DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
CMCS Informational Bulletin 
DATE:  July 25, 2016 
FROM:  Vikki Wachino, Director 
Center for Medicaid and CHIP Services 
SUBJECT:  Coordination of Eligibility and Enrollment between Medicaid, CHIP and the 
Federally Facilitated Marketplace (FFM or Marketplace) 
This CMCS Informational Bulletin (CIB) reminds states about federal requirements related to 
coordination of eligibility and enrollment among insurance affordability programs under section 
1943 of the Social Security Act (the Act), added by section 2201 of the Affordable Care Act and 
implementing regulations at 42 CFR 435.1200, 457.348, and 457.350.  As CMS and states 
served by the FFM have made significant improvements to the Account Transfer process, this 
CIB provides an overview of current regulations to ensure timely determination of eligibility and 
coordination across insurance affordability programs.  We also highlight a simplified approach to 
assessing potential eligibility for enrollment in coverage through the Marketplace.  This 
approach is designed to minimize administrative burden on states. 
Regulations require that determinations of eligibility and enrollment in the appropriate insurance 
affordability program are made promptly and without undue delay.  In particular, this CIB 
addresses the requirements for Medicaid and the Childrens Health Insurance Program (CHIP) 
agencies to transfer the electronic accounts, for both applicants and beneficiaries, to the FFM when 
they are determined ineligible for Medicaid and CHIP, as well as the actions states should take when 
accounts are transferred from the FFM to the state agency.   
Streamlined, Coordinated Eligibility and Enrollment 
The Affordable Care Act and implementing regulations established a coordinated system of eligibility 
and enrollment across all insurance affordability programs.  Consumers must be able to submit a 
single streamlined application to either the Marketplace serving their state or the state Medicaid or 
CHIP agency, receive an eligibility determination, and be enrolled in the appropriate program.  This 
no-wrong-door approach requires effective coordination between state Medicaid and CHIP agencies 
and Marketplaces to ensure that consumers have a seamless, streamlined path to coverage in the 
program for which they are eligible.  
Per regulations at 435.1200(b) and 457.348(a), state Medicaid and CHIP agencies utilizing the 
FFM must enter into an agreement with the FFM describing the responsibilities of each entity to 
coordinate applications for all programs in a manner that minimizes consumer burden and 
ensures prompt determinations of eligibility and enrollment in the appropriate program.  States 
have the option to delegate authority to make Medicaid and CHIP final eligibility determinations 
based on Modified Adjusted Gross Income (MAGI) to the FFM (determination states), or to   
 
CMCS Informational Bulletin  Page 2  
 
use the FFM to make an initial assessment of potential Medicaid and CHIP eligibility based on 
MAGI (assessment states).  This election will be reflected in the agreement between the 
agency and the FFM; a delegation of authority to make eligibility determinations must be 
reflected in a state plan amendment approved by CMS. The agreements between the state 
agencies and the FFM are updated on a regular basis.  
 
Consumers Applying at the FFM and Determined or Assessed as Potentially Eligible for 
Medicaid or CHIP 
  
When an individual submits an application to the FFM and is assessed or determined eligible for 
Medicaid or CHIP, the application information is transferred to the state Medicaid or CHIP agency via 
account transfer.  The account will contain all of the information the individual provided on the 
application as well as indication as to whether information was verified through the Hub.  The 
account transfer will also identify individuals who should be screened for eligibility on a basis 
other than MAGI and, in assessment states, whether an individual has requested a full eligibility 
determination from the state.   
 
Consumers Determined Eligible for Medicaid or CHIP by the FFM (435.1200(c) and 
457.348(b)) 
 
In determination states, the FFM makes a final determination of MAGI-based Medicaid or CHIP 
eligibility and sends the account to the state for enrollment in coverage.  Per the agreement, the 
MAGI-based eligibility determination made by the FFM is accepted as final by the Medicaid or 
CHIP agency.  Consumers should be enrolled in Medicaid or CHIP, as appropriate, without 
delay (42 CFR 435.1200(c)(2)). 
 
If an individual appears likely to be eligible for Medicaid or CHIP, but the FFM has identified an 
inconsistency between information on the application and information obtained through the Federal 
Data Services Hub (Hub), or no information is available through the Hub, that application is 
transferred through the Hub to the state Medicaid/CHIP agency for resolution and final eligibility 
determination. 
 
State Agency responsibilities  
The state agency must establish procedures to receive the electronic account.  When the FFM 
transfers an individuals electronic account, the state agency must: 
1.  Notify the FFM of the receipt of the electronic account; 
2.  Promptly enroll the individual in Medicaid or CHIP, as appropriate; 
3.  Provide a reasonable opportunity for the applicant to document citizenship or 
immigration status, if needed;  
4.  Collect additional information for any application that is transferred with an 
inconsistency regarding other eligibility criteria and complete the final eligibility 
determination; and   
 
CMCS Informational Bulletin  Page 3  
 
5.  For applications/accounts for which potential eligibility on a basis other than MAGI is 
flagged, collect additional information to determine eligibility on a non-MAGI basis in 
accordance with 435.911(c)(2). 
 
Consumers Assessed as Potentially Eligible for Medicaid or CHIP by the FFM (435.1200(d) 
and 457.348(c))  
 
In an assessment state, if the FFM assesses an individual as potentially eligible for Medicaid or CHIP 
based on MAGI, or if the individual is screened as potentially eligible for Medicaid on a non-MAGI 
basis, based on the information contained on the application, the FFM transfers the individuals 
electronic account through the Hub to the state agency for a final eligibility determination.  If the 
FFM does not assess someone as potentially eligible for Medicaid on any basis, the individual can 
request that his or her account be transferred to the state agency for a final MAGI eligibility 
determination.   
 
State Agency responsibilities 
The state agency must establish procedures to receive the electronic account.  When the FFM 
transfers an individuals electronic account, the state agency must: 
1.  Notify the FFM of the receipt of the electronic account; 
2.  Not request information from the individual that is included in the individual's electronic 
account; 
3.  Accept any finding relating to a criterion of eligibility made by the FFM, without further 
verification, if such finding was made in accordance with policies and procedures applied 
by the agency or approved by it in the agreement between the agency and the FFM;  
4.  Promptly determine the individuals Medicaid or CHIP eligibility based on MAGI and, if 
appropriate, non-MAGI, in accordance with 435.911, without requiring a new application 
and begin providing coverage, if eligible; and 
5.  Notify the FFM of the final determination of the individual's eligibility or ineligibility for 
Medicaid or CHIP. 
 
Consumers Applying at the State Agency and Determined Not Eligible for Medicaid or CHIP 
(435.1200(e) and 457.350(i)-(k)) 
 
When an individual submits an application to a state Medicaid or CHIP agency, or the agency is 
processing a current beneficiarys renewal, no coordination with the Marketplace is needed if the 
agency determines that the individual is or remains eligible for Medicaid or CHIP.  (See discussion 
below if the individual is eligible for Medicaid that is not Minimum Essential Coverage).  If the 
agency determines the individual is not eligible for Medicaid and/or CHIP, the agency must promptly 
assess the individuals potential eligibility for other insurance affordability programs and transfer the 
individuals electronic account to the appropriate program (see examples below).  The account must 
include all of the information collected and generated by the state, regarding the individuals Medicaid 
and/or CHIP eligibility.   
   
 
CMCS Informational Bulletin  Page 4  
 
For states that are served by the FFM or which do not use a shared eligibility service to determine 
eligibility for all insurance affordability programs, a simplified approach to the assessment of potential 
eligibility for enrollment in a Qualified Health Plan (QHP) and receipt of Advance Payments of the 
Premium Tax Credit (APTC) is described below.   
 
The timing of a transfer from Medicaid to another program differs depending on whether the 
determination of ineligibility is at application or renewal.  The path that an individuals account will 
follow also depends on his or her circumstances and whether the Medicaid and CHIP programs are 
jointly administered.  In the discussion that follows, we assume joint administration of Medicaid and 
CHIP with respect to eligibility determinations.  We also assume that Medicaid, CHIP and coverage 
through the Marketplace are the only insurance affordability programs available in the state (i.e., the 
state has not adopted a Basic Health Program, authorized under section 1331 of the Affordable Care 
Act). 
 
Application 
 
If an individual submits an application to a state Medicaid or CHIP agency and the agency determines 
the individual is ineligible for Medicaid based on MAGI and CHIP, or is subject to a CHIP waiting 
period imposed by the state, the agency must assess potential eligibility for coverage through the 
Marketplace and transfer the individual's electronic account to the FFM.  The electronic account 
must include all information collected and generated by the state, including documentation 
described in 435.914, which is relevant to the individuals Medicaid or CHIP eligibility and 
enrollment (see definition of electronic account provided in 435.4 and 457.10).   
 
In the case of an individual subject to a CHIP waiting period, information transferred to the FFM 
must also include the end date of the waiting period.  The state agency must also notify the 
applicant of the end date of the waiting period, when the individual is eligible to enroll in CHIP.  
 
In the case of an individual who is determined not eligible for Medicaid on a MAGI basis or for 
CHIP, and for whom the agency is determining eligibility on a basis other than MAGI, the 
agency must determine potential eligibility for coverage through the Marketplace and transfer the 
individual's electronic account to the FFM and provide notice to the FFM as well as the 
individual that the individual is not Medicaid-eligible based on MAGI, but a final determination 
of Medicaid eligibility is still pending.  This provides the individual with the opportunity to 
obtain QHP coverage, while waiting for a final determination of eligibility for Medicaid on all 
bases.  Once the agency makes a final determination, it must inform the individual and the FFM 
of the agency's final determination of eligibility or ineligibility for Medicaid.  The notice to the 
individual should include information and instructions about ending QHP coverage and APTC. 
 
Renewal         
Before terminating Medicaid coverage for a current beneficiary and transferring the electronic account 
to the FFM, the agency must determine whether the individual is eligible in any other eligibility 
category (See 42 CFR 435.916(f)(1)).  This may require the agency to obtain additional information 
from the beneficiary.  The beneficiary remains enrolled in Medicaid, and the account is not 
transferred, until the agency completes the eligibility determination.  For individuals determined   
 
CMCS Informational Bulletin  Page 5  
 
ineligible for Medicaid and CHIP, the agency must determine potential eligibility for coverage 
through the Marketplace and transfer the account to the FFM.  
 
 
Streamlining the Assessment of Eligibility for Coverage through the Marketplace 
 
Medicaid and CHIP agencies may have insufficient information to assess an individual as 
potentially eligible for APTC or Cost-Sharing Reductions (CSR) through the Marketplace, as 
such assessment requires application of different financial methodologies, evaluation of access to 
or enrollment in employer-sponsored or other forms of coverage, and, in some cases, non-citizen 
eligibility criteria.  States are not required to conduct individual assessments, but instead may 
implement a streamlined approach that will reduce administrative burden for states and ensure 
timely transfer of individuals potentially eligible for QHP enrollment.  States can treat anyone 
who is determined ineligible for Medicaid or CHIP as potentially eligible for QHP enrollment at 
their option, other than individuals denied or terminated for a procedural reason and individuals 
who do not attest to U.S. citizenship or lawful presence.  This simplifies the assessment required 
under the regulations and ensures that consumers have the ability to purchase a QHP even if they 
are not determined eligible for APTC.  The agency would then transfer the electronic account of 
anyone screened as potentially eligible for QHP enrollment using this streamlined approach to 
the FFM.   
 
Medicaid and CHIP agencies should not transfer accounts for consumers whose eligibility has 
been denied or terminated for procedural reasons to the FFM.  Procedural reasons include failure 
to respond in a timely manner to requests for information necessary to determine Medicaid or 
CHIP eligibility, including failure to document citizenship or eligible immigration status during a 
reasonable opportunity period, failure to comply with assignment of rights or medical child 
support cooperation requirements, and failure to apply for other benefits for which the individual 
may be eligible.   
 
Examples of Accounts to Transfer to the FFM using the Streamlined Approach 
 
1:  The parents have verified income over the applicable Medicaid or CHIP standard; 
children are determined eligible for Medicaid or CHIP.  A family submits an application 
to the agency.  The children are determined eligible for Medicaid or CHIP, but the parents 
are determined to be ineligible based on MAGI for either program.  There is no indication 
of Medicaid eligibility on a non-MAGI basis, and neither parent has requested a 
determination on a non-MAGI basis.  The agency would transfer account information for 
the parents to the FFM. 
 
2:  An applicant has been determined ineligible for Medicaid based on MAGI, but is 
being evaluated for coverage on a non-MAGI basis.  The agency has determined that an 
applicant has income over the applicable MAGI-based standard.  However, the applicant has 
indicated potential disability on the application.  The agency would transfer the account to the 
FFM for a determination of eligibility for enrollment in a QHP.  Once the agency has made a 
final determination of eligibility for Medicaid on all bases, the agency would notify the FFM   
 
CMCS Informational Bulletin  Page 6  
 
of its final determination.  The agency also would provide appropriate notice to the applicant 
of his or her initial denial based on MAGI as well as the final Medicaid eligibility 
determination. 
 
3:  A child has been determined ineligible for CHIP during a period of uninsurance 
(waiting period).  A child is determined to meet all eligibility criteria for CHIP, but is 
subject to a CHIP waiting period imposed by the state.  The agency would transfer the childs 
account to the FFM for a determination of eligibility to enroll in a QHP with APTC for the 
duration of the waiting period and inform the FFM of the date on which the waiting period 
ends and the child will be eligible to enroll in CHIP.  The agency also would provide 
appropriate notice to the applicant of his or her initial denial based on the waiting period, as 
well as the date on which the waiting period ends.   
 
4:  An applicant is lawfully present in the United States, but has been determined 
ineligible for Medicaid or CHIP based on immigration status.  Non-citizens who are 
lawfully present in the United States, but are not eligible for Medicaid or CHIP based on 
immigration status (for example, during the 5-year waiting period) may be eligible to enroll in 
a QHP and to receive APTC and CSRs.  Since this individual verified lawful presence, the 
agency would transfer him to the Marketplace for determination of eligibility for APTC in a 
QHP.  If the agency was not able to verify a qualified immigration status for Medicaid or 
CHIP eligibility purposes and does not have the capacity to assess all lawfully present statuses, 
the agency also would transfer the individuals account to the Marketplace.   
 
Examples of Accounts NOT to Transfer to the FFM: 
 
1:  An applicant has been determined ineligible for Medicaid for failure to respond to a 
request for additional information to verify eligibility.  Individuals who are required to 
provide documentation of income (i.e., due to an inconsistency between attested income and 
information available via electronic data sources) and/or documentation of citizenship or 
immigration status, and who fail to respond in a timely manner, may be denied eligibility.  
These individuals should not have their accounts transferred to the FFM. 
 
2:  An applicant does not attest to citizenship or to lawful presence in the US.  An 
individual who is not a citizen, and not lawfully present in the US is not eligible to purchase 
coverage on the Marketplace.  The account should not be transferred to the FFM.  
 
Individuals Determined Eligible for Coverage in a Medicaid Program that is Not Minimum 
Essential Coverage (MEC)   
 
Medicaid and CHIP coverage generally is recognized as MEC.  The Internal Revenue Service 
(IRS) has determined, however, that limited-benefit Medicaid coverage and coverage authorized 
under a section 1115 demonstration project is not recognized as MEC under IRS regulations.  
For example, coverage limited to family planning services or other limited-benefit programs is 
not recognized as MEC under IRS regulations.  
   
 
CMCS Informational Bulletin  Page 7  
 
However, under section 5000A(f)(1)(E) of the Internal Revenue Code, the HHS Secretary, in 
coordination with the Treasury Secretary, has authority to determine that coverage which is not 
recognized as MEC under the IRS regulations will be recognized as MEC.  In a November 7, 
2014, State Health Official Letter (SHO #14-002), CMS described the criteria we would consider 
in determining whether Medicaid coverage not recognized as MEC under IRS regulations would 
be recognized as MEC under section 5000A(f)(1)(E).  A list of state programs that were required 
to be evaluated by CMS to determine whether they are MEC, as well as a copy of SHO #14-002, 
can be found on Medicaid.gov.  https://www.medicaid.gov/medicaid-chip-program-
information/by-topics/benefits/minimum-essential-coverage.html. 
 
Individuals enrolled in Medicaid coverage that is not considered MEC are eligible to enroll in a 
QHP with APTC/CSRs if otherwise eligible.  Accounts for individuals determined eligible for 
coverage that is not considered MEC should be transferred to the FFM for assistance in obtaining 
comprehensive coverage without requiring that Medicaid be denied.   
 
Additional Resources 
 
CMS will continue to work with states to ensure timely determinations of eligibility for all 
insurance affordability programs.  States should refer to the Federal Data Services Hub Account 
Transfer (AT) Business Service Definition (BSD) Version 2.4 (July 2016) for technical guidance 
and specifications related to the transferring accounts between states and the FFM. 
 
For additional information about coordination with the FFM, please contact your state SOTA 
lead or Judith Cash, Director, Division of Eligibility and Enrollment, Children and Adults Health 
Programs Group, at judith.cash@cms.hhs.gov or 410-786-4473.