (assets) of no more than $2,000 (for one person).
Impact of Employment on Eligibility
Many persons with disabilities who are employed remain Medicaid-eligible under ACA Adult or Family Care plans. For example, working 20 hours a week at the state minimum wage of $8.25/hour would yield a monthly income of roughly $710, which is below the income limit of $1,396 for an individual. However, as wages and/or hours worked increase, so does the risk of losing medical benefits. For example, an individual earning $12/hour working 30 hours a week would earn roughly $1,550, and would no longer qualify for medical benefits under the ACA Adult or Family Care plans due to income exceeding the income limit.
The situation is more complex for individuals who are eligible under AABD (Aid to Aged, Blind and Disabled). In addition to the lower income eligibility limit ($1,012 for an individual), there is a resource (asset) limit of $2,000, so potential savings from ongoing employment could also threaten eligibility for continued coverage.
Programs to Preserve Medical Coverage for Individuals Who Work
Individuals with disabilities may qualify for medical assistance in Illinois even when income and resources exceed the limit for Medicaid coverage under FamilyCare, ACA Adult or regular AABD.
Spenddown is a program for individuals who may be eligible for AABD but who have income or resources (assets) above the AABD limit. Spenddown is similar to an insurance deductible. Enrollees pay for the cost of their medical care up to a set amount each month based on income and resources (assets). This is called the spenddown amount. An individual must provide proof of medical expenses (bill and receipts) that totals their monthly spenddown amount in order to be eligible for medical coverage beyond their spenddown amount. Spenddown covers standard Medicaid benefits as well as waiver services.
Persons enrolled in AABD Spenddown may choose to enroll in the Pay-In Spenddown program. Person enrolled in spenddown will automatically receive an enrollment form for the Pay-In Spenddown program. This program allows enrollees to make a payment to meet their spenddown each month. Each month, the enrollee may decide whether to meet spenddown by submitting incurred medical expenses to the local Department of Human Services Family and Community Resource Center (local office), submitting a payment to the Department of Healthcare and Family Services or a combination of both.
Health Benefits for Workers with Disabilities (HBWD)
Illinois residents age 16 through 64 who have a disability adjudicated using SSA criteria and who are working can purchase medical benefits through the Health Benefits for Workers with Disabilities (HBWD) Program. HBWD allows individuals with income up to 350% of the federal poverty level ($3,541/month for an individual) and resources (assets) up $25,000 to pay a monthly premium based on their income. Most retirement accounts are exempt. Premiums are determined on a sliding scale based on both earned and unearned income. HBWD covers standard Medicaid benefits as well as waiver services.
Other Programs Relevant to Workers with Disabilities
Achieving a Better Life Experience (ABLE) Accounts
ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families, and they are a potentially valuable tool for workers with disabilities. They were created as a result of the passage of the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014. ABLE accounts can be used for a wide range of expenses, as long as they are related to blindness or disability, including expenses for health, prevention and wellness, employment training and support, and assistive technology and personal support. Notably, savings of up to $100,000 in ABLE accounts cannot be considered in calculating eligibility for means tested programs including Medicaid and SSI. The annual contribution limit to an ABLE account is $15,000. More information about ABLE accounts can be found at http://www.illinoistreasurer.gov/Individuals/ABLE.
The Vocational Rehabilitation Program helps people find and keep jobs. It is operated by the Illinois Department of Human Services Division of Rehabilitation Services (DHS-DRS). People with disabilities may be eligible if they are of working age and have a significant physical or mental impairment that makes it difficult to go to work. More information about Vocational Rehabilitation can be found at https://www.dhs.state.il.us/page.aspx?item=29737.
Work Incentive Planning and Assistance (WIPA) Program
WIPA was created to help individuals receiving SSI or Social Security Disability Income understand how working will affect their benefits. This program is often referred to as Benefits Planning. WIPA is federally-funded. WIPA is operated in Chicago by the Mayor's Office for People with Disabilities and throughout the rest of the state by the Illinois Assistive Technology Program. Additional information can be found at https://www.iltech.org/repository/wipa.