Medi-Cal Handbook page (b)

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1 Medi-Cal Handbook page Effective January 1, 2014, the Affordable Care Act (ACA) expanded eligibility and enrollment simplification for several coverage groups, including Medi-Cal (MC). As of 1/1/2014 new MC applicants are no longer evaluated for MC eligibility; however, recipients enrolled in 1931b MC by 12/31/2013 remained in their current MC aid type until their next MC redetermination (RD). At MC RD they will be re-evaluated for MC under the new expanded MC rules. is expected to be phased out in Background The Personal Responsibility and Work Opportunity Act (PRWORA) of 1996 (Welfare Reform) eliminated the AFDC program and created the new TANF program. It also established the Section Medi-Cal program which provides zero share-of-cost Medi-Cal to families who would have been eligible for cash assistance under the former AFDC rules which were in effect as of July 16, Section 161 of Assembly Bill 1542 established the California Work Opportunity and Responsibility to Kids (CalWORKs) program which was implemented 1/1/98. The law provides that to the extent that federal financial participation is available, the Department of Health Services (DHS) shall extend eligibility for Medi-Cal to all recipients of aid under CalWORKs. Section Medi-Cal was effective 1/1/98. Due to the many eligibility requirements, procedures and MEDS programming that had to be developed prior to implementation, the state did not issue instructions until 11/98. Santa Clara County implemented the program for new applications in 2/99. Senate Bill (SB) 708, chaptered on 7/22/99, raises the income limits for the Section program to 100% of the Federal Poverty Level (FPL). The MBSAC income limit can still be used for RECIPIENTS when it is more advantageous. The effective date for this change is 3/1/00. Update # Revised: 10/14/14

2 page 34-2 Medi-Cal Handbook 34.2 Section General Rules The general Section rules are as follows: 1. CalWORKs recipients automatically receive Medi-Cal under Section. This is called cash-based Section. 2. Families may apply for Section Only either because they do not want to apply for CalWORKs or they are not eligible for CalWORKs. 3. A family may be ineligible for CalWORKs and still be eligible for Section because of certain less restrictive AFDC rules that do not apply to CalWORKs but which continue to apply to Section Medi-Cal. 4. Family members who are sanctioned from CalWORKs (i.e. time limits, work requirements) or are ineligible for CalWORKs (undocumented immigrant) may be eligible for Section. 5. Families with members whose income is counted by CalWORKs that would NOT have been counted in the former AFDC program may qualify for Section Medi-Cal. 6. Otherwise eligible aliens who do not have satisfactory immigration status may be eligible under Section for restricted benefits (emergency and pregnancy-related services only). 7. Personal property rules are similar to the Food Stamp property rules. 8. In general, real property is determined, defined, counted and valued in accordance with the July 16, 1996 AFDC rules. 9. Persons applying for Section must first meet residency, age, deprivation and family requirements. 10. Sneede class members of a Section MFBU who do not qualify for Section may qualify for Section after a Sneede evaluation is done. Other MFBU members who do not qualify for Section eligibility must be evaluated for AFDC-MN eligibility. Revised: 10/14/14 Update #

3 Medi-Cal Handbook page Definitions Applicant A person/family who submitted an application for Medi-Cal AND who has not received Section, separately or as a CalWORKs recipient, in any ONE of the four months prior to the month of application. Applicants must pass the 100% FPL TEST. (NOTE: The additional 50% Deduction used in the MBSAC TEST does not apply to the 100% FPL TEST.) Note: If no family member received CalWORKs or Section in ONE of the four months prior to the month of application, the family must pass the 100% FPL TEST. Once the 100% TEST is passed as an APPLICANT, the family is awarded RECIPIENT status. A RECIPIENT must pass either the 100% FPL TEST or the MBSAC TEST to remain financially eligible Disability-Based Income (DI) The Section 100% FPL and MBSAC TEST treat the following two types of unearned income as Disability-Based Income and allows a SPECIAL DEDUCTION of $240: Disability benefits from the Social Security Administration (RSDI), and Private disability benefits. (Private disability benefits paid to a covered disabled individual by his/her insurer under a disability insurance plan which the individual purchased through premiums.) [Refer to Section Income Deductions, page 34-40] Note: Social Security Survivor s and Retirement benefits are NOT considered Disability-Based income. Update # Revised: 10/14/14

4 page 34-4 Medi-Cal Handbook Note: If any part of the Railroad Retirement (RR) pension or the Veteran s (VA) benefits is based on disability, then the full amount is treated as disability-based income and must be allowed the $240 income deduction for both Section applicants and recipients Earned Income Section treats the following types of income as earned income: Earnings from a job, Temporary Workman s Compensation (TWC), and State Disability Insurance Payments (SDI) Recipient A recipient is a person/family who has received CalWORKs or Section in at least ONE of the four months prior to the month of application or case review. When a family member is added to a recipient case, he/she is treated as a RECIPIENT for purposes of evaluating his/her income. Note: RECIPIENTS must pass either the 100% FPL TEST or the MBSAC TEST to remain financially eligible for the Section program Responsible Relative A responsible relative is one who is financially responsible for someone else. Consistent with regular Medi-Cal rules, Section defines financial responsibility as: Spouse for spouse, and Parent for Child. Revised: 10/14/14 Update #

5 Medi-Cal Handbook page Forms The Section forms used for manual computations are: Form Number SC 1931 A SC 1931 B SC 1931 C SC V SC P Form Name Section Review Worksheet Section - 100% FPL TEST / MBSAC TEST Income Determination Budget Worksheet Section - MBSAC TEST Continuation Budget Worksheet for 3 or More Wage Earners Vehicle Determination Work Sheet for Section Property Reserve Worksheet-Section Program NOTE: The 100% FPL TEST and the MBSAC TEST use different income deductions. EWs must use the correct side of the SC. APPLICANTS must pass the 100% FPL TEST. RECIPIENTS must pass either the 100% FPL TEST or the MBSAC TEST. The Section - Sneede forms used in manual computations are: Form Number MC 175-3I.2A MC 175-3I.2R MC 324 Form Name Section Sneede v. Kizer Net Nonexempt Income Determination and Mini-Budget Unit (MBU) Determination - 100% FPL TEST Section Sneede v. Kizer Net Nonexempt Income Determination and Mini Budget Unit (MBU) Determination - MBSAC TEST Section Group Sneede v. Kizer Property Work Sheet NOTE: The 100% FPL TEST and the MBSAC TEST use different income deductions. EWs must use the correct Sneede Income Budget Form. MC 175-3I.2A is used for the 100% TEST (APPLICANTS or RECIPIENTS) and the MC 175-3I.2R is used for the MBSAC TEST (RECIPIENTS only). Update # Revised: 10/14/14

6 page 34-6 Medi-Cal Handbook 34.5 Section Eligibility Determination When a family applies for Medi-Cal, the EW must determine whether there is Section eligibility BEFORE any other Medi-Cal determination is made. The family may not choose AFDC-MN, ABD-MN or MI Medi-Cal over Section Medi-Cal. However, persons may choose whichever program is more beneficial for them when they are eligible for other Medi-Cal programs, such as the Pickle program or Limited Service programs (e.g. TB program, QMB/SLMB/QI, Income Disregard program for pregnant women). When a family is discontinued from CalWORKs due to earnings related reasons, the EW must determine ongoing Section eligibility BEFORE a Transitional Medi-Cal (TMC) or any other Medi-Cal determination is made. Example: A family received CalWORKs for 18 months and is discontinued from CalWORKs because of increased earnings. (The PWE is not subject to the 100 hour rule for Section cash-based Medi-Cal, but his/her earnings increase makes the family ineligible). The EW evaluates the family for Section eligibility and the income does not exceed the Section income limit. The family is eligible for and must be issued Section, not Transitional Medi-Cal (TMC). The family may later qualify for TMC if Section is discontinued due to increased earnings Months Retroactive Section Medi-Cal A Medi-Cal applicant is entitled to request and be evaluated for retroactive eligibility for any month within the three-month retroactive period. The application for Retroactive Medi-Cal may be made in conjunction with, or after, the application for Medi-Cal is submitted. However, it must be submitted within one year of the month for which retroactive coverage is being requested. Revised: 10/14/14 Update #

7 Medi-Cal Handbook page General Rule When evaluating the 3-month retroactive time period for Section, the EW must determine if the household has APPLICANT or RECIPIENT status. This will determine which income test applies when determining financial eligibility. If CalWORKs or Section was received in any of the four months preceding the month being evaluated, then the retroactive month is treated under the RECIPIENT status rules. (100% FPL TEST or MBSAC TEST is used.) If CalWORKs or Section was NOT received in any of the four months preceding the month being evaluated, then the retroactive month is treated under the APPLICANT status rules. (100% FPL TEST is used.) Once the 100% FPL TEST is passed, RECIPIENT status rules apply in each successive retroactive month and in the month of application EXAMPLES EXAMPLE 1: A family applies for Section in May. They last received CalWORKs in December, which is not within four months of their application month. They have no outstanding medical bills so Retro Medi-Cal is not requested. The family has APPLICANT status and the 100% FPL TEST is used to determine eligibility for the month of May. EXAMPLE 2: A family applies for Section in may. They last received Section in December, which is not within four months of their application month. They request Retro Medi-Cal for February, March and April. The EW reviews February and sees that the family received Section in December (within the four months prior to February). Therefore, the family has RECIPIENT status and the 100% FPL TEST or MBSAC TEST is used to determine eligibility for February. If the family passes the Section 100% FPL TEST or MBSAC TEST in February, then RECIPIENT status is brought forward to March, April, May, June, etc., until there is a break-in-aid of 4 months or more. This means that the family is also entitled to RECIPIENT status in the application month of May. EXAMPLE 3: A family applies for Section in May. They last received CalWORKs in November, which is not within four months of their application month. Retro Medi-Cal is requested for April only. The EW reviews April and sees that the family did not receive CalWORKs or Section within the four months prior to April. Therefore, the family has APPLICANT status and the 100% FPL TEST applies. Update # Revised: 10/14/14

8 page 34-8 Medi-Cal Handbook If the family passes the Section 100% FPL TEST in April, then RECIPIENT status begins in May (the application month). If the family does not pass the 100% FPL TEST in April, then the family must pass the 100% FPL TEST in May in order to be determined Section eligible Late Requests for Retro Late Requests for Retroactive Coverage refers to Retro applications submitted timely, but after the original Medi-Cal application has been processed and the eligibility determination has been completed. When a Late Request for Retroactive Coverage is submitted, the EW must determine Section eligibility for the retro months. Follow the chart below to determine the appropriate actions: If Retro Section eligibility is... NOT established, Established and Section was approved when the original application was processed, Established and Section was NOT approved when the original application was processed, Then... Evaluate the family for other types of Medi-Cal. Approve Section in the appropriate Retro months. 1. Approve Section in the appropriate Retro months. 2. Do NOT redetermine Section eligibility in the month of application. 3. In the month following the month in which the request for Retro Medi-Cal was made, evaluate Section eligibility using the RECIPIENT status rules. Approve Section if either the 100% FPL TEST or the MBSAC TEST is passed. NOTE: If neither test is passed at this time, all future Section reviews are done following the standard APPLICANT/RECIPIENT rules. Example: On 12/3, a Medi-Cal application is submitted. The EW explores Retroactive Medi-Cal; however, the client indicates that he/she does NOT need it. On 12/7, the EW determines that the family is not Section eligible because they do not pass the 100% FPL TEST. AFDC-MN and FPL Medi-Cal are approved instead. Revised: 10/14/14 Update #

9 Medi-Cal Handbook page 34-9 On 4/6, the family contacts the EW to request retroactive Medi-Cal for October and November. The family passes the Section 100% FPL TEST for October. The month of November is processed under RECIPIENT status rules. Since the Medi-Cal determination for December has already been completed, the EW does not redetermine Section eligibility for December as a RECIPIENT. The original determination stands. However, the EW reviews for Section eligibility in May using the RECIPIENT status rules General Eligibility Procedures Note: Unless otherwise stated, all eligibility rules and determinations for Section follow regular Medi-Cal rules per the Medi-Cal Handbook. Step Action 1. Identify families who meet the potential Section eligibility criteria. (Residency, Age, Deprivation) 2. Review CalWIN/MEDS for type of benefits received in the last four months. 3. Determine status as APPLICANT or RECIPIENT for Section income eligibility tests. 4. Determine if family members meet the Section eligibility criteria (Residency, Age, Deprivation, Income, and Property). 5. Complete the appropriate income budget worksheet(s) when using a manual process. 6. Complete the Property Reserve Worksheet-Section [SC -P] when using a manual process. 7. If not income or property eligible and there is a Sneede class member, determine eligibility for Section Sneede. 8. If not Section Sneede eligible, determine eligibility for TMC, MN, MN Sneede, Property Waiver and Special Programs. Update # Revised: 10/14/14

10 page Medi-Cal Handbook 34.8 Section Screening Criteria All Medi-Cal applications other than ABD, LTC and Minor Consent must be evaluated for Section eligibility before any other Medi-Cal eligibility is established, including Transitional Medi-Cal (TMC). The EW must screen all cases containing AFDC-MN and MI children when: Completing the initial intake interview, Completing the annual redetermination, Revising the budget due to changes in income or circumstances, The client requests a Section determination Age A family must have at least one child under 18 years of age. Exception: The child may be 18 years old if he/she is enrolled as a full-time high school student and is expected to graduate before reaching the age of nineteen. School verification is required. EWs may use either the CSF 37 school verification form or a letter from the school on letterhead. THE SC 1302 MUST NOT BE USED FOR SECTION. A person age 18 and over, not meeting the exception above, who is living in the home with a senior parent and other siblings is: Considered an adult for Section, Not eligible for Section (unless he/she has a deprived child), An ineligible member in the Senior parent s Section MFBU, unless he/she is a parent of a deprived child who is living in the home and could apply for Section in a separate case, and the senior parent does not have care and control of the adult parent s child. Revised: 10/14/14 Update #

11 Medi-Cal Handbook page Unborn The unborn of a pregnant woman with NO other eligible children is considered a child for Section eligibility for the sole purpose of evaluating the mother s eligibility for Section in her last trimester. The unborn must have a deprivation. If the only deprived child is an unborn in the last four months of pregnancy (last trimester), the spouse or the unmarried father in the home is an ineligible member of the Section MFBU and is not eligible for Section until the child is born. The father (married or unmarried) may be eligible for the MN program. The unborn of a pregnant woman WITH other eligible children is counted in the family size when determining the Section income limit starting from the onset of pregnancy. [Refer to Pregnant Woman, page ] 34.9 Deprivation Deprivation must exist. Rules to establish deprivation includes: Deceased Parent Deprivation[50209] Deprivation of parental support or care exists if either of the child's parents is deceased. The death of a parent links the children, the remaining parent or a non-parent caretaker relative of the children Note: Client's sworn statement on the MC210 is sufficient to establish this deprivation, unless there is reason to believe that the statement is questionable. Update # Revised: 10/14/14

12 page Absent Parent (A/P) Deprivation Medi-Cal Handbook Deprivation of parental support or care exists if there is continued absence of one or both parents from the home. Deprivation of absence links the children of the absent parent, the remaining parent or the non-parent caretaker relative, including the caretaker of children receiving PA. Continued Absence Continued absence shall constitute deprivation if the absence is both: 1. Of such a nature as to interrupt, terminate or preclude the parent's providing for the children any of the following: Maintenance, or Physical care, or Guidance AND 2. Of a known or indefinite duration which would preclude the parent's planning for the present support or care of the children. Temporary Absence Deprivation does not exist when the parent is absent from the home on a temporary basis, such as for: A visit. A trip. Current employment. Seeking prospective employment. Due solely to active duty in the uniformed services of the United States. Note: Uniformed services include the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanographic and Atmospheric Administration and Public Health Service of the United States. Revised: 10/14/14 Update #

13 Medi-Cal Handbook page Establishing A/P Deprivation Absent Parent Deprivation will be established by client's statement on the Statement of Facts unless the EW has conflicting information. In the case of conflicting information, the client's statement shall be supported by one of the following: Written statement from the absent parent. Written statement from persons with prior knowledge of the family relationship. The actions of the applicant, beneficiary or absent parent clearly indicate the physical absence of the other parent OR the interruption of or marked reduction in marital and family responsibilities. The above must be clearly documented on the [Case Comment] window in CalWIN. Other evidence that substantiates continued absence. Joint Custody Deprivation based on continued absence may be established in joint custody cases as long as the child(ren) is not living with both parents at the same time. Periods of time spent in the home of the parent who is not the caretaker parent will be considered temporary absences. [Refer to Definitions, page 60-1.] Who is Linked to A/P Deprivation The following people are linked to Medi-Cal due to A/P deprivation of the child: The child. The parent/caretaker relative in the home. Note: If the parent in the home is married, and the spouse also has children from a prior union, then the separate children of each parent and both parents are linked due to A/P deprivation. The mutual children could be eligible as MI. Update # Revised: 10/14/14

14 page Incapacitated Parent Deprivation [50211] Medi-Cal Handbook Deprivation of parental support or care exists if either of the child's parents is physically or mentally incapacitated. Incapacity provides linkage for the children of the incapacitated parent, the incapacitated parent, the second parent of the children if living in the home, and the spouse of the incapacitated person, (i.e. the stepparent of the deprived children). The physical or mental illness, defect or impairment must be EXPECTED TO LAST AT LEAST 30 DAYS AND: Reduce substantially or eliminate the parent's ability to support or care for the child, or Prevent the parent from working full-time at a job in which he/she is customarily engaged, or Prevent the parent from working a full-time job for which he/she is equipped by education, training, experience or which could be learned by on-the-job training, or Cause employers to refuse to employ the parent for work the parent could do and is willing to do because of behavioral or other disorders which interfere with the securing and maintaining of employment, or Prevent the parent from accomplishing as much on the job as a regular employee and, as a result, the parent is paid on a reduced basis, or Establish for the parent, linkage to Adult-MN as blind or disabled; or Cause the parent to be qualified for and employed in a job which is rehabilitative, therapeutic, or is in a sheltered workshop, and which is not considered to be full-time. Establishing Incapacitated Parent Deprivation Incapacitated Deprivation shall be established by one of the following: Written statement by a physician, a licensed or certified psychologist, or authorized staff member on doctor's letterhead. Completed Medical Report (MC 61) Form. Revised: 10/14/14 Update #

15 Medi-Cal Handbook page Current DDSD 221R. Receipt of RSDI, SSI/SSP or R/R Board benefits based on total and permanent disability or blindness. Receipt of SDI or Workers Compensation. Verbal statement from a physician, licensed or certified psychologist or authorized member of their staff may be accepted for 60 days, pending receipt of written verification. Document in the Maintain Case Comments window for follow-up. Use Other Conclusive Verification as the verification source. Note: A statement from a chiropractor or any other health professional not described above cannot be accepted as proof of incapacity for Medi-Cal purposes. Reminder: Incapacity must be verified prior to approval of eligibility. [Refer to Definitions, page 60-1 for further information.] Unemployed Parent Deprivation [50215] Effective November 26, 1996, U/P deprivation requires only that the PWE does not work 100 hours or more in a given month. Effective March 1, 2000, U/P deprivation requirements were expanded to include families with a PWE who works over 100 hours per month, if the family s net non-exempt EARNED income is AT or BELOW 100% Federal Poverty Limit (FPL). Effective May 1, 2001, a State Plan Amendment was approved which further expanded U/P deprivation requirements to exempt all earned income of children in the family when determining whether the PWE is unemployed even though he/she is working 100 hours or more. Rule Deprivation of parental support or care exists if a parent with whom the child lives meets the conditions of an Unemployed Parent (U/P). Conditions of an Unemployed Parent The Unemployed Parent (U/P) must be determined as the Principal Wage Earner (PWE) AND meet ONE of the following conditions for U/P deprivation to exist: Update # Revised: 10/14/14

16 page Medi-Cal Handbook 1. Is working under 100 hours per month. This includes when the PWE is: Not working, or Working less than 100 hours per month, or Employed on an intermittent basis more than 100 hours per month and the hours in excess of 100 hours are of a temporary nature. Note: Temporary nature is shown if the parent was under the 100 hour standard for the two prior calendar months and is expected to be under the standard during the next month. OR 2. The total net non-exempt EARNED income of the parents or the parent and his/her spouse is AT or BELOW 100% of the Federal Poverty Level (U/P Income Test). Principal Wage Earner (PWE) EWs must first establish which parent is the Principal Wage Earner (PWE) in order to determine if U/P deprivation exists. The PWE is the parent who has earned the greater amount of income in the 24-month period immediately preceding either: The month of application, reapplication or restoration, or The date that a family's circumstances have changed in such a way as to meet the U/P deprivation requirements. Note: If both parents qualify as the PWE and have earned an identical amount of income (or no income) in the 24-month period, the EW in consultation with the parents must designate which parent is the PWE. Once the PWE has been determined, this parent continues to be the PWE for each consecutive month, even if the other parent has earnings in the last two years. EXAMPLES Incapacitated at Time of ApplicationA family applies for Medi-Cal on December 1st and deprivation is based on the incapacity of the father. In March, the EW learns that the father is no longer incapacitated as of March 10th. A U/P Revised: 10/14/14 Update #

17 Medi-Cal Handbook page determination must be completed in March. A determination of who is the PWE begins on the date that the deprivation changed (March 10th). It is not based on the month of the original application. Unemployed Parent Becomes IncapacitatedA family is determined eligible for Medi-Cal based on U/P deprivation at the point of application. Four months later the PWE becomes incapacitated due to a broken arm. The deprivation must be changed to incapacity. However, when the incapacitated parent recovers, the deprivation is changed back to U/P. The PWE determination still exists based on the earlier U/P determination. CalWORKs U/P Case Becomes Medi-Cal Only CaseThe father is determined to be the Principal Earner (PE) in a CalWORKs U/P case. His wife begins to work and the family becomes financially ineligible for CalWORKs due to excess earnings. CalWORKS is discontinued and ongoing Medi-Cal eligibility is explored. U/P deprivation still exists and does NOT need to be reestablished since the PWE is still considered an unemployed parent. Therefore, the family is still linked to the Section program. Eligibility for Section is determined first. If the family is not eligible, TMC is explored. Reapplication for Medi-CalIf there has been more than a one month break-in-aid, the PWE must be reestablished. MC 210 S-W CalWIN determines the PWE if employment history for both parents is entered. CalWIN also determines the U/P deprivation. If the client is having an interactive interview at Intake, it is not necessary for them to complete the Vocational and Work History form (MC 210 S-W). The EW will obtain that information from the client and enter it in CalWIN. For mail-in applications, the worker can first try to obtain the employment history from the client over the phone, enter it in CalWIN and document in Maintain Case Comments window how the information was obtained. If the worker is unable to contact the client to get the information, then the MC 210 S-W must be sent to the client to gather the data for CalWIN to determine the PWE. Unless there was a break in aid or only one parent was in the home at intake and the A/P has now returned, a new PWE determination does not need to be done at redetermination. The MC 210 S-W can be used to determine: Which parent is the principal wage earner (PWE) Update # Revised: 10/14/14

18 page U/P deprivation when both parents are in the home. Medi-Cal Handbook Note: If the PWE works 100 hours or more a month, the Unemployed Parent Worksheet (MC 337) will be used to determine U/P deprivation. Only one signature is required, usually the applicant's. Determination of the PWE is not required when there is other linkage, such as absent parent. U/P Income Test U/P deprivation exists if the total net non-exempt EARNED income of the parents or the parent and his/her spouse is AT or BELOW 100% of FPL (U/P Income Test). Sneede rules do NOT apply to the U/P Income Test. The U/P Income Test applies to AFDC-MN and Section. Countable Earned Income Only the net non-exempt EARNED income of the parents or the parent and the parent s spouse is counted. Earned Income includes income received from: Employment, Earned Income In Kind State Disability Insurance (SDI), and Temporary Workers Compensation (TWC). DO NOT count the EARNED income of a parent who receives Public Assistance (PA) or Other PA or who has the option not to be aided and is not in the MFBU. DO NOT include these persons in the family size to determine 100% of FPL. Allowable Deductions The following deductions are allowed when determining net non-exempt EARNED income for U/P deprivation: $90 Standard Work Expense (SWE) $65 and 1/2 if there is an aged, blind or disabled family member in the MFBU Child Care Deduction Court-Ordered Child/Spousal Support Allocations to PA Members Allocations to Excluded Children. Revised: 10/14/14 Update #

19 Medi-Cal Handbook page Note: Health Insurance Premiums are allowable deductions for Medically Needy (MN) budget only. Procedure Follow the steps below to determine the net non-exempt income: Step Action Calculation 1. Subtract $90 from the gross non-exempt EARNINGS of the PWE and his/her spouse. (Use the $65 + 1/2 and the unused $20 rather than the $90 if there is an ABD person in the MN determination). 2. Add each person s net EARNINGS together to get the total family countable EARNED INCOME. Earnings of: PWE 2nd Adult $ - 90 = $ $ - 90 = $ Countable Earnings = $ 3. Determine total allowable deductions, including: Child Care Expenses, Court-Ordered Child/Spousal Support, Allocations to PA members, and Allocations to excluded children. $ + $ + $ + $ Total Deductions = $ 4. Subtract the allowable deductions to get the family s Total Net Non-exempt EARNED Income Step 2 - Step 3 = $ 5. Determine 100% of FPL for the appropriate family size. 100% of FPL = $ 6. Compare Line 4 to Line 5. Is the Total Net Non-Exempt EARNED Income of the Parents AT or BELOW 100% of FPL? Yes; U/P Deprivation Exists. No; No U/P Deprivation. Who is Linked to U/P Deprivation Unemployed Parent (U/P) deprivation links the: Child(ren) of the unemployed parent, Unemployed parent, and Second parent in the home. Note: The stepparent can be treated as an essential person in the Section program. [Refer to MFBUs Containing Stepparents, page ] Update # Revised: 10/14/14

20 page Medi-Cal Handbook Exception: Once Unemployed Parent (U/P) deprivation is established under the Section program, U/P deprivation continues as long as the family continues to pass either the 100% FPL TEST or the MBSAC TEST, even if the PWE works more than 100 hours per month or the parents/parent and spouse s earnings exceed 100% of FPL (U/P Income Test). [Refer to Unemployed Parent Deprivation [50215], page ] Earned income in-kind is counted when determining unemployed parent deprivation. U/P deprivation must be reestablished whenever there is a one calendar month break-in-aid. The PWE must once again meet the 100 hour rule or pass the U/P Income Test. [Refer to U/P Income Test, page ] EXAMPLE 1: If the case is already a U/P case and the PWE RECIPIENT begins to work over 100 hours, the 100-hour rule does NOT apply. The case retains the U/P deprivation. EXAMPLE 2: If the case is already a U/P case and the total net non-exempt EARNED income of the parent(s) and the parent s spouse exceeds 100% of FPL, the case retains U/P deprivation as long as the family remains income eligible (100% FPL TEST or MBSAC TEST is passed). EXAMPLE 3: When absent parent deprivation stops due to the A/P returning home, a new deprivation must be established in order to continue Section Medi-Cal. If U/P deprivation is being established, the PWE must meet the 100 hour rule or pass the U/P Income Test. (The RECIPIENT status for income tests continue to apply when determining financial eligibility.) EXAMPLE 4: When the unemployed PWE becomes incapacitated, and then changes back to U/P deprivation, the PWE does NOT need to meet the 100 hour rule or pass the U/P Income Test. (Again, the RECIPIENT status for income tests continue to apply when determining financial eligibility.) Revised: 10/14/14 Update #

21 Medi-Cal Handbook page Property The property limit for an MFBU of one or two is $3000. For each additional family member in the MFBU, add $150 to the property limit. Note: A family found to be ineligible for Section due to excess income or excess property, may qualify for regular Medi-Cal. In some situations, the applicable financial eligibility requirements for regular Medi-Cal are less restrictive Income An APPLICANT family must pass the 100% FPL TEST. A RECIPIENT family must pass either the 100% FPL TEST or the MBSAC TEST. (NOTE: The EW must use the most advantageous of the two tests.) [Refer to Section Income Limits and Tests, page ] [Refer to Chart Book, Current Section Income Limits, page 5-46.] 34.10MFBU Determination General Section MFBU Rules ALL family members are included in the Section MFBU. Family members who do not meet Section eligibility criteria (i.e. no deprivation or linkage) are treated as ineligible persons (IE) in the Section MFBU. CalWORKs, SSI, Pickle, and/or IHSS recipients are treated as excluded members in the Section MFBU. Otherwise eligible immigrants who do not have Satisfactory Immigration Status (SIS) may be eligible for restricted Section Medi-Cal benefits only. A parent is linked to Section if he/she: Update # Revised: 10/14/14

22 page Is a deprived child (as in a minor parent case), or Medi-Cal Handbook Has at least one deprived child eligible for Section or any other type of zero share-of-cost Medi-Cal (this includes, Deemed Eligibility [DE], Continuous Eligibility for Children [CEC], Federal Poverty Lever [FPL] programs), AND the parent passes other Section eligibility criteria (e.g., income, property). Example: Mom, Dad and one child apply for Medi-Cal. Mom and Dad have zero income, but the child receives $1000/month unearned income. When the Section - Sneede computation is completed, Mom and Dad pass the Section income limits, but the child does not. The child is evaluated for MN/MI and is found to have a SOC. The child is then evaluated for the appropriate FPL program. If the child is eligible for the FPL program (zero SOC Medi-Cal), Mom and Dad are eligible for Section, provided that Mom and Dad pass other Section eligibility criteria (e.g., income, property). If the child is NOT eligible for the FPL program and ends up getting Medi-Cal with a SOC, Mom and Dad are not linked nor eligible for Section Mixed Household Situations Section & MN/MI Medi-Cal When only some family members are determined eligible for Section or Section - Sneede, the remaining family members may be eligible for MN/MI Medi-Cal. Follow the rules listed below to establish the MN/MI MFBU and determine the appropriate treatment of income for each MFBU member. All persons from the original Section MFBU who are ELIGIBLE for Section are NOT included in the MN/MI MFBU. Their income and property is not counted. All persons from the original Section MFBU who are INELIGIBLE for Section are included in the MN/MI MFBU. The income of MN/MI MFBU members is treated as follows: All non-exempt income of a child in the MN/MI MFBU is counted. Revised: 10/14/14 Update #

23 Medi-Cal Handbook page If the income of an adult in the MN/MI MFBU was used to determine Section eligibility for a spouse, then none of the adult s income is used in the MN/MI determination. If the income of an adult in the MN/MI MFBU was used to determine Section eligibility for his/her child, then the income or portion of income used (parental allocation to each child eligible for Section 1931[b]) is not used again in the MN/MI determination. No income or Sneede allocation from any person eligible for Section is carried over to family members who did not pass Section and are being determined for the MN/MI program. [Refer to Income Allocation Rules - Section and MN/MI Medi-Cal, page for additional information.] Section & FPL Medi-Cal All persons included in the original Section MFBU are included in the FPL family size to determine the applicable poverty level limit. When determining the net nonexempt income of the family, count only the income of the: Child being evaluated, and Family members who are responsible relatives of that child. Example: Count the income of the parent of a child being evaluated for an FPL program. Do not count the income of a sibling or stepparent of a child being evaluated for an FPL program. The following individuals are included in the entire FPL family size but their income is not counted. An essential person who chooses not to receive Medi-Cal and only the spouse s separate children are requesting Medi-Cal. An unmarried father who does not want to be aided with his pregnant girlfriend and he has no other born children living in the home. Update # Revised: 10/14/14

24 page MFBUs Containing Stepparents Medi-Cal Handbook Stepparents may be aided as an essential person under the former Aid to Families with Dependent Children (AFDC) and the current California Work Opportunity and Responsibility to Kids (CalWORKs) program. Regular Medi-Cal rules only allow the stepparent to be linked if the spouse is incapacitated. Under Section, the stepparent must ALWAYS be included in the MFBU because he/she is financially responsible for his/her spouse, regardless of whether the stepparent wishes to be aided or not. However, Sneede rules would apply. Exception: The stepparent is not included in the Section MFBU if only the separate children of his/her spouse want Medi-Cal. Count any income/property belonging to the children applying for Medi-Cal. If the children s parent has income, allow a parental allocation, allow an allocation to the spouse and other children in the household and then, budget the balance of his/her income. The stepparent income and/or property is not counted at all. Stepparent s Non-Cooperation If the stepparent refuses to cooperate or does not wish to be aided, his/her spouse would be an ineligible member of the MFBU with her separate children. The stepparent spouse s separate children are not in any way affected by the stepparent s non-cooperation and therefore must be evaluated for Medi-Cal. If the mutual children or the stepparent s separate children wants to be aided, the stepparent must be included, otherwise there is no eligibility for either the mutual or the stepparent s separate children Excluded Child Children can be excluded from the Section MFBU regardless of whether or not they have separate income or property. The parent or caretaker must sign the Sneede v. Kizer Excluded Child Statement (MC 239 SN-3). Revised: 10/14/14 Update #

25 Medi-Cal Handbook page When a child is excluded, he/she is not included in the MFBU and his/her separate property and income are not considered when determining program eligibility. An excluded child cannot be used as the basis for deprivation/linkage. The child, however, does receive a Sneede parental allocation Pregnant Woman A pregnant woman must have a deprived child or an unborn who if born would be deprived, in order to be potentially eligible for Section. Pregnant Woman With No Other Children A pregnant woman with no other children must be in her last four months (last trimester) of pregnancy to be potentially eligible for Section Medi-Cal, if she has no other deprived children in the home. The unborn must have deprivation. These rules are consistent with the rules of the former AFDC program. Father of the Unborn in the Home With No Other Deprived Children If the father (married or unmarried) of the unborn is in the home, he is NOT eligible for Section until the unborn is born. However, the father must be included in the Section MFBU and his income and property are considered when determining Section eligibility for the pregnant woman. If the parents are NOT married, Sneede rules apply. The father (unmarried or married) of the unborn may be eligible for AFDC-MN Medi-Cal if he wants to be aided. IF... A MARRIED father wants to be aided under the MN/MI program, THEN... His income is NOT carried over to his MN MFBU because he is a financially responsible relative to his spouse and his income is used when determining his pregnant spouse s eligibility for Section. Once the baby is born, he may be added to Section with no determination IF there is no change in the family income. An UNMARRIED father wants to be aided under the MN/MI program, All of his income is counted in his MN MFBU. He may not deduct his income (used when determining Section 1931[b] eligibility for his pregnant girlfriend) from his MN MFBU. Update # Revised: 10/14/14

26 page Pregnant Woman With Other Children Medi-Cal Handbook If the pregnant woman has other deprived children, the unborn is included in the family size at the onset of pregnancy Care and Control A question of care and control is not included in any Medi-Cal applications. As part of eligibility and MFBU determination, the EW must explore care and control if an ADULT or a MINOR parent with his/her child live with a caretaker relative. A person is considered to have care and control if the person: Decides where the child attends school Deals with the school on child s educational decisions and problems Controls child s participation in extracurricular and recreational activities Arranges child s medical and dental care services Claims the child as a tax dependent Purchases and maintains the child s clothing. The chart below illustrates the importance of determining who has care and control. For Section Care and control determines who has linkage and MFBU composition. Section allows an otherwise eligible caretaker relative or a senior parent, ADULT parent and adult parent s child to ALL be aided when they reside in the same home and the senior parent has care and control of the adult parent s child. If a senior parent (with no other deprived children) has no care and control of both the MINOR parent and the minor parent s child, then the senior parent is an ineligible member of the minor parent s Section MFBU. The senior parent must then be evaluated for the MN program in an MFBU of one (similar to what would occur if the minor mother were receiving CalWORKs). For MN Program The issue of care and control of a senior parent in a three generation household does not matter if the ADULT parent is in the home. Regular Medi-Cal does not aid a caretaker relative if an ADULT parent is in the home, unless the ADULT parent s parental rights have been terminated. Care and control is not an issue for the MN program if children are under 21 and living with a senior parent. Since a senior parent is a financially responsible relative to the MINOR parent, the senior parent and the minor parent are in the same MN MFBU. The minor parent is an ineligible member of his/her child s MFBU. Revised: 10/14/14 Update #

27 Medi-Cal Handbook page Caretaker Relatives The following rules apply to caretaker relatives. MFBU Requirements A related child can provide linkage to the caretaker relative because the parent is absent from the home or for Section purposes only, the parent lives in the home but has no care and control. A caretaker relative is not required to be in the MFBU if he/she is not requesting Medi-Cal benefits for himself/herself. Caretaker relatives are not responsible for their related children. No allocation of the caretaker relative s income/property is to be made. If the caretaker relative is pregnant, aged, blind or disabled, he/she need not be included with the related child. However, he/she must be linked to a deprived child to be eligible for the Section program. If a caretaker lives with his/her spouse, the spouse may not be aided unless the spouse has other linkage (e.g., aged, blind or disabled). If the caretaker s spouse has other linkage, he/she is in his/her own MFBU.The caretaker s spouse s income and property is not counted in the caretaker s MFBU with the related child. Note: Spouse for spouse responsibility rule does not apply when a caretaker is in the MFBU with his/her related child. More Than One Non-Parent Caretaker Relative and Related Children ONLY one NON-PARENT caretaker relative may be linked to a child. If there is more than one child in the household and they are NOT siblings, each caretaker may be linked to a different child. The caretakers would be in separate budget units with their related child. Spouse for spouse responsibility rule does not apply when a caretaker is in the MFBU with his/her related child. Option to be Linked to Related Children or Own Children A caretaker relative with his/her own deprived child and a related child may choose to be linked to either his/her own child or the related child. Update # Revised: 10/14/14

28 page Medi-Cal Handbook When a caretaker relative chooses to be aided with his/her related child: The related child can provide linkage for the caretaker (i.e., if the caretaker s children have no deprivation). The caretaker s income and property is NOT counted in the caretaker s spouse/children s Section MFBU, MN or MI MFBU, except when determining Federal Poverty Level (FPL) eligibility for his/her children. A caretaker relative who is eligible for Section with a related child is not in the MFBU with other household members who are not eligible for Section unless the caretaker s spouse, other parent, or children are being evaluated for the Federal Poverty Level (FPL) programs. The chart below further enumerates different situations to clarify MFBU determinations and ONLY applies when a caretaker relative chooses to be linked with his/her related child. If the caretaker relative chooses to be linked with his/her related child AND THE CARETAKER RELATIVE... But... Then the Caretaker Relative... Is eligible for Section with a related child, Is eligible for Section, Note: The related child must be eligible for a zero share of cost (SOC) Medi-Cal program for the caretaker to be linked to Section. Is INELIGIBLE for Section, The related child is not eligible for Section, The related child is eligible for Section, Is not included in his/her spouse s and/or children s Section, MN or MI MFBU, except when determining FPL eligibility for his/her children. Is not in the related child s MN MFBU, and Is not in his/her spouse/children s MN/MI MFBU. Must be evaluated for the MN program, and Is linked to the deprived related child, and Is NOT in his/her spouse/children s Section MFBU, or Is in the same MN/MI MFBU with his/her spouse and/or children (i.e., if his/her own children not eligible for Section 1931[b]). Revised: 10/14/14 Update #

29 Medi-Cal Handbook page If the caretaker relative chooses to be linked with his/her related child AND THE CARETAKER RELATIVE... But... Then the Caretaker Relative... And the related child are BOTH INELIGIBLE for Section (even after applying the Sneede rules,) Are eligible for the MN program Is in the same MN MFBU with the related child, and The caretaker is also included in his/her spouse s and/or children s MN or MI MFBU as an ineligible member. Note: The caretaker s full income is both counted in his/her MN MFBU with the related child, AND in his/her spouse/children s MN/MI MFBU. Adult Parent with Children Living with a Caretaker Relative For Section, an adult is a person age 18 (not expected to graduate before his/her 19th birthday) or older. The Section program (consistent with the California Work Opportunity and Responsibility to Kids (CalWORKs) program) allows an otherwise eligible adult parent, adult parent s child, and a caretaker to ALL be aided when they reside in the same home. The caretaker relative must have care and control of the adult parent s child. If... A caretaker relative or a senior parent has care and control of the ADULT parent s child, A caretaker relative wishes to be aided Then... The caretaker relative or the senior parent is linked to Section. Example 1: Jane (age 19) and her son live with Jane s mother who has care and control of her son. Jane s mother is linked to Section. Example 2: Jane (age 19) and her son live with Jane s Aunt who has care and control of her son. The aunt is linked to Section. ALL (caretaker relative, adult parent, and adult parent s child) are included in one MFBU. The MFBU is under the ADULT parent s name and case serial #. Example: Same as above. Jane, her son, and her mother must be in the same MFBU. The MFBU has excess income or property, Sneede rules would apply and only the income of the ADULT parent is allocated to the child. Update # Revised: 10/14/14

30 page Medi-Cal Handbook If... The caretaker is not eligible for Section, The ADULT parent s parental rights have been terminated, Then... The caretaker is not eligible under the MN program if the ADULT parent is being aided in Section unless he/she has other linkage. Example: Jane s mother is ineligible for Section due to excess income. Jane s son cannot provide MN linkage for the senior parent/caretaker relative if Jane is being aided in Section. The ADULT parent is not included in the MFBU. Example: Same as above but Jane s parental rights have been terminated. MFBU consists of Jane s son and the senior parent. Jane, even though living in the home, is not included in the MFBU. Jane s income/property is not counted. Note: Regular Medi-Cal (MN) rules do not aid a caretaker relative if there is an adult parent (age 21 or older per MN definition) and their minor child in the home. Non-Needy Caretaker s Related Children Receiving CalWORKs A non-needy caretaker relative who receives CalWORKs for needy children may be eligible for Section Medi-Cal. The EW must evaluate that caretaker relative for Section eligibility first, before determining eligibility for any other Medi-Cal program No Caretaker Relative If a child is not living with a parent or caretaker relative, the child is not eligible for Section Medi-Cal Senior Parent/Minor Parent Cases Consistent with the AFDC and CalWORKs rules, Section considers any parent under the age of 18 living with his/her parent(s) a minor parent. Note: AFDC-MN/MI rules consider any parent under the age of 21 living with his/her parent(s) a minor parent. Revised: 10/14/14 Update #

31 Medi-Cal Handbook page A parent 18 years of age or older living with his/her own parents is treated as an adult under the Section program. ONLY under the Section program, the Senior Parent(s) is not considered financially responsible for the 18 year old parent and the Senior Parent income/property is not considered when determining Section eligibility for the 18 year old and his/her child. The minor parent who is living in the home of his/her parents may qualify for Section if he/she is: A deprived child, or Requesting aid only for himself/herself and his/her deprived child. In either case, the senior parent s income and property are counted until the minor is an adult and the senior parent must apply for the minor parent. MFBU Rules for Senior/Minor Parent Cases If the caretaker relative is not the parent of the child, he/she is not required to be in the MFBU unless he/she wishes to be aided. The Senior Parent s income/property is never used to determine the eligibility for the minor parent s child. If there are no siblings in the home and the senior parent wants to be aided, the senior parent must have care and control of BOTH the Minor Parent and the Minor Parent s child in order to be potentially eligible for Section. If the Senior Parent... Has care and control of both the minor parent and the minor parent s child, THEN... There are two Section MFBUs: MFBU # 1- Senior Parent(s), Minor Parent MFBU # 2 - Minor Parent as an Ineligible Member (IE), Minor Parent s child Update # Revised: 10/14/14

32 page Medi-Cal Handbook If the Senior Parent... Does not have care and control of both the minor parent and the minor parent s child, THEN... There are three MFBUs. 2 Section MFBUs: MFBU # 1 - Senior parent as ineligible member, minor parent. The MFBU is under the senior mother s name and case serial #. MFBU # 2 - Minor parent as ineligible member, minor parent s child. The MFBU is under the minor mother s name and case serial #. 1 MN MFBU: Senior parent If the senior parent s income/property makes the MINOR parent ineligible for Section, then: Only the minor parent s child is eligible, and The minor parent is an ineligible member of the child s Section MFBU. The Senior Parent and/or Minor Parent may be eligible for the MN and/or FPL programs. If there are other eligible siblings in the home, the issue of care and control is not considered. The Senior Parent(s) is potentially eligible for Section, however, Sneede rules apply if the siblings or Minor Parent have income. If the deprived Minor Mother, her child and the unmarried father live in the home with the Senior Parent(s) and siblings, the MFBUs are established as follows: First MFBU Minor Mother, Senior Parent(s) and siblings. Second MFBU Minor mother s child and unmarried father. Minor Parent is an ineligible member (IE) of this MFBU. Note: If the Minor Mother s child is an unborn, the unborn is in both MFBUs and may be counted in the family size prior to the last trimester. Revised: 10/14/14 Update #

33 Medi-Cal Handbook page If the Minor Parent, his/her spouse and their child live in the home of the Senior Parent(s), use the same MFBU rules that are used for married minors in the MN program. There are three MFBUs depending on who wishes to be aided and whether there are siblings in the home. [Refer to MFBU Determinations when an Unmarried Minor Parent Lives in the Home of Senior Parent(s), page 60-22], and [Refer to MFBU Determination When a Married Minor Child (Parent or not) Lives in the Home of Senior Parent(s), page 60-25] for additional information. Examples of Minor Parent Cases Situation # 1 Medi-Cal Application: A 17-year old minor mom is living with her unemployed Senior Parents and 2 siblings. The EW determines that U/P deprivation exists. The minor parent s child has Absent Parent deprivation. Senior Dad has $2000 per month net nonexempt unearned income. The minor mother has no income. Section - Senior Parent/Minor Parent MFBU #1 Income MFBU #2 Income Senior Mom $0 <Minor Mom> (IE) $0 Senior Dad $2000 Minor Mom s Infant $0 Minor Mom $0 Sibling #1 $0 Sibling #2 $0 Total $2,000 Total $0 100% FPL Income Limit (5) $1, % FPL Income Limit (2) $1,100 Only the infant is eligible for Section. The other family members should be evaluated for the MN and/or FPL programs. Situation # 2 Update # Revised: 10/14/14

34 page Medi-Cal Handbook Medi-Cal Application: A 16-year old minor mother and her 17-year old unemployed boyfriend, who is the father of her child, lives with her senior parents. The senior parents are employed. The minor mother has care and control of herself and her child. We will assume that there is no in-kind income to the boyfriend. Section - Senior Parent/Minor Parent MFBU #1 Income MFBU #2 Income <Senior Mom> (IE) $3000 <Minor Mom> (IE) $0 <Senior Dad> (IE) $50 Minor Dad $0 <Minor Mom> $0 Infant $0 Total $3050 Total $0 100% FPL Income Limit (3) $1, % FPL Income Limit (3) $1,384 All persons in MFBU #1 are ineligible because there is no deprivation. The Minor Mom should be evaluated for the MI, FPL program. Minor Consent may also be considered. The minor Dad and the infant are eligible for Section PA/Other PA Caretaker relatives of children receiving Public Assistance (e.g., Foster Care, SSI) has AFDC-MN linkage and may qualify for Medi-Cal only benefits for themselves, if otherwise eligible. CalWORKs and Section recipients are treated as Public Assistance (PA) or Other PA. If some family members are receiving CalWORKs, other family members applying for Medi-Cal need NOT be evaluated for Section. The other family members are PRESUMED ELIGIBLE AS LONG AS THEY MEET AGE AND DEPRIVATION CRITERIA. An MC 210 is NOT required. A MEDS printout showing the Aid Codes of the cash beneficiaries is acceptable verification of receipt of CalWORKs. Note: A Statement of Citizenship/Alien Status, (MC 13) is required for any noncitizen Section Medi-Cal family member if the EW does not have enough information from the CalWORKs case record regarding citizenship/alien status to determine eligibility for full-scope vs. restricted benefits. Revised: 10/14/14 Update #

35 Medi-Cal Handbook page Example: A father and two children ages six and eight are receiving Medi-Cal through CalWORKs. The mother is not eligible for CalWORKs because she does not meet the time limit requirement. The oldest child is not eligible for CalWORKs because he is 20 years old. CalWORKs Section MN/MI Father Mother 20 year old Child #1 Child #2 The mother is presumed eligible for Section without an income/resource determination because her spouse and children are receiving CalWORKs. The 20 year old is in his own MFBU because those on CalWORKs are treated as PA. If the mother is a noncitizen, an MC 13 is required. The CalWORKs QR7 meets the status report requirement for mom s case. The 20 year old is exempt from the Midyear Status Report (MC 176S) requirement Section Income Limits and Tests To be financially eligible for the Section program: 1. An APPLICANT family must pass the Section 100% FPL test. The total net non-exempt family income must be AT or BELOW 100% of the Federal Poverty Level (FPL) for the number of persons in the family. 2. A RECIPIENT family must pass either the Section MBSAC test or the Section 100% FPL test. The total net non-exempt family income must be BELOW MBSAC for the number of persons in the family, OR The total net non-exempt family income must be AT or BELOW 100% FPL for the number of persons in the family. Note: When determining income eligibility for RECIPIENTS, the EW must use the most advantageous of the two tests. Update # Revised: 10/14/14

36 page Medi-Cal Handbook [Refer to Section 100% FPL Test, page ] [Refer to Section MBSAC Test, page ] [Refer to Chart Book, Current Section Income Limits, page 5-46.] 34.12Types of Income CalWORKs Diversion Payments CalWORKs diversion payments are exempt for purposes of determining Section income eligibility CalWORKs Special Needs Payment Any payment from the CalWORKs program to meet the special needs of a person or family are exempt for purposes of determining Section income eligibility Disability-Based Income (DI) Under the Section 100% FPL and MBSAC TEST, the following two types of unearned income are considered Disability-Based income and receive a SPECIAL DEDUCTION (for both applicants and recipients) of $240: Disability benefits from the Social Security Administration (RSDI), and Private disability benefits. (Disability benefits paid to a covered disabled individual by his/her insurer under a disability insurance plan which the individual purchased through premiums.) [Refer to Section Income Deductions, page 34-40] Note: Social Security Survivors and Retirement benefits are NOT considered Disability-Based income. Revised: 10/14/14 Update #

37 Medi-Cal Handbook page Note: If any part of the Railroad Retirement (RR) pension or the Veteran s (VA) benefits is based on disability, then full amount is treated as disability-based income and must be allowed the $240 income deduction for both Section applicants and recipients Earned Income Temporary Workman s Compensation (TWC), and State Disability Insurance Payments (SDI) are considered earned, NOT DISABILITY-BASED, income for determining Section eligibility Income In-Kind Values for Section The Section income in-kind values are the federally approved 1996 AFDC state plan values for In-Kind income. [Refer to Chart Book, Section Income-In-Kind, page 5-47.] WIA (Workforce Investment Act) WIA earnings of a person 18 years or younger are exempt for up to six months per calendar year. Any WIA payments, other than earnings, to a person 19 years of age (i.e.; a 19 year old parent) or older are exempt to the extent that the payment reimbursements do not exceed that person s actual training expenses Lump Sum Income Lump Sum Income is counted as income in the month received and there is no period of ineligibility associated with its receipt. Note: If any of the lump sum income remains in the month following it s receipt, it is considered property and spenddown applies. Update # Revised: 10/14/14

38 page Medi-Cal Handbook 34.13Treatment of Income Actual Income [50517] Income is considered available in the month received unless it is apportioned over a period of time Treatment of Apportioned Income [50517] Apportioned income is defined and treated the same as in AFDC Medically Needy Only cases, as follows: Earned Income Received in More Than Eight but Less Than Twelve Months Income that is earned and received in more than 8 but less than 12 months under an annual contract of employment shall be prorated over the period of the contract beginning with the first month of the contract. Example: Teacher's contracts are annual and income must be apportioned over the 12 months of the contract, even though teachers may work only 9 or 10 months. Income Received Other Than Monthly or Semi-Monthly If income is received weekly, bi-weekly, quarterly or bi-monthly, AND Client requests Medi-Cal for three or more months, and Client will receive the income for a full month, and Income is not fluctuating, THEN Convert to monthly income as follows: Revised: 10/14/14 Update #

39 Medi-Cal Handbook page Multiply weekly income by Multiply income received every two weeks by Divide quarterly income by 3. Divide income received every two months by 2. Example #1:Client receives DIB of $265 every two weeks. Compute as follows to arrive at a monthly amount: $265 x = $574.26/mo. Example #2:Client receives earnings of $350 gross every week. Gross amount is always the same. Compute as follows to arrive at a monthly amount: $350 x 4.33 = $ /mo. Example #3: Client s income fluctuates. If it is to the client s benefit, obtain 2 or 3 full months of income, divide by the number of months to obtain a monthly average and enter as monthly income. If the client wants Medi-Cal for one or two months only, use actual income Income Allocation Rules - Section and MN/MI Medi-Cal When only some members of a family are found eligible for Section, the remaining members are evaluated for other types of Medi-Cal. When completing the MN/MI evaluation, consider the following rules when allocating income between the Section MFBU and the MN/MI MFBU. Section Eligibles The income of a Section eligible is not counted when determining Medi-Cal eligibility for other family members under the MN/MI program. Child A child is never considered a responsible relative. Therefore, when a child is found ineligible for Section, even if the child s nonexempt income was used to determine Section eligibility for other members of his/her family, his/her income is used AGAIN in the MN/MI eligibility determination. Update # Revised: 10/14/14

40 page Medi-Cal Handbook Any Sneede allocations given to a child from a parent in the Section determination ARE NOT counted again when determining eligibility for the MN/MI program. Adult An adult can be a responsible relative. Therefore, when an adult is found ineligible for Section, and his/her income was used to determine Section eligibility for his/her: Spouse, then none of the adult s income is counted in the MN/MI determination. Child, then the adult s income (or portion of that income) used is not counted again in the MN/MI determination. [Refer to Section & MN/MI Medi-Cal, page for additional information.] 34.14Section Income Deductions The Section 100% FPL TEST and the Section MBSAC TEST use different income deductions. Additionally, certain income deductions are allowable only from certain types of income. Refer to the list below for the available Section income deductions, the type of income test (100% FPL TEST v. MBSAC TEST) and the type of income (e.g. earned, unearned) to which they are applicable $240/$120 Deduction A fixed amount of $240 may be deducted from Disability-Based income and/or Earned income. This deduction is used both in the Section 100% FPL and MBSAC TEST. Note: For RECIPIENT TEST only, if there are more than two wage earners, the first two highest combined earnings receive any unused portion of the $240. Each additional person s earnings will receive a deduction of $120. Revised: 10/14/14 Update #

41 Medi-Cal Handbook page For APPLICANT TEST, any unused or remaining portion of the $240 is not subtracted from the applicants earnings. If the $240 (and $120, if applicable) deduction is more than the amount of earned or Disability-Based income to which it applies, the total net earned/disability-based income is 0. This deduction does not apply to any other unearned income and is used both in the Section 100% FPL TEST and MBSAC TEST. Example: Mom earns $100 per month and is allowed the $240 deduction up to her earning amount of $100 ($100 less $240 = 0 income left). Dad receives $400 in Unemployment Benefits, which is NOT allowed the remaining $140 deduction because Unemployment is not earned or Disability-Based income. Only $100 of the $240 deduction can be used by the MFBU. [Refer to How to Apply the /2 Deduction in the MBSAC TEST, page for additional information.] Percent Deduction 50 percent may be deducted from any remaining EARNED income, once the $240 (and $120, if applicable) has been used. This deduction is used only in the Section MBSAC TEST. [Refer to How to Apply the /2 Deduction in the MBSAC TEST, page for additional information.] $90 Work Related Expense (WRE) The $90 Work Related Expense (WRE) may be deducted from the EARNED income of each person in the MFBU. This deduction is used only in the Section 100% FPL TEST. [Refer to Deduction for Work-Related Expenses (WRE) [ ], page 56-9 for additional information.] Update # Revised: 10/14/14

42 page Allocation to an Excluded Child Medi-Cal Handbook The MN/MI program allows an allocation to an excluded child. This allocation is also applicable to both the Section 100% FPL and MBSAC tests. [Refer to Allocation to Excluded Children [50558], page for additional information.] Court Ordered Child/Spousal Support The Court Ordered Child/Spousal Support deduction applies to all types of income: Earned, Unearned and Disability-Based income. This deduction is used in both the Section 100% FPL and MBSAC tests. In the Section MBSAC test, the deduction for court-ordered child/spousal support is subtracted from all remaining net nonexempt income (earned, disability-based, and unearned) after the $240 and one/half and dependent care deductions have been applied. Any income remaining is the net nonexempt income to the MFBU. [Refer to Spousal or Child Support, page for additional information.] Dependent Care The Dependent Care deduction is applied to EARNED income only. This deduction is used in both the Section 100% FPL and MBSAC tests. In the Section MBSAC test, the allowable dependent care deduction is subtracted from the MFBU s earned income that remains after the $240 and 1/2 deduction has been applied. [Refer to Dependent Care, page 56-9 for additional information.] Educational Expenses The Educational Expenses deduction applies to UNEARNED income. This deduction is used in both the Section 100% FPL and MBSAC tests. [Refer to Educational Expenses [50547], page 57-6 for additional information.] Revised: 10/14/14 Update #

43 Medi-Cal Handbook page Health Insurance Premium Deduction Section does NOT allow a deduction for health insurance premiums Income Counted by Public Assistance Programs A deduction is allowed from any income of a Section applicant or recipient that has already been counted against family members by a Public Assistance (PA) program (such as CalWORKs or SSI) and resulted in the reduction of the cash grant for that PA program. When some of a family member s income is used to determine Public Assistance, the amount used is an allowable income deduction in the MFBU and is subtracted from countable income. Without a deduction for this income that has already been counted by the cash assistance program, a portion of the Section applicant/recipient s income would be counted both by the PA program and the Section program. This deduction is used in both the Section 100% FPL and MBSAC tests. Reminder: If some family members are receiving CalWORKs, the other family members are PRESUMED eligible for Section as long as they meet the AGE and DEPRIVATION requirements (e.g. undocumented mom of a CalWORKs eligible child). [Refer to PA/Other PA, page for additional information.] Property Expenses - Income from Property Property expenses allowed in the MN/MI program are also allowable in the Section program in both the 100% FPL TEST and the MBSAC TEST. [Refer to Net Income From Property [50515, Procedures 10G], page for additional information.] Self-Employment Income Deduction/Allowable Expenses Section allows a self-employed individual the choice of two methods to determine allowable business expenses from self-employed income: Update # Revised: 10/14/14

44 page Medi-Cal Handbook A deduction of each self-employed person s actual, verified, allowable business expenses from self employment income, or A deduction of 40% of the MFBU s total self-employment income in lieu of actual business expenses. Note: If the client chooses the 40% deduction, no verification is necessary. If the customer chooses actual expenses, these expenses must be verified. The method chosen applies to the entire MFBU. Both methods cannot be simultaneously applied to the same MFBU, even though the MFBU has two or more persons with self-employment income. Once a method is chosen, it cannot be changed until the next redetermination or after six months, whichever occurs first. Note: Apply other earned income deductions, as applicable, including, but not limited to the $90 SWE, $240 and 1/2, and dependent care deductions. Revised: 10/14/14 Update #

45 Medi-Cal Handbook page How to Apply the /2 Deduction in the MBSAC TEST MFBUs With No More than Two Persons with Earnings Step Action 1. Total the MFBU s non-exempt Disability-Based income and subtract the $240 deduction. 2. Total the MFBU s earned income and subtract any unused portion of the $240 deduction, if any. This only applies to recipient test. 3. Decrease the remaining earned income by 50 percent. MFBUs with Three or More Persons with Earnings Step Action 1. Total the MFBU s non-exempt Disability-Based income and subtract the $240 deduction. 2. Total the non-exempt earned income of the two persons with the highest earned income and subtract any unused portion of the $240 deduction. 3. Subtract $120 from the non-exempt earned income of the person with the third highest earned income, then subtract $120 from the person with the fourth highest income, etc. NOTE: The $120 deduction does not apply to the two persons in the MFBU with the highest earned income. The $120 does not apply to disability income. 4. Total the remaining earned income of all persons in the MFBU and decrease it by 50 percent. Update # Revised: 10/14/14

46 page Medi-Cal Handbook 34.16Determining Income Eligibility Section 100% FPL Test The Section 100% FPL test is used to determine income eligibility for: ALL Section APPLICANTS [Refer to Applicant, page 34-3], and Some Section RECIPIENTS [Refer to Recipient, page 34-4]. Note: EWs must use the most advantageous test to determine income eligibility for RECIPIENTS; the 100% FPL Test or the MBSAC Test. The Section - 100% FPL TEST (SC 1931-B, side 1) is used to determine Section income eligibility using the 100% FPL Test. The following table gives line by line instructions for using this form for a manual determination. Line Action 1. Enter the gross non-exempt UNEARNED income of each member of the MFBU. (List any exempt unearned income in the Exempt Income area at the bottom of the form.) 2. Enter the total non-exempt UNEARNED income of all members of the MFBU. 3. Subtract allowable educational expenses. 4. Subtract the $50 Family Support Disregard, if applicable. 5. Enter the total net non-exempt UNEARNED income of the MFBU. (Line 2 minus Line 3 and Line 4) 6. Enter the nonexempt Disability-based income of each member of the MFBU. 7. Enter the total nonexempt Disability-based income of the MFBU. 8. Subtract the $240 deduction. 9. Enter the net non-exempt Disability-based income of MFBU. If deduction exceeds disability-based income, enter $ Enter the non-exempt EARNED income of each member of the MFBU. Subtract applicable business expenses from self-employment, property expenses from property income, and JTPA payments to a child. (List any exempt earned income in the Exempt Income area at the bottom of the form.) Revised: 10/14/14 Update #

47 Medi-Cal Handbook page Line Action 11. Subtract the $90 Work Related Expenses (WRE) deduction from each MFBU member s EARNED income. NOTE: This deduction applies to the 100% FPL Test only. 12. Enter the net non-exempt EARNED income of each member of the MFBU. 13. Enter the total net non-exempt EARNED income of all members of the MFBU. 14. Subtract any qualifying dependent care expenses. 15. Enter the total net non-exempt EARNED income of all members of the MFBU. (Line 13 minus Line 14) 16. Enter the Total Net Non-exempt UNEARNED, DISABILITY-BASED and EARNED income of all members of the MFBU. (Line 5 plus Line 9 plus Line 15) 17. Subtract any qualifying Child/Spousal Support Payments. 18. Subtract any allocation to an excluded children. 19. Subtract any allocation to a PA family member. 20. Enter the total net non-exempt income of the MFBU. (Line 16 minus Lines 17, 18, and 19) 21. Enter the Section 100% FPL income limit for the appropriate family size. If the family s total net non-exempt income (Line 20) is AT or BELOW the 100% FPL income limit (Line 21), the MFBU is income eligible for Section. If the family is found to be ineligible for Section and there is a Sneede class member in the MFBU, (one or more children receive income, or the parents are unmarred) eligibility for Section must be redetermined by applying the Sneede/Gamma rules. [Refer to Section - Sneede, page ] If there are any Sneede mini budget units (MBUs) that are not eligible for Section, eligibility for Medi-Cal must be evaluated under the Medically Needy (MN), Medically Indigent (MI), and if appropriate, the Special FPL Programs Section MBSAC Test The Section MBSAC test is used to determine income eligibility for: Section RECIPIENTS only. [Refer to Recipient, page 34-4.] Note: EWs must use the most advantageous test to determine income eligibility for RECIPIENTS; the 100% FPL Test or the MBSAC Test. Update # Revised: 10/14/14

48 page Medi-Cal Handbook The Section - MBSAC TEST (SC 1931-B, side 2) is used to determine Section income eligibility using the MBSAC Test. The following table gives line by line instructions for using this form to complete a manual determination. Line Action 1. Separate unearned income into DISABILITY-BASED INCOME and OTHER UNEARNED income. Enter only the gross non-exempt UNEARNED income of each member of the MFBU. (List any exempt unearned income in the Exempt Income area at the bottom of the form.) 2. Enter the total non-exempt UNEARNED income of all members of the MFBU. 3. Subtract allowable educational expenses. 4. Subtract the $50 Family Support Disregard, if applicable. 5. Enter the total net non-exempt UNEARNED income of the MFBU. (Line 2 minus Lines 3 and 4) 6. Enter the DISABILITY-BASED income (Social Security or Private Disability Insurance payments) of each member of the MFBU. 7. Enter the total non-exempt DISABILITY-BASED income of all members of the MFBU. 8. Subtract the $240 Deduction. NOTE: This deduction applies only to the MBSAC Test. 9. Enter the total net non-exempt DISABILITY-BASED income of the MFBU. (Line 7 minus Line 8) 10. If 2 or less persons in the MFBU are working: Enter the non-exempt EARNED income of each member of the MFBU. If 3 or more persons in the MFBU are working: Skip lines 10 thru 12 and proceed to the worksheet for 3+ Earners. Subtract applicable business expenses from self-employment, property expenses from property income, and JTPA payments to a child. (List any exempt EARNED income in the Exempt Income area at the bottom of the form.) NOTE: Temporary Workman s Compensation (TWC) and State Disability Insurance (SDI) are treated as EARNED income for Section. 11. Enter the TOTAL non-exempt EARNED income of the MFBU. 12. Subtract any unused portion of the $240 Deduction. (Line 8 minus Line 7, if the result is 0 or less, enter 0.) 13. Enter the remaining net non-exempt EARNED income. If deduction exceeds the EARNED income, enter 0. (Or, enter the amount from Line 12 of the 3+ Earners Continuation Budget Worksheet.) Revised: 10/14/14 Update #

49 Medi-Cal Handbook page Line Action 14. REDUCE the remaining net non-exempt EARNED income by 50 percent. (Line 13 divided by 2) 15. Subtract any qualifying dependent care expenses. 16. Enter the TOTAL net non-exempt EARNED income of the MFBU. (Line 14 minus Line 15) 17. Enter the TOTAL net non-exempt UNEARNED, DISABILITY-BASED, and EARNED income of the MFBU. (Line 5 + Line 9 + Line 16) 18. Subtract any qualifying Child/Spousal Support Payments. 19. Subtract any allocation to an excluded children. 20. Subtract any allocation to a PA family member. 21. Enter the total net non-exempt income of the MFBU. (Round down to the nearest dollar.) (Line 17 minus Lines 18, 19, and 20) 22. Enter the Section MBSAC income limit for the appropriate family size. If the family s total net non-exempt income (Line 21) is BELOW the MBSAC income limit (Line 22), the MFBU is income eligible for Section. If the recipient does not pass the Section MBSAC Test, the EW must review eligibility using the Section 100% FPL Test before discontinuing Section. [Refer to Section 100% FPL Test, page ] If the recipient family is found to be ineligible for Section and there is a Sneede class member in the MFBU, (one or more children receive income, or the parents are unmarried) eligibility for Section must be redetermined by applying the Sneede/Gamma rules. [Refer to Section - Sneede, page ] If there are any Sneede mini budget units of the MFBU that are not eligible for Section, eligibility for Medi-Cal must be evaluated under the MN, MI, and if appropriate, the Special FPL Programs. Update # Revised: 10/14/14

50 page Medi-Cal Handbook MFBU and Linkage Examples Note: In the examples listed below, the <> symbol indicates that the person is an Ineligible (IE) member of the MFBU Some Family Members Receive CalWORKs A father and two children (age six and eight) are receiving Medi-Cal through CalWORKs. Mother is not eligible for CalWORKs because she does not meet the other CalWORKs requirements (e.g., work requirement, time limits, etc.). Oldest child is not eligible for CalWORKs because he is age 20. CalWORKs Section MN/MI MFBU Father Child # 1 (age 6) Child # 2 (age 8) Mother <20 year old> (IE) 20-Year-Old There is no income or property determination required for the mother because she is presumed eligible for Section because the other family members are receiving CalWORKs. The 20-year-old is in his own MN/MI budget unit. He is not eligible for Section because he is over the age limit. No income or property from other family members are used to determine his MN/MI eligibility CalWORKs Discontinued Because of Earnings A father and two children, ages six and eight were receiving CalWORKs. The mother was not eligible due to work requirement reasons and was receiving Section Medi-Cal Only. The 20 year old was not eligible for CalWORks due to age and was receiving MN/MI. The family is now terminated from CalWORKs because of increased earnings. Section eligibility is evaluated before TMC. When determining Section eligibility, the EW must: Include all family members in the Section MFBU, whether they are eligible or not. Revised: 10/14/14 Update #

51 Medi-Cal Handbook page Consider Mom potentially eligible for Section because there are no work requirements for this program. Evaluate the 20 year old under regular Medi-Cal. MFBU #1 Section Father MFBU #2 MN/MI 20 year old Child #1 ($) Child #2 Mother <20 year old>(ie) If the family is eligible for Section, they continue to receive zero SOC Medi-Cal. If they are later discontinued from Section due to increased earnings, all but the 20 year old would be eligible for TMC. 1. Assume the family is NOT eligible for Section. The family must be evaluated under Section Sneede rules because child #1 has income. STEP ONE Section STEP TWO Section Sneede Father MBU No. 1 MBU No. 2 Child #2 Father Child # 1 ($) Mother Mother Child #1 ($) Child # 2 <20 year old> (IE) <20 year old> (IE) 2. Assume all family members, except Child #1, are determined eligible for Section after the Sneede determination. Child #1 must be evaluated with the 20 year old under the MN program. MN/MI MFBU 20 year old Child #1 ($) Update # Revised: 10/14/14

52 page Medi-Cal Handbook 3. Assume the 20 year old and Child #1 do not qualify for no SOC Medi-Cal under the MN program. Apply regular Sneede rules because Child #1 has income. MN/MI Sneede MBU No. 1 MBU No year old Child # 1 ($) 4. Assume the 20 year old qualifies for no SOC Medi-Cal since he/she has no income and Child #1 does NOT qualify for no SOC when using regular Sneede rules. Child #1 must be evaluated for any applicable FPL program. When determining FPL eligibility, use the original Section MFBU (5) to determine the family size for the FPL income limit. Include Child #1 s own income. Include Mom and Dad s income since they are both financially responsible for Child # Husband, Wife, Two Mutual Children, Husband s Separate Child, Wife s Separate Child EXAMPLE 1: A married couple with separate children and 2 mutual children applies for Medi-Cal. The wife is the PWE and works over 100 hours, and the parent s net non-exempt earnings are over 100% of FPL. The mutual children are ineligible for Section as there is no deprivation. The husband, wife and separate children all have A/P linkage and are potentially eligible for Section. Section MFBU MN/MI MFBU Husband Mutual Child #1 Wife Mutual Child #2 <Mutual Child #1> (IE) <Mutual Child #2> (IE) Wife s Separate Child Husband s Separate Child Revised: 10/14/14 Update #

53 Medi-Cal Handbook page This family did not receive CalWORKs or Section in one of the past four months so the Section 100% FPL test applies. If the husband and his separate child choose not to be aided, his separate property, plus 1/2 of the community property are exempt under the Section program; his income, however, is counted. This property exemption applies even though his wife is requesting benefits. If the husband s separate child wants benefits, then the husband is considered a parent and the stepparent exemption does not apply. EXAMPLE 2: A married couple with separate children and 2 mutual children applies for Medi-Cal. The wife is the PWE and works over 100 hours; however, the parent s net non-exempt income is below 100% of FPL. U-Parent deprivation is established and all family members are linked to Section. Section MFBU Husband Wife Mutual Child #1 Mutual Child #2 Wife s Separate Child Husband s Separate Child This family did not receive CalWORKs or Section in one of the past four months so the Section 100% Income Test applies. Since the family contains stepparents, Sneede rules apply if the family does not pass the Section 100% FPL Test. If the husband and his separate child choose not to be aided, his separate property, plus 1/2 of the community property are exempt under the Section program; his income, however, is counted. This property exemption applies even though his wife is requesting benefits. If the husband s separate child wants benefits, then the husband is considered a parent and the stepparent exemption does not apply. Update # Revised: 10/14/14

54 page Medi-Cal Handbook Family Members Living in the Home Who are Not PA or Other PA Example 1: Grandmother requests Medi-Cal for herself and her grandchildren (siblings or half siblings). The grandfather and their children (none of whom are the grandchildren s parents) also live in the home. The grandfather has no linkage and does not want Medi-Cal nor do their own children. Household Composition Caretaker grandmother, grandchildren, caretaker s spouse and own children 1 MFBU for Either Section or MN MFBU Caretaker grandmother and grandchildren Example 2: Grandmother requests Medi-Cal for herself, her grandchildren (siblings or half siblings), her spouse, and their own children (none of whom are the grandchildren s parents). The grandfather and their children (not deprived) live in the home. The grandfather has no linkage. The grand mother has no basis for linkage except as a non-parent caretaker relative to her grandchildren. The grandmother and her grandchildren are eligible for Section. The mutual children must be evaluated for the Medically Indigent (MI) program and the Percent programs. The grandmother is not included in her children s MI MFBU but is included in the entire family size when determining FPL eligibility for her children. Section MFBU MI MFBU FPL Programs Household Composition: Caretaker grandmother, grandchildren, caretaker s spouse, their own children. Caretaker grandmother, grandchildren Caretaker s spouse and own children <Grandmother (Parent)> <Grandfather (Parent)> Own children Revised: 10/14/14 Update #

55 Medi-Cal Handbook page If the caretaker grandmother and grandchildren are not eligible for Section after applying Sneede rules, or the grandchildren are above the age limit for Section, all household members must be evaluated for the MN/MI and FPL programs, if applicable. Household Composition Caretaker grandmother, grandchildren, caretaker s spouse, their own children 2 MN/MI MFBU MFBU # 1 - Caretaker grandmother, grandchildren MFBU # 1 - <Caretaker grandmother (Parent)> and <caretaker s spouse (Parent)> as ineligible members, their own eligible MI children. Example 3: Aunt requests Medi-Cal for herself, her nieces and nephews (siblings or half siblings), and her spouse is aged. They have no children of their own in the home. The aunt has no basis for linkage except as a non-parent caretaker relative to her nieces and nephews. IF... The caretaker aunt and the related children are eligible for Section, Section MFBU Caretaker aunt, related children The related children are eligible for Section but the caretaker aunt is not, Section MFBU Related children The caretaker passed Section but the related children do not, Section MFBU Caretaker aunt Note: The related children must be eligible for a zero share of cost (SOC) Medi-Cal program for the caretaker to be linked to Section. The related children have a SOC, THEN... The aunt is not an ineligible member of her aged spouse s MFBU. MN MFBU Caretaker aunt s aged spouse She must be evaluated for the MN program. The aunt is linked to the deprived related children. The aunt is in the MFBU with her aged spouse. MN MFBU Caretaker aunt s aged spouse, caretaker aunt The children must be evaluated for the MN program. The related children are not in the MFBU with the caretaker aunt s aged spouse. 2 MN MFBUs MFBU #1 - Related children MFBU #2 - Caretaker aunt s Aged Spouse The related children must be evaluated for the FPL programs Update # Revised: 10/14/14

56 page Medi-Cal Handbook IF... THEN... Net Nonexempt Income Counted and Included in the FPL Size Caretaker aunt, related Children The related children are not eligible for the FPL program and they have income, Each related child would be in his/her own MBU per Sneede rules. Use only each child s income and compare it to the FPL for the total family size of the original MFBU (caretaker and all related children). Section Sneede MBUs MBU #1 - Child 1 MBU #2 - Child 2 Neither the caretaker nor the related children are eligible for Section, They must be evaluated for the MN program. 2 MN MFBUs MFBU #1 - Caretaker, related children MFBU #2 - Caretaker as ineligible member, caretaker s aged spouse Example 4: Grandmother requests Medi-Cal for herself, her grandchild, and her sister s children. She has no spouse or children of her own. The grandmother may choose to be in either case. Children who are not siblings or half-siblings must be in their own MFBU and in separate cases. This example is the same for the Section and MN programs. Two Section MFBUs Option 1 OR Option 2 MFBU #1 - Grandchild MFBU #2- Niece, nephew, grandmother. Note: Both cases must be flagged as companion cases. MFBU #1 - Grandchild, grandmother MFBU #2- Niece, nephew. Note: Both cases must be flagged as companion cases. Revised: 10/14/14 Update #

57 Medi-Cal Handbook page Example 5: Grandmother requests Medi-Cal for herself and her grandchild. She is 65 years old and chooses not to be aided as an aged person. She has no income. Her spouse does not want Medi-Cal. This example is the same for the Section and MN programs. One Section MFBU Grandmother, grandchild If the grandmother wants to be aided as an aged person, she must be in the MN MFBU with her spouse. The related child would be alone in a separate MFBU. Example 6: Father requests Medi-Cal for himself, his children, and his nephew. The father may choose to be linked to either of his nephew or his children. IF... If he chooses to be aided in his nephew s MFBU and is eligible for Section, Option 1 (2 Section MFBUs) MFBU #1 - Caretaker, nephew MFBU #2- Caretaker s children If the MFBU fails the Section income or property test, Sneede rules apply. If the caretaker is eligible for Section, but the nephew or the children are ineligible for Section due to the nephew s or children s income/property, Section MFBU Caretaker Note: The related children or his children must be eligible for a zero share of cost (SOC) Medi-Cal program for the caretaker to be linked to Section. THEN... His income and property is not counted in his children s MFBU. Option 2 (2 Section MFBUs) MFBU #1 - Nephew MFBU #2- Caretaker and caretaker s children The caretaker is not in the MN MFBU with the nephew or his/her children. 2 MN MFBUs MFBU #1 - Caretaker s children (if SOC, Sneede MBUs must be established for each child). MFBU #2 - Nephew Update # Revised: 10/14/14

58 page Medi-Cal Handbook IF... Sneede rules apply and the caretaker fails Section, but the nephew or his/her children with income pass Section, 2 Section MFBU MFBU #1 - Caretaker s children THEN... The caretaker is by himself in his MN MFBU. Any parental allocation that the caretaker made to his/her children is deducted from his/her income. MN MFBU Caretaker MFBU #2 - Nephew Family Members Living in the Home Who are PA or Other PA Example 1: Uncle, his brother s daughters (siblings or half siblings), his wife and their mutual children request Medi-Cal. His wife is incapacitated. Nieces are SSI recipients. The uncle may be linked to either the SSI nieces or to his wife and their mutual children. IF... The caretaker chooses to be linked to his SSI nieces, Option 1 (2 Section MFBUs) MFBU #1 - Caretaker MFBU #2- Spouse, mutual children The caretaker chooses to be linked to his SSI nieces and is not eligible for the Section, but his spouse and mutual children are eligible, Section MFBU Spouse, mutual children The caretaker chooses to be linked to his SSI nieces and is not eligible for Section, and his spouse and their mutual children are not eligible for Section, THEN... His income and property is not counted in his spouse and children s Section MFBU. Option 2 (1 Section MFBUs) MFBU #1 - Caretaker, spouse, mutual children The caretaker is by himself in his MN MFBU. Since his income was used in determining his spouse eligibility for Section 1931[b]), none of his income is counted in his MN MFBU. MN MFBU Caretaker All must be evaluated for the MN program. 2 MN MFBU s MFBU #1 - Caretaker MFBU # 2 - Caretaker as ineligible member, spouse, mutual children Revised: 10/14/14 Update #

59 Medi-Cal Handbook page Example 2: Grandmother requests Medi-Cal for herself, her SSI granddaughter, her 19-year-old grandson, and her own children (not deprived). The grandmother s only linkage is as a non-parent caretaker relative of her SSI granddaughter. The 19-year-old grandson is not eligible for Section due to age. The grandson is not in the MFBU with the grandmother s children because they are not siblings. Section 131(b) MFBU MN MFBU MI MFBU Household Composition: Caretaker grandmother, SSI granddaughter, 19-year-old grandson, caretaker s spouse, their own children. Caretaker grandmother Note: SSI granddaughter provides linkage. 19-year-old Grandson <Grandfather (Parent)> Own children If the grandmother is not eligible for Section, then there are two MN/MI MFBUs. MN MFBU Caretaker grandmother, 19-year-old grandson MI MFBU <Grandmother (Parent)> <Grandfather (Parent)> Own children Update # Revised: 10/14/14

60 page Senior Parent/Minor Parent Situations Example 1: Medi-Cal Handbook Pregnant minor, age 17, and senior mother apply for Medi-Cal. There is no senior father nor other siblings in the home. IF... The senior mother applies for herself and her minor child, THEN... It is assumed that she has care and control. 1 Section MFBU Senior mother, pregnant minor The senior mother does not have care and control of both the minor and the minor s child (assume the baby is born), 2 Section MFBUs MFBU #1 - Senior mother as ineligible member, minor mother MFBU #2 - Minor mother as ineligible member, minor mother s child The minor turns 18 (considered ADULT for Section 1931[b]) and is not enrolled in school, and the senior parent DOES NOT have care and control of the ADULT parent s child, 1 Section MFBU 18 year old mother and her child The senior mother becomes an ineligible member of the Section MFBU. The senior mother can apply for the MN program in an MFBU by herself (similar to what would occur if the minor mother were receiving CalWORKs). MN MFBU Senior mother Note: Senior mother may deduct all her income in the MN MFBU because it was used to make the minor mother eligible for Section. The 18 year old is no longer considered a MINOR parent. She is considered an ADULT parent. The senior mother is no longer included in her ADULT daughter s Section MFBU. The senior mother may continue to be aided in the MN program using her 18-year-old daughter (if deprived) as linkage if she is otherwise eligible until the daughter reaches age 21. The adult daughter is an ineligible member in the senior mother s MN MFBU. MN MFBU Senior mother <18-year-old adult daughter> Note: Count all of the senior mother s income since none of her income was used in her 18-year-old daughter s Section MFBU. Revised: 10/14/14 Update #

61 Medi-Cal Handbook page IF... The minor turns 18 (considered adult for Section 1931[b]) and is not enrolled in school, but the senior parent HAS care and control of the ADULT parent s child, THEN... All (senior parent, adult parent (18-year-old daughter), adult parent s child) are in one Section MFBU. The MFBU is under the ADULT parent s name and case serial #. Sneede rules would apply if the MFBU has excess income/property. Example 2: A minor parent and minor parent s child are living with senior parent. The minor s child is receiving CalWORKs. However, the minor parent is ineligible for CalWORKs due to the senior parent s income. The minor parent is not automatically deemed eligible for Section without a determination. IF... The senior parent does not have care and control of both the minor and the minor parent s child, 1 CalWORKs AU Minor parent s child THEN... The senior parent is an ineligible member of the minor parent s Section MFBU. 1 Section MFBU Senior parent as ineligible member, and the minor parent. Note: If the minor has income which was used in determining the CalWORKs grant, allow a deduction (equal to the decrease in the CalWORKs grant) from the minor parent s Section budget. If the minor parent is ineligible for Section due to excess income, both the minor and the senior parent must be evaluated for the MN program. The senior parent may be an eligible member in the MN program. Update # Revised: 10/14/14

62 page Example 3: Medi-Cal Handbook A 26-year-old adult parent and her child live with the senior parent who has care and control of adult parent s child. Under Section, a caretaker relative with care and control of a child may be aided even if the adult parent is in the home. IF... The senior parent is ineligible for Section due to excess income (once Sneede rule is applied), THEN... The senior parent is not eligible under the MN program. Under the MN program, a caretaker cannot be aided if the adult parent of a minor child is living in the home. 1 Section MFBU 26-year-old adult parent and her child Married Pregnant Woman with No Other Children A married pregnant adult woman with no other children in her last four months (last trimester) and the unemployed father of the unborn are applying for Medi-Cal. The unborn is deprived. Dad has $500 in net nonexempt income. Section MFBU MN Program Mom Unborn <Dad> Total Limit for 3 $ 0 $ 0 $ $500 $1252 Dad Total Maintenance Need (1) $ $ 0$ $600 Mom is eligible for Section. Dad is only eligible for the MN program. His income is not carried over to the MN program because he is a financially responsible relative to his spouse and his income was used to make his spouse eligible for Section. Once the baby is born, he may be added to Section program with no determination if there is no change in the family income. Revised: 10/14/14 Update #

63 Medi-Cal Handbook page If the above parents are not married, dad would also be an ineligible member of the pregnant mother s Section MFBU until the baby is born. Sneede would apply if his income causes mom to be ineligible for Section. If mom is eligible for Section, dad may not deduct his income in his MN MFBU. Section MFBU MN Program Mom Unborn <UnmarriedDad> Total Limit for 3 $ 0 $ 0 $ $500 $1252 Dad Total Maintenance Need (1) $ $ 500$ $ Essential Person Married couple with no mutual children apply for Medi-Cal. The wife has a separate child. The stepfather requests to be aided as an essential person. He may not opt out because his wife want to be aided; however, he can be an ineligible member of the MFBU if he does not want to be aided. IF... Her separate child is eligible for Section but the mother and the stepfather are ineligible (after Sneede determination), THEN... The mother must be evaluated for the MN program. The stepfather is not eligible for the MN program as an essential person since he has no deprived child. For the MN program, stepparent may only be aided if the stepparent s spouse is incapacitated Income Allocation Examples Income Allocation: Non-Sneede Case Married Couple, 2 Mutual Children, 2 Separate Children A Medi-Cal application is filed on March 10, The Section 100% FPL test is used to determine Section financial eligibility for APPLICANTS. Update # Revised: 10/14/14

64 page Medi-Cal Handbook Mom and Dad are employed full-time; however, the parents net non-exempt EARNINGS are below 100% of FPL. Dad is the PWE and U/P deprivation is established. All family members have AFDC linkage, but the 20 year old separate child is not eligible for Section. He may be eligible for AFDC-MN. Mom s net nonexempt income is $114 and Dad s net nonexempt income is $581. The 20 year old has net unearned income of $17/mo. Mutual Child #1 has net unearned income of $70/mo. Everyone else in the family has no income. The 100% FPL income test is passed. (The total non-exempt income is AT or BELOW the 100% FPL income limit of $1,862 for a family of six.) Mom, Dad, one separate child, and both common children are eligible for Section. An AFDC-MN determination is completed for the 20 year old. Since Mom is eligible for Section, none of her income is used in the AFDC-MN determination. The 20 year old s own income ($17) is use to determine AFDC-MN eligibility. Since his income is less than the maintenance need of $600 for one, the 20 year old is eligible with no SOC. Section MFBU Net Income MN/MI MFBU Net Income Mom $114 Mom s 20 year old $17 Dad $581 Mutual Child #1 (IE) $70 Mutual Child #2 (IE) $0 <Mom s separate 20 year old> (IE) $17 Mom s Separate 10 year old $0 Total $782 Total $17 100% FPL Income Limit (6) $1,862 Maintenance Need (1) $ Income Allocation: Sneede Case Married Couple, 2 Mutual Children, 2 Separate Children A Medi-Cal application is filed on 3/28. The Section 100% FPL test is used to determine Section financial eligibility for APPLICANTS. Mom and Dad are both employed full-time, and their net non-exempt EARNINGS ($2,300) are over 100% of the FPL for 6 ($2,234). U/P deprivation does NOT exist so the two mutual children have no linkage. Mom s separate children have absent Revised: 10/14/14 Update #

65 Medi-Cal Handbook page parent deprivation so Mom has linkage. One separate child is 20 years old and is not potentially eligible for Section. Dad is a stepparent and may be aided as an essential person under the Section program. Mom s net nonexempt earned income is $495 and Dad s net nonexempt earned income is $1739. The 20 year old has net unearned income of $111/mo. Mutual Child #1 has net unearned income of $70/mo. Everyone else in the family has no income. The 100% FPL income test is NOT passed because the TOTAL net non-exempt income ($2300) is ABOVE the 100% FPL income limit of $2,234 for a family of six. Since there is a Sneede class member, Section Sneede applies. Dad receives a $687 parental needs amount from his income. The $893 remaining from his income is divided between Mom and his mutual children ($298 each). Mom receives a $687 parental needs amount from her income. There is nothing remaining from her income. No allocations are made. Children are not responsible relatives so their income is not allocated out. SECTION 1931(B) - SNEEDE DETERMINATION Section MBU #1 Income Section MBU #2 Income Dad (essential person) Mom <Mutual Child #2> (IE) $687 Mom s 10 year old $0 $495 + $298 $298 Total $1,778 Total $0 100% FPL Income Limit (3) $1, % FPL Income Limit (1 - Prorated/1 Parent) $550 Mom and Dad are ineligible for Section. Mutual Child has no linkage. Child is eligible for Section Section MBU #3 Income Section MBU #4 Income <Mom s 20 year old> (IE) $111 <Mutual Child #1> (IE) $70 + $298 Total $111 Total $ % FPL Income Limit (1 - Prorated/1 Parent) $ % FPL Income Limit (1 - Prorated/2 Parents) $462 Child has no linkage for Section Child has no linkage for Section Update # Revised: 10/14/14

66 page Medi-Cal Handbook Only Mom s 10 year old is eligible for Section. Mom, Dad, Mutual Child #1, Mutual Child #2, and Mom s 20 year old are now evaluated for the MN/MI program. Since Dad is not a responsible relative of Mom s 10 year old, all of Dad s income is used in the MN/MI determination. Mom is a responsible relative, but none of her income was allocated to the 10 year old. Therefore, all of her income is used in the MN/MI determination. Note: Dad is now considered an ineligible (IE) person since a stepparent cannot be aided as an essential person in the MN/MI program and Dad has no linkage. MN/MI ELIGIBILITY DETERMINATION MN/MI MFBU Income <Dad> (IE) $1580 Mom $495 Mutual Child #1 $70 Mutual Child #2 $0 Mom s 20 year old $111 Total $2256 Maintenance Need (5) $1259 SOC $ 997 Since the family has a SOC under the MN/MI program and there are Sneede class members, regular Sneede rules apply. Mom keeps her entire $495 because it is less than the $600 Sneede/Gamma parental needs amount. None of her income is allocated. Dad keeps the $600 Sneede/Gamma parental needs amount. The $980 remaining from his income is divided between Mom and his mutual children ($327 each). The children who have income keep their entire income. REGULAR SNEEDE DETERMINATION MBU # 1 Income MBU # 2 Income MBU # 3 Income Mom $495 + $327 Mom s 20 year old $111 Mutual Child #1 $70 +$327 <Dad> (IE) $600 Mutual Child #2 $327 Total $1749 Total $111 Total $397 MNIL $ 934 MNIL $375 MNIL $312 Revised: 10/14/14 Update #

67 Medi-Cal Handbook page REGULAR SNEEDE DETERMINATION MBU # 1 Income MBU # 2 Income MBU # 3 Income Mom and Child SOC = $815 Child has no SOC Child SOC = $85 Mom s 20 year old is eligible for zero SOC Medi-Cal under the MN/MI program. Mom, Dad and the mutual children have a share of cost. The mutual children are now evaluated for the 133% Program. The FPL family size is based on the original Section MFBU of 6. Only the child s own income and the income of any responsible relative is used. FPL DETERMINATION FPL for Mutual Child # 1 Income FPL for Mutual Child # 2 Income Own Income $70 Own income $0 Dad s income $1,580 Dad $1580 Mom s income $495 Mom $495 Total $2,145 Total $2075 FPL for (6) $2,971 FPL for (6) $2971 This child is eligible This child is eligible The overall results of the entire Medi-Cal determination for all programs are: Mom s 10 year old is eligible for Section. Mom s 20 year old is eligible for MN/MI with no SOC. Mom is eligible for MN/MI with a SOC of $815. Both mutual children are eligible for the 133% Program. Dad is not eligible because he has no linkage to any program. Next month, the family has RECIPIENT status and must pass either the: Section 100% FPL test using the $90 SWE earned income deduction, or Section MBSAC test using the $240 and 1/2 income deduction. The family must be reevaluated for Section since the increased deductions may allow more family members to be Section eligible. Update # Revised: 10/14/14

68 page Medi-Cal Handbook 34.19Property Limit The property limit for Section is determined by MFBU size. If the property reserve is at or below the property limit at some time during the month, then there is property eligibility for the entire month. Refer to the chart below to determine the property limit for Section customers: MFBU Size Property Limit 1 Person $3,000 2 Persons $3,000 3 Persons $3,150 4 Persons $3,300 5 Persons $3,450 6 Persons $3,600 7 Persons $3,750 8 Persons $3,900 9 Persons $4, or more Persons $4, Excess Property When a family is determined ineligible for Section 1931 (b) due to excess property, the EW must: Step Action 1. Review the case for Sneede class members and redetermine property according to Section - Sneede rules, if appropriate. [Refer to Sneede Property Methodology, page ] 2. Explain the Medi-Cal spenddown rules. Revised: 10/14/14 Update #

69 Medi-Cal Handbook page Step Action 3. Evaluate the MFBU members for eligibility under other Medi-Cal programs, such as AFDC-MN, Special Programs (including the property waiver provisions), etc. NOTE: A family found to have excess property for Section may qualify for regular Medi-Cal because for some types of property, the applicable property regulations are less restrictive Determining the Property Reserve Property Which Must Be Considered The separate property and share of community property of any person included in the MFBU must be considered when determining Section eligibility. Do NOT include the property of the following persons: 1. Stepparent - The separate and community property share of real and personal property owned by a stepparent who is not an applicant or beneficiary is exempt. [EAS Manual Sections e and p] 2. Excluded Child - The exclusive personal property of a child who does not receive Section is exempt when determining eligibility for the Section MFBU. 3. SSI recipient - The value of all real and personal property held separately by an MFBU member or jointly with an SSI recipient (regardless of community property rules) which is considered in determining the eligibility of the SSI recipient is exempt. [EAS Manual Sections i and t] Section Property Reserve Worksheet (SC 1931-P) When determining and/or redetermining eligibility manually for Section : Complete a Section Property Reserve Worksheet (SC 1931-P), and Scan a copy of the SC 1931-P into IDM. Update # Revised: 10/14/14

70 page Medi-Cal Handbook 34.21Treatment of Property Unavailable Property Real and/or Personal Property which is determined to be unavailable is NOT included in the property reserve. Refer to the following chart to determine unavailability of property: Type of Property All property (real and personal), Is Considered Unavailable When: The owner does NOT have the: Legal right, power, and authority to liquidate the property, and Right to use the proceeds. Personal property owned jointly with someone outside of the MFBU, It is demonstrated that such property is inaccessible to the owner in the MFBU. If the customer can demonstrate that only a portion of the property is accessible, then only the accessible portion will be considered available and included in the property reserve. Personal property of a woman who is temporarily residing in a shelter for battered women and children, The property is owned jointly with a member(s) of the former household from which the woman fled, AND Access to such property requires the consent of both the woman and the member(s) of the former household. Non-exempt real property, The owner begins a bonafide and good faith effort to sell the property. It is then considered unavailable for a period of no more than nine months. [Refer to Exempt and Unavailable Real Property, page ] Informing Requirement When real property is considered unavailable because it is listed for sale, the customer must be informed that the property will only be considered unavailable for a time-limited period of nine months. At the end of the nine month period the net market value of the property will be included in the property reserve. Revised: 10/14/14 Update #

71 Medi-Cal Handbook page Property of Insignificant Value Property of Insignificant Value is: 1. Any item of personal property, other than financial instruments or vehicles, which would be unlikely to produce any significant amount of funds or a significant return if sold or otherwise disposed of. 2. Considered unavailable for Section and is not included in the property reserve. Any significant amount of funds Funds amounting to the one-half or more of the applicable property limit. Significant return Any return, after estimated costs of sale or disposition, and taking into account the ownership interest of the household, which is estimated to be one-half or more of the applicable property limit. Example: Mom, Dad and 3 children apply for Section. Mom owns a cocktail ring which is valued at $1,500. Since the ring is unlikely to produce more than 1/2 of the family s property limit ($3,450 divided by 2 = $1,725) if sold, the ring is considered unavailable as property of insignificant value and is NOT included in the property reserve Exempt Property Treat the following property as exempt property when determining eligibility for Section : Types of Exempt Personal Property 1. Personal items used to furnish and equip a home. For example household furniture, cameras, camcorders, tools and power tools, musical instruments, recreational equipment, cell phones, bicycles, computers, televisions, stereos, hobby items and collections. 2. Personal property that is directly related to the maintenance or use of an exempt vehicle. Update # Revised: 10/14/14

72 page Medi-Cal Handbook Types of Exempt Personal Property 3. Stock in a water company not appurtenant to the land in the amount necessary for agricultural purposes. 4. Real or personal property purchased with funds received under Title 1 or Title II of the Economic Opportunity Act when such funds were excluded from consideration as income or property. This exclusion does not extend to income or profits from such property. 5. A Native American s interest in land held in trust by the United States Government is exempt. 6. Federal, State or Local Earned Income Tax Credit (EITC) payments received by any customer shall be exempt for 12 months, when the customer: Was participating in the Section program at the time of receipt of the EITC, and Participates continuously during that 12 month period of exemption. (Continuous participation includes breaks in participation of one month or less due to administrative reasons, such as delayed recertification or missing or late status reports.) 7. All payments or property exempt under federal law for Medi-Cal, AFDC on July 16, 1996 or the Food Stamp program are also exempt for Section 34.22Motor Vehicles All motor vehicles (automobiles, vans, trucks, boats, mobile homes, motor homes, campers, trailers, snowmobiles, jet skis, motorcycles, and tractors) are treated as follows: Step Action 1. Determine if the vehicle is exempt. 2. Determine the Excess Fair Market Value (FMV) and Equity Value of each non-exempt vehicle 3. Exempt all vehicles that have an equity value of $1500 or less. 4. Determine which value is less: the Excess FMV or the Equity Value. 5. Use the lesser value in the property reserve, except: Deduct $1,500 from the Equity Value of the non-exempt vehicle with the highest Equity Value before including it in the property reserve. Revised: 10/14/14 Update #

73 Medi-Cal Handbook page Exempt Vehicles ALL vehicles with an Equity Value of $1,500 or less are exempt, regardless of usage and are not to be included in the property reserve when determining eligibility for Section Medi-Cal. NOTE: The terms licensed and registered are two different things. A licensed vehicle is one that has been assigned license plates. It does not mean currently registered. Licensed Motor Vehicles Licensed motor vehicles (or unlicensed vehicles owned by a tribal member of an Indian reservation which does not require vehicles of tribal members to be licensed) are exempt if used for any of the following reasons: 1. As the home (only one vehicle per household can be exempt for this purpose). 2. On the job, for self-support or self-employment, or for producing income even if only on a seasonal basis. (This does NOT apply to a vehicle used for daily commuting.) Example: The vehicle of a traveling sales person or a migrant farm worker moving from job to job can be considered exempt. 3. Previously used by a self-employed MFBU member for farming but is no longer used over 50 percent of the time in farming because the MFBU has terminated his/her self-employment. (This exemption is limited to no more than one year from the date self-employment ends.) 4. To transport a physically disabled individual living in the home. (This exemption is limited to one vehicle per disabled individual living in the home.) Verification of disability is only required when the disability is not evident. The disability can be permanent or temporary. Exception: This exemption does not apply to person living in a boarding house or other licensed resident or facility, unless the disabled individual is the applicant/beneficiary or an ineligible member of the MFBU. 5. To get the household s primary fuel or water, etc. Update # Revised: 10/14/14

74 page Unlicensed Motor Vehicle Medi-Cal Handbook Note: An unlicensed vehicle may be exempt as a home Determining the Value of a Non-exempt Vehicle To determine the Excess Fair Market Value (FMV) and Equity Value of a non-exempt vehicle, the EW must first determine the estimated fair market value (FMV) of a vehicle. Any of the following methods can be used: 1. Wholesale value determined by the Kelly Blue Book or similar type of publication. 2. An estimate obtained by the customer from a disinterested, knowledgeable source, such as an auto dealer. Excess Fair Market Value (FMV) The Excess FMV is determined as follows: Step Action 1. Determine the Fair Market Value. 2. If licensed (or unlicensed and owned by a tribal member of an Indian reservation which does not require vehicles of tribal members to be licensed), subtract $4, Remaining amount equals the Excess FMV. Equity Value The Equity Value is determined as follows: Step Action 1. Determine the Fair Market Value. 2. Subtract encumbrances. 3. Remaining amount equals the Equity Value. Revised: 10/14/14 Update #

75 Medi-Cal Handbook page Value to Use in Property Reserve The Excess FMV or Equity Value, whichever is less, of each non-exempt vehicle must be included in the property reserve. Note: If the Equity Value is used for a vehicle, subtract $1,500 from the vehicle with the greatest equity value prior to adding the Equity Value of that vehicle to the property reserve. Reminder: ANY vehicle with an equity value of $1,500 or less is exempt, regardless of usage and is NOT to be included in the property reserve Section Vehicle Determination Worksheet (SC 1931-V) When determining and/or redetermining eligibility manually for Section for an MFBU with a vehicle: Complete a Section Vehicle Determination Worksheet (SC 1931-V), and Scan a copy of the SC 1931-V in into IDM Personal Property Determining the Value of Personal Property Net Market Value (fair market value less encumbrances) is used to determine the value of non-exempt personal property (other than motor vehicles). Fair Market Value The fair market value of non-exempt personal property is determined by the lowest face value or balance in the month, after subtracting any income. Update # Revised: 10/14/14

76 page Net Market Value Medi-Cal Handbook The net market value is the fair market value less: Any encumbrances against the property, Penalties for early withdrawal, and/or Costs of sales (costs which are deducted before the proceeds are distributed to the seller of the property) Treatment of Personal Property Use the following chart to determine the treatment of personal property for Section. Personal property not mentioned in the following chart is treated according to regular Medi-Cal rules. [Refer to Treatment of Personal Property, page ] Type of Personal Property Bonds Treatment The total bond value is the market value of the bond. If interest is being accrued, recorded and is available to the owner without having to liquidate the bond, then the monthly interest is subtracted from the total bond value. Burial funds and burial space items Exempt. [EAS Manual Section ] Revised: 10/14/14 Update #

77 Medi-Cal Handbook page Type of Personal Property Business Property Treatment Personal property which is essential to employment or self-employment of an MFBU member is exempt. [FS Manual Section (e)] Business property includes, but is not limited to: Stock and Inventories Tools of a tradesman Equipment of a farmer Funds in a checking or savings account, whether maintained exclusively for business purposes or commingled with non-exempt funds. The EW must accept the client s statement that property, including financial reserves, is essential to his/her employment or self-employment and is necessary to produce either current or future income. When a client alleges that some or all of the funds contained in a personal account are those of the business of a self-employed MFBU member, then verification must be provided to demonstrate that some or all of the funds in the account are receipts of the business AND that business expenses have been paid out of that account as well. When a client ceases to be self-employed in farming, property which was essential to this self-employment will continue to be exempt for a period of one year from the date of termination. Income Producing Property Personal property (except cash, nonbusiness financial institution accounts and other nonbusiness financial instruments where cash is available upon demand) which produces ANY income is exempt, even if only used on a seasonal basis. [FS Manual (d)] This rule does NOT apply to real property. Independent Living Program Cash savings and interest accumulated pursuant to the Independent Living Program (ILP) retained by a child who is 16 years of age or older and is participating in the ILP is exempt. There is no limit to the amount that can be retained under this subsection. [EAS Manual Section aa] IRAs and Available KEOGHs The fair market value of IRAs, and available KEOGHs shall be the total fund value. Available KEOGHs are those which are established solely between MFBU members. Life Insurance The cash surrender value of life insurance policies is exempt, regardless of face value. [FS Manual, Section (b)] Update # Revised: 10/14/14

78 page Medi-Cal Handbook Type of Personal Property Loans Treatment Loans are considered exempt when there is a written agreement signed and dated by the lender and the customer as parties to the agreement that clearly specifies: The obligation of the customer to repay the loan, and A repayment plan which provides for installments of specified amounts that continue on a regular basis until the loan is fully repaid. [EAS Manual Section ] Lump Sum - SSI/SSP Lump Sum - Nonrecurring Social Insurance Payments Notes, Mortgages, Deeds of Trust, Installment Contracts and Agreements Pension Funds and Plans, and Some KEOGHs Lump Sum retroactive SSI payments are exempt for an unlimited period of time. [EAS Manual Section t(3)] Considered property in the month of receipt and/or exempt as described under Title 22, California Code of Regulations, Section The full value of deeds of trust, promissory notes, mortgages installment contracts or agreements shall be exempt if interest income is being produced. The portion of the payments which represents interest is considered income in the month of receipt. The portion of the payments which represents principal is considered property. Pension funds and plans are exempt. The cash value of KEOGH plans which involve a contractual relationship with individuals who are not in the MFBU are exempt. [FS Manual Section (b)] Restricted Accounts Retroactive Corrective Aid Stock or Mutual Funds Trusts Restricted accounts set up under CalWORKs continue to be considered exempt under Section when at least one household member continues to be eligible for and receives CalWORKs. [W & I Code, Section ] Retroactive corrective aid payments are exempt in the month of receipt and the following calendar month. [EAS Manual Section h] The market value of stock or mutual funds shall be the lowest price per share during the month or total fund value. If interest or dividends are accrued, recorded, and are available to the owner without having to liquidate the stock or mutual fund, then the interest or dividends shall be subtracted from the lowest price per share or total fund value. Trusts are treated in accordance with the CalWORKs rules, except there is no requirement to petition the court. [EAS Manual Section , e, ] Revised: 10/14/14 Update #

79 Medi-Cal Handbook page Real Property Real property shall be determined, defined, counted and valued in accordance the July 16, 1996 AFDC rules Exempt and Unavailable Real Property Principal Residence A home, regardless of its value, occupied by the assistance unit is exempt. [EAS Manual Section ] A home continues to be considered exempt during a temporary absence for reasons such as illness, seasonal employment, visits, extreme climatic conditions, etc. provided the client plans to, and it appears will be able to, return to the home when such circumstances no longer exists. If the principal residence is a multiple dwelling unit, only the unit occupied as a home is exempt. The value of the other unit is included in the property reserve unless it is considered unavailable. The other unit(s) is considered unavailable if the unit(s) cannot be sold separately. It can also be considered unavailable for up to nine months if the owner is making a bonafide and good faith effort to sell the unit(s). The Section home exemption applies only to the separately assessed parcel which includes the home. Any property which is contiguous and adjacent to the home, including structures and buildings that are located on other parcels is not exempt. The contiguous property must be evaluated for availability before it can be included in the property reserve. If it cannot be sold separately, it is considered unavailable. [Refer to Exempt and Unavailable Real Property, page ] The Home During a Marital Separation During a marital separation, the home which was the usual home of the applicant/recipient shall be treated as follows: Update # Revised: 10/14/14

80 page Revised: 10/14/14 Update # Medi-Cal Handbook 1. Exempt during the month of application (or separation) and for the following three consecutive months. 2. The client must be informed when the exemption is granted that it is time-limited and that at the expiration of the three month period, the status of the home will be reconsidered and the net market value may be included in the property reserve. 3. The status of the home must be reconsidered at the end of the three month period to determine if the home is no longer exempt or unavailable. 4. If the court has issued an order that neither spouse may liquidated any of the couple s property, then the home is considered unavailable until the court determines ownership. 5. If the home is no longer exempt or unavailable, then the net market value of the home must be included in the property reserve. [EAS Manual Section ] Real Property Listed For Sale Other real property is considered unavailable for a period of up to nine months when the owner begins a bonafide and good faith effort to sell the property. Informing RequirementWhen non-exempt property is listed for sale, the client must be informed that: The property is considered unavailable for a time-limited period of up to nine months, and At the end of the nine month period, the real property will be reevaluated and the net market value may be included in the property reserve. Bonafide and Good Faith EffortA bonafide and good faith effort is demonstrated when either of the following two conditions exist. 1. The owner lists the property for sale with a licensed real estate broker at the property s approximate fair market value and is willing to negotiate the terms of the sale with potential buyers, OR 2. The owner makes an individual effort to sell the property by doing ALL of the following: Advertises on a weekly basis that the property is for sale in at least one publication of general circulation.

81 Medi-Cal Handbook page Places a sign on the property indicating that the property is for sale. Whenever possible, the sign shall be visible from the street. Offers the property for sale at its approximate fair market value. Is willing to negotiate the terms of the sale with potential buyers and respond to all reasonable inquiries about the property. Nine Month Period of UnavailabilityThe nine month period of unavailability for real property listed for sale stops when: The bonafide and good faith effort to sell the property stops, or Eligibility for Section stops, or The nine month period is used up. When the nine month period of unavailability stops, the full net market value of the property must be included in the property reserve. If eligibility for Section stops before the full nine months is used up, the remaining number of months may continue at a later date if eligibility for Section is reestablished. Example: A family applies for Medi-Cal on 3/2. Their vacation home in Lake Tahoe is currently listed for sale and can be considered unavailable for up to 9 months. The family meets all other income and property limits and Section is approved. The family fails to submit a Midyear Status Report (MSR) which is due in September and the case is discontinued on 9/30. The family reapplies for Medi-Cal in November. The vacation home has not yet sold, but is still listed for sale. The vacation home was previously considered unavailable for 7 months (March through September). The vacation home can be considered unavailable for an additional 2 months Determining the Value of Real Property Net Market Value (fair market value less encumbrances) is used to determine the value of real property, other than exempt and unavailable real property, and is included in the property reserve. Fair Market Value The fair market value of real property is: The most recent assessed value of the property, OR Update # Revised: 10/14/14

82 page Medi-Cal Handbook A valuation of the market value of the property obtained by the owner from a licensed real estate broker. Exception: In exceptional circumstances, such as when the property is located in a remote area and it is impossible or impractical to obtain a valuation, and the owner believes that the assessed value is too high or too low, the county and the owner may agree on the market value based upon other available information. An exception based on remoteness is not likely to occur in Santa Clara County. Net Market Value The net market value (fair market value minus any encumbrances) is included in the property reserve. Encumbrances include, but are not limited to: Mortgage notes Deeds of trust Delinquent tax liens, Court orders relating to judgements and mechanics liens Assessments 34.25Transfers of Property Medi-Cal transfer of property rules apply. [Refer to Transfers of Property on or After 1/1/90 [50408, 50411], page ] 34.26Section - Sneede The Sneede federal lawsuit limits financial responsibility to: Spouse for spouse, and Parent for child. Revised: 10/14/14 Update #

83 Medi-Cal Handbook page These rules did not exist in the AFDC program, however, the requirements of the Sneede lawsuit apply to all Medi-Cal eligibility determinations, including Section. This means that if a family is determined ineligible for Section due to excess property or failure to meet the Section income test, Sneede provisions apply if there is a Sneede class member in the MFBU. [Refer to Definition Sneede Case, page 70-1] Sneede Property Methodology Sneede property methodology and property limits used in regular Medi-Cal are used for Section - Sneede. [Refer to Sneede Property Methodology, page ] [Refer to Chart Book, MBSAC TEST: CURRENT Section Sneede v Kizer Prorated Income and Property Levels Effective 7/1/04-8/31/04 and 12/1/04 and Ongoing, page 5-48.] Sneede Budgeting Methodology Generally, the same Sneede budgeting methodology is used for Section as is used for the regular Medi-Cal program except for the following: SECTION SNEEDE MEDI-CAL Aged, Blind and Disabled deductions are not allowed Section 100% FPL TEST A parental needs allowance of 100% of FPL for one person is allowed before allocating to others. REGULAR SNEEDE MEDI-CAL Aged, Blind, and Disabled deductions are allowed A parental needs allowance (Gamma deduction) of $600 based on Maintenance Need Income Level (MNIL), is allowed before allocating to others. Section MBSAC TEST A parental needs allowance of MBSAC for one minus $1 is allowed before allocating to others. Update # Revised: 10/14/14

84 page Medi-Cal Handbook SECTION SNEEDE MEDI-CAL REGULAR SNEEDE MEDI-CAL NOTE: For regular Sneede and the Section Sneede MBSAC test, the family income must be BELOW the Sneede Income limit for there to be Sneede eligibility. For the Section 1931 Sneede 100% FPL Test, the family income must be AT or BELOW the Sneede Income limit for there to be Sneede Eligibility. There is a chart in the chart book that contains prorated amounts of income and property for use in determining certain MBUs prorated income and property amounts [Refer to Chart Book, MBSAC TEST: CURRENT Section Sneede v Kizer Prorated Income and Property Levels Effective 7/1/04-8/31/04 and 12/1/04 and Ongoing, page 5-48.] [Refer to Chart Book, 100% FPL TEST: CURRENT Section Sneede v Kizer Prorated FPL Income Standard and Property Levels Effective 4/1/14, page 5-49.] 34.27Transitional Medi-Cal for Section (Aid Codes 39 and 59) The Personal Responsibility and Work Opportunity Act (PRWORA) of 1996 provides that individuals who are discontinued from Section due to increased earnings are eligible for the TMC program. Individuals discontinued from Section are eligible for TMC if they were: Eligible for Section in three of the six months preceding the month in which the Section eligibility is lost, and Discontinued from Section due to increased earnings CalWORKs Discontinuance and Section or TMC When an individual is discontinued from CalWORKs due to employment related reasons, the EW must first review the case for ongoing Section eligibility. [Section eligibility criteria are less restrictive than CalWORKs criteria. For example, the dependent care deduction is still allowable for Section.] If Section eligibility exists, there is NO TMC eligibility at this time. Revised: 10/14/14 Update #

85 Medi-Cal Handbook page If Section eligibility does NOT exist, then explore TMC eligibility. TMC begins in the month immediately following the last month of Section eligibility. EWs must deduct any months in which the family received zero share-of-cost under Edwards, zero basic grant, or any other zero share-of-cost Medi-Cal other than Section from the TMC time period. Example: A family is receiving CalWORKs and the PWE starts working over 100 hours. Because the PWE is a Section RECIPIENT, the 100 hour rule does not apply, but the increased earnings makes the family ineligible for CalWORKs cash. The EW does a Section evaluation and the family income is within the Section limits. The family is Section eligible and DOES NOT QUALIFY for TMC. The family may later qualify for TMC if Section is discontinued for earnings related reasons. [Refer to Overview [50244], page 35-1] 34.28Four-Month Continuing Eligibility (Aid Code 54) Section recipients and CalWORKs recipients are entitled to Four Month Continuing Medi-Cal benefits if they are terminated due to: The collection of child or spousal support payments, or The increased collection of child or spousal support payments. [Refer to Four-Month Continuing, page 35-26] Update # Revised: 10/14/14

86 page Medi-Cal Handbook 34.29Comparison Chart - Section & AFDC-MN Topic Section Only AFDC-MN/MI SHARE OF COST Always zero share of cost (SOC). Can be SOC or no SOC. AGE UNEMPLOYMENT DEPRIVATION Children must be under 18 years of age, or 18 years old and a full-time student graduating before his/her 19th birthday. The unborn of a pregnant woman with other deprived children is included in the MFBU size from the onset of pregnancy. The unborn of a pregnant woman with NO other children is considered a child when the mother is in her third trimester. 100-Hour Rule/100% FPL Earned Income Test must be met when establishing U/P deprivation for the first time (applicant) or when deprivation changes from absent to unemployment. If the PWE in a U/P case becomes incapacitated, and then changes back to U/P status, he/she does not have to meet the 100 Hour Rule/100% FPL Earned Income Test again. Children must be under 21 years of age. 100-Hour Rule/100% FPL Earned Income Test used to determine U/P deprivation applies to recipients AND applicants. INCOME-IN-KIND Use values from the AFDC State Plan as of 7/16/96. Use Medi-Cal chart values or actual amount. SELF-EMPLOYMENT Customer has the choice of using: Actual verified business expense, or 40% of total self-employment income. Customer has the choice of using: Actual verified business expense, or IRS allowable business expenses averaged over 12-month period. Revised: 10/14/14 Update #

87 Medi-Cal Handbook page Topic Section Only AFDC-MN/MI STEPPARENT INCOME DISABILITY-BASED INCOME DISABILITY-BASED INCOME DEDUCTIONS Must be included in the MFBU, regardless of if Medi-Cal is requested for him/her. Sneede rules apply. Private Disability benefits, and Disability benefits from Social Security Administration (RSDI) Note: TWC and DIB are treated as earned income 100% FPL TEST - No deductions allowed. MBSAC TEST - $240 deduction (50% deduction NOT allowed) Other applicable deductions. Medi-Cal requested for: Separate children only--do NOT count stepparent income. Parent and/or stepparent--count stepparent income. Not applicable. Note: TWC, DIB, and Temporary Private Disability are treated as earned income Not Applicable. EARNED INCOME DEDUCTIONS APPLICANTS 100% FPL TEST USED: $90 work expense Dependent Care deduction Court-Ordered Child/Spousal Support Other applicable deductions $90 work expense Dependent care deduction Health insurance premium Other applicable deductions RECIPIENTS The EW must use the most advantageous of these two tests: $90 work expense 100% FPL TEST: $90 work expense Dependent Care deduction Court-Ordered Child/Spousal Support Other applicable deductions MBSAC TEST: $240 deduction 50% deduction Dependent care deduction Court-ordered child/spousal support Dependent care deduction Health insurance premium Court-ordered child/spousal support HEALTH INSURANCE DEDUCTION Health Insurance premium deductions NOT allowed. Health Insurance premium deductions allowed. Update # Revised: 10/14/14

88 page Medi-Cal Handbook Topic Section Only AFDC-MN/MI PROPERTY Property Limits MFBU of 1 = $3,000 MFBU of 2 = $3,000 Increases by $150 for each additional family member. Property of Insignificant Value Any property item that, if sold or disposed of, would produce less than 1/2 of the applicable property limit is exempt. MFBU of 1 = $2,000 MFBU of 2 = $3,000 Increases by $150 for each additional family member. Not applicable. Stepparent Property REAL PROPERTY Principal Residence Real Property for Sale Note: Not applicable to vehicles or financial instruments. If stepparent does not receive Medi-Cal, do not count stepparent s separate property or half of community property. Note: This does not change whether or not the parent wishes to receive Medi-Cal. Principal residence is exempt: If the MFBU is living in it, or During a temporary absence if the customer plans to return and it appears that he/she has the ability to return. Each parcel of real property listed for sale is considered unavailable for up to nine months. After the nine months expire, the full net market value is included in the property reserve. If parent receives Medi-Cal, count ALL of stepparent s property. Otherwise, exempt stepparent s property. Principal residence is exempt: If the MFBU is living in it, or If the MFBU has the intent to return. Listed for sale and verified - Considered exempt for an indefinite period of time (Beltran v. Myers). Exempt property may be disposed of without adequate consideration. Revised: 10/14/14 Update #

89 Medi-Cal Handbook page Topic Section Only AFDC-MN/MI Marital Separation and Real Property The home is exempt in the month of application (or separation) and the following 3 months. After the 3 months expire, the customer s share of the home is: Counted in the property reserve, or Considered unavailable if there is a court order to not liquidate property, until court determines ownership. Not applicable. Other Real Property (ORP) Utilization is not applicable. Utilization rules apply. PENSION PLANS Exempt total value Exempt if steps are taken to obtain periodic payments. IRAs KEOGHs MOTOR VEHICLES Exempt Motor Vehicles Count Net Market Value (lowest face value minus penalties) in property reserve. Established with persons within the MFBU - Consider available and counted in the property reserve. Contractual agreement with persons outside the MFBU - Consider unavailable and not included in the property reserve. Exempt all vehicles used for any of the following reasons: Used as household s residence (one per household). Used to transport a physically disabled individual living in the home (one car per disabled person). Used on the job or for income producing purposes, even if only on a seasonal basis or temporarily unemployed. Necessary for long distance travel essential to individual s employment, other than daily commuting. Used to transport the primary source of heating fuel or water. Exempt if steps are taken to obtain periodic payments. Exempt if steps are taken to obtain periodic payments. Exempt: A vehicle used as the principal residence. Any one vehicle chosen by the customer. Update # Revised: 10/14/14

90 page Medi-Cal Handbook Topic Section Only AFDC-MN/MI Non-Exempt Motor Vehicles Include in the property reserve the lesser of: The Excess Fair Market Value (FMV), or Equity Value (Subtract $1,500 from the vehicle with the highest Equity Value). Definitions: Fair Market Value (FMV) = Blue Book / DMV chart /appraisal Net Market Value (NMV) = FMV - $1,500 Excess FMV = FMV - $4,650 Equity Value = FMV - Encumbrances Include in the property reserve the Net Market Value of each nonexempt vehicle. Definitions: Fair Market Value (FMV) = Blue Book / DMV chart /appraisal Net Market Value (NMV) = FMV - Encumbrances LIFE INSURANCE - CSV Exempt the cash surrender value (CSV) of all life insurance policies. Exempt term life insurance. Combined face value of all policies for each person is $1500 or less -CSV exempt. Combined face value of all policies for each person exceeds $ CSV included in the property reserve. SNEEDE Parental Needs allowance is MBSAC for one less $1. Parental Needs allowance is GAMMA deduction of $600. FOUR MONTH CONTINUING (AID CODE 54) TMC Available to families who were: Eligible for Section in 3 of the last 6 months, and Discontinued from Section due to an increase in child and/or spousal support payments. Available to the families who were: Eligible for Section in 3 of the last 6 months, and Terminated from Section due to increased earnings. Note: When a family is discontinued from CalWORKs, determine ongoing Section eligibility before determining TMC eligibility. Not applicable. Not applicable. Revised: 10/14/14 Update #

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92 page Medi-Cal Handbook Revised: 10/14/14 Update #