WAG 02-07-05 Reasonable Compatibility for Medical Verification

PM 02-07-05

Revised Text.Reasonable compatibility is used to determine if reported income may be used to determine eligibility for medical cases. IES determines reasonable compatibility of reported Revised Text.(declared) income at application and at redetermination when electronic sources of income are available through clearances. To view the reasonable compatibility calculation in IES, run eligibility then click on the reasonable compatibility tab in the EDG summary. When reported income is LESS than the standard and the income verification obtained electronically is MORE than the standard, apply reasonable compatibility to determine if additional verification or information is needed.

New Text.Use the chart below to determine when to use reasonable compatibility, whether to use reported income, and when to send a request for additional information.

Reported Income Income Obtained from Other Sources Reasonable Compatibility of Reported Income to Verified Income Worker Action

Below the standard

 New Text(Example 1)

 Below the standard Not needed Use the reported income.  No further proof is needed.

Below the standard

 New Text(Example 2)

 Above the standard Reasonably compatible (within Revised Text.30%) Use the reported income. No further proof is needed.

Below the standard

New Text(Example 3)

 Above the standard Not reasonably compatible (greater than Revised Text.30%) Contact the customer for an explanation and additional verification if appropriate.

Above the standard

New Text(Example 4)

 Below or above the standard Not needed Use the reported income.  No further proof is needed.

Other sources of verification include electronic sources such as The Work Number (TWN), AWVS, or the Federal Data Services Hub.

Hard copies of wage verification (pay stub or employer statement) are acceptable forms of income verification. Do not run reasonable compatibility when the client has provided current hard copy income verification.

Perform a reasonable compatibility calculation when an income tax return is used as proof of income.

New TextReasonable compatibility is used when an applicant reports (declares) their income not when acceptable verification of their income is provided.

New TextReasonable compatibility is NOT used when the reported income is for self-employment.

Revised Text.Follow the steps below to determine if the difference between the reported income and the income from another source is within 30%.

  1. Determine the percentage of the federal poverty limit (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 Revised Text.30% of each other.

New Text.If the difference is more than 30%, the two are not reasonably compatible and a VCL is needed to request an explanation.

For the income reported on the application, use the income averaged amount (see PM 15-04-02 for FHP and PM 15-04-03 for AABD). Use common rounding to determine each percentage amount. New TextRemember to always drop the cents before each calculation when budgeting income.

The FPL is the same as the income standard for AABD (100% of the FPL). To determine the percentage of FPL of the reported income or the income from another source, divide the income by 100% of the FPL for the household size. 

Note: A reasonable compatibility calculator is available Revised Text.to calculate manually when needed.

Revised Text.Example 1: Ms. Ray and her husband applied for ACA Adult coverage. She reports her monthly earned income is $315 per week, and her husband's earned income is $75 per week. The total income averaged amount is $1,676. The electronic source shows the combined income is $1,870. The income standard is $1,945. Reasonable compatibility is not needed in this case as both the declared amount and electronically verified amount are below the income standard.

Reported (declared) - $1,676

Electronic verification - $1,870

New TextThe income standard amounts used in this scenario are for illustration purposes only. See Revised Text.WAG 25-03-02 (2) for current income thresholds.

Revised Text.Example 2: Mr. November lives by himself and requests ACA Adult coverage. He reports his earned income is $315 per week. The income averaged amount is $1,354. Electronic source shows his income is $1,375 per month. The income standard is $1,366. Since the reported income is LESS than the income standard and the income available from the electronic source is MORE than the income standard - reasonable compatibility must be used to determine how to proceed. The ACA income threshold is 138% of the FPL. 

Reported (declared) - $1,354 divided by $1,041= 1.300 or 130%

Electronic verification - $1,375 divided by $1,041= 1.321 or 132%

132% minus 130%= 2%

Since the difference between the reported income and income verified from another source is Revised Text.30% or less, the amount reported is reasonably compatible and no further verification is needed. Use the reported income.

New TextThe income standard amounts used in this scenario are for illustration purposes only. See Revised Text.WAG 25-03-02 (2) for current income thresholds.

New TextExample 3: Ms. Oscar and her husband applied for ACA Adult coverage. She reports her earned income is $315 per week and her husband's earned income is $75 per week. The total income averaged amount is $1,676. Electronic source shows the combined income is Revised Text.$2,375. The income standard is $1,945.

Since the reported income is LESS than the income standard and the income available from the electronic source is MORE than the income standard - reasonable compatibility must be used to determine how to proceed. The ACA income threshold is 138% of the FPL.

Reported (declared)  - $1,676 divided by $1,409 = 1.19 or 119%

Electronic verification - $2,375 divided by $1,409 = 1.68 or 168%

168% minus 119%= 49%

The reported income is not reasonably compatible with the electronic income because the difference between the two is more than Revised Text.30%. Contact Ms. Oscar to get an explanation of the discrepancy and verification of her and her husband's income.

New TextThe income standard amounts used in this scenario are for illustration purposes only. See Revised Text.WAG 25-03-02 (2)  for current income thresholds.

New TextExample 4: Mr. Stephens applied for AABD coverage. He reports his monthly earned income is $515 per week. The total income averaged amount is $2,214. The income standard is $1,255. Electronic verification is not required in this example as Mr. Stephens has reported (declared) his income over the limit. Reasonable compatibility is not used in this example due to the applicant reporting income over the program limit. Use the reported income.

Reported (declared) - $2,214

New TextThe income standard amounts used in this scenario are for illustration purposes only. See WAG 25-03-02 (2) for current income thresholds.