17144 Federal Register / Vol. 77, No. 57 / Friday, March 23, 2012 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 431, 435, and 457 

[CMS–2349–F] 

RIN 0938–AQ62 

Medicaid Program; Eligiblity Changes 

Under the Affordable Care Act of 2010 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule; Interim final rule. 

SUMMARY: This final rule implements 

several provisions of the Patient 

Protection and Affordable Care Act of 

2010 and the Health Care and Education 

Reconciliation Act of 2010 (collectively 

referred to as the Affordable Care Act). 

The Affordable Care Act expands access 

to health insurance coverage through 

improvements to the Medicaid and 

Children’s Health Insurance (CHIP) 

programs, the establishment of 

Affordable Insurance Exchanges 

(‘‘Exchanges’’), and the assurance of 

coordination between Medicaid, CHIP, 

and Exchanges. This final rule codifies 

policy and procedural changes to the 

Medicaid and CHIP programs related to 

eligibility, enrollment, renewals, public 

availability of program information and 

coordination across insurance 

affordability programs. 

DATES: Effective Date: These regulations 

are effective on January 1, 2014. 

Comment Date: Certain provisions of 

this final rule are being issued as 

interim final. We will consider 

comments from the public on the 

following provisions: § 431.300(c)(1) 

and (d), § 431.305(b)(6), § 435.912, 

§ 435.1200, § 457.340(d), § 457.348 and 

§ 457.350(a), (b), (c), (f), (i), (j), and (k). 

To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. Eastern Standard Time 

(EST) on May 7, 2012. 

ADDRESSES: In commenting, please refer 

to file code CMS–2349–F. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed) 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–2349–F, P.O. Box 8016, Baltimore, 

MD 21244–8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–2349–F, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. Alternatively, 

you may deliver (by hand or courier) 

your written comments ONLY to the 

following addresses prior to the close of 

the comment period: a. For delivery in 

Washington, DC—Centers for Medicare 

& Medicaid Services, Department of 

Health and Human Services, Room 445– 

G, Hubert H. Humphrey Building, 200 

Independence Avenue SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, call 

telephone number (410) 786–7195 in 

advance to schedule your arrival with 

one of our staff members. 

Comments erroneously mailed to the 

addresses indicated as appropriate for 

hand or courier delivery may be delayed 

and received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

‘‘SUPPLEMENTARY INFORMATION’’ section. 

FOR FURTHER INFORMATION CONTACT: 

Sarah delone, (410) 786–0615. 

Stephanie Kaminsky, (410) 786–4653. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://regulations.gov. 

Follow the search instructions on that 

Web site to view public comments. 

Comments received timely will be 

also available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

In addition, several sections in this 

final rule are being issued as interim 

final rules and we are soliciting 

comment on those sections. Given the 

highly connected nature of these 

provisions, we are combining provisions 

that are being issued as an interim final 

rule and provisions that are being issued 

as a final rule into a single document so 

that a reader will be able to see the 

context and interrelationships in the 

overall regulatory framework. 

Table of Contents 

I. Executive Summary 

II. Background 

III. Summary of Proposed Provisions and 

Analysis of and Responses to Public 

Comments 

A. Changes to Medicaid Eligibility 

B. Financial Methodologies for 

Determining Medicaid Eligibility Based 

on MAGI Under the Affordable Care Act 

(§ 435.603) 

C. Residency for Medicaid Eligibility 

Defined (§ 435.403) 

D. Timeliness Standards (§ 435.912) 

E. Application and Enrollment Procedures 

for Medicaid (§ 435.905, § 435.907, and 

§ 435.908) 

F. MAGI Screen (§ 435.911) 

G. Coverage Month (§ 435.917) 

H. Verification of Income and Other 

Eligibility Criteria (§ 435.940, § 435.945, 

§ 435.948, § 435.949, § 435.952, and 

§ 435.956) 

I. Periodic Renewal of Medicaid Eligibility 

(§ 435.916) 

J. Coordination of Eligibility and 

Enrollment Among Insurance 

Affordability Programs—Medicaid 

Agency Responsibilities (§ 435.1200) 

K. Single State Agency (§ 431.10 and 

§ 431.11) 

L. Implementing Application of MAGI to 

CHIP (§ 457.10, § 457.301, § 457.305, 

§ 457.315, and § 457.320) 

M. Residency for CHIP Eligibility 

(§ 457.320) 

N. CHIP Coordinated Eligibility and 

Enrollment Process (§ 457.330, § 457.340, 

§ 457.343, § 457.348, § 457.350, 

§ 457.353, and § 457.380) 

O. FMAP for Newly Eligible Individuals 

and for Expansion States (§ 433.10, 

§ 433.206, § 433.210, and § 433.212) 

IV. Provisions of the Final Rule 

V. Waiver of Proposed Rulemaking 


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VI. Collection of Information Requirements 

VII. Summary of Regulatory Impact Analysis 

I. Executive Summary 

The legal authority for this final rule 

comes from the Patient Protection and 

Affordable Care Act (Pub. L. 111–148, 

enacted on March 23, 2010), as 

amended by the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152, enacted on March 30, 

2010), and together referred to as the 

Affordable Care Act of 2010 (Affordable 

Care Act). 

This final rule implements several 

provisions of the Affordable Care Act 

related to Medicaid eligibility, 

enrollment and coordination with the 

Affordable Insurance Exchanges 

(Exchanges), the Children’s Health 

Insurance Program (CHIP), and other 

insurance affordability programs. It also 

simplifies the current eligibility rules 

and systems in the Medicaid and CHIP 

programs. This final rule: (1) Reflects 

the statutory minimum Medicaid 

income eligibility level of 133 percent of 

the Federal Poverty Level (FPL) across 

the country for most non-disabled 

adults under age 65; (2) eliminates 

obsolete eligibility categories and 

collapses other categories into four 

primary groups: children, pregnant 

women, parents, and the new adult 

group; (3) modernizes eligibility 

verification rules to rely primarily on 

electronic data sources; (4) codifies the 

streamlining of income-based rules and 

systems for processing Medicaid and 

CHIP applications and renewals for 

most individuals; and (5) ensures 

coordination across Medicaid, CHIP, 

and the Exchanges. 

Several provisions of this rule are 

issued on an interim final basis. As 

such, we will consider comments from 

the public on the following provisions: 

§ 431.300(c)(1) and (d) and 

§ 431.305(b)(6)—Safeguarding 

information on applicants and 

beneficiaries. 

§ 435.912—Timeliness and 

performance standards for Medicaid. 

§ 435.1200—Coordinated eligibility 

and enrollment among insurance 

affordability programs. 

§ 457.340(d)—Timeliness standards 

for CHIP. 

§ 457.348—Coordinated eligibility 

and enrollment among CHIP and other 

insurance affordability programs. 

§ 457.350(a), (b), (c), (f), (i), (j), and 

(k)—Coordinated eligibility and 

enrollment among CHIP and other 

insurance affordability programs. 

II. Background 

The Patient Protection and Affordable 

Care Act (Pub. L. 111–148, enacted on 

March 23, 2010), and amended by the 

Health Care and Education 

Reconciliation Act of 2010 (Pub. L. 111– 

152, enacted on March 30, 2010), are 

together referred to as the Affordable 

Care Act of 2010 (Affordable Care Act). 

Section 205 of the Medicare & Medicaid 

Extenders Act of 2010 (Pub. L. 111–309, 

enacted December 15, 2010) made 

technical corrections to the Social 

Security Act (the Act) to implement the 

Affordable Care Act. The Three Percent 

Withholding Repeal and Job Creation 

Act (Pub. L. 112–56, enacted November 

21, 2011), changed the MAGI definition 

of income to include all Social Security 

benefits. 

In the August 17, 2011 Federal 

Register (76 FR 51148), we published a 

proposed rule entitled ‘‘Medicaid 

Program; Eligibility Changes under the 

Affordable Care Act of 2010,’’ 

(hereinafter referred to as ‘‘Medicaid 

Eligibility proposed rule’’). This 

Medicaid Eligibility proposed rule was 

published in concert with three other 

proposed rules: the July 15, 2011 rule 

titled ‘‘Establishment of Exchanges and 

Qualified Health Plans;’’ the August 17, 

2011 rule titled ‘‘Exchange Functions in 

the Individual Market: Eligibility 

Determinations and Exchange Standards 

for Employers;’’ and the August 17, 

2011 rule titled ‘‘Health Insurance 

Premium Tax Credit Proposed Rule.’’ 

These rules proposed eligibility and 

enrollment provisions for the Affordable 

Insurance Exchanges and the 

accompanying changes to the Internal 

Revenue Code (IRC) needed to 

implement the calculation of modified 

adjusted gross income (MAGI) for 

purposes of determining eligibility for 

assistance with purchasing health 

coverage. Together, these proposed rules 

were designed to implement the 

eligibility and enrollment-related 

provisions of the Affordable Care Act 

that expand access to health coverage 

through improvements in Medicaid and 

CHIP and the establishment of the new 

Affordable Insurance Exchanges. In 

addition, the proposed rules simplify 

and streamline the enrollment and 

renewal processes and create alignment 

across insurance affordability programs. 

III. Summary of Proposed Provisions 

and Analysis of and Responses to 

Public Comments 

We received a total of 813 comments 

from State Medicaid and CHIP agencies, 

policy and advocacy organizations, 

health care providers and associations, 

Tribes, Tribal organizations, and 

individual citizens. In addition, we held 

many consultation sessions with States 

and interested parties, including three 

sessions with Tribal governments 

(August 22, 2011, September 7, 2011, 

and September 15, 2011), to provide an 

overview of the Medicaid Eligibility 

proposed rule where interested parties 

were afforded an opportunity to ask 

questions and make comments. At these 

consultation sessions, the public was 

reminded to submit written comments 

before the close of the public comment 

period that was announced in the 

Medicaid Eligibility proposed rule. 

The vast majority of commenters 

supported the policies we proposed, 

although, as discussed below, there 

were concerns about some specific 

policies. In particular, a large number of 

comments focused on the need for 

coverage options for individuals with 

disabilities. Summaries of the public 

comments that are within the scope of 

the proposals and our responses to those 

comments follow. 

We have revised the proposed 

regulation to reflect our final policies. 

However, some comments were outside 

the scope of the Medicaid Eligibility 

proposed rule, and therefore, are not 

addressed in this final rule. In some 

instances, commenters raised policy or 

operational issues that will be addressed 

through regulatory and subregulatory 

guidance subsequent to this final rule; 

therefore some, but not all, comments 

are addressed in the preamble to this 

final rule. 

The Medicaid Eligibility proposed 

rule proposed to amend 42 CFR parts 

431, 435, and 457 to implement an 

eligibility, enrollment, and renewal 

system required by the Affordable Care 

Act. We proposed amendments to 42 

CFR part 435 subparts B and C to 

implement the changes to Medicaid 

eligibility. We proposed amendments to 

subpart A to add new definitions or 

revise current definitions. 

Under our proposed amendments to 

42 CFR part 435 subpart G, most 

individuals would have financial 

eligibility for Medicaid determined 

based on MAGI. The proposed 

regulations also defined the new MAGIbased financial methodologies and 

identified individuals whose eligibility 

would not be based on MAGI. Subpart 

E included proposed eligibility 

requirements regarding residency. 

Proposed amendments to subpart J 

established Federal guidelines for States 

to establish a seamless and coordinated 

system for determining eligibility and 

enrolling in the appropriate insurance 

affordability program. Subpart M 

delineates the responsibilities of the 

State Medicaid agency in the 

coordinated system of eligibility and 

enrollment established under the 

Affordable Care Act, and proposed 


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comparable amendments for CHIP at 42 

CFR part 457. 

We proposed to amend 42 CFR part 

433 to add new provisions at § 433.10(c) 

to specify options for establishing the 

increased Federal Medicaid matching 

rates available to States under the 

Affordable Care Act; these amendments 

will be finalized in future rulemaking. A 

number of other provisions in the 

Affordable Care Act were not included 

in the Medicaid Eligibility proposed 

rule, but either have been or will be 

addressed in separate rulemaking or 

other guidance. 

Responses to General Comments 

Generally, comments were supportive 

of the policies in the Medicaid 

Eligibility proposed rule to simplify, 

streamline, and align the eligibility and 

enrollment process, coordinate with 

other insurance affordability programs, 

reduce or eliminate burdensome 

requirements on States, and build on 

successful State practices that are 

currently underway. Throughout this 

rule, we summarize comments received 

that pertain to this rule: comments on 

policies not contained in this rule are 

not addressed. 

Comment: We received several 

comments (nearly half of all comments 

received) raising concerns about 

coverage of individuals with disabilities 

or in need of long-term services and 

supports under the new eligibility group 

for low-income adults. 

Response: We acknowledge and have 

responded to these concerns as 

discussed in detail in sections III.B. and 

III.E. of this preamble and at § 435.603 

and § 435.911 of the regulation text. 

Comment: We received some 

comments, questions, and scenarios 

related to how States will operationalize 

the policy changes to Medicaid and 

CHIP that were set forth in the Medicaid 

Eligibility proposed rule. 

Response: As we have done in these 

regulations, we plan to rely on and 

build upon State experience with 

implementing new policies and program 

changes as a means of ensuring a 

successful partnership between the 

States and the Federal government. We 

also intend to provide intensive 

technical assistance and support to 

States, as well as facilitate sharing and 

collaboration across States as 

implementation continues. The public 

comments received will inform the 

development of future operational 

guidance and tools that will be designed 

to support State implementation efforts. 

The effective date for this final rule is 

January 1, 2014. However, it should be 

noted that States may, and are 

encouraged to, conduct activities in 

preparation for the policy and 

programmatic changes that will need to 

take place in order to implement the 

provisions of this final rule. Federal 

administrative matching funds will be 

available for such activities. 

Comment: Some commenters 

requested additional information for the 

data reporting requirements for States to 

ensure adequate oversight of the 

administration of the program. 

Response: Under existing Medicaid 

regulations at § 431.16, § 431.17, and 

§ 457.720, States must maintain records, 

collect data and submit to the Secretary 

such reports as are needed by the 

Secretary to monitor State compliance 

with the regulations and ensure the 

proper and efficient operation of the 

Medicaid program. In the Medicaid 

Eligibility proposed rule, as well as this 

final rule, we have noted several types 

of data that States will need to provide, 

including data to ensure compliance 

with single State agency regulations at 

§ 431.10, and we will issue guidance on 

the specific data to be submitted, as well 

as the format and method for such 

submission. 

Comment: We received some 

comments regarding the need for 

program integrity and Payment Error 

Rate Measurement (PERM) rules to be 

clarified and aligned with the policies 

in the proposed rules. 

Response: We agree that PERM and 

other program integrity rules and 

procedures must be aligned with the 

new eligibility rules, and also must 

account for the role that Exchanges may 

play in determining eligibility in a 

particular State. We will address these 

issues in subsequent guidance. 

A. Changes to Medicaid Eligibility 

To establish a foundation for a more 

simplified, streamlined Medicaid 

eligibility process in the context of the 

new eligibility group for low-income 

adults that will become effective in 

2014, we proposed a more 

straightforward structure of four major 

eligibility groups: children, pregnant 

women, parents and caretaker relatives, 

and the new adult group. 

1. Coverage for Individuals Age 19 or 

Older and Under Age 65 at or Below 133 

Percent of the FPL (§ 435.119) 

We proposed to implement section 

1902(a)(10)(A)(i)(VIII) of the Act, 

referred to as ‘‘the adult group,’’ under 

which States will provide Medicaid 

coverage starting on January 1, 2014 to 

non-pregnant individuals between 19 

and 64 years old who are not otherwise 

eligible and enrolled for mandatory 

Medicaid coverage; are not entitled to or 

enrolled in Medicare; and have 

household income, based on the new 

MAGI-based methods (described in 

more detail in 76 FR 51155 through 

51160), at or below 133 percent of the 

FPL. 

Comment: One commenter requested 

clarification of the requirement at 

§ 435.119(c) that a parent or other 

caretaker relative living with a 

dependent child may not be covered by 

Medicaid under the adult group if the 

child is not enrolled in Medicaid, CHIP, 

or other minimum essential coverage. 

The commenter was uncertain whether 

this requirement applies to a custodial 

parent when the child is claimed as a 

tax dependent by the non-custodial 

parent and to a non-custodial parent 

who is required to pay for all, or part, 

of the child’s medical support. Several 

commenters pointed out the difficulty 

and unfairness of applying this 

requirement to a parent in custody 

situations if the other parent is legally 

responsible for the child’s medical 

support. Also, the commenters pointed 

out the difficulty in applying the 

requirement to a non-parent caretaker 

relative who is not financially 

responsible for the child. Another 

commenter recommended that the 

requirement be revised to include an 

exception to the prohibition on coverage 

for parents and caretaker relatives if an 

application for a child’s coverage is 

pending. Finally, other commenters 

were unclear about the eligibility groups 

to which this requirement applies. 

Response: We are finalizing 

§ 435.119(c) without modification. We 

believe the requirements for coverage of 

parents and other caretaker relatives 

under § 435.119 and § 435.218 are clear 

and consistent with the statutory 

requirements at sections 1902(k)(3) and 

1902(hh)(2) of the Act. The 

requirements are limited to custodial 

parents and other caretaker relatives 

who live with dependent children, 

because non-custodial parents are not 

taken into account in determining a 

child’s Medicaid eligibility according to 

§ 435.603 of this final rule. We do not 

provide an exemption from the 

requirement if an application for a 

child’s coverage is pending because if a 

child’s pending application is denied 

for all insurance affordability programs 

or the parent or caretaker relative fails 

to enroll the child in such program, the 

child must be enrolled in other 

minimum essential coverage for the 

custodial parent or other caretaker 

relative to be covered by Medicaid 

under the § 435.119 or § 435.218. In 

virtually all cases, if the parent or other 

caretaker relative is eligible for 

Medicaid, the child also will be eligible 

for Medicaid, and the adjudication of 


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eligibility for the child should not delay 

the eligibility determination for the 

parent or caretaker relative. 

Comment: Numerous commenters 

expressed concern about the placement 

of disabled individuals and individuals 

needing long-term services and supports 

in the adult group, because individuals 

under the adult group will receive a 

benchmark benefit package that might 

not cover institutional services, home 

and community-based services, or other 

specialized services available under 

certain optional eligibility groups. 

Response: We agree with the 

commenters’ concerns. As discussed 

further in section III.F. of this preamble, 

we have revised the policy in § 435.911 

of this final rule to address the needs of 

this population consistent with the 

statute. 

2. Individuals With MAGI-Based 

Income Above 133 Percent of the FPL 

(§ 435.218) 

We proposed at § 435.218 to 

implement section 

1902(a)(10)(A)(ii)(XX) of the Act that 

gives States the option, starting on 

January 1, 2014, to provide Medicaid 

coverage to individuals under age 65 

(including pregnant women and 

children) with income determined 

based on MAGI to be above 133 percent 

of the FPL. We proposed to establish 

this optional eligibility group for 

individuals who are not eligible for and 

enrolled in an eligibility group under 

section 1902(a)(10)(A)(i) of the Act and 

42 CFR part 435 subpart B or under 

section 1902(a)(10)(A)(ii)(I) through 

(XIX) of the Act and 42 CFR part 435 

subpart C; and have household income 

based on MAGI that exceeds 133 

percent of the FPL but does not exceed 

the income standard established by the 

State for coverage of this optional group. 

Comment: Several commenters 

recommended that we revise proposed 

§ 435.218 to provide that an individual 

who appears, based on information 

provided on the application, to be 

eligible for Medicaid as medically needy 

or as a spend down beneficiary in a 

209(b) State may be enrolled in the 

optional group under this section. 

Another commenter recommended that 

an individual enrolled in an optional 

Medicaid group that does not provide 

minimum essential coverage should not 

be prohibited from enrollment in the 

group under § 435.218, which provides 

full Medicaid benefits. 

Response: We believe the rule is clear 

that only individuals eligible and 

enrolled as categorically needy for 

coverage are excluded from coverage 

under this section. The provision does 

not apply to individuals potentially 

eligible as medically needy under 

section 1902(a)(10)(C) of the Act or as 

spend down beneficiaries in a 209(b) 

State eligible under section 1902(f) of 

the Act. However, we are revising the 

final rule to specify sections 

1902(a)(10)(A)(ii)(I) through (XIX) of the 

Act as statutory citations for the 

optional groups related to this 

requirement, because individuals 

eligible for the optional family planning 

group under section 

1902(a)(10)(A)(ii)(XXI) of the Act are not 

excluded from enrollment under the 

new optional eligibility group at 

§ 435.218. The determination as to 

whether this coverage constitutes 

minimum essential coverage is governed 

by section 5000A of the Code, and the 

determination as to when an individual 

is considered eligible for minimum 

essential coverage is governed by 

section 36B(c)(2)(b). 

Comment: Several commenters 

requested that we clarify the intended 

Federal financial participation (FFP) 

rate for this optional coverage group and 

whether the enhanced Federal medical 

assistance percentage (FMAP) rates 

specified in proposed § 433.10 apply. 

Response: As discussed in section 

III.O. of this preamble, the enhanced 

FMAP for ‘‘newly eligible’’ individuals 

under section 1905(y) of the Act, as 

added by section 2001 of the Affordable 

Care Act, is only available for 

individuals covered under the new 

adult group. However, enhanced FMAP 

rates under CHIP specified at § 433.11 

may apply for children younger than age 

19 covered under § 435.218 who meet 

the definition of optional targeted lowincome child at § 435.4. 

3. Simplified Eligibility Rules for 

Parents and Caretaker Relatives, 

Pregnant Women, and Children— 

Amendments to Part 435, Subpart B 

(§ 435.110, § 435.116, and § 435.118) 

We proposed to streamline and 

simplify current regulations governing 

Medicaid eligibility for children, 

pregnant women, parents, and other 

caretaker relatives whose financial 

eligibility, beginning in CY 2014, will be 

based on MAGI. Consistent with section 

1902(a)(19) of the Act, we proposed to 

simplify and consolidate certain 

existing mandatory and optional 

eligibility groups into three categories: 

(1) Parents and other caretaker relatives 

(§ 435.110); (2) pregnant women 

(§ 435.116); and (3) children (§ 435.118). 

The Medicaid Eligibility proposed rule 

(76 FR 51152 through 51155) provided 

a detailed description of the proposed 

consolidation and explained how 

certain mandatory and optional groups 

in current regulations would be moved 

into the new broader groups for parents 

and other caretaker relatives, pregnant 

women, and children under age 19. 

Comment: Many commenters 

supported the proposal. A few 

commenters recommended that CMS 

consolidate eligibility categories beyond 

what was already proposed in this 

regulation. One commenter suggested 

having one eligibility group for all 

individuals with MAGI-based income 

up to 133 percent of the FPL, one for 

individuals with MAGI-based income 

above 133 percent of the FPL, and 

another for the MAGI-exempt 

populations. Another recommended 

eliminating the proposed minimum and 

maximum income standards and 

requiring a common income standard of 

133 percent of the FPL for parents and 

other caretaker relatives at § 435.110, 

pregnant women at § 435.116, and 

children under age 19 at § 435.118. One 

commenter stated that nothing about the 

proposed structure can credibly be 

described as simplified because it 

maintains all the old categorical and 

optional eligibility groups and standards 

in addition to an entirely new array of 

‘‘simplified’’ eligibility groupings. 

Response: We will consider future 

rulemaking or issuance of guidance to 

address further simplification of 

Medicaid eligibility groups not 

addressed in this rule. We do not have 

the statutory authority to eliminate the 

maximum permissible income standards 

specified for each eligibility group in 

this final rule, nor do we think it would 

be appropriate to eliminate State 

flexibility to cover each of these groups 

at a higher income standard up to the 

maximum permitted. 

Comment: Some commenters 

questioned whether guidance will be 

issued for the new eligibility group for 

former foster care children and for the 

new options of presumptive eligibility 

provided by the Affordable Care Act 

starting on January 1, 2014. The 

commenters also questioned whether 

certain existing Medicaid mandatory 

and optional coverage and eligibility 

groups will remain after January 1, 2014 

such as Transitional Medical 

Assistance; deemed newborn eligibility; 

optional coverage for parents and other 

caretaker relatives; women needing 

treatment for breast or cervical cancer; 

non-IV–E State subsidized adoption 

children; continuous eligibility for 

children; and presumptive eligibility for 

children and pregnant women. 

Response: The Affordable Care Act 

did not eliminate or change the 

requirements of existing Medicaid 

eligibility groups, except to require the 

use of MAGI-based financial 

methodologies for the populations 


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included under MAGI. These eligibility 

categories and coverage options, as well 

as the other new eligibility pathways 

created by the Affordable Care Act will 

be addressed in future guidance. 

Comment: Several commenters 

questioned whether there is any reason 

to keep medically needy coverage for 

Aid to Families of Dependent Children 

(AFDC) related populations and stated 

that this is especially a problem because 

States must cover pregnant women and 

children under age 18 as medically 

needy to cover the aged, blind, or 

disabled (ABD) populations as 

medically needy. Some commenters 

were concerned that eligibility for 

medically needy coverage under 

Medicaid would preclude eligibility for 

the advance payments of premium tax 

credits (APTCs) through the Exchange. 

Another commenter stated that States 

should have the option to provide 

medically needy coverage under section 

1902(a)(10)(C) of the Act and 42 CFR 

part 435 subpart D for the population of 

adults described in paragraph (xiv) of 

the matter preceding sections 1905(a) 

and 1902(a)(10)(A)(i)(VIII) of the Act. 

Response: The Affordable Care Act 

did not change any current 

requirements for medically needy 

eligibility under section 1902(a)(10)(C) 

of the Act, including the requirement 

that States covering medically needy 

individuals must cover medically needy 

pregnant women and children under age 

18. However, by expanding coverage to 

adults under age 65, the Affordable Care 

Act also provides States with the option 

to cover as medically needy those adults 

under age 65 who have incomes above 

the Medicaid income levels but 

otherwise meet the eligibility 

requirements of the adult group or the 

optional group for individuals with 

income over 133 percent of the FPL, 

provided that they meet spend-down 

requirements. Individuals otherwise 

eligible for APTCs through the Exchange 

who can spend down to medically 

needy eligibility under Medicaid could 

potentially enroll in either program, 

depending on whether they elect to 

spend down to Medicaid eligibility as 

medically needy. Individuals who do 

not spend down to Medicaid eligibility 

may be eligible to receive APTCs for 

enrollment through the Exchange. 

Comment: Many commenters 

disagreed with the policy in the 

Medicaid Eligibility proposed rule that 

States will not be required to convert 

the statutory minimum income 

standards set forth in sections 1931 and 

1902(l) of the Act for coverage under 

§ 435.110(c)(1), § 435.116(c)(1) and 

(d)(4)(i), and § 435.118(c)(1) to a MAGIequivalent standard, to account for 

disregards and exclusions currently 

used by the State that are not permitted 

under MAGI. The commenters stated 

that some individuals would lose 

eligibility if a State lowers its income 

standard for a group to the minimum 

once the maintenance of effort 

requirement ends for that population; 

for others, the scope of benefits could be 

reduced. Several commenters requested 

clarification about the conversion of 

States’ income standards to MAGIequivalent standards and whether 

income conversion applies for the 

eligibility groups exempt from MAGI. 

Response: We are not revising the 

final rule to require MAGI conversion of 

the statutory minimum income 

standards for each eligibility group, to 

which a State may reduce its income 

standard once maintenance of effort 

ends. Section 1902(e)(14)(A) and (E) of 

the Act, as added by section 2002 of the 

Affordable Care Act, provides only for 

the conversion of the income standards 

in effect in the State prior to the 

Affordable Care Act. The Act does not 

provide for conversion of the Federal 

statutory minimum income standards. 

Further, by raising the statutory 

minimum standard for children ages 6 

to 18 to 133 percent of the FPL under 

section 1902(a)(10)(A)(i)(VII) of the Act, 

according to section 2001 of the 

Affordable Care Act, we believe the 

Congress indicated an intent to align the 

minimum statutory standards for all age 

groups of children at 133 percent of the 

FPL, along with adults under age 65. 

Since the statutory increase in the 

minimum standard for older children 

would not be converted from MAGI, 

conversion of the minimum standards 

for younger children would defeat such 

alignment and result in children in the 

same family potentially being eligible 

for different insurance affordability 

programs depending on their age. (The 

only exception to complete alignment 

would be for infants and pregnant 

women, in States required to cover 

pregnant women and infants at a higher 

income standard under section 

1902(l)(2)(A) of the Act.) We note that 

the potential for a State to reduce its 

income standard for a children’s 

eligibility group to the minimum 

standard permitted under statute will 

not occur until the maintenance of effort 

for children ends on October 1, 2019, in 

accordance with section 1902(gg) of the 

Act as added by section 2001 of the 

Affordable Care Act. In States that 

reduce coverage of parents and caretaker 

relatives under § 435.110 to the 

minimum permitted under statute, the 

affected individuals may be eligible 

under the new adult group. Pregnant 

women affected by a reduction of 

coverage to the minimum permitted 

may be eligible for APTC for enrollment 

through the Exchange. 

a. Parents and Other Caretaker Relatives 

(§ 435.110) 

Comment: One commenter stated that 

CMS should provide clarifying 

information on how the ‘‘1931 program’’ 

should be administered through both 

MAGI and AFDC rules. 

Response: The rules for Medicaid 

coverage under section 1931 of the Act 

are set forth in § 435.110 and the related 

definitions of ‘‘caretaker relative’’ and 

‘‘dependent child’’ at § 435.4. AFDC 

methodologies for determining financial 

eligibility under section 1931 will be 

superseded effective January 1, 2014 by 

methodologies based on MAGI (set forth 

in § 435.603), and therefore, no longer 

will be relevant to eligibility under 

section 1931 of the Act. 

b. Pregnant Women (§ 435.116) 

Comment: Many commenters urged 

that we revise proposed § 435.116(d) to 

eliminate the State option to establish 

an applicable income limit for full 

Medicaid coverage of pregnant women 

and only cover services related to 

pregnancy or to other conditions which 

may complicate pregnancy (hereinafter 

referred to as ‘‘pregnancy-related 

services’’) for pregnant women with 

income above that limit. The 

commenters recommended that we not 

permit each State to define pregnancyrelated services, but that we amend 

§ 440.210(a)(2) to broadly define 

‘‘pregnancy-related services’’ as full 

Medicaid coverage. The commenters 

noted that this would be consistent with 

the current practice in most States. 

Commenters stated that, otherwise, 

pregnant women with incomes above 

that limit but with income no more than 

133 percent of the FPL might be covered 

for lesser benefits than non-pregnant 

adults covered under the adult group at 

§ 435.119, from which pregnant women 

are excluded by statute. These 

commenters stated that the Congress did 

not intend to make low-income 

pregnant women eligible for a more 

limited scope of benefits than other 

adults with the same income. 

Response: Clause VII in the matter 

following section 1902(a)(10) of the Act 

expressly limits the medical assistance 

for which pregnant women are eligible 

under sections 1902(a)(10)(A)(i)(IV) and 

1902(a)(10)(A)(ii)(IX) of the Act to 

pregnancy-related services. Eligibility 

for all pregnant women—including 

those eligible under these sections, as 

well as sections 1931 and 

1902(a)(10)(A)(i)(III) of the Act—is 


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codified at § 435.116. Pregnant women 

with income no more than the 

applicable income limit for full 

Medicaid coverage defined in 

§ 435.116(d)(4) are eligible under 

section 1931 or 1902(a)(10)(A)(i)(III) of 

the Act, while those with income above 

such limit are eligible under section 

1902(a)(10)(A)(i)(IV) or 

1902(a)(10)(A)(ii)(IX) of the Act. While 

we appreciate the commenters’ concern, 

we do not have the authority to 

specifically require that pregnancyrelated services be considered to mean 

full Medicaid coverage. However, 

because it is difficult to identify what is 

‘‘pregnancy-related’’ and because the 

health of a pregnant woman is 

intertwined with the health of her 

expected child, the scope of such 

services is necessarily comprehensive, 

as reflected in current regulation at 

§ 440.210(a)(2). Therefore, we are 

revising § 435.116(d)(3) to clarify that a 

State’s coverage of pregnancy-related 

services must be consistent with 

§ 440.210(a)(2) and § 440.250(p), which 

allows States to provide additional 

services related to pregnancy to 

pregnant women. If a State proposes not 

to cover certain services or items for 

pregnant women that it covers for other 

adults, the State must describe in a State 

plan amendment for the Secretary’s 

approval its basis for determining that 

such services are not pregnancy-related. 

Comment: One commenter supported 

the elimination of the ‘‘third trimester 

rule,’’ which permitted States to deny 

full-scope Medicaid to pregnant women 

in the first or second trimester of 

pregnancy who have no dependent 

children, for pregnant women’s 

eligibility under section 1931 of the Act. 

Response: States have the option 

under section 1931 of the Act (in 

accordance with section 406(g)(2) of the 

Act as in effect prior to enactment of the 

Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 

(PRWORA)) to provide full Medicaid 

coverage for pregnant women with no 

dependent children during the third 

trimester of pregnancy. States are 

required to cover ‘‘qualified pregnant 

women’’ during all trimesters of 

pregnancy for full Medicaid benefits, in 

accordance with sections 

1902(a)(10)(A)(i)(III) and 1905(n) of the 

Act, if they meet the statutory minimum 

income and resource requirements or 

more liberal methodologies 

implemented by the State for this group 

under section 1902(r)(2) of the Act. 

These coverage requirements are 

incorporated into the consolidated 

group for pregnant women at § 435.116. 

Comment: Several commenters raised 

a question about whether a woman 

covered under the adult group must be 

transferred to coverage under § 435.116 

when she becomes pregnant, and 

whether, when the post-partum period 

ends, the woman would then be 

transferred back to coverage under the 

adult group. Commenters were 

concerned that this could result in 

lesser coverage at a time when the 

woman is more vulnerable. Also, these 

commenters were concerned that this 

transferring back and forth could impact 

continuity and quality of care and the 

receipt of medically necessary services 

during pregnancy. 

Response: While continuity is 

important, States are not required to 

monitor the pregnancy status of women 

covered under the adult group. 

However, women should be informed, 

in accordance with § 435.905 related to 

the availability of program information 

discussed later in this preamble at 

section III.E.1, of the benefits afforded to 

pregnant women under the State’s 

program. If a woman becomes pregnant 

and requests a change in coverage 

category, the State must make the 

change if she is eligible. But, we will not 

otherwise expect States to monitor 

pregnancy status and to shift women 

into the group for pregnant women once 

they become pregnant. 

c. Infants and Children Under Age 19 

(§ 435.118) 

Comment: Many commenters 

supported the expanded minimum 

income standard for children aged 6 

through 18 from 100 to 133 percent of 

the FPL. The commenters also 

supported States’ ability to continue to 

claim enhanced match from their CHIP 

allotment for children transferred from 

a separate CHIP to Medicaid as a result 

of this Medicaid expansion. One 

commenter expressed concern about 

quality, access, and continuity of care 

when children are moved from coverage 

under a separate CHIP to coverage under 

Medicaid, and proposed that children 

be allowed to remain with their medical 

home rather than being shifted from one 

program to another. 

Response: States may claim enhanced 

match from their CHIP allotment for 

children who meet the definition of an 

‘‘optional targeted low-income child’’ at 

§ 435.4 and become eligible for 

Medicaid as a result of the amendment 

of section 1902(1)(2)(C) of the Act to 

increase the income standard for 

mandatory coverage of children aged 6 

through 18 under section 

1902(a)(10)(A)(i)(VII) of the Act from 

100 to 133 percent of the FPL. 

4. Other Conforming Changes to 

Existing Regulations (§ 435.4) 

We proposed several definitions 

specific to the Medicaid eligibility 

changes under the Affordable Care Act 

(listed in more detail in 76 FR 51155) 

and received the following comments. 

Comment: One commenter 

recommended that the definition of 

‘‘Affordable Insurance Exchanges 

(Exchanges)’’ be revised to include a 

‘‘quasi-governmental agency.’’ Another 

commenter recommended that the 

definition be revised to include an 

‘‘individual market Exchange’’ and a 

‘‘SHOP Exchange,’’ and that ‘‘refer’’ be 

changed to ‘‘may refer’’ because some 

references to an Exchange just refer to 

certain types of Exchanges. 

Response: The definition of 

‘‘Exchange’’ is outside the scope of the 

Medicaid regulations and governed by 

the Exchange regulations. Therefore, we 

are revising the definition of 

‘‘Affordable Insurance Exchanges 

(Exchanges)’’ in this final rule to 

reference the definition of ‘‘Exchange’’ 

in 45 CFR 155.20 of the final Exchange 

regulation. We are making a similar 

revision to the definition of ‘‘advance 

payment of the premium tax credit 

(APTC).’’ 

Comment: One commenter 

recommended that the definition of 

‘‘caretaker relative’’ include the 

domestic partner of a child’s parent or 

other caretaker relative, and also a 

parent or relative standing ‘‘in loco 

parentis.’’ Another commenter pointed 

out that, under the AFDC rules, a 

caretaker relative had to be a certain 

degree of relationship to a dependent 

child. 

Response: States should have the 

option to consider the domestic partner 

of a child’s parent or relative as a 

‘‘caretaker relative’’ of a dependent 

child. We are also revising the final rule 

to offer States the option to consider any 

adult with whom a child is living and 

who assumes primary responsibility for 

the dependent child’s care to be a 

caretaker relative. However, since 

caretaker relatives are, in essence, 

standing in the shoes of a parent to 

assume primary responsibility to care 

for a child, we do not see the need to 

add a reference to relatives standing ‘‘in 

loco parentis.’’ Moreover, the term ‘‘in 

loco parentis’’ could be read overly 

broadly to include relatives who have 

only temporary or fleeting custody of 

the child (such as in the provision of 

day care or babysitting). We are also 

revising the definition of ‘‘caretaker 

relative’’ in this final rule to specify the 

degrees for relationship of relatives, for 

consistency with current policy based 


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on section 406(a) of the Act, as in effect 

prior to enactment of PRWORA. 

However, we have revised the 

regulation text to provide States with 

the option to expand the definition of 

caretaker relatives to cover additional 

degrees of relationship to a dependent 

child. 

Comment: Many commenters 

supported the codification of the 

definition of ‘‘dependent child,’’ 

including the State option either to 

eliminate the ‘‘deprivation’’ requirement 

altogether or to establish a higher 

number of working hours as the 

threshold for determining 

unemployment if deprivation is 

considered. One commenter pointed out 

that the definition omitted a parent’s 

physical or mental incapacity as a 

reason for a child to be considered 

‘‘deprived’’ of parental support and so 

‘‘dependent.’’ Another commenter 

expressed concern that the proposed 

definition of ‘‘dependent child’’ would 

change the longstanding option for 

States to include as ‘‘dependent 

children’’ 18-year olds who are full-time 

students to a requirement. 

Response: We unintentionally omitted 

a parent’s physical or mental incapacity 

as a reason for a child to be considered 

‘‘deprived’’ of parental support, and are 

adding this to the definition of 

‘‘dependent child’’ for consistency with 

45 CFR 233.90(c)(i), as required by 

section 1931(b) of the Act. We also 

revised the final rule to clarify that the 

18-year old full-time students included 

as ‘‘dependent children’’ at § 435.4 are 

those in a secondary school (or 

equivalent level of vocational or 

technical training), consistent with the 

definition of ‘‘dependent child’’ in 

section 406(a) of the Act, as in effect 

prior to passage of PRWORA. Also, we 

revised the final rule to clarify that 

coverage of 18-year old full-time 

students as ‘‘dependent children’’ is a 

State option, rather than a requirement, 

consistent with current policy. 

Comment: One commenter 

recommended that the definition of 

‘‘insurance affordability program’’ be 

amended to include the Medicare Part D 

Low Income Subsidy (LIS) program. 

Response: The definition of 

‘‘insurance affordability program’’ 

mirrors the definition of ‘‘applicable 

State health subsidy program’’ in 

section 1413(e) of the Affordable Care 

Act and is limited to the programs 

included by statute in the streamlined 

eligibility and enrollment system 

required by the Affordable Care Act, 

eligibility for which can be determined 

based on MAGI. The LIS program does 

not meet this definition. 

Comment: Several commenters stated 

that the definition and application of 

the term ‘‘minimum essential coverage’’ 

are unclear. The commenters questioned 

whether an individual who is covered 

by Medicaid for limited benefits is 

considered enrolled in minimum 

essential coverage and so is ineligible 

for subsidized full benefits from the 

Exchange. Commenters pointed to 

several situations in which Medicaideligible individuals receive a limited 

benefit package including: pregnant 

women eligible for pregnancy-related 

services only (if the State does not cover 

all State plan benefits as pregnancyrelated); individuals eligible under the 

State plan or a waiver for family 

planning services; individuals eligible 

under section 1902(a)(10)(A)(ii)(XII) of 

the Act for tuberculosis-related services 

only; and certain immigrants who are 

eligible only for emergency medical 

services. The commenters 

recommended that CMS clarify that 

limited-benefit coverage under 

Medicaid is not considered ‘‘minimum 

essential coverage,’’ so that individuals 

would be permitted to receive APTCs to 

enroll in a qualified health plan (QHP) 

through the Exchange. For individuals 

who so choose, commenters suggested 

that Medicaid would serve as a 

secondary payer to the Exchange plan. 

Response: We do not have authority 

to define ‘‘minimum essential 

coverage,’’ which is defined in section 

5000A(f) of the Internal Revenue Service 

(IRS) Code (IRC) and is subject to 

implementing regulations issued by the 

Secretary of the Treasury, as referenced 

in the definition at § 435.4. Providing 

further guidance on the meaning of this 

term is beyond the scope of this rule, 

but will be addressed by the Secretary 

of the Treasury in future guidance. 

However, we affirm that to the extent 

that an individual is enrolled in any 

insurance plan, including an Exchange 

plan, Medicaid would be a secondary 

payer. No change has been made to 

section 1902(a)(25) of the Act, which 

provides generally that Medicaid pays 

secondary to legally liable third parties. 

Comment: Several commenters 

recommended that we drop the word 

‘‘properly’’ from the definition of ‘‘tax 

dependent’’ because the agency cannot 

and should not determine whether an 

individual is or will be properly 

claimed as a tax dependent for tax 

purposes. The commenters noted that 

only the IRS can make such a 

determination. 

Response: We made this revision in 

the final rule to drop the word 

‘‘properly’’ from the definition of ‘‘tax 

dependent.’’ Also, we revised the 

definition to reference both sections 151 

and 152 of the IRC. 

B. Financial Methodologies for 

Determining Medicaid Eligibility Based 

on MAGI Under the Affordable Care Act 

(§ 435.603) 

In the Medicaid Eligibility proposed 

rule, we set forth proposed 

methodologies to implement MAGI in 

determining financial eligibility for 

Medicaid for most individuals effective 

January 1, 2014. Consistent with section 

1902(e)(14) of the Act, our proposed 

methodologies codify the definition of 

MAGI and household income in section 

36B of the IRC (‘‘36B definitions’’), 

except in a limited number of situations. 

We received the following comments 

concerning the proposed provisions for 

determining financial eligibility based 

on MAGI methods. We also received 

many questions from commenters 

asking how MAGI applies in specific 

scenarios. We will continue to provide 

information and assistance for such 

scenarios as we work with States to 

implement these final regulations. 

1. Basis, Scope, and Implementation 

(§ 435.603(a)) 

Comment: Some commenters 

suggested that the final regulation 

should permit a State to convert its 

current income levels for eligibility 

groups to which MAGI-based 

methodologies do not apply to a MAGIequivalent threshold using a process 

that is the same as or similar to that 

provided under section 1902(e)(14)(A) 

and (E) of the Act for groups to which 

MAGI-based methodologies will apply. 

Commenters were concerned that States 

would have to maintain two eligibility 

systems, but would not receive Federal 

funds to maintain the necessary legacy 

systems. 

Response: We do not have the 

statutory authority to permit States to 

apply MAGI-based methodologies and 

convert current income standards to 

equivalent MAGI-based standards for 

MAGI-excepted individuals and 

eligibility groups described under 

section 1902(e)(14)(D) of the Act. 

However, if a State is able to 

demonstrate that application of MAGIbased methods to an income standard 

converted for such methods is less 

restrictive than the methodologies and 

standard otherwise applied, a State may 

be able to accomplish the goal sought by 

the commenters by proposing a State 

plan amendment in accordance with 

section 1902(r)(2) of the Act. 

Alternatively, a State could seek to 

convert standards for MAGI-excepted 

groups to MAGI-based methods through 

a demonstration under section 1115 of 


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the Act. We are available to work with 

any State interested in exploring this 

possibility. 

We do not believe States will need to 

maintain two eligibility systems, even 

with the different income 

methodologies for the MAGI and nonMAGI populations, nor will Federal 

matching funds be available to operate 

two eligibility systems. We note that 

State eligibility systems currently must 

support eligibility categories using 

different financial methodologies, based 

on the rules applied under either the 

AFDC or Supplemental Security Income 

(SSI) programs. Enhanced funding is 

available to States to develop, design, 

and maintain eligibility systems 

supporting the full range of eligibility 

categories, as long as certain conditions 

and standards ensuring high 

performance are met. States can also use 

the enhanced funding to transform their 

eligibility systems in phases, since 90/ 

10 match is available through the end of 

CY 2015 for design and development 

activities. Legacy systems unable to 

meet those conditions and standards are 

still eligible for a 50/50 match. 

Comment: Many commenters 

recommended that current beneficiaries 

be converted to MAGI as of their first 

redetermination on or after January 1, 

2014, so that everyone’s eligibility 

would not have to be redetermined as of 

January 1, 2014 to see if the grace period 

applies, which would place an 

enormous burden on States. 

Response: Section 1902(e)(14)(D)(v) of 

the Act, as added by section 2002 of the 

Affordable Care Act, provides for a 

temporary grandfathering of coverage 

for beneficiaries who are enrolled in 

Medicaid on January 1, 2014 and would 

lose eligibility due to the application of 

MAGI-based methodologies prior to 

March 31, 2014 or their next regularlyscheduled renewal, whichever is later. 

We proposed this provision in the 

Medicaid Eligibility proposed rule at 

§ 435.603(a)(3); however, we are 

deleting in the final rule the phrase in 

the Medicaid Eligibility proposed rule 

that provides for the delay of the 

application of MAGI-based 

methodologies to current beneficiaries 

‘‘if the individual otherwise would lose 

eligibility as the result of the application 

of these methods,’’ as we believe that 

this phrase is unnecessary and may be 

the source of the commenters’ concern. 

We revised § 435.603(a)(3) in the final 

rule to clarify that MAGI-based 

methodologies will not be applied to 

current beneficiaries who were 

determined eligible for Medicaid on or 

before December 31, 2013 until March 

31, 2014 or the next regularly-scheduled 

renewal of eligibility for such individual 

under § 435.916, whichever is later. 

However, according to § 435.603(a)(2), 

MAGI will be applied to individuals 

whose eligibility for Medicaid is 

determined effective on or after January 

1, 2014. 

2. Definitions (§ 435.603(b)) 

Comment: Many commenters 

recommended that, in the case of a 

pregnant woman expecting more than 

one child, States be required to count 

each expected child in determining 

family size when making an eligibility 

determination for a pregnant woman, as 

well as when determining eligibility for 

other household members. A few other 

commenters recommended that States 

be provided with the option to count 

each expected child, especially for the 

family size of other household members. 

Response: Our intent was to codify 

current Medicaid policy for household 

size for pregnant women, but the 

Medicaid Eligibility proposed rule did 

not accomplish this intent. Therefore, 

we are revising the definition of ‘‘family 

size’’ in § 435.603(b) to be consistent 

with current policy, as intended. Under 

the final rule, for the purpose of 

determining a pregnant woman’s 

eligibility, family size will reflect the 

pregnant woman plus the number of 

children the woman is expecting. For 

the family size of other individuals in 

the pregnant woman’s household, States 

will have the option to count the 

pregnant woman as either one or two 

persons or to count her as one person 

plus each expected child, if more than 

one. 

3. Financial Methodologies Based on 

MAGI § 435.603(c) Through (i) 

Comment: Many commenters believed 

that, in attempting to strike the proper 

balance between using 36B policies and 

current Medicaid policies, the Medicaid 

Eligibility proposed rule is too complex. 

Others supported the exceptions from 

36B definitions provided in the 

Medicaid Eligibility proposed rule— 

including the treatment of certain types 

of income and the treatment of 

individuals claimed as qualifying 

relatives by someone other than a parent 

or spouse, children claimed as a tax 

dependent by a non-custodial parent, 

and spouses who do not file a joint tax 

return—but believed that we should go 

further to retain current Medicaid 

principles in all instances. Some 

commenters expressed concern about 

the impact of using the 36B definitions 

on States’ budgets because the 36B 

definitions are more generous in the 

treatment of several types of income 

from the perspective of individuals 

seeking eligibility as compared to 

current Medicaid methods. Other 

commenters stated that we are not 

justified in deviating from the 36B 

definitions, and that the rule should be 

simplified by adopting the 36B 

definitions without exception. One 

commenter stated that the proposed 

regulations violate a clear Congressional 

mandate at section 1902(e)(14) of the 

Act to use MAGI as defined by the IRC 

for determining Medicaid and CHIP 

eligibility. Several commenters 

recommended that CMS first apply the 

36B definitions and then apply current 

Medicaid rules if the individual is 

ineligible based on the 36B definitions, 

or give individuals a choice as to which 

rules are applied. 

Response: After consideration of all of 

these comments, we are not modifying 

our policy. As explained in the 

Medicaid Eligibility proposed rule (76 

FR 51155 through 51159), eligibility for 

most individuals for Medicaid, as well 

as for APTCs, is based in the statute on 

the 36B definitions and we do not have 

flexibility to retain current Medicaid 

rules across the board. While there are 

some modest differences between the 

36B definitions and the MAGI-based 

household and income counting rules 

adopted for Medicaid, due to statutory 

requirements at section 1902(e)(14)(H) 

of the Act for continued application of 

Medicaid rules regarding point-in-time 

income and sources of income, the rules 

adopted are for the most part fully 

consistent with the 36B definitions and 

we believe that overall, simplicity has 

been achieved relative to current 

Medicaid household and income 

counting rules. Where there are 

differences, we believe that they can be 

handled without compromising 

seamless coordination. We believe that 

by using targeted solicitation of 

information and computer programming 

tools, States can implement these 

requirements efficiently. We will work 

closely with States to provide technical 

assistance on this and other issues as we 

work together to implement this final 

rule. 

Comment: Many commenters 

expressed concern about potential gaps 

in coverage due to application of 

different MAGI-based methods for 

determining financial eligibility for 

Medicaid and APTCs for enrollment 

through the Exchange. Several 

commenters recommended a ‘‘safe 

harbor’’ to ensure coverage in Medicaid 

for individuals who otherwise would 

fall into a coverage gap because their 

household income based on the MAGIbased methodologies in § 435.603 is 

above the applicable Medicaid income 

standard, but household income based 

on the 36B definition of MAGI and 


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household income is below the floor of 

100 percent of the FPL for APTC 

eligibility. 

Response: We believe that such 

potential coverage gaps will be rare, but 

agree that eliminating any potential gap 

is important. Therefore, we are 

redesignating proposed paragraph (i) of 

§ 435.603 to paragraph (j) in this final 

rule and are adding a new paragraph (i) 

to provide that States apply the 36B 

definitions in the situation described 

above. 

Comment: Several commenters 

questioned how States or applicants can 

be expected to determine and verify 

prospectively for the current calendar 

year who will file for taxes, what 

dependents will be claimed, and 

whether children or other tax 

dependents will be required to file a tax 

return. Commenters pointed out that 

such determinations may affect 

eligibility and questioned whether the 

State needs to verify whether an 

individual is properly claiming 

someone as a dependent or whether an 

individual must file taxes; if so, the 

commenters were concerned that this 

would interfere with the IRS’s authority. 

Several commenters stated that such 

attestations would be prone to fraud, 

abuse, and error. One commenter 

expressed concern about a State’s 

potential liability when making 

Medicaid determinations regarding tax 

dependency that is later proved wrong 

when the individual files his or her tax 

return. 

Response: As with other factors of 

eligibility, States must make their best 

determination as to whether an 

individual’s attestation or statement 

regarding the tax dependency status of 

another individual is reasonable, based 

on the information available at the time. 

However, there may be circumstances in 

which such status cannot be reasonably 

ascertained. We have added a new 

paragraph (f)(5) in § 435.603 to provide 

that when a taxpayer cannot, consistent 

with the procedures adopted by the 

State in accordance with § 435.956(f), 

reasonably establish that another 

individual will be a tax dependent of 

the taxpayer for the tax year in which 

Medicaid is sought, the inclusion of the 

other individual in the household of the 

taxpayer is determined in accordance 

with the rules for non-filers set forth in 

paragraph (f)(3) of § 435.603. Finally, 

the PERM program, which identifies 

improper payments, measures the 

accuracy of the agency’s determinations 

based on the information available to 

the agency at the time the determination 

is made, not based on information that 

only becomes available at a later date, 

when the taxpayer actually files his or 

her tax return. We will be working to 

ensure that all PERM rules and 

instructions conform to this principle 

and will issue additional guidance for 

States as needed. 

4. Household Income (§ 435.603(d)) 

Comment: Several commenters 

recommended using current Medicaid 

policies for determining whether a 

child’s income is counted, rather than 

requiring the applicant and the agency 

to determine whether a minor or adult 

child who is included in the parent’s 

household will be required to file taxes 

for the current calendar year. The 

commenters questioned how States can 

determine prospectively whether an 

individual will earn enough during the 

year for which eligibility is being 

determined to be required to file a tax 

return. 

Response: Except in cases where the 

statute provides for use of a different 

rule for Medicaid, we must apply the 

36B rules for household income when 

States determine Medicaid financial 

eligibility for MAGI-included 

populations. The statute calls for 

reliance on the 36B household 

definition. We have clarified the 

regulation text at § 435.603(d)(2)(i) to 

provide that the income of a child 

included in his or her parent’s 

household is not counted if the child is 

not expected to be required to file a tax 

return for the year in which coverage is 

sought. We expect that States will be 

able to make a reasonable determination 

as to whether an individual will be 

expected to be required to file a tax 

return, based on the individual’s current 

income for the applicable budget period 

(current monthly income for applicants; 

current monthly, or projected annual 

income for beneficiaries if the State 

exercised the option provided at 

§ 435.603(h)(2)). Such determinations 

would be based on information 

available at the time of application and 

renewal, not based on information only 

available at a later date, and States will 

not be held accountable for reasonable 

determinations made at the time of the 

determination, even if later proven 

wrong. Filing requirements are 

contained in section 6102 of the IRC and 

are discussed in IRS Publication 501. 

However, we are revising 

§ 435.603(d)(2) to make a technical 

correction in the language so as to 

implement the intent behind the 

proposed regulation to clarify when the 

income of tax dependents is and is not 

counted in total household income. 

Specifically, we are redesignating 

§ 435.603(d)(2) of the Medicaid 

Eligibility proposed rule at paragraph 

(d)(2)(i) of this final rule and adding 

language at § 435.603(d)(2)(ii) to clarify 

that the income of tax dependents other 

than the taxpayer’s children also is not 

counted in determining household 

income of the taxpayer if such 

dependent is not expected to be 

required to file a tax return. The income 

of such tax dependents, who are 

described in § 435.603(f)(2)(i), is 

counted in determining the tax 

dependent’s household income. For 

example, consider Taxpayer Joe, an 

adult (not himself claimed as a tax 

dependent) who claims his Uncle Harry 

as a tax dependent. Harry is not 

expected to be required to file a tax 

return. Consistent with the 36B 

definitions, Harry is included in Joe’s 

family size for purposes of Joe’s 

eligibility per § 435.603(f)(1), but 

Harry’s income is not counted in Joe’s 

household income under 

§ 435.603(d)(2)(ii). Under 

§ 435.603(f)(2)(i) and (f)(3) of our 

regulations, Harry will be considered for 

Medicaid eligibility as a separate 

household, and under § 435.603(d)(1), 

Harry’s income will be counted in 

determining his own eligibility. 

Comment: Many commenters 

supported the exception at 

§ 435.603(f)(2)(i) to the use of 36B 

definitions for individuals claimed as a 

tax dependent by someone other than a 

parent or spouse, and the application of 

the household composition rules for 

non-filers in determining such 

individuals’ eligibility. However, some 

of the commenters opposed inclusion of 

the requirement at § 435.603(d)(3) to 

count as household income for such 

individuals any actually available cash 

support received from a taxpayer who 

claims the individual as a tax 

dependent. Several commenters stated 

that this policy would be difficult to 

implement and that obtaining and 

verifying information about such 

support would interfere with real-time 

eligibility determinations, while not 

making much of a difference in the 

eligibility result. One commenter 

suggested counting such support only if 

it exceeds a certain amount, but not 

counting insignificant sums. 

Response: After considering the 

comments received, we are revising this 

provision in the final rule to make it a 

State option, rather than a requirement, 

to count actually available cash support, 

exceeding nominal amounts, provided 

by a taxpayer to a tax dependent in 

determining the latter’s eligibility. 

5. MAGI-Based Income (§ 435.603(e)) 

Comment: In the Medicaid Eligibility 

proposed rule (76 FR 51157), we 

proposed income counting rules at 

§ 435.603(e) that are, in general, the 


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same as the section 36B definitions, to 

ensure streamlined eligibility rules and 

avoid coverage gaps. We solicited 

comments on the application of the 

treatment of non-taxable Social Security 

benefits under the section 36B 

definitions for purposes of Medicaid 

eligibility. We received many such 

comments. 

Response: When the Medicaid 

Eligibility proposed rule was published, 

section 36B of the IRC did not include 

non-taxable Social Security benefits in 

MAGI. Public Law No. 112–56, signed 

into law on November 21, 2011, 

amended section 36B(d)(2)(B) of the IRC 

to modify calculation of MAGI to 

include in MAGI Social Security 

benefits which are not taxed. Therefore, 

all Social Security benefits under Title 

II of the Act, including those that are not 

taxable, will be counted in determining 

MAGI for Medicaid and other insurance 

affordability programs. 

Comment: We also solicited 

comments on our proposal to retain 

current Medicaid rules for the treatment 

of income in three limited 

circumstances: Lump sum payments; 

certain educational scholarships and 

grants; and certain American Indian and 

Alaska Native (AI/AN) income. 

While many commenters supported 

the proposed policy for consideration of 

lump sum income, several commenters 

opposed counting a lump sum as 

income only in the month received and 

not prorating lump sum income to count 

such windfalls of potentially large 

amounts of money (for example, lottery 

earnings or gambling profits) over the 

period under consideration. 

Response: The policy specified in the 

Medicaid Eligibility proposed rule 

reflects the methodology already 

applied in many States. It also reflects 

the SSI policy that is used for many 

non-MAGI eligibility groups. No 

commenter provided evidence and we 

are not aware of any evidence that this 

policy will have a significant impact on 

Medicaid eligibility. We believe that the 

potential for individuals who receive 

large windfalls of money in a lump sum 

payment to become eligible for 

Medicaid under the rule is outweighed 

by the likelihood that many more lowincome individuals would lose 

Medicaid eligibility under the 

commenters’ proposal due to receipt of 

a small lump sum payment that is not 

in fact available to purchase coverage 

through the Exchange throughout the 

year. 

Comment: A number of commenters 

requested that the rule specify that if an 

individual is determined ineligible due 

to lump sum income, the individual’s 

eligibility should be considered for the 

next month when the lump sum income 

is not taken into consideration, and the 

individual should not be required to file 

a new application. 

Response: We are not requiring States 

to reconsider applicants’ eligibility in a 

subsequent month without a new 

application if lump sum income in the 

month of application results in financial 

ineligibility for Medicaid. However, 

doing so is permitted under the statute 

and regulations. 

Comment: Some commenters 

supported our proposed policy at 

§ 435.603(e)(2) for certain educational 

scholarships and grants to be excluded 

as MAGI-based income; no commenters 

opposed the proposed policy. 

Response: We are finalizing 

§ 435.603(e)(2) as proposed, except that 

we are also excluding awards used for 

education purposes. It was an oversight 

that such awards were not mentioned in 

the Medicaid Eligibility proposed rule. 

Comment: Several commenters 

recommended clarifying revisions in the 

exemption of certain AI/AN income 

specified at § 435.603(e)(3) to reflect 

section 5006 of the American Recovery 

and Reinvestment Act of 2009 (Recovery 

Act) (Pub. L. 111–5, enacted on 

February 17, 2009) and other legislative 

and statutory requirements. Several 

commenters supported the provisions 

proposed in § 435.603(e)(3) to use the 

most beneficial (that is, least restrictive) 

exemptions of AI/AN income from the 

current Medicaid and 36B rules, to 

maximize these individuals’ access to 

Medicaid coverage while maintaining 

enrollment simplification and 

coordination. 

Response: We are finalizing 

§ 435.603(e)(3) with some modifications 

for consistency with Federal statutory 

requirements about certain AI/AN 

income and with the guidance issued by 

CMS on January 22, 2010 in State 

Medicaid Director Letter #10–001, 

available at http://www.cms.gov/smdl/ 

downloads/SMD10001.PDF. 

Comment: Several commenters 

suggested that we replace the words 

‘‘distributions’’ and ‘‘payments’’ with 

the term ‘‘income derived’’ throughout 

§ 435.603(e)(3). 

Response: Section 5006(b) of the 

Recovery Act specifies that these 

properties and ownership interests are 

excluded resources for Medicaid and 

CHIP. Monies that result from 

converting excluded resources are not 

considered income, but are still 

considered resources. Therefore, 

changing ‘‘distributions’’ and 

‘‘payments’’ to ‘‘income derived’’ would 

reclassify exempted resources as income 

that would need to be counted under 

MAGI, which we do not believe is the 

commenter’s intent. Resources are not 

counted in determining financial 

eligibility using MAGI-based methods. 

Therefore, we are not accepting the 

comment. 

Comment: Several commenters 

recommended adding exclusions for 

Judgment Funds distributions due to 

their exclusion from taxable income 

under the Judgment Fund Use and 

Distribution Act (25 U.S.C. 1401, et seq). 

Response: We are finalizing 

§ 435.603(e)(3) without adding a specific 

exclusion for Judgment Funds because 

the IRC and the section 36B definition 

of MAGI treat Judgment Fund 

distributions either identically to or 

more liberally than current Medicaid 

rules for exclusions from consideration 

for AI/AN populations. In 

§ 435.603(e)(3), we are only listing the 

specific types of distributions that the 

IRC treats as taxable income, but which 

are excluded from consideration as 

income for purposes of Medicaid and 

CHIP eligibility under the Recovery Act 

and current law. 

Comment: Several commenters stated 

that proposed § 435.603(e)(3) narrows 

the exclusion under section 1396a(ff) of 

the Act of distributions from ownership 

interests and real property usage rights 

relating to off-reservation hunting, 

fishing, gathering, harvesting, or usage 

rights not tied to real property 

ownership from consideration for 

purposes of Medicaid eligibility. 

Response: We have added a new 

paragraph (iii) at § 435.603(e)(3) (and 

have renumbered paragraphs (iii) 

through (v) in the Medicaid Eligibility 

proposed rule as (iv) through (vi) in this 

final rule) to exclude distributions and 

payments derived from the ownership 

interests and real property usage rights 

at issue. 

Comment: Several commenters 

inquired whether alien sponsor deeming 

will still apply under MAGI policies for 

Medicaid. 

Response: Nothing in the Affordable 

Care Act changed the requirements in 

section 421 of PRWORA, as amended, 

which require that the income of a 

sponsor and the sponsor’s spouse be 

deemed available to certain sponsored 

non-citizens. We expect to provide 

subsequent guidance on this matter. 

Comment: Several commenters 

mentioned that the proposed rules are 

silent on how to treat other types of 

income, and requested clarification as to 

whether current Medicaid rules or the 

36B rules will apply to those types of 

income in determining Medicaid 

eligibility. 

Response: Unless there is an 

exception provided at § 435.603(e) of 

the regulation, 36B definitions are 


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applied to all types of income. We will 

provide subsequent detailed guidance 

on the treatment of all types of income 

under the new MAGI-based 

methodologies. 

Comment: Several commenters 

requested guidance regarding how 

States will obtain different MAGI 

income calculated for various 

household members. 

Response: Section 1902(e)(14) of the 

Act, as added by section 2002 of the 

Affordable Care Act, provides for 

application of a new set of rules—or 

methodologies—to determine financial 

eligibility for Medicaid. While the new 

Medicaid MAGI-based financial 

methodologies differ somewhat from 

current Medicaid AFDC-based 

methodologies, the need to determine 

countable income for different 

household members is similar to the 

process used today for obtaining 

information and calculating countable 

income for eligibility determinations. 

States generally will need to obtain 

information through the application 

process, as well as from electronic data 

sources to calculate the MAGI-based 

income of each person in the household 

whose income will be included in total 

household income. 

6. Household (§ 435.603(f)) 

Comment: One commenter 

encouraged the Federal agencies to 

come up with a common, workable 

definition of household and fully 

reimburse States for the cost of 

implementing the new definition, 

including the costs resulting from any 

increased Medicaid and CHIP 

enrollment. 

Response: While we understand the 

commenters’ interest in having a single 

definition of household across all 

Federal programs, the statutory 

provisions governing the definitions and 

methodologies for each program 

necessitate some variation. State 

options, such as Express Lane 

eligibility, offer ways that States can 

look beyond differences in program 

definitions. Enhanced funding at a 

90/10 matching rate is available for 

systems development needed to 

implement the new rules subject to 

certain standards and conditions, under 

the ‘‘Federal Funding for Medicaid 

Eligibility Determination and 

Enrollment Activities’’ final rule 

published on April 19, 2011 (76 FR 

21950). Under section 1905(y) of the 

Act, increased FFP, set at 100 percent 

for the first 3 years of implementation 

and phasing down to 90 percent in 2020 

and beyond, also is available for 

‘‘newly-eligible’’ individuals eligible for 

coverage under the adult group at 

§ 435.119. 

Comment: One commenter questioned 

whether States can permit an applicant 

to exclude certain household members 

(for example, a stepparent or a sibling 

with income) to make other members 

eligible for Medicaid, as is permitted 

currently under Medicaid. 

Response: Individuals cannot choose 

who is to be included or excluded from 

their household under § 435.603(f). 

Comment: Some commenters see no 

reason to apply different policies for tax 

filers versus non-filers or based on who 

files and claims someone else in the 

family as a tax dependent. These 

commenters stated that whether and 

how families file taxes should not have 

such a direct impact on their eligibility 

for health insurance. 

Response: As explained in the 

preamble of the Medicaid Eligibility 

proposed rule (76 FR 51156–51159), 

section 1902(e)(14)(A) of the Act 

generally requires application of tax 

relationships in determining household 

composition, except as provided in 

section 1902(e)(14) (D) and (H) of the 

Act. However, in the case of non-filers, 

there are no tax relationships upon 

which to determine the household for 

purposes of Medicaid eligibility. 

Therefore, separate rules are needed. As 

explained in the Medicaid Eligibility 

proposed rule (76 FR 51158 through 

51159), we are issuing rules for nonfilers which, for most families, will 

result in the same outcome as the rules 

for tax filing families. Also, we are 

revising language at § 435.603(f)(1), 

(f)(2), and (f)(3) to replace language 

about who ‘‘files’’ a tax return with who 

‘‘expects to file’’ and to replace language 

about who ‘‘is claimed’’ with who 

‘‘expects to be claimed’’ as a tax 

dependent by another taxpayer for the 

taxable year in which an initial 

determination or renewal of eligibility is 

being made. Similarly, consistent with 

tax-filing rules, we are providing at 

§ 435.603(d)(2)(i) and (ii) that the 

income of a child or other tax 

dependent is not counted in the 

taxpayer’s household income if such 

dependent does not expect to be 

required to file a tax return for the year 

in which coverage is sought. 

Comment: Many commenters 

expressed particular concern about 

stepparent deeming under 

§ 435.603(f)(1) and (f)(2) of the rule, 

especially in States where stepparents 

are not financially responsible for 

stepchildren or if the stepparent does 

not claim the stepchild as a tax 

dependent. Many commenters also 

opposed counting a child’s income in 

determining the eligibility of other 

household members, including parents 

and siblings. Some commenters 

opposed inclusion in the parents’ 

household of children aged 21 and older 

and those living outside the parents’ 

home if such child is claimed as a tax 

dependent. The commenters feel that 

adopting the 36B definitions in such 

cases will result in a loss of eligibility 

that cannot be justified by a desire for 

consistency between Medicaid and 

Exchange policies. Several commenters 

mentioned the Sneede v. Kizer and 

related court decisions which prohibit 

income deeming for individuals besides 

the spouse or a minor child’s parents. 

Response: Some individuals’ 

eligibility will be affected by the 

inclusion of children in their 

stepparents’ household, the inclusion of 

older children and those living outside 

of the home in the parents’ household 

if they are claimed as tax dependents, 

and the inclusion of stepparent income, 

as well as the income of a child or 

sibling when required to file a tax 

return. However, the law generally 

requires that Medicaid apply the 36B 

household and income definitions 

beginning in 2014. Therefore, for the 

reasons specified in the Medicaid 

Eligibility proposed rule (76 FR 51157 

through 51159), we are finalizing 

without modification the provisions 

relating to the inclusion of stepchildren 

and stepparents in the household and 

the counting of child and sibling income 

when such income exceeds the filing 

threshold defined in the IRC. We do not 

comment on specific existing court 

orders. Parties affected by such orders 

must determine whether they need to 

seek relief or modification from the 

appropriate court in light of the changes 

to Federal law affected by the 

Affordable Care Act. 

Comment: Several commenters stated 

that the agency should not have to 

determine whether an individual aged 

19 or 20 is a full-time student for 

purposes of the household composition 

rules at § 435.603(f)(3) because doing so 

will increase the administrative burden 

and time required for determining 

eligibility. 

Response: While determining student 

status may add to administrative burden 

and complexity, we do not think it 

appropriate to prohibit States from 

counting parental income for full-time 

students age 19 and 20 whom the 

parents can claim as qualifying children 

on their tax return. To accommodate 

both these concerns, we are revising the 

final regulations at § 435.603(f)(3)(ii) 

and (iii) and adding a new paragraph at 

§ 435.603(f)(3)(iv) to provide States with 

the flexibility to consider children and 

siblings age 19 or 20 who are full-time 


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students to be members of the same 

household as the parents and other 

siblings under age 19. Conforming 

revisions to the exceptions to the 

application of the 36B definitions at 

§ 435.603(f)(2)(ii) (relating to children 

living with both parents who do not 

expect to file a joint tax return) and 

§ 435.603(f)(2)(iii) (relating to children 

expected to be claimed as a tax 

dependent by a non-custodial parent) 

also are made to align the ages of 

children specified in those paragraphs 

with the option now afforded States 

under § 435.603(f)(3)(iv). 

Comment: Regarding the exception to 

the application of the 36B definition of 

household at § 435.603(f)(2)(ii) for 

children living with both unmarried 

parents, some commenters 

recommended that we follow the 36B 

definition to count only income of the 

parent claiming the child as a tax 

dependent. The commenters were 

concerned that similarly-situated 

families will be treated differently 

depending on their tax filing and 

marital status, such as a child living 

with married parents compared with a 

child living with unmarried parents. 

These commenters stated that under the 

Medicaid rule, the income of both 

parents will be counted in determining 

the child’s Medicaid eligibility; whereas 

under the Treasury rule, only the 

income of the parent claiming the child 

as a tax dependent will be counted in 

determining eligibility for APTC 

through the Exchange. Although the 

income of both parents in this situation 

is considered for the child’s Medicaid 

eligibility under current Medicaid rules, 

the commenters were concerned that 

counting both parents’ income for the 

child’s Medicaid eligibility could cause 

a gap in coverage if the Exchange only 

counts the income of one parent and 

both parents have income below the 

Medicaid standard for coverage under 

the adult group. 

Response: We do not believe that the 

gap about which the commenters are 

concerned will, as a practical matter, 

exist. If one parent has income above 

the applicable MAGI standard for the 

child’s Medicaid eligibility, that parent 

can receive an APTC for the child, as 

long as the parent claims the child when 

filing his or her tax return for the year 

in which coverage is sought. If both 

parents’ income is below 100 percent of 

the FPL, we believe that the child’s 

household income for a family size 

including both parents, as well as the 

child, will be at or below the lowest 

possible applicable MAGI standard 

possible for children under Federal 

law—133 percent of the FPL, so the 

child will be eligible for Medicaid. 

However, new § 435.603(i) eliminates 

any inadvertent gaps in coverage 

resulting from a difference in 

methodologies applied under the 

Medicaid and Exchange regulations. 

Additionally, we are making a 

technical change to the proposed 

regulation at § 435.603(f)(2)(ii) to except 

a child from the general rule applicable 

to children expected to be claimed as a 

tax dependent by a parent in paragraph 

(f)(1). The Medicaid Eligibility proposed 

rule applied this exception to children 

under 21 who are living with both 

parents when the parents are not 

married. The intent, as explained in the 

Medicaid Eligibility proposed rule (76 

FR 51158), was to apply this exception 

in the case of children living with both 

parents when the parents cannot 

(because they are not married) or do not 

choose to file a joint tax return. We are 

revising paragraph (f)(2)(ii) to reflect 

this intent in this final rule. Under the 

final rule, the rules applicable to nonfilers at § 435.603(f)(3) will apply to 

children living with both parents, when 

the parents do not expect to file a joint 

tax return. 

Comment: Commenters generally 

supported proposed § 435.603(f)(2)(iii) 

for recognizing that custodial parents 

need to be able to apply for and obtain, 

based on that parent’s income, coverage 

for the child, regardless of which parent 

claims the child as a tax dependent. 

However, commenters also expressed 

concern that different policies applied 

for purposes of determining Medicaid 

eligibility versus eligibility for APTCs 

(for which the child is always counted 

in the household of the parent who 

claims the child as a tax dependent) 

would be difficult to administer and 

may result in a gap in coverage in some 

situations. Some commenters stated that 

the proposed Medicaid policy for 

custody situations does not address 

joint or shared custody arrangements. 

Many commenters suggested more 

flexibility in the rules, such as 

permitting parental choice. Some 

commenters recommended that if the 

custodial parent refused to apply for 

Medicaid for the child, the noncustodial parent should be able to apply 

for the child. Some commenters 

recommended that the non-custodial 

parent’s income rather than the 

custodial parent’s income be counted 

for the child’s eligibility if that would 

make the child eligible. A few 

commenters pointed out that if a court 

requires a non-custodial parent to 

provide medical support for the child, 

the non-custodial parent may not know 

whether the custodial parent has filed 

an application for coverage under 

Medicaid or other insurance 

affordability programs. 

Response: We agree with the 

commenters that the rule regarding 

shared or joint custody situations needs 

clarification. We are revising 

§ 435.603(f)(2)(iii) to provide that, for 

purposes of Medicaid eligibility, the 

custodial parent is established based on 

physical custody specified in a court 

order or binding separation, divorce, or 

custody agreement; or if there is no such 

order or agreement or in the event of a 

shared custody agreement, based on 

with whom the child spends more 

nights. This definition is consistent with 

the rule applied by the IRS for 

determining which parent may claim a 

child as a tax dependent. (See IRS 

Publication 501.) 

We do not agree that a gap is created 

by the lack of alignment in the rules. A 

divorced or separated parent is not 

required to claim a child in the current 

tax year simply because he or she did 

so in the year before coverage is sought. 

Under sections 151 and 152 of the IRC 

(and as explained in IRS Publication 

501), the custodial parent has the right 

to claim the child as a tax dependent, 

and only with the custodial parent’s 

agreement can the non-custodial parent 

do so. Thus, by claiming the child on 

his or her tax return, the custodial 

parent can avoid any potential coverage 

gap that might otherwise result. We also 

do not agree that parents should be able 

to choose which parent claims the child 

as a member of his or her household for 

purposes of Medicaid eligibility, or that 

the non-custodial parent should be able 

to claim the child as part of his or her 

household whenever the custodial 

parent does not file an application for 

Medicaid, which would create a 

potential for gaming the rules (by 

allowing the parents to include the 

child in whichever household would 

make the child Medicaid eligible). 

Comment: One commenter requested 

that we clarify the meaning of ‘‘living 

with’’ in the context of the non-filer 

household composition rule and 

questioned whether the State would 

have the flexibility to determine this in 

the context of students and in other 

situations. 

Response: This provision, which 

relates to whether spouses, parents, and 

children are members of the same 

household for purposes of determining 

financial eligibility and reflects 

longstanding Federal policy derived 

from the former AFDC program, is a 

different matter than the State residency 

rules addressed in section III.C. of this 

preamble and § 435.403 of this final 

rule. We will consider providing future 

guidance on the meaning of this term. 


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Comment: A commenter questioned 

whether a child under age 21 not living 

with the child’s parents may file an 

application without the parent being 

informed or involved (even if the parent 

claims the child as a tax dependent), 

consistent with current practice in many 

States. 

Response: State law and regulation 

establish who may file an application 

for an insurance affordability program 

on behalf of a child under age 21, and 

nothing in the Affordable Care Act or 

these regulations alters State authority 

or flexibility on this matter. 

Comment: One commenter asked 

whether the omission of the word 

‘‘natural’’ related to siblings in 

§ 435.603(f)(3)(iii) was an oversight. 

Response: The omission of ‘‘natural’’ 

before ‘‘adoptive and stepsiblings’’ in 

§ 435.603(f)(3)(iii) was an oversight 

which we are correcting in this final 

rule. 

Comment: Several commenters 

recommended retaining current 

Medicaid policies for a minor child who 

is pregnant or a custodial parent and is 

living with the minor child’s parent, so 

the minor child may be considered as a 

separate household from the minor 

child’s parent if otherwise the minor 

child would be ineligible, even if the 

minor child’s parent is claiming the 

child as a tax dependent. 

Response: Under section 

1902(a)(17)(D) of the Act, States 

currently are generally required to count 

the income of a minor child’s parent in 

determining the child’s eligibility. 

However, prior to the implementation of 

MAGI in 2014, States may use the 

authority of section 1902(r)(2) or 1931 of 

the Act to adopt a more generous 

financial methodology and disregard a 

parent’s income to make a pregnant teen 

or teen parent eligible. Such income 

disregards will not be possible under 

the MAGI-based financial 

methodologies. 

7. No Resource Test or Income 

Disregards (§ 435.603(g)) 

Comment: Many commenters 

supported the proposal to prohibit 

consideration of assets in determining 

financial eligibility for Medicaid and 

CHIP. A few commenters recommended 

retaining the asset test because 

eliminating the test entirely could 

incentivize people with significant 

assets to stop working and could result 

in others with significant assets, but 

minimal income, being enrolled in 

Medicaid at the taxpayer’s expense. 

Response: Section 1902(e)(14)(C) of 

the Act, as added by section 2002 of the 

Affordable Care Act, expressly prohibits 

consideration of assets in determining 

eligibility for individuals whose 

financial eligibility is based on MAGI 

methods. We do not have the flexibility 

to issue regulations to the contrary and 

are finalizing the regulation at 

§ 435.603(g) as proposed. We note that 

currently almost all States do not 

consider assets when determining 

children’s eligibility for Medicaid and 

nearly half of all States have also 

dropped the asset test for parents. 

8. Budget Period (§ 435.603(h)) 

Comment: In the Medicaid Eligibility 

proposed rule (76 FR 51156), we 

solicited comments on how best to 

prevent a gap in coverage between 

eligibility for Medicaid and for APTCs 

through the Exchange when eligibility 

for APTCs is based on annual income, 

whereas eligibility for Medicaid is based 

on current monthly income. Many 

commenters expressed concern that the 

goals of coordination and simplicity 

will be undermined if the budget 

periods used by Medicaid, CHIP, and 

the Exchange are not aligned, and that 

confusion on the part of consumers and 

gaps in coverage might result. Many 

commenters recommended either 

requiring the use of annual income for 

new applicants or providing this as a 

State option. One commenter suggested 

requiring use of annual income, but 

giving applicants a choice to use current 

monthly income if less than annual 

income. A number of commenters also 

recommended requiring use of annual 

income for current beneficiaries, rather 

than doing so at State option. Some 

commenters urged that the annual 

income previously reported to, and 

available through, a data match with the 

IRS be used by all programs. A number 

of commenters recommended that 

annual projected income for 

beneficiaries under the option afforded 

States in proposed § 435.603(h)(3) be 

based on each individual’s 12-month 

redetermination period established 

under § 435.916, rather than the current 

calendar year, as proposed in 

§ 435.603(h)(2). Several commenters 

stated that a mechanism is needed to 

cover individuals in Medicaid if their 

current monthly income exceeds the 

Medicaid limits but they are ineligible 

for APTCs through the Exchange 

because their projected annual income 

is less than 100 percent of the FPL. 

Response: The Medicaid ‘‘point in 

time’’ principle is explicitly retained in 

the Affordable Care Act. Thus, we are 

finalizing § 435.603(h)(1) as proposed to 

require the use of current monthly 

income in evaluating eligibility of 

applicants and individuals newly 

enrolling in the program, as provided 

under section 1902(e)(14)(H) of the Act. 

However, we agree with the commenters 

that unintended gaps in coverage should 

be avoided. As discussed above, we are 

adding new language at § 435.603(i) of 

the final rule to apply 36B 

methodologies, including use of annual 

income, when application of different 

MAGI-based methods under Medicaid 

than those applied under the 36B 

definitions otherwise would result in a 

gap in coverage. We also are revising 

§ 435.603(h)(2) to clarify that the 

projected annual household income 

which States can opt to use for current 

beneficiaries is for the remainder of the 

current calendar year. This will prevent 

a gap in coverage and someone 

bouncing back and forth between 

programs when current monthly income 

is below the Medicaid income standard, 

but projected annual income based on 

the full calendar year (including 

previous months) is above the Medicaid 

standard. 

Comment: Several commenters 

expressed concern about how to 

determine applicants’ MAGI-based 

income for a monthly budget period, as 

some of the line items on the Federal tax 

return, reported as an annual figure, are 

not easily translated to a monthly 

amount. 

Response: While we are not 

addressing this issue in this rulemaking, 

we understand the need for further 

information and will provide ongoing 

technical assistance on the 

determination of current monthly 

income using MAGI-based 

methodologies in the context of working 

with States on implementing this final 

rule. 

Comment: Several commenters stated 

the potential difference in FPL amounts 

used by Medicaid as compared with the 

Exchange for determining eligibility. 

Response: Because Medicaid 

eligibility is determined at a point in 

time, Medicaid uses the FPL amounts 

that are published and in effect when 

eligibility is determined. Under 45 CFR 

155.300(a) of the final Exchange 

regulation and § 1.36B–1(h) of the 

proposed Treasury regulation, eligibility 

for APTCs is based on the most recently 

published FPL amounts as of the first 

day of the annual open enrollment 

period for applying for coverage in a 

QHP through the Exchange. Since 

Medicaid will always use the same or 

more recent FPL amounts, which are 

adjusted for inflation, than those used 

for purposes of the APTC, the FPL 

amounts for Medicaid will be either the 

same as or higher than the amounts 

used for purposes of APTC eligibility. 

Therefore, no gap in coverage will 

result. In addition, we are adding a 


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definition of FPL to § 435.4 of the 

Medicaid final rule. 

Comment: Many commenters 

supported the flexibility offered to 

States at § 435.603(h)(3) to adopt a 

reasonable method for including a 

prorated portion of reasonably 

predictable future income when 

determining eligibility for applicants 

and current beneficiaries, to account for 

seasonal workers, changes in 

employment contracts, or layoffs. Many 

commenters recommended that this 

method be required to prevent churning 

in and out of coverage, rather than 

offered to States as an option. A few 

commenters recommended that States 

be required to take into account 

predictable decreases, but not increases, 

in income. One commenter 

recommended that States not be given 

the option to include future increases in 

income, which may never come to pass. 

Several commenters recommended that 

the rule provide examples of what CMS 

would consider to be a ‘‘reasonable 

method.’’ Several commenters 

recommended that proposed 

§ 435.603(h)(1) be amended to make it 

clear that paragraph (h)(3) is an 

exception to the use of monthly income 

under paragraph (h)(1). 

Response: We are finalizing proposed 

§ 435.603(h)(3) without modification. 

The policy is designed to provide States 

with flexibility to reduce churning 

between programs, which results from 

the fluctuations in income experienced 

by many Medicaid beneficiaries, and 

thereby to promote continuity of 

coverage for individuals and reduce 

administrative burden on States. States 

may make different choices in how best 

to achieve the goals of efficiency and 

continuity of coverage, so we are not 

making this policy a requirement. We 

also do not believe it is necessary to 

indicate in § 435.603(h)(1) that 

paragraph (h)(3) is an exception to the 

rule. Section 435.603(h)(3) clearly states 

that the option it affords States can be 

applied in determining monthly income 

under § 435.603(h)(1). Section 

435.603(h)(3) provides that a prorated 

portion of a predictable change in 

income may be included or excluded in 

determining current monthly income. 

States will have flexibility to develop 

reasonable methodologies which make 

sense in the context of their State 

eligibility and enrollment systems. We 

will work with States to ensure the 

reasonableness of any method adopted. 

We will also collect and analyze data to 

inform States, the Federal government, 

and others as to the extent to which 

churning occurs and the policies and 

procedures that are effective in reducing 

churning. 

Comment: Many commenters 

supported providing States with the 

flexibility to ignore temporary 

fluctuations in income when 

determining eligibility for current 

beneficiaries by using annual income 

rather than average monthly income. 

Several commenters recommended that 

States be offered the option to cover 

adults for a continuous eligibility 

period, similar to the option for 

children’s coverage at section 

1902(e)(12) of the Act. 

Response: Use of the option to project 

annual income for current beneficiaries 

can help States minimize the churning 

between programs that each of the 

strategies proposed by the commenters 

seeks to address. However, there is no 

statutory authority for States to elect 

continuous eligibility for adults. In 

addition, section 1902(e)(14)(B) of the 

Act does not permit States to disregard 

fluctuations in income experienced by 

beneficiaries. However, States may 

propose section 1115 demonstration 

projects to apply continuous eligibility 

for adults and to adopt other 

simplification measures for parents or 

other adults. 

9. Eligibility Groups for Which MAGI– 

Based Methods Do Not Apply 

(§ 435.603(j)) 

Comment: Numerous commenters 

were concerned about the eligibility of 

individuals with disabilities and those 

needing long-term services and supports 

under the Medicaid Eligibility proposed 

rule. Commenters were concerned that 

such individuals would be adversely 

affected if they are evaluated for 

coverage under optional eligibility 

groups only after they fail to establish 

eligibility based on MAGI-based 

methodologies. 

Response: The expansion of eligibility 

to all adults under 65 under the 

Affordable Care Act was not intended to 

keep anyone from being able to access 

coverage under Medicaid that is more 

appropriately suited to their needs. 

Therefore, we are revising our policy 

under the final rule such that 

individuals who meet the eligibility 

requirements, and are determined 

eligible, for coverage under an eligibility 

group for blind or disabled individuals 

or for an eligibility group under which 

long-term services and supports are 

covered will be able to enroll for such 

coverage, regardless of whether or not 

they have MAGI-based household 

income which is at or below the 

applicable MAGI standard (133 percent 

of the FPL for the new adult group). 

Revisions to implement this change in 

policy being made to the MAGI screen 

regulation at § 435.911 are discussed in 

section III.F. of the preamble. 

Conforming revisions to the exceptions 

from application of MAGI-based 

methodologies for blind and disabled 

individuals and those needing long term 

care services also are being made in the 

final rule at § 435.603(j)(3) and (j)(4) 

(redesignated from paragraph (i) in the 

Medicaid Eligibility proposed rule) to 

provide for exception from application 

of MAGI methodologies to such 

individuals, but only for the purposes of 

determining eligibility on the basis of 

disability or being blind or for an 

eligibility group under which long term 

care services are covered. We also 

clarify in the final rule at § 435.603(j)(6) 

that the exception from MAGI for the 

medically needy is only for the purpose 

of determining eligibility on such basis. 

Comment: One commenter requested 

clarification regarding the 

methodologies to be applied when 

eligibility is being determined based on 

the need for long term care services. The 

commenter specifically inquired about 

the applicability of spousal 

impoverishment rules. 

Response: Our reference to eligibility 

‘‘on the basis of the need for long-term 

care services’’ in the Medicaid 

Eligibility proposed rule would have too 

narrowly limited the MAGI exception 

contemplated by 1902(e)(14)(D)(iv) of 

the Act to individuals eligible under 

1902(a)(10)(A)(ii)(V) and (VI) of the Act, 

and certain section 1115 waivers. We 

have revised the language relating to 

this exception in § 435.603(j)(4) of this 

final rule to except from application of 

MAGI methods individuals seeking 

coverage of long term care services for 

the purpose of determining eligibility 

under a group that covers such services. 

In making such determinations, all 

current methodologies, including 

spousal impoverishment rules, will 

apply to the same extent as such 

methodologies apply today. 

Comment: Individuals over the age of 

65 are exempt under the Affordable Care 

Act from application of MAGI-based 

methods, but determinations of 

eligibility for parents/caretaker relatives 

is based on MAGI methodologies. In the 

Medicaid Eligibility proposed rule (76 

FR 51159), we solicited comments on 

what methodology should be used in 

determining eligibility for elderly 

parents and caretaker relatives over the 

age 65. Many commenters believe it 

would be burdensome for States to have 

to apply existing AFDC methodologies 

in the small number of cases in which 

an individual age 65 or older is being 

evaluated for eligibility on the basis of 

being a parent or caretaker relative. The 

commenters suggested that we limit the 

MAGI exemption for individuals age 65 


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and older to determinations where age 

is a condition of eligibility. 

Response: We are revising 

§ 435.603(j)(2) to except individuals age 

65 or older from application of MAGIbased methods only when being 65 or 

older is a condition of Medicaid 

eligibility. 

Comment: Some commenters 

suggested that we explicitly identify 

newborns automatically deemed eligible 

for Medicaid under section 1902(e)(4) of 

the Act (‘‘deemed newborns’’) as an 

exception to MAGI-based methodologies 

in § 435.603(j)(1) (§ 435.603(i)(1) in the 

Medicaid Eligibility proposed rule) 

because the Medicaid agency does not 

need to make a determination of income 

for these babies. 

Response: Deemed newborns are 

excepted from application of MAGIbased methodologies as noted by the 

commenters. However, we are not 

modifying the Medicaid Eligibility 

proposed rule, as we do not find it 

necessary to list every situation in 

which the agency is not required to 

make an income determination in the 

regulation. 

Comment: § 453.603(i)(6) provides 

that MAGI-methodologies do not apply 

to the determination of financial 

eligibility for the medically needy. One 

commenter questioned whether States 

will have flexibility to choose to apply 

some or all of the MAGI methodologies 

in determining medically needy 

eligibility for simplicity of 

administration. 

Response: The Affordable Care Act 

expressly exempts medically needy 

individuals, whose eligibility is based 

on either AFDC or SSI financial 

methodologies, from application of 

MAGI-based financial methodologies. 

States which cover medically needy 

individuals are required under section 

1902(a)(10)(C) of the Act to cover 

medically needy pregnant women and 

children, financial eligibility for whom 

currently is determined using AFDC 

methods. We recognize that retention of 

AFDC methods solely for the purpose of 

determining medically needy eligibility 

for these populations could be 

administratively burdensome for States. 

We are examining the options that may 

be available to avoid such burden. 

Comment: One commenter questioned 

whether aged, blind and disabled 

individuals in section 209(b) States 

would be required to spend-down 

income to the traditional standard of 

need or 133 percent of the FPL. This 

same commenter suggested that the 

current policy of spending down to the 

standard of need forces a result contrary 

to the intent of Affordable Care Act 

because it places higher financial 

burden on access to coverage for ABD 

individuals. 

Response: States which have elected 

to apply more restrictive methods than 

those applied for determining eligibility 

for SSI under section 1902(f) of the Act 

and § 435.121 of the regulations (‘‘209(b) 

States’’), but which do not cover 

medically needy aged, blind and 

disabled individuals, must allow aged, 

blind and disabled individuals whose 

income exceeds the income standard 

established for eligibility under 

§ 435.121 to spend down to such 

standard and receive coverage. Nothing 

in the Affordable Care Act changes this 

provision. However, as explained in the 

preamble to the Medicaid Eligibility 

proposed rule (76 FR 51151), blind and 

disabled individuals whose income 

exceeds the standard established in a 

209(b) State for coverage under 

§ 435.121 are not required to spend 

down to such standard to become 

eligible for Medicaid. Such individuals 

are eligible for and can enroll in 

coverage under the new adult group 

without meeting a spend-down, 

provided that their MAGI-based income 

is at or below the applicable MAGI 

standard (133 percent of the FPL for the 

new adult group). However, such 

individuals have the choice to spenddown to establish eligibility under 

§ 435.121 if coverage on such basis 

better meets their needs. Individuals age 

65 and over are not eligible for Medicaid 

under the new adult group. Such 

individuals may be able to spend-down 

to Medicaid eligibility under § 435.121. 

Comment: One commenter supported 

the policy that the exemption from 

MAGI only applies to the determination 

of eligibility for medically needy 

coverage and suggested that this policy 

be extended to individuals spending 

down to eligibility under § 435.121 in 

209(b) States. 

Response: An exception from 

application of MAGI-based methods 

applies in both circumstances. 

Eligibility for medically needy coverage 

under section 1902(a)(10)(C) of the Act 

is excepted from application of MAGIbased methods per section 

1902(e)(14)(D)(IV) of the Act, as codified 

at § 435.603(j)(6) in this final rule. 

Eligibility for mandatory coverage for 

blind and disabled individuals in 209(b) 

States under sections 

1902(a)(10)(A)(i)(II) and 1902(f) of the 

Act and § 435.121 of the regulations, 

including the ability to spend down to 

such eligibility, is excepted from 

application of MAGI-based methods per 

section 1902(e)(14)(D)(i)(III) of the Act, 

as codified at § 435.603(j)(3) in this final 

rule. 

Comment: One commenter questioned 

why proposed § 435.603(i)(5) excludes 

from MAGI-based methods only the 

determination of Medicaid eligibility for 

Medicare cost sharing assistance and 

not individuals who are in receipt of 

Medicare generally. 

Response: The Affordable Care Act 

does not provide for an exception from 

application of MAGI-based methods for 

individuals eligible for Medicare. The 

exception at section 1902(e)(14)(D)(i)(III) 

is limited to individuals eligible for 

Medicare cost-sharing assistance under 

section 1902(a)(10)(E) of the Act. We are 

interpreting the exception to apply only 

to determinations of eligibility for 

Medicare cost sharing so that States can 

apply the same MAGI-based methods 

used to determine such individuals’ 

eligibility for full Medicaid benefits 

under other eligibility groups as are 

used for other individuals who are not 

eligible for Medicare cost-sharing 

assistance. 

Comment: For the exception for foster 

care children from MAGI-based 

methods in section 1902(e)(14)(D)(i)(I) 

of the Act, one commenter questioned 

what ‘‘being deemed to be a child in 

foster care under the responsibility’’ of 

the State means. The commenter 

questioned whether ‘‘under the 

responsibility of the State’’ requires only 

that the State provide State-funded 

foster care assistance, or whether the 

State must exercise additional legal 

responsibility for the child. 

Response: The exception to MAGIbased methods at section 

1902(e)(14)(D)(i)(I) of the Act, as 

codified at § 435.603(j)(1) in the final 

rule, applies to children receiving 

Federal foster care, guardianship or 

adoption assistance payments under 

title IV–E of the Act and children 

eligible under an optional eligibility 

group for children receiving State foster 

care payments or in State-funded foster 

care, if the State covers such optional 

group under its State plan and does not 

apply an income test. Key to the 

application of the MAGI exception to 

such children is whether the State 

Medicaid agency is required to make a 

determination of income for a child in 

foster care to determine eligibility for 

Medicaid. The precise legal or custodial 

status of the child in relationship to the 

State is not material. 

Comment: One commenter noted that 

children as a group are omitted from the 

list of exceptions from MAGI proposed 

§ 435.603(i), which the commenter 

believes is inconsistent with section 

1902(e)(14)(H)(ii) of the Act and section 

2101(f) of the Affordable Care Act. The 

commenter recommended that the 

regulations should provide a 


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‘‘secondary’’ screening for children who 

would be eligible using current 

standards and methodologies, but who 

are not eligible when MAGI-based 

income is compared to the MAGIequivalent income standard determined 

by the State under section 

1902(e)(14)(A) and (E) of the Act. 

Response: We disagree that the policy 

in the Medicaid Eligibility proposed 

rule is inconsistent with section 

1902(e)(14)(H)(ii) of the Act or section 

2101(f) of the Affordable Care Act. 

Section 1902(14)(H)(ii) of the Act— 

which provides that the application of 

the definitions of MAGI and household 

income in section 36B of the IRC ‘‘shall 

not be construed as affecting or limiting 

the application of any rules established 

under’’ the Medicaid statute or under a 

State plan or waiver of the State plan 

‘‘regarding sources of countable 

income’’—must be read in conjunction 

with the general directive in section 

1902(e)(14)(A) of the Act that financial 

eligibility for Medicaid be determined 

based on the section 36B definitions. 

We interpreted the whole of section 

1902(e)(14) of the Act in the Medicaid 

Eligibility proposed rule as requiring 

that the section 36B definitions of 

‘‘MAGI’’ and ‘‘household income’’ 

apply, except as expressly provided in 

section 1902(e)(14)(D) of the Act, or 

under the authority of section 

1902(e)(14)(H)(ii) of the Act, where the 

impact on beneficiaries of applying the 

36B definitions would be significant 

and where departing from the 36B 

definitions in favor of retaining the 

current Medicaid rule would not 

undermine the seamless and 

coordinated eligibility and enrollment 

system established under section 1413 

of the Affordable Care Act and section 

1943 of the Act. Section 1902(e)(14)(D) 

does not provide for a general exception 

from application of MAGI-based 

methodologies for children. Finally, the 

commenters’ reliance on section 2101(f) 

of the Affordable Care Act is misplaced. 

As explained in section III.L. of the 

preamble, that section relates to the 

CHIP eligibility of children who lose 

Medicaid eligibility due to the 

elimination of income or expense 

disregards under section 1902(e)(14)(B) 

of the Act. Section 2101(f) of the 

Affordable Care Act does not provide for 

the retention of current financial 

methodologies for children in 

determining their eligibility for 

Medicaid. 

Comment: One commenter disagreed 

that individuals who are deemed to be 

receiving SSI should be excepted from 

application of MAGI-based methods 

because an income determination for 

Medicaid is not required. The 

commenter stated that, except for 

eligibility under section 1619(a) and (b) 

of the Act, a determination of income 

must be made by the State Medicaid 

agency to determine if someone is 

deemed to be receiving SSI. The 

commenter also believes that a 

regulatory citation for disabled adult 

children should be included in the list 

of regulatory cross references included 

in § 435.603(j)(1), (§ 435.603(i)(1) in the 

Medicaid Eligibility proposed rule) for 

individuals who are deemed to be 

receiving SSI. 

Response: The statute specifically 

includes the eligibility groups for 

deemed SSI recipients, along with 

individuals actually receiving SSI, in 

the list of individuals to whom the 

MAGI rules will not apply under section 

1902(e)(14)(D)(i)(I) of the Act, which we 

proposed to codify at § 435.603(i)(1). 

Therefore, we are retaining the 

exception from MAGI-based methods 

for deemed SSI recipients in the final 

rule at § 435.603(j)(1). However, we are 

making a technical correction at 

§ 435.603(j)(1) to indicate accurately 

which of the regulations cross 

referenced relate to eligibility based on 

receipt of SSI benefits and which relate 

to eligibility based on being deemed to 

receive such benefits. 

Eligibility for disabled adult children 

under section 1634(c) of the Act is not 

codified in the Medicaid regulations at 

this time. Therefore, we will take the 

suggestion under consideration for 

possible future guidance. 

Comment: Commenters agreed with 

the proposal (discussed at 76 FR 51159) 

not to identify at § 435.603(j)(3) 

(§ 435.603(i)(3) in the Medicaid 

Eligibility proposed rule) as excepted 

from MAGI-based methods children 

who are under age 18 who were 

receiving SSI on the basis of disability 

as of August 22, 1996, and would 

continue to receive SSI but for changes 

made by section 211 of PRWORA. 

Although such children are excepted 

from MAGI methods, there will be no— 

or virtually no— such children eligible 

for Medicaid on this basis as of January 

1, 2014. 

Response: We are not specifically 

identifying these children in this final 

rule. 

C. Residency for Medicaid Eligibility 

Defined (§ 435.403) 

As part of our overall effort to 

promote the coordinated eligibility and 

enrollment system established under 

sections 1413 and 2201 of the 

Affordable Care Act (discussed in 

greater detail in the Medicaid Eligibility 

proposed rule (76 FR 51160 and 

51166)), we proposed to simplify 

Medicaid residency rules and to align 

those rules with those that will apply 

under the other insurance affordability 

programs. 

Comment: Many commenters 

supported our proposal to remove the 

term ‘‘permanently or for an indefinite 

period’’ from the residency definition 

for adults in § 435.403(h)(1) and (h)(4), 

and replace the term ‘‘intention to 

remain’’ with ‘‘intends to reside, 

including without a fixed address.’’ 

Another commenter requested that CMS 

provide guidance for residency 

determinations for individuals who live 

in or visit multiple States or countries. 

A few commenters expressed concern 

that the proposed term ‘‘intends to 

reside’’ introduces an element of 

ambiguity to the definition that may 

result in inconsistent application across 

States. A few of these commenters 

recommended that CMS add regulatory 

language consistent with the discussion 

in the preamble to the Medicaid 

Eligibility proposed rule to clarify that 

visitors are not considered residents of 

the State they are visiting. 

Response: We believe that the 

proposed term ‘‘intends to reside,’’ 

when read within the context of the 

preamble clarifications, limits any such 

potential for ambiguity. In the preamble 

to the Medicaid Eligibility proposed 

rule, we explained that we interpret this 

language to mean that persons who are 

visiting the State, including for the 

purpose of obtaining medical care, are 

not considered residents of the State (76 

FR 51150). Also, current regulations at 

§ 435.403(j)(3) address a temporary 

absence and § 435.403(m) provides 

guidance regarding cases of disputed 

residency between States. For these 

reasons, we believe that further 

clarification in the regulatory text to 

preclude visitors from being considered 

residents of a State in which they are 

visiting is unnecessary. 

Thus, we are adopting our proposal to 

strike the term ‘‘permanently or for an 

indefinite period’’ and replace the term 

‘‘intention to remain’’ with ‘‘intends to 

reside, including without a fixed 

address’’ without substantive 

modification in § 435.403(h)(1) and 

(h)(4). Note that the language that 

appears in the Medicaid Eligibility 

proposed rule at § 435.403(h)(1)(i) 

regarding individuals who do not have 

capacity to state intent is now found at 

paragraph (h)(2) in the final rule, 

without any substantive modification. 

Therefore, we redesignated paragraphs 

(h)(2) through (h)(4) as paragraphs (h)(3) 

through (h)(5). We have also added 

clarifying language to paragraph (h) to 

specify that State residency of 

individuals receiving State 


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supplementary payments is addressed 

in paragraph (f) of this section. 

Comment: Many commenters 

supported the proposed inclusion of 

individuals who have entered the State 

with a job commitment or are seeking 

employment (whether or not currently 

employed) as satisfying the State 

residency requirement for adults as 

proposed at § 435.403(h)(1)(ii). 

However, a few commenters expressed 

concern that such inclusion could create 

a burden for States to cover those 

seeking work, but not living in the State. 

One commenter recommended we limit 

this provision to migrant or seasonal 

workers. A few commenters raised a 

concern that removal of ‘‘living’’ in the 

State from § 435.403(h)(1)(i) would have 

the unintended effect of eliminating the 

physical presence requirement from the 

definition of residency. In contrast, one 

commenter recommended inclusion of a 

future intent to reside in a State in 

limited circumstances, such as when a 

disabled individual desires to relocate 

but cannot safely do so until Medicaid 

services are in place. 

Response: We are retaining our 

proposed language in § 435.403(h) 

regarding individuals who have secured 

employment or are seeking employment 

and we are revising our regulation text 

consistent with commenters’ 

recommendations so our intent is clear 

that to be a resident, an individual must 

be living in the State. As explained in 

the Medicaid Eligibility proposed rule 

preamble, we proposed to remove the 

word ‘‘living’’ from the definition of 

residency to simplify the language, not 

to change the policy. We are revising the 

proposed regulation at § 435.403(h)(1) 

and § 435.403(h)(4) (redesignated to 

§ 435.403(h)(5) in the final rule), to 

clarify its application to only those 

individuals who are living in the State. 

With regard to an individual’s ability 

to initiate the application and 

enrollment process when such 

individual is not present in the State, 

we may address in future guidance ways 

in which States might facilitate the 

determination of eligibility for 

individuals moving into the State, 

particularly for those whose health care 

needs are such that a gap in coverage 

occasioned by a move would be 

detrimental to their health. 

Comment: In response to our proposal 

to maintain States’ current flexibility to 

determine whether students ‘‘reside’’ in 

a State for families in which children 

attend school in a State different than 

their parents, many commenters urged 

CMS to establish a clear policy on 

student residency that aligns with 

Exchange policy, which allows 

taxpayers to choose State of residency 

for tax dependents who live in another 

State to prevent potential gaps in 

coverage. These commenters strongly 

recommended that States should not be 

given flexibility, but be required to 

allow parents to choose the State of 

their child’s residence for purposes of 

Medicaid eligibility as well. Another 

commenter suggested that individuals 

age 18 and older be allowed to express 

their own intent, rather than relying on 

their parents. Several commenters 

expressed concern about access to 

services when American Indian/Alaskan 

Native (AI/AN) youth reside apart from 

their parents in boarding schools 

operated by the Bureau of Indian 

Education. 

Response: As stated in the Medicaid 

Eligibility proposed rule, while States 

will have flexibility for students 

attending school in States different from 

their parents, States must still provide 

individuals with the opportunity to 

provide evidence of actual residency (76 

FR 51160). If there is a dispute in 

Medicaid State residency, the 

individual is a resident in the State in 

which the individual is physically 

located under our current regulations at 

§ 435.403(m). If the individual’s 

household income is under the 

applicable MAGI standard in the 

Medicaid State of residency (at least 133 

percent of the FPL), the individual will 

be eligible for Medicaid based on MAGI 

in that State. If the individual’s 

household income is over the applicable 

MAGI standard in the Medicaid State of 

residence, the individual will be eligible 

for Exchange-based coverage in the State 

of residency determined in accordance 

with Exchange regulations at 45 CFR 

155.305(a)(3)(iv). Thus, there should be 

no gap in coverage. Permitting taxpayers 

or parents/guardians to decide in which 

State an individual is a State resident 

could have significant cost implications 

for States, particularly with large 

student populations, and also could be 

challenging to operationalize. Note that 

students who are under age 21 and who 

are married or emancipated will be 

considered State residents using the 

same rules as adults (see 

§ 435.403(i)(1)), enabling them to 

express their own intent about their 

State of residence. Thus, we are not 

modifying our regulation text, but will 

work with States and other stakeholders 

on the application and enrollment 

information that applicants will need to 

apply and enroll in coverage. Finally, 

access to care for individuals 

temporarily physically located in a State 

other than their State of residence is a 

concern that is not unique to AI/AN 

students going to a school in a State 

other than where their parents live. 

Coordination and cross-State payment 

arrangements are important mechanisms 

to address this and we will continue to 

work on this issue (see more 

information below). 

Comment: Many commenters 

supported the consolidation of two 

existing definitions of residency for 

children (disabled children with nondisabled, non-institutionalized, 

non-IV–E foster care/adoption 

assistance children) as proposed in 

§ 435.403(i)(2), primarily for stated 

simplification purposes. One 

commenter noted that such prohibition 

would eliminate the current problem 

with States denying Medicaid for 

newborns residing in the State born to 

parents who may not be considered 

State residents. 

Response: We are finalizing the 

Medicaid Eligibility proposed rule 

without significant change, as set forth 

at § 435.403(i)(2). We agree that 

consolidation of the two existing 

definitions of residency for children, 

application of a similar residency 

definition as that proposed for most 

adults without the ‘‘intent’’ component 

simplifies the regulation. We have also 

made minor modifications to the 

regulation text to clarify that States 

cannot determine a child’s residency 

based solely on the parent’s residency at 

§ 435.403(i)(2). We have also added 

clarifying language to paragraph (i) to 

specify that State residency of 

individuals receiving State 

supplementary payments and 

individuals receiving IV–E assistance 

are addressed in paragraphs (f) and (g) 

of this section, respectively. 

Comment: In response to our 

solicitation for comments for whether 

we should change the current State 

residency policy with regard to 

individuals living in institutions and 

adults who do not have the capacity to 

express intent, we received many 

comments urging CMS to determine 

residency for institutionalized 

individuals based on the intent of the 

parent or guardian, rather than current 

policy that determines residency based 

on State residency of the parent or 

guardian at time of the individual’s 

placement in the institution even after 

a parent or guardian has moved to 

another State. One commenter 

recommended that CMS consider 

amending § 435.403 to provide that the 

State of residence for all individuals 

who lack the capacity to form intent be 

chosen by the parent or guardian, 

irrespective of an individual’s age. 

Response: We will consider these 

suggestions in our development of 


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future guidance and technical 

assistance. 

Comment: Several commenters 

recommended that CMS modify the 

proposal to include as residents 

individuals who enter the State seeking 

medical treatment, particularly in the 

context of persons who are members of 

Tribes who receive services at Youth 

Residential Treatment Centers (YRTCs), 

federally-managed boarding schools for 

tribal members, Indian Health Service 

(IHS) or other tribal providers. The 

commenters also raised concerns about 

the administrative burdens and barriers 

that providers serving these individuals 

experience entering into provider 

agreements with multiple States and 

receiving Medicaid payments for 

services rendered to individuals who 

reside in those States. Some 

commenters suggested that we develop 

a rule that would provide State 

residency for AI/AN children in the 

State in which the provider or facility is 

located. 

Response: In general, we do not 

believe it is reasonable to require a State 

to administer benefits to individuals 

who are present in the State only to 

receive medical care, and thus we are 

not modifying the Medicaid Eligibility 

proposed rule. We believe such a policy 

would be inconsistent with the common 

understanding of State residency, which 

is focused on individuals who live and 

intend to remain living in the State. 

Requiring a State to cover individuals 

who were solely present in the State to 

seek medical treatment would have a 

differential financial impact on States 

with medical institutions that attract 

individuals from across the country. 

That said, it is important to address 

interstate coordination of enrollment, 

retention, and access to services for lowincome Medicaid and CHIP children. In 

accordance with section 213 of the 

Children’s Health Insurance Program 

Reauthorization Act (CHIPRA), we 

published a notice in the December 18, 

2009 Federal Register (74 FR 67232) 

soliciting comments to assist in the 

development of a model interstate 

coordination process. The model 

process is available at http:// 

www.cms.gov/CHIPRA/Downloads/ 

InterstateCoordination.pdf and we have 

invited feedback from interested parties 

regarding the viability of the proposal. 

We intend to consider whether there 

is a need for further rulemaking to 

address the situation of individuals who 

are receiving services at entities that are 

federally-managed or operated under 

the authorities established by the Indian 

Self-Determination and Education 

Assistance Act, such as YRTCs operated 

under the Indian Health Care 

Improvement Act and boarding schools 

operated by the Bureau of Indian 

Education, whether operated by the 

Indian Health Service, Bureau of Indian 

Education, or by an Indian Tribe or 

Tribal organization. We welcome 

information on the impact such policy 

might have on States, federally-managed 

providers, Tribal governments, and 

Tribal members. We also plan to consult 

with Tribes as we consider this issue. 

Comment: One commenter 

recommended that § 435.403 codify the 

definition of ‘‘lawfully residing’’ 

currently in use in Medicaid and CHIP, 

under CHIPRA. Additionally, the 

commenter recommended the inclusion 

of the additional categories to the 

current CHIPRA definition. 

Response: The definition of ‘‘lawfully 

residing’’ is outside the scope of this 

final rule. 

Comment: We received one comment 

asking whether our proposed revisions 

to the State residency definition affect 

children receiving foster care or 

adoption assistance under title IV–E of 

the Act or State-funded programs. 

Response: Our proposed revisions to 

the State residency definition have no 

impact on IV–E foster care or subsidized 

adoption children, as we did not 

propose to amend the rules governing 

State residency of individuals who 

receive IV–E assistance at § 435.403(g). 

All other individuals under the age of 

21, who are not institutionalized or 

emancipated or receiving a State 

supplementary payment, would be 

treated under our rules at redesignated 

§ 435.403(i) in our final rule. 

D. Timeliness Standards (§ 435.912) 

Comment: A number of commenters 

requested additional information 

regarding timeliness and performance 

standards that will assure a seamless 

consumer experience, minimize 

administrative burdens, and otherwise 

ensure compliance with various 

provisions of this final rule. We also 

received comments requesting 

additional information with respect to 

the data reporting requirements for 

States to ensure adequate oversight of 

the administration of the program. 

Response: We recognize the need to 

provide parameters within which 

performance will be measured and to 

outline the areas where data and other 

information will need to be provided to 

monitor compliance with this final rule. 

We have revised current regulations at 

§ 435.911 (redesignated at § 435.912) to 

provide additional guidance on the 

timeliness standards for making 

eligibility determinations. We are 

soliciting additional comment and 

issuing as interim final § 435.912. 

Under the current regulations, States 

are directed to establish standards not to 

exceed 90 days in the case of 

individuals applying for Medicaid on 

the basis of disability and 45 days for all 

other applicants. The revised regulation 

at § 435.912 distinguishes between 

performance and timeliness standards, 

and States are directed to establish both. 

Under § 435.912(a), ‘‘timeliness 

standards’’ refer to the maximum period 

of time in which every applicant is 

entitled to a determination of eligibility, 

subject to the exceptions in § 435.912(e); 

‘‘performance standards’’ are overall 

standards for determining eligibility in 

an efficient and timely manner across a 

pool of applicants, and include 

standards for accuracy and consumer 

satisfaction, but do not include 

standards for an individual applicant’s 

determination of eligibility. 

Section 435.912(b) also includes the 

expectation, set forth in the proposed 

§ 435.911(c) and § 435.1200(e) and (f), 

that the State agency determine 

eligibility and, where appropriate, 

transfer the electronic account of 

individuals to other insurance 

affordability programs, promptly and 

without undue delay. Section 435.912(c) 

sets forth criteria which the agency must 

account for in establishing timeliness 

and performance standards, including: 

(1) The capabilities and cost of generally 

available systems and technologies; (2) 

the general availability of electronic 

data matching and ease of connections 

to electronic sources of authoritative 

information to determine and verify 

eligibility; (3) the demonstrated 

performance and timeliness experience 

of State Medicaid, CHIP and other 

insurance affordability programs, as 

reflected in data reported to the 

Secretary or otherwise available; and (4) 

the needs of applicants and their 

preferred mode of application 

submission and communication, as well 

as the relative complexity of 

adjudicating the eligibility 

determination based on household, 

income, or other relevant information. 

Note that the standards to be adopted 

pursuant to proposed § 435.912(c) are 

expected to reflect the systems and 

technological capabilities and electronic 

data matching which are generally 

available for use by States at reasonable 

cost. Our expectations are that these 

systems and technological capacities 

generally make it possible for real time 

determinations of eligibility in most 

cases. Standards shall be set reflecting 

this expectation as well as the pace and 

experience of States that are making 

ongoing and reasonable investments in 

systems improvements and technology 


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supported by Federal matching 

payments. Finally, we clarify in the 

regulation at § 435.912(b) that the 

Secretary will provide additional 

guidance on the timeliness and 

performance standards, with which the 

standards established by States under 

the regulation also will need to comply. 

Not addressed in § 435.912 are 

performance standards relating to other 

aspects of States’ eligibility and 

enrollment systems to ensure 

accountability, consistency, and 

coordination. Guidance regarding such 

other performance standards is 

forthcoming. 

E. Application and Enrollment 

Procedures for Medicaid (§ 435.905, 

§ 435.907, and § 435.908) 

The Affordable Care Act directs the 

Secretary to establish a model, 

streamlined application and enrollment 

process for use by States. The sections 

that follow summarize the key elements 

of the process. 

1. Availability of Program Information 

(§ 435.905) 

We proposed to implement section 

1943(b)(1)(A) of the Act directing States 

to develop procedures that enable 

individuals to apply for, renew, and 

enroll in coverage through an internet 

Web site through amendments to 

§ 435.907 and § 435.908. In conjunction 

with those procedures, we also 

proposed to revise § 435.905 to require 

that information be available in 

electronic formats, as well as in paper 

formats (and orally as appropriate). 

Comment: Many commenters advised 

that the list of information that the 

agency must furnish, as described in 

§ 435.905(a)(1) through (a)(3), needs to 

be expanded to include information on 

application/renewal processes, 

assistance, appeals, and benefits 

including the benchmark benefit 

package. One commenter also requested 

that § 435.905(a) be revised to state that 

applicant information should be 

confidential in all circumstances. 

Response: We do not believe that any 

revision to the proposed regulation is 

required. We are strongly committed to 

ensuring applicants and beneficiaries 

have the information they need as well 

as to ensuring the confidentiality of 

applicant and beneficiary information. 

Most of the information identified must 

be furnished to applicants and other 

parties under the existing regulation at 

§ 435.905, and that requirement was not 

changed by the Medicaid Eligibility 

proposed rule. The remaining requested 

information is required to be provided 

to applicants and other parties in other 

parts of the regulations governing the 

Medicaid program. Applications and 

assistance must be available under 

§ 435.907 and § 435.908. Regulations 

governing confidentiality of applicant 

and beneficiary information are set forth 

in existing regulations at subpart F of 

part 431 of the regulations. 

Comment: Many commenters 

suggested that the information in 

§ 435.905 needs to be publicly available 

online, not just to those ‘‘who request 

it.’’ Several commenters specifically 

recommended that we add a crossreference to § 435.1200(d), relating to 

the Internet Web site required under the 

Affordable Care Act. One commenter 

requested that we clarify that States 

only need to mail applicants program 

information upon request. 

Response: Our intention is for 

program information to be widely 

available in ‘‘electronic’’ formats, 

meaning that such information must be 

available to the public via the Internet 

Web site, not just upon request. We are 

adding a cross-reference to the 

regulation at § 435.1200(f) as a helpful 

clarification of this policy. Under 

§ 435.905, States are only required to 

mail program information upon request. 

Comment: A few commenters stated 

that Medicaid agencies should be 

required to provide information 

regarding all insurance affordability 

programs, not just Medicaid, to promote 

consistency and coordination across 

programs. 

Response: It is our expectation that all 

insurance affordability programs will 

coordinate and make available the basic 

information needed for individuals to 

understand all programs and make 

informed choices about applying for 

coverage. The Internet Web site required 

under § 435.1200(f) must promote 

access to information on all insurance 

affordability programs, which includes 

Exchange, Medicaid, CHIP, and the 

Basic Health Program (BHP) if 

applicable. Section 1943(b)(4) of the 

Act, as added by section 2201 of the 

Affordable Care Act, requires that such 

Web site be linked to the Web site 

established by the Exchange, and under 

§ 435.1200(b)(3), the State Medicaid 

agency must enter into an agreement 

with the other insurance affordability 

programs operating in the State to 

implement the requirements of 

§ 435.1200, including paragraph (f). 

Comment: The large majority of 

commenters support our proposed 

regulation that program information be 

provided in simple and understandable 

terms and accessible to persons who are 

limited English proficient and people 

with disabilities. Many commenters 

made specific recommendations that we 

include in the regulation standards and 

thresholds for translation of written 

information. For example, many 

suggested that we require written 

translations where at least 5 percent or 

500 limited English proficient 

individuals reside in the State or service 

area of the Medicaid program, 

whichever is less. Many commenters 

also recommended we add to this rule 

specific requirements to provide oral 

interpretation, such as for all languages 

free of charge to the individual, and to 

inform individuals how to access these 

services, such as requiring ‘‘taglines’’ in 

a specified number of languages. (A 

tagline is a brief statement in the 

individual’s language that informs the 

person how to obtain language services.) 

Many of these commenters 

recommended that we add to the final 

rule more detailed requirements on 

accessibility, including providing 

written materials such as large print and 

Braille documents and information 

about obtaining sign language 

interpretation. One commenter 

recommended that we have a specific 

section of regulation that addresses 

access for people with disabilities. A 

number of other commenters suggested 

that accessibility standards be required 

in all modalities that individuals may 

wish to communicate with States, that 

is, paper, online, oral communication, 

and that applications and renewal forms 

meet the same accessibility standards. A 

few commenters requested flexibility for 

States in developing language services 

requirements as States’ populations and 

needs differ, and one commenter 

expressed concern that requiring a 

specific standard for States could pose 

an unreasonable burden. 

Response: We are finalizing, with 

some modifications, our proposed 

regulations at § 435.905 and 

§ 435.1200(d) (redesignated at 

§ 435.1200(f)) to provide information 

and make Web sites accessible to 

persons who are limited English 

proficient or have disabilities. Section 

435.901 already requires States to 

comply with the Civil Rights Act of 

1964, as well as section 504 of the 

Rehabilitation Act of 1973, and all other 

relevant provisions of Federal and State 

laws, which would include relevant 

provisions of the Americans with 

Disabilities Act. Guidance issued in 

2003 (68 FR 47311) provides some 

parameters on language assistance 

services for persons who are limited 

English proficient, including oral 

interpretation and written translation 

services; this guidance is at http:// 

www.justice.gov/crt/about/cor/lep/ 

hhsrevisedlepguidance.pdf. On July 1, 

2010 we also issued a State Health 


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Official Letter (#10–007), available at 

http://www.cms.gov/smdl/downloads/ 

SHO10006.pdf, explaining the enhanced 

match available for translation and 

interpretation services in connection 

with improving outreach to, enrollment 

of, and use of services by children in 

Medicaid and CHIP. 

In addition to the Civil Rights Act, we 

believe that the requirements reflected 

in section 1413 of the Affordable Care 

Act and section 1943 of the Act, as 

added by section 2201 of the Affordable 

Care Act, to establish a coordinated 

system of eligibility and enrollment 

across all insurance affordability 

programs, as well as the specific 

requirement in section 1943(b)(1)(F) of 

the Act that States establish procedures 

for conducting outreach to and enrolling 

vulnerable underserved populations, 

including racial and ethnic minorities, 

would support requiring written 

translation and oral interpretation. 

We modified our proposed 

§ 435.905(b), accordingly, to specify that 

information for persons who are limited 

English proficient or have a disability be 

provided in an accessible and timely 

manner and at no cost to the individual. 

For people with disabilities, we specify 

that accessibility includes auxiliary aids 

and services. We clarify that application 

and renewal forms meet the same 

accessibility standards at § 435.907(g) 

and § 435.916(g). Note that we make a 

minor modification to our proposed 

language in § 435.905(b) to replace the 

term ‘‘simple and understandable 

terms,’’ with ‘‘plain language’’ to align 

with the language in the Exchange final 

rule at 45 CFR 155.205(c). 

We are not adding specific 

accessibility standards and thresholds 

in this final rule, but intend to issue 

such standards in future guidance, 

seeking input first from States and other 

stakeholders about appropriate 

standards and thresholds. Such 

guidance will coordinate our 

accessibility standards with the 

Exchange, other insurance affordability 

programs, and across HHS programs, as 

appropriate, providing more detail 

regarding literacy levels, language 

services and access standards. 

2. Applications (§ 435.907) 

To support States in developing a 

coordinated eligibility and enrollment 

system for all insurance affordability 

programs, we proposed to implement 

section 1943(b)(3) of the Act, which 

directs the Secretary to develop and 

provide States with a single, 

streamlined application. Accordingly, 

we proposed to amend the existing 

‘‘Application’’ provisions at § 435.907 to 

reflect use of the new single, 

streamlined application. 

Comment: Many commenters 

requested that we specify that States can 

continue to use multi-benefit 

applications. One commenter 

recommended that CMS only approve 

State-developed supplemental forms 

that collect enough information to 

qualify individuals for any human 

service program for which they may be 

eligible. 

Response: The intent of the rule is to 

codify the statutory requirement that 

there be a single streamlined application 

for timely enrollment of all eligible 

individuals in the appropriate health 

insurance affordability program. An 

individual must have an option to apply 

for Medicaid using the Secretarydeveloped or a Secretary-approved 

single streamlined application which 

asks questions relevant only to the 

eligibility and administration of 

insurance affordability programs. The 

regulations do not prohibit use of multibenefit applications, which may be 

approved in accordance with 

§ 435.907(b)(2). Use of supplemental 

forms in conjunction with the 

streamlined application would be one 

acceptable approach to assure access to 

a range of benefits, but States also are 

permitted to develop alternative multibenefit applications which do not use 

supplemental forms. We look forward to 

working with States interested in 

developing streamlined multi-benefit 

applications. 

Comment: Some commenters stated 

that applicants should be able to submit 

the alternative and supplemental forms 

for determination of non-MAGI 

eligibility through the submission 

modes proposed at § 435.907(d). 

Response: States must make 

application processes accessible for all 

individuals, and maximize the 

submission options for individuals 

being evaluated for eligibility on a basis 

other than MAGI. All individuals must 

be able to begin the application process 

via the Internet Web site, telephone, 

mail, or in person using the single, 

streamlined application in accordance 

with § 435.907(a). States have the option 

to use supplemental or separate forms 

for approval of eligibility under a nonMAGI category, as described in 

§ 435.907(c). To the extent practical, 

those forms should also be accepted by 

the agency through all submission 

modes described in § 435.907(a). 

Comment: Most commenters 

supported the requirement for 

Secretarial approval of a State’s 

alternative single, streamlined 

application and requested that if a State 

wishes to make substantive changes, we 

require an additional approval. Some 

commenters requested that the 

Secretarial approval process be flexible. 

Response: For States opting to 

develop an alternative single, 

streamlined application the statute 

requires that such applications be 

approved by the Secretary. To 

implement this provision, under 

§ 435.907(b)(2), the regulations specify 

that the Secretary approve the initial 

application and any substantive change 

to such application. We intend to be 

flexible and timely in working with 

States to secure Secretarial approval of 

alternative applications that meet the 

relevant regulations and guidance. 

Comment: Some commenters 

mentioned specific criteria or questions 

that should be included on the model 

application and alternate applications, 

such as information that captures 

information to elicit eligibility for other 

Medicaid categories, including coverage 

under section 1115 waivers, Medicaid 

Buy-In programs, medically frail criteria 

or for long-term services and supports, 

as well as vital applicant information 

such as AI/AN status. Several 

commenters provided recommendations 

on the functioning of an online 

application, such as using decision tree 

logic to ask minimum questions, prepopulating the form with information 

available electronically, and providing a 

printable copy to applicants. 

Response: This input will help inform 

our work to develop the application and 

accompanying guidance. 

Comment: Some commenters 

supported the provision in the proposed 

regulation that alternative and 

supplemental forms for determination of 

non-MAGI eligibility must be approved 

by the Secretary in a manner similar to 

the single, streamlined application. 

Other commenters urged against 

requiring such approval, stating that 

such forms are already in use and do not 

require changes in 2014. One 

commenter suggested that the Secretary 

publish required data elements for these 

non-MAGI forms and facilitate best 

practices via review, but not approval, 

of non-MAGI applications and 

supplemental forms. Another 

commenter suggested delaying 

requirements for approval until after 

2014, given the implementation 

demands on States over the next two 

years. 

Response: We have revised 

§ 435.907(c) to specify that any 

application or supplemental form used 

by a State for determining eligibility on 

bases other than the applicable MAGI 

standard meet Secretarial guidelines. 

These forms must be submitted to the 

Secretary, and will be available for 


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review by the public, but will not have 

to be approved prior to use. 

Comment: Many commenters 

requested that the single streamlined 

application include a question to screen 

for potential eligibility on a basis other 

than MAGI, such as whether an 

applicant may be disabled, and a 

notification that applicants have the 

right to a full Medicaid determination 

on all bases if desired. A few 

commenters requested that the 

application also include an explanation 

of the benefits of obtaining a non-MAGI 

determination. Many noted concerns 

that the Exchange proposed rules would 

require a screen for non-MAGI 

eligibility, while this is not explicitly 

required in the Medicaid Eligibility 

proposed rule. 

Response: We intend to include such 

questions on the model application, 

which will support State agencies in 

fulfilling provisions for appropriate 

eligibility determinations under 

§ 435.911. 

Comment: One commenter advised 

that the blind and disabled should not 

be required to complete any forms or 

provide any information beyond the 

single streamlined application. The 

commenter advised that the single, 

streamlined application ‘‘should 

include all information necessary to 

determine eligibility whether based on 

income or some other criteria.’’ 

Response: Including all questions 

necessary for non-MAGI determinations 

on the single, streamlined application 

would make the application 

unnecessarily burdensome for the many 

applicants who will be eligible based on 

MAGI. We will work with States to 

design approaches to minimize burdens 

on all applicants and to help ensure that 

all eligible individuals are enrolled in 

the appropriate eligibility category. 

Comment: Some commenters 

questioned and raised concerns about 

logistics and expense of the requirement 

for telephonic applications and 

signatures and requested clarification on 

CMS’ expectations. One commenter 

mentioned a concern with the 

requirement to accept applications via 

facsimile in proposed § 435.907(d)(5) 

due to a possible lack of privacy 

inherent in fax submissions. Finally, a 

commenter expressed concern that the 

proposed regulations do not account for 

potential technological changes that 

may make new submission channels 

viable. 

Response: We anticipate that 

telephonic applications may be 

implemented in different ways by 

States, including through use of a call 

center that completes the online 

application in real-time with 

information obtained from the applicant 

on the phone. This may reduce expense 

and logistical difficulty as compared to 

implementing a new fully-automated 

telephonic application process. We 

recognize the need for State flexibility 

and will be issuing subsequent guidance 

on this issue that permits States 

flexibility to design their telephonic 

application process. In addition, we 

have deleted specific reference to 

accepting applications by facsimile in 

revised § 435.907(a)(5), and have 

broadened this provision to include 

acceptance of applications via ‘‘other 

commonly available electronic means,’’ 

to accommodate changing technologies. 

Such electronic means may include 

scanning, imaging, and email processes 

as well as facsimile. Under the final 

rule, States are expected to discontinue 

the use of technologies as they are 

superseded by newer and more 

commonly employed mechanisms. 

Acceptance of signatures along with an 

application accepted by facsimile may 

also continue under the authority to 

accept signatures via other electronic 

means in § 435.907(f). Requirements to 

safeguard applicant information at part 

431 subpart F apply equally to all 

applicant information, regardless of the 

mode of submission. 

Comment: Many commenters 

supported the policy to prohibit inperson interviews as a requirement of 

eligibility, as discussed in the preamble 

to the Medicaid Eligibility proposed 

rule, but requested that the policy be 

included in regulation text. 

Response: We have revised 

§ 435.907(d) to state that ‘‘the agency 

may not require an individual to 

complete an in-person interview as part 

of the application process for a 

determination of eligibility using MAGIbased income.’’ We are also adding 

corresponding language to § 435.916 to 

clarify that face-to-face interviews 

cannot be required as part of a MAGIbased renewal. 

Comment: Many commenters strongly 

supported our proposed regulation to 

codify previous guidance prohibiting 

States from requiring an individual who 

is not applying for an eligibility 

determination for him or herself (a nonapplicant) from providing a Social 

Security Number (SSN) or information 

about his or her citizenship or 

immigration status. Many commenters 

also supported codification of this 

policy in CHIP. However, a few 

commenters noted that verification of 

MAGI income through the IRS will 

require an SSN, and expressed concern 

that without an SSN it may not be 

possible to determine eligibility for 

these applicants through real-time 

processes. A few commenters requested 

that States be permitted to require an 

SSN from non-applicants to 

electronically verify household income 

of all applicants. A few other 

commenters requested guidance on how 

to verify income if a non-applicant has 

not provided an SSN. 

Response: As stated in the preamble 

of the Medicaid Eligibility proposed 

rule (76 FR 51161), we are codifying the 

longstanding policy regarding use of an 

SSN contained in the Tri-Agency 

Guidance for Medicaid and CHIP, which 

is available at http://www.hhs.gov/ocr/ 

civilrights/resources/specialtopics/tanf/ 

triagencyletter.html. The Guidance 

states that individuals not seeking 

coverage for themselves who are 

included in an applicant’s or 

beneficiary’s household to determine 

eligibility of such applicant or 

beneficiary, may not be required to 

provide either an SSN or information 

about their citizenship, nationality or 

immigration status to avoid deterring 

enrollment of eligible applicants. 

Provision of an SSN may occur on a 

voluntary basis, as discussed below. 

That policy is grounded in section 

1902(a)(7) of the Act, Title VI of the 

Civil Rights Act of 1964, and the Privacy 

Act. 

If an SSN for a non-applicant 

household member is not provided, 

States will need to use other procedures 

to verify income, in accordance with our 

verification regulations, as done in 

States today. We recognize that, in some 

cases, verification of income without an 

SSN may not occur in real-time. We also 

codify this rule in CHIP at § 457.340(b) 

and have added a definition of ‘‘nonapplicant’’ at § 435.4. 

Comment: Many commenters 

supported our proposed regulation that 

sets out conditions if States choose to 

ask for SSNs of non-applicants on a 

voluntary basis, stating these conditions 

are helpful to avoid deterring eligible 

individuals from applying for coverage 

and requested that we retain these 

requirements. A few other commenters 

noted their concern that in an online 

application, a non-applicant’s SSN 

would be voluntary and that individuals 

be provided notice that providing this 

information is voluntary. A few 

commenters expressed concern that 

even permitting States to voluntarily ask 

for SSNs of non-applicants may deter 

eligible individuals and their families 

from applying. 

Response: We note that the Medicaid 

Eligibility proposed rule regarding the 

voluntary provision of SSNs codifies 

longstanding policy reflected in the TriAgency Guidance discussed above. We 

are retaining in this final rule the 


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codification of this policy at 

§ 435.907(e)(3), which will apply to the 

single streamlined application the 

Secretary develops under 

§ 435.907(b)(1), as well as other 

applications and supplemental forms 

discussed at § 435.907(b) and (c) of this 

section. We understand the concern that 

some individuals may be deterred from 

seeking coverage, even when provision 

of the SSN for non-applicants is 

voluntary. However, given the 

importance of electronic verification of 

income and other information to reduce 

burden and achieve real time eligibility 

determinations for applicants who may 

have non-applicant household 

members, we believe that States should 

be allowed to request, and individuals 

should have the option to provide, an 

SSN voluntarily, as long as the 

conditions set out in our Medicaid 

Eligibility proposed rule are met in 

accordance with current policy. 

Comment: A number of commenters 

requested that CMS codify in regulation 

text the discussion in the preamble of 

the Medicaid Eligibility proposed rule 

(76 CFR 51161) that information 

provided by a non-applicant necessary 

to determine eligibility of an applicant 

is considered information ‘‘concerning’’ 

the applicant or beneficiary, and 

therefore, is protected under 

confidentiality and safeguard provision 

of 1902(a)(7) of the Act. Commenters 

noted that this policy will avoid 

deterring family members that have 

eligible applicants. 

Response: In § 431.300(b) of this final 

rule, we have codified our interpretation 

that information provided by a nonapplicant, such as a parent, will be 

information ‘‘concerning’’ the applicant 

or beneficiary and will be protected to 

the same extent as applicant or 

beneficiary information under section 

1902(a)(7) of the Act. We also clarify 

that information of applicants and 

beneficiaries includes information 

submitted by a non-applicant. Note that 

we have replaced the term ‘‘recipient’’ 

with ‘‘beneficiary’’ in our final rule, and 

we intend the terms to have the same 

meaning. At § 431.305(b), we add SSNs 

to the list of information for which a 

State must have criteria and a plan to 

safeguard, consistent with current 

policy and other privacy law 

protections. In the final rule, we also 

revise proposed § 435.907(e)(2)(ii), 

redesignated as § 435.907(e)(3)(ii) in this 

rule, to permit a non-applicant’s SSN to 

be shared with other insurance 

affordability programs for the purposes 

of an eligibility determination for those 

programs. 

Comment: A number of commenters 

requested that we codify in regulation 

that a State cannot require information 

that is not necessary to determine 

eligibility, including asking that we 

amend our regulations to preclude a 

State from ‘‘requesting’’ information 

from a non-applicant about his or her 

citizenship or immigration status. A 

number of commenters expressed 

concern that any inquiry about 

citizenship or immigration status will 

have a chilling effect on eligible 

applicants living with household 

members who are not applying for 

coverage. 

Response: States may only require 

information that is necessary to make an 

eligibility determination or that is 

directly connected to administration of 

the State plan and we are codifying this 

longstanding policy in regulation text in 

revised § 435.907(e)(1) of the final rule. 

In § 435.907(e)(2), we clarify that, in 

addition, a State may request 

information necessary to determine 

eligibility for another insurance 

affordability program or other benefit 

program. States may not request 

information regarding a non-applicant’s 

citizenship or immigration status under 

this rule. We also have amended 

§ 435.916(e) to clarify that renewal 

forms must not collect information that 

is unnecessary to renew eligibility and 

that the provisions at § 435.907(e) apply 

to the renewal process. 

Comment: One commenter questioned 

if proposed § 435.907(e) conflicts with 

proposed § 435.948(c)(2) (redesignated 

at § 435.948(c) in the final rule) which 

requires the agency to request income 

information by submitting an 

individual’s SSN when it is available. 

Response: We do not believe there is 

a conflict between these provisions. 

Section 435.948(c) takes into account 

the possibility that an SSN may not be 

available, which is consistent with 

§ 435.907(e). 

Comment: One commenter suggested 

that we include in regulation the legal 

sources and bases for the policy 

outlined in § 435.907(e), such as the 

section 1902(a)(7) of the Act, the Civil 

Rights Act of 1964, Privacy Act, and TriAgency Guidance. The commenter 

suggested we also include those sources 

in Medicaid and CHIP regulation for 

application and redetermination at 

§ 435.907, § 435.916, § 457.330, and 

§ 457.335. 

Response: The applicability of section 

1902(a)(7) of the Act to non-applicant 

information is specified at § 431.300. 

Further, our current regulation at 

§ 435.901 requires compliance with 

Title VI of the Civil Rights Act of 1964 

and other Federal laws. Thus, while we 

have discussed the statutes and 

guidance in the preamble to this final 

rule, we do not think that it is necessary 

to further cite the other recommended 

statutes and guidance in our revisions to 

the regulations. 

3. Assistance With Application and 

Renewal (§ 435.908) 

We proposed to amend the provisions 

of § 435.908 to ensure that the agency 

provide assistance through a variety of 

means to aid individuals seeking help 

with the application or redetermination 

process. We also proposed that States 

have flexibility to design the available 

assistance, while assuring that such 

assistance is provided in a manner 

accessible to individuals with 

disabilities and individuals who are 

limited English proficient. In this final 

rule, we are switching the order of 

§ 435.908 (a) and (b). 

Comment: Some commenters 

requested that we clarify the difference 

between assisters and authorized 

representatives and specify what 

authorized representatives can do. 

Response: There is a difference 

between an application assister and an 

authorized representative both in the 

way that they are designated by the 

applicant, as well as the permissions 

that are given within the application 

and renewal processes. In general, 

application assisters are staff and 

volunteers of organizations authorized 

by the State Medicaid agency or State 

CHIP agency to provide assistance to 

individuals with the application and 

renewal process, at the request of the 

applicant/beneficiary. The activities of 

assisters generally include providing 

information on insurance affordability 

programs and coverage options, helping 

individuals complete an application or 

renewal, and gathering required 

documentation. In contrast, an applicant 

may designate an authorized 

representative who may act on behalf of 

the applicant or beneficiary including 

signing the application and receiving 

notices. Regardless of whether an 

applicant or beneficiary has selected an 

assister or designated an authorized 

representative, the agency must provide 

the assistance described in § 435.908(a). 

Additional information about the 

potential roles and responsibilities of 

authorized representatives and assisters 

will be provided in subsequent 

guidance. We anticipate that if 

individuals who help with application 

and renewal processes as provided in 

§ 435.908(b) are not recognized by a 

State agency, not officially designated as 

authorized representatives and not 

permitted to submit an application as 

provided in § 435.907(a), then such 

individuals will not have access to 

sensitive applicant and beneficiary 


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information, consistent with 

confidentiality regulations in 42 CFR 

part 431 subpart F and the statutory 

protections that apply to IRS data. 

Comment: One commenter noted that 

in their State a doctor’s note is currently 

required for an individual to appoint an 

authorized representative. 

Response: Such a requirement is not 

consistent with current longstanding 

regulations at § 435.907 and § 435.908 as 

revised in this rulemaking. Legally 

competent applicants and beneficiaries 

must be permitted to designate 

representatives of their choosing and 

authorization from a physician is not a 

prerequisite for such a designation. In 

addition, we have further clarified at 

§ 435.907(a) the situations in which the 

State Medicaid agency must accept an 

application from someone acting 

responsibly on behalf of an applicant. 

Comment: Most commenters 

expressed strong support for the 

requirements in proposed § 435.908(b) 

for agencies to provide assistance in 

multiple modes. Some commenters 

requested that we specify that assistance 

must be provided during and outside 

normal business hours, or through 

specific mechanisms such as internet 

kiosks. One commenter stated that 

assistance from community-based 

organizations is far more effective than 

a State’s customer service telephone 

line. 

Response: While it is important to 

have a range of assistance opportunities 

available, we do not believe that our 

regulations should be revised to provide 

additional specificity as to the manner 

in which the Medicaid agency provides 

assistance. Assistance provided by other 

entities is outside the scope of this 

rulemaking. 

Comment: Some commenters 

suggested that the rule should codify 

outreach requirements to vulnerable and 

underserved populations, as required by 

section 1943(b)(1)(F) of the Act. Some 

emphasized the importance of 

addressing the unique needs of certain 

populations, such as those with mental 

illness and substance abuse disorders. 

Others asked that certain organizations 

and places be specifically recognized as 

key providers of application assistance 

and outreach, such as hospitals, 

Federally Qualified Health Centers 

(FQHCs), and correctional facilities. 

Some commenters noted the potential to 

leverage Medicaid outstationing 

requirements to provide outreach. Some 

commenters inquired about Federal 

funding for outreach. 

Response: We did not propose any 

new outreach requirements and, at this 

time, we are not codifying new outreach 

requirements. We recognize the 

importance of outreach, and we intend 

to inform States of all available options 

to obtain Federal funding for outreach 

activities as we work together to move 

ahead with implementation of these 

changes. 

Comment: One commenter noted that 

if an individual is found ineligible for 

all insurance affordability programs, 

then he or she should be referred to a 

consumer assistance program or 

navigator who can provide information 

on obtaining coverage outside the 

Exchange. 

Response: We do not have the 

authority to require agencies to provide 

assistance in obtaining coverage other 

than through the Exchange, Medicaid 

and CHIP and the BHP, if applicable. 

Comment: Several commenters wrote 

about the relationship between 

§ 435.908 and the requirements in 45 

CFR 155.205 on Medicaid and CHIP 

assistance via Exchange Navigators. 

Some commenters suggested a 

requirement that Medicaid and CHIP 

application and renewal assistance meet 

the same criteria required for Exchange 

assistance. One commenter inquired 

whether States may combine these 

programs. 

Response: The Medicaid agency is 

responsible for fulfilling the 

requirements of the Medicaid 

regulations at § 435.908. The assistance 

which Medicaid agencies provide under 

§ 435.908 is distinct from that provided 

by Exchange Navigators in accordance 

with 45 CFR 155.210 of the final 

Exchange regulation. Some aspects of 

applicant and beneficiary assistance 

may be integrated with the consumer 

assistance tools and programs of the 

Exchange. For example, a State may 

choose to operate one application 

assistance call center or one applicant 

assistance online chat feature. 

Comment: Many commenters 

encouraged the Secretary to measure the 

effectiveness of the assistance efforts 

and State agency performance by 

looking at criteria including call 

abandonment, call wait times, number 

of days to wait for an in-person 

assistance appointment, and waiting 

time for online assistance. 

Response: As noted in the preamble to 

the Medicaid Eligibility proposed rule, 

we intend to develop performance and 

processing standards for many aspects 

of the application and eligibility 

determination process in consultation 

with States, consumer groups and other 

stakeholders. We will consider these 

recommendations in developing such 

standards. 

Comment: Many commenters 

expressed strong support for our 

proposed regulation at § 435.908(b) to 

have States provide assistance to 

persons with disabilities and those who 

are limited English proficient who seek 

help with the application or 

redetermination process. Some 

commenters made recommendations to 

make the types of assistance required 

more specific, such as including oral 

interpretation, sign language 

interpreters, Braille and large print, and 

translated materials. A few commenters 

also suggested that we require that any 

assistance to persons who are limited 

English proficient be provided in a 

culturally competent manner. A few 

commenters recommended codifying a 

duty to assist when an applicant reports 

the existence of a disability, consistent 

with the requirements of the Americans 

with Disabilities Act. 

Response: We have revised § 435.908 

to align with our modifications in 

§ 435.905. Individual who are limited 

English proficient or have disabilities 

should be provided assistance in an 

accessible manner. We are not 

addressing specific components of 

assistance such as cultural competence 

or a duty to assist in this rule, but will 

consider these comments as we develop 

subsequent guidance on these issues. 

For more detail regarding accessibility, 

see the discussion in section III.E.1. of 

the preamble. 

F. MAGI Screen (§ 435.911) 

Consistent with sections 1902(a)(4), 

(a)(8), (a)(10(A), (a)(19), and (e)(14) and 

section 1943 of the Act, in § 435.911, we 

described a new simplified test for 

determining eligibility based on MAGI. 

We also proposed several pertinent 

definitions, including ‘‘applicable MAGI 

standards,’’ which will be at least 133 

percent of the FPL, but in some States, 

based on State-established standards, 

may be higher for pregnant women, 

children, or in a few States, parents and 

caretaker relatives. These and other 

proposed provisions are discussed in 

more detail in the Medicaid Eligibility 

proposed rule (76 FR 51161 and 51162). 

Comment: We received many 

comments on the eligibility of 

individuals with disabilities and those 

needing long-term services and supports 

under the Medicaid Eligibility proposed 

rule. Under the Medicaid Eligibility 

proposed rule, if an applicant is eligible 

based on the applicable MAGI standard, 

a State would not determine whether 

that person is also eligible under an 

optional group (for example, for blind or 

disabled individuals). Many 

commenters appreciated the ability of 

everyone with income below the 

applicable MAGI standard to be quickly 

and efficiently determined eligible for 

coverage without regard to disability 


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status or need for institutional or other 

long-term services and supports. 

However, commenters uniformly were 

concerned that individuals who qualify 

for coverage using current 

methodologies under an optional group 

for disabled individuals or an optional 

group covering institutional or other 

long-term services and supports would 

be adversely impacted under the 

Medicaid Eligibility proposed rule, 

because such individuals would be 

required to enroll for coverage in the 

adult group at § 435.119 and the 

commenters were concerned that 

eligibility under the adult group would 

not meet their benefit needs to the same 

extent as eligibility under the optional 

eligibility groups. 

A few commenters noted the 

operational difficulty States may have in 

ensuring that persons needing long-term 

services and supports are placed in the 

most appropriate eligibility category. 

Many commenters stated that the 

Medicaid Eligibility proposed rule was 

inconsistent with Medicaid 

requirements that beneficiaries eligible 

for more than one category may choose 

to have their eligibility determined 

under either category and that States 

determine eligibility in the ‘‘best 

interest’’ of Medicaid beneficiaries. At 

least one commenter suggested that all 

individuals in need of long-term 

services and supports be exempted from 

using the MAGI methodology or be 

given the option to apply for long-term 

services and supports under existing 

methodologies. 

Response: We have revised the policy 

in this final rule to ensure that 

individuals who meet the eligibility 

requirements for coverage based on the 

applicable MAGI standard (for example, 

under the new adult group at § 435.119) 

and who also meet the requirements for 

coverage under an optional eligibility 

group excepted under section 

1902(e)(14)(D) of the Act from the 

application of MAGI methods may 

enroll in the optional eligibility group. 

As discussed in Section B of the 

preamble, we are interpreting the 

exception from application of MAGIbased methods at sections 

1902(e)(14)(D)(i)(III) and 

1902(e)(14)(D)(iv) of the Act, codified at 

§ 435.603(j)(3) and (j)(4) of this final 

rule, to apply for the purpose of 

determining eligibility on the basis of 

disability or being blind or for an 

eligibility group under which long-term 

services and supports are covered. 

Individuals who meet the eligibility 

requirements for coverage based on the 

applicable MAGI standard nonetheless 

may be excepted from application of 

MAGI methods for purposes of 

evaluation under an optional eligibility 

group which better meets their coverage 

needs. Until eligibility on such other 

basis is determined, such individuals 

are not precluded from enrolling in the 

program under the new adult group (or 

other eligibility group, such as for 

children or pregnant women) based on 

MAGI. However, while no individual 

may be required to provide additional 

information needed to determine 

eligibility based on disability or another 

MAGI-excepted basis, once eligibility on 

such basis is established, the individual 

would no longer be eligible for 

Medicaid on the basis of MAGI (unless 

his or her circumstances changed), but 

would enroll in the program on the 

MAGI-excepted basis. 

Under this final rule, individuals who 

meet the eligibility criteria for coverage 

based on the applicable MAGI standard 

will be able to receive coverage on that 

basis while they undergo a final 

determination of eligibility based on 

eligibility for an optional group covering 

long-term services and supports. 

Beneficiaries enrolled in coverage under 

a MAGI-based eligibility group also will 

be able to move to an optional group 

based on a disability or long-term care 

needs should their circumstances 

change. Consistent with current rules at 

§ 435.905(a) and in accordance with 

§ 435.911(c)(2), States must determine 

eligibility under a basis other than 

MAGI for an individual described in 

§ 435.911(d), which includes 

individuals who indicate such potential 

eligibility on the single streamlined 

application, alternative application or 

renewal forms, as well as those who 

request such a determination. In 

addition, in accordance with current 

regulations at § 435.905, States must 

provide information to applicants and 

beneficiaries about the different 

eligibility options and benefit packages 

to enable them to make an informed 

decision about seeking coverage under 

other eligibility groups which may 

better meet their needs. 

This policy change is implemented 

through revisions to the regulatory 

provisions relating to the MAGI screen 

at proposed § 435.911 and to the 

regulatory provisions relating to the 

exceptions from MAGI-based financial 

methodologies proposed at 

§ 435.603(i)(3) and (i)(4) in the Medicaid 

Eligibility proposed rule (redesignated 

at § 435.603(j)(3) and (j)(4) in this final 

rule). Revisions at § 435.603(j) are 

discussed in section III.B. of the 

preamble. For § 435.911, paragraphs (a) 

and (b), which set forth the statutory 

basis and applicable MAGI standards for 

the eligibility categories described at 

§ 435.110, § 435.116, § 435.118, 

§ 435.119, and § 435.218, remain 

unchanged. In § 435.911(c), we retain 

our proposed language that this 

paragraph applies to individuals who 

submit an application described in 

§ 435.907 and meet the non-financial 

eligibility criteria or are determined 

eligible for Medicaid under a reasonable 

opportunity period to verify citizenship 

or immigration status. We have also 

added language to paragraph (c) to 

clarify the responsibility of the agency 

to apply § 435.911 to individuals whose 

eligibility is being renewed in 

accordance with § 435.916. Note that the 

process for determining eligibility set 

forth in § 435.911 will not apply at 

initial enrollment to so-called ‘‘autoeligibles’’ who are not required to file an 

application described in § 435.907—for 

example, individuals who are 

automatically eligible for Medicaid due 

to receipt of SSI or benefits under title 

IV–E of the Act and newborns deemed 

eligible under section 1902(e)(4) of the 

Act and § 435.117 of the regulations. 

We are revising § 435.911(c)(1) to 

provide that the State must furnish 

Medicaid promptly and without undue 

delay, consistent with timeliness 

standards established under § 435.912, 

to individuals (including children, 

pregnant women, parents and caretaker 

relatives and certain adults under age 65 

not eligible for Medicare) who are at or 

below the applicable MAGI standard. In 

the case of individuals who may be 

eligible on a basis other than the 

applicable MAGI standard (for example, 

based on disability), the obligation 

under § 435.911(c)(1) can be met either 

by promptly determining an individual 

eligible based on the applicable MAGI 

standard and providing benefits on such 

basis and then exploring eligibility for 

other eligibility categories excepted 

from MAGI methods, as appropriate, or, 

if possible to achieve promptly and 

without undue delay, by first 

determining eligibility on the MAGIexcepted basis. 

Paragraph (c)(2) of § 435.911 is 

revised to ensure that States also 

determine eligibility for Medicaid on a 

basis other than the applicable MAGI 

standard in the case of the following 

individuals, described in a new 

paragraph (d) which includes: (1) 

Individuals whom the agency identifies 

on the basis of information contained in 

the single streamlined application used 

for all insurance affordability programs 

or renewal form described in 

§ 435.916(a)(3), or on the basis of other 

information available to the State, as 

potentially eligible on a basis other than 

the applicable MAGI standard; (2) 

Individuals who submit an alternative 

application designed for MAGI-excepted 


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populations; and (3) Individuals who 

otherwise request a determination of 

eligibility on a basis other than the 

applicable MAGI standard. Under 

§ 435.911(c)(2), the Medicaid agency 

will need to collect such additional 

information as may be needed to 

determine eligibility on such other basis 

in accordance with our regulations at 

§ 435.907(c). Note that § 435.911(c)(2) 

applies to both individuals with MAGIbased household income at or below the 

applicable MAGI standard, as well as to 

those with MAGI-based household 

income above the applicable MAGI 

standard. In the case of individuals with 

income above the applicable MAGI 

standard, paragraph (c)(2) also applies 

to the determination of eligibility under 

optional eligibility groups subject to 

MAGI-based methods—for example, 

optional coverage of children receiving 

State adoption assistance in families 

with income above the applicable MAGI 

standard for children in the State, as 

well as optional groups excepted from 

MAGI methods. 

Finally, although the comments 

received and the discussion above focus 

on the implications of § 435.911 for 

individuals with disabilities and those 

needing long-term services and 

supports, we note that § 435.911(c) 

applies also in the case of individuals 

who may be excepted from the 

application of MAGI-based 

methodologies on other bases, including 

medically needy individuals eligible 

under section 1902(a)(10)(C) of the Act 

and 42 CFR part 435, subparts D and I 

of the regulations, excepted from MAGIbased methods at § 435.603(j)(6) and 

women screened under the Centers for 

Disease Control and Prevention (CDC) 

breast and cervical cancer early 

detection program, eligible under 

sections 1902(a)(10)(A)(ii)(XVIII) and 

1902(aa) of the Act, excepted from 

MAGI-based methods at § 435.603(j)(1). 

Section § 435.911(c)(3), redesignated 

from § 435.911(c)(2)(iii), relates to 

coordination of eligibility with the 

Exchange when an individual is 

ineligible for Medicaid based on the 

applicable MAGI standard, but is 

undergoing a Medicaid determination 

on another basis. In paragraph (c)(3), we 

have revised the cross-reference to our 

regulations at § 435.1200(e) to reflect 

revisions to § 435.1200 in this final rule, 

and the text at paragraph (c)(3) is not 

substantively modified. 

Comment: Some commenters 

requested that State Medicaid agencies 

be required to screen for the Part D LowIncome Subsidy (LIS) program, although 

they acknowledged that LIS is not 

included in the insurance affordability 

program definition. One commenter 

stated that required screenings should 

include potential Medicare Savings 

Program (MSP) eligibility. 

Response: Since LIS is not defined in 

the Affordable Care Act as an insurance 

affordability program, these rules cannot 

require a State to screen for it. In 

addition, nothing in our regulation 

changes already existing requirements 

for States to determine an individual’s 

eligibility on the most advantageous 

basis including eligibility for Medicare 

Savings Programs. 

Comment: One commenter suggested 

the final rule should require States to 

screen for pregnancy-related coverage, 

eligibility for women with breast or 

cervical cancer, eligibility for family 

planning services, and that States 

otherwise should provide information to 

individuals about all of the available 

coverage options. 

Response: Eligibility for pregnant 

women with income below the 

applicable MAGI standard is included 

in determination of eligibility under 

§ 435.911(c)(1). As noted above, 

§ 435.911 applies to all individuals 

described in § 435.911(d), including 

individuals such as women with breast 

or cervical cancer, and States will be 

expected in accordance with § 435.905, 

to provide individuals with sufficient 

information to make an informed choice 

about requesting a determination on a 

basis other than the applicable MAGI 

standard. 

Comment: A few commenters 

requested clarification regarding the 

treatment of parents and caretaker 

relatives who may be eligible under an 

optional group for parent or caretaker 

relatives or for better benefits under 

section 1931 of the Act and § 435.110 

than the benchmark benefits that may be 

offered to individuals in the adult 

group. 

Response: In furnishing medical 

assistance to individuals whose MAGIbased income is at or below the 

applicable MAGI standard in 

accordance with § 435.911(b) and (c)(1), 

States will need to ensure that 

individuals are enrolled in the 

categories for which they are eligible 

and covered for the relevant benefits. 

Parents and caretaker relatives with 

income below the standard applied by 

the State under § 435.110, should be 

enrolled for coverage in accordance 

with that section. Parents and caretaker 

relatives who meet both the eligibility 

requirements for coverage under an 

optional group for parents and caretaker 

relatives and for coverage under the new 

mandatory adult group will be enrolled 

under the new adult group. If the State 

covers optional parents and caretaker 

relatives up to an income standard 

higher than 133 percent of the FPL, such 

individuals would be enrolled in the 

optional group in accordance with 

§ 435.911(c)(2). 

Comment: Several commenters also 

requested clarification on how 

eligibility under the new optional group 

for individuals above 133 percent of the 

FPL under section 

1902(a)(10)(A)(ii)(XX) of the Act, 

codified at § 435.218 of the regulations, 

fits into the MAGI screen in § 435.911. 

Response: If a State has elected to 

cover the optional group codified at 

§ 435.218 for individuals with income 

above 133 percent FPL, the income 

standard applied by the State to this 

group is incorporated into the 

applicable MAGI standard under 

§ 435.911(b)(1)(iv). 

Comment: One commenter asked for 

clarification of whether proposed 

§ 435.911(b)(1)(i) contradicts 

§ 435.110(c) that describes the income 

standard for parents and caretaker 

relatives. 

Response: Parents and caretaker 

relatives certainly will be eligible if 

their MAGI-based income is below 133 

percent of the FPL—under either the 

new adult group at § 435.119 or under 

the mandatory group for parents and 

caretaker relatives at § 435.110. 

Typically, the income standard for 

coverage of parents and caretaker 

relatives under § 435.110(c) will be less 

than 133 percent of the FPL, but if 

higher, the applicable MAGI standard 

under § 435.911(b)(1) will be such 

higher standard. 

Comment: Some commenters stated 

that the proposed regulations have 

constructed two different doors to 

access health care which will result in 

different outcomes for the applicant 

depending on which door the applicant 

enters through. The commenters stated 

that the proposed rules for the Exchange 

generally require a basic screening for 

Medicaid on bases other than the 

applicable MAGI standard, whereas the 

proposed Medicaid rules at § 435.911 

require a full Medicaid eligibility 

determination only when an applicant 

is not found eligible for ‘‘MAGI-based 

Medicaid,’’ by which we assume the 

commenters mean that the applicant’s 

income exceeds the applicable MAGI 

standard. The commenters question the 

utility of the ‘‘basic screen’’ by the 

Exchange, since all cases in which the 

Exchange screens individuals as 

potentially eligible on a basis other than 

the applicable MAGI standard will be 

referred to Medicaid for further 

evaluation, but the Medicaid agency 

will not evaluate eligibility on such 

other bases if the individual has income 

at or below the applicable MAGI 


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standard. In addition, the commenters 

stated that even if the Exchange’s 

screening questions are identical to 

Medicaid’s eligibility questions, a 

person who could have been found 

Medicaid eligible may not complete the 

Medicaid eligibility determination 

process after he or she has enrolled in 

a QHP with subsidized premiums. 

Response: The ‘‘basic screen’’ is 

designed to allow a streamlined 

eligibility process by which individuals 

applying through the Exchange can get 

real-time eligibility determinations, 

either by the Exchange or the Medicaid 

agency, without having to wait for the 

Medicaid agency to review and make a 

determination based on disability or 

other MAGI-excepted bases that may 

take longer to complete. Regardless of 

which entity initially handles the 

application, all individuals will be 

treated the same. Under § 435.911 and 

§ 435.1200(d) and the Exchange final 

regulation at 45 CFR 155.345, both 

individuals with income at or below the 

applicable MAGI standard as well as 

those with income above the applicable 

MAGI standard will be considered on 

other bases by the Medicaid agency, 

consistent with § 435.911(c)(2). Under 

the Exchange final regulation at 45 CFR 

155.345, for an applicant who is not 

eligible for Medicaid based on the 

applicable MAGI-based standard, using 

the single streamlined application, the 

Exchange will assess the information 

provided by the applicant on his or her 

application for potential Medicaid 

eligibility based on factors other than 

the applicable Medicaid MAGI-based 

income standard. In accordance with 45 

CFR 155.345(e) of the Exchange 

regulation and § 435.911(c)(3) and 

§ 435.1200(e)(2) of the Medicaid 

regulation, such individuals will be 

permitted to enroll in a QHP through 

the Exchange and receive APTCs until 

Medicaid notifies the Exchange that the 

applicant is eligible for and enrolled in 

Medicaid. Similarly, under 

§ 435.911(c)(3) and § 435.1200(e)(2), 

individuals who submit a streamlined 

application to the Medicaid agency and 

who have MAGI-based income above 

the applicable MAGI standard, but who 

may be eligible for Medicaid on another 

basis, will be able to enroll through the 

Exchange and receive APTCs pending 

completion of the Medicaid 

determination on bases other than the 

applicable MAGI standard. Individuals 

with MAGI-based income at or below 

the applicable MAGI standard also will 

be treated the same regardless of which 

program receives the initial application, 

as the Medicaid agency will be 

responsible, under § 435.1200(c)(2) and 

(d)(3) of this final rule, for ensuring that 

individuals who apply to the Exchange 

but have income at or below the MAGI 

standard are evaluated for coverage on 

other bases in accordance with 

§ 435.911(c)(2) to the same extent as 

similarly-situated individuals who 

submit an application directly to the 

Medicaid agency. 

Comment: One commenter requested 

clarification of the retention of the 

provisions at § 435.608 that require 

applicants to take necessary steps to 

obtain other benefits such as any 

annuities, pensions, retirement, and 

disability benefits, to which they are 

entitled. The commenter requests that 

CMS consider these requirements when 

creating the single, streamlined 

application. 

Response: There is nothing in this 

rule that changes § 435.608, but we note 

that States may not delay approval of an 

individual’s eligibility for the Medicaid 

program based on this provision. 

Comment: Several commenters asked 

who bears the financial liability for 

benefits costs incurred for individuals 

incorrectly determined eligible for 

Medicaid by another insurance 

affordability program. 

Response: Nothing in this rule affects 

the financial liability requirements 

under the Medicaid program. The 

Medicaid agency is responsible for 

assuring quality in the Medicaid 

program, including exercising oversight 

and taking any necessary actions to 

correct errors in the program, as 

affirmed in the single State agency 

regulation at § 431.10. For more 

discussion of the oversight 

responsibilities of a State agency, see 

the discussion in section III.K. of this 

preamble. Regulations governing the 

MEQC or PERM programs also remain 

in effect and, as noted, we will be 

reviewing these rules to ensure 

alignment with the rules issued under 

this regulation and the development of 

a coordinated eligibility and enrollment 

system involving all insurance 

affordability programs. There is no 

recoupment of funds between insurance 

affordability programs for individuals 

placed in the incorrect program. 

Comment: One commenter 

understands that individuals with 

household income at or below the 

applicable MAGI standard could be 

declared presumptively eligible for 

Medicaid benefits promptly and without 

undue delay. One commenter asked 

about costs incurred during a 

presumptive eligibility period. 

Response: Coverage provided to an 

individual based on MAGI who might 

then be moved to a different eligibility 

category, for example based on 

disability, is not based on presumptive 

eligibility. These individuals are fully 

eligible for Medicaid based on MAGI 

standards, even if they ultimately might 

be found eligible under another 

eligibility category. These rules do not 

modify the presumptive eligibility rules 

that currently apply under the Medicaid 

program, or address new rules relating 

to presumptive eligibility enacted under 

the Affordable Care Act. 

Comment: Many commenters 

requested clarification as to whether the 

term ‘‘as needed’’ in § 435.911(c)(2) is 

meant to limit what additional 

information may be collected from an 

applicant to that information that is 

required to make a determination of 

eligibility on a basis other than the 

applicable MAGI standard, as opposed 

to limiting States’ discretion to request 

information that is not relevant to the 

determination of Medicaid eligibility on 

such bases. 

Response: Information that is not 

necessary to make an eligibility 

determination cannot be required. The 

phrase ‘‘as needed’’ in § 435.911(c)(2) 

(revised to read, ‘‘as may be needed’’ in 

the final rule) refers specifically to 

information that the agency does not 

have—for example, based on the 

information received through the single, 

streamlined application used by all 

insurance affordability programs—but 

which is needed to determine eligibility 

on a basis other than the applicable 

MAGI standard. Collection of additional 

information needed to determine 

eligibility on a basis other than the 

applicable MAGI standard, in 

accordance with § 435.907(c), would be 

appropriate. 

Comment: A number of commenters 

requested further guidance on what 

‘‘promptly and without undue delay’’ 

means, and how such standard relates to 

the current 45 and 90 days application 

processing timeframes set forth in 

existing regulations at § 435.911 

(redesignated as § 435.912 in this rule), 

and of the impact on the MAGI-exempt 

populations. 

Response: Existing regulations at 

§ 435.911 (redesignated at § 435.912 in 

this rule as interim final for which we 

soliciting comments), provide that State 

Medicaid agencies establish timeliness 

standards for determining eligibility, not 

to exceed 90 days in the case of 

individuals applying for coverage on the 

basis of disability, and 45 days in the 

case of all other applicants. As 

discussed in section III.D. of this 

preamble, we are revising § 435.912 to 

provide further parameters on the 

standards regarding the adjudication of 

eligibility which States are directed to 

establish under the regulations. Revised 


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§ 435.912(b) and (c) provide that such 

standards both may not exceed the 

current 90 and 45 day limit for any 

individual applicant and must also 

provide for prompt eligibility 

determinations across the pool of 

individuals seeking coverage. 

Comment: One commenter requested 

clarification of whether States still need 

to determine eligibility for emergency 

services for non-qualified immigrants 

who do not qualify for full Medicaid 

benefits but are eligible for enrollment 

in coverage through the Exchange with 

APTC. The commenter stated that it is 

inappropriate for taxpayers to cover 

both Federal emergency services and 

subsidized insurance premiums for nonqualified immigrants. 

Response: Nothing in the Affordable 

Care Act changes the requirement that 

States provide emergency services to 

individuals not eligible for full 

Medicaid benefits due to their 

immigration status, and States will still 

need to determine eligibility for 

emergency services for such 

populations. To the extent that any such 

individuals have insurance, either 

through the Exchange or otherwise, 

Medicaid would pay secondary to that 

insurance, so there would be no 

duplication of coverage. Whether 

immigrants who are enrolled in 

Medicaid for coverage of emergency 

services only can qualify for APTC is a 

separate question relating to the 

definition of ‘‘minimum essential 

coverage’’ under section 5000A(f) of the 

IRC, and is beyond the scope of this 

rulemaking. 

G. Coverage Month (§ 435.917) 

In the Medicaid Eligibility proposed 

rule, we noted that under the Exchange 

proposed rule at § 155.410, enrollment 

in the Exchange for individuals 

terminated from Medicaid would begin 

at the earliest on the first day of the 

month following the date the individual 

loses Medicaid eligibility and is 

determined Exchange-eligible. Under 

the Exchange proposed rule, if the 

individual was terminated from 

Medicaid or CHIP after the 22nd of the 

month, Exchange enrollment would 

begin at the earliest on the first day of 

the second month after the termination 

date. To help address the potential for 

a gap in coverage, the final Exchange 

rule at 45 CFR 155.420(b)(2)(ii) will 

allow individuals enrolling through a 

special enrollment period, including 

those losing Medicaid or CHIP, to enroll 

by the first day of the following month, 

provided plan selection is completed by 

the end of the month of termination 

from Medicaid or CHIP. Therefore, 

beneficiaries terminated, for example, 

on the 31st of the month may be able to 

enroll as early as the next day in 

Exchange coverage. Nonetheless, for 

beneficiaries terminated earlier, a gap in 

coverage could still occur for a period 

that could last close to a full month if 

States do not extend Medicaid or CHIP 

coverage until the end of the month. 

We noted that directing State 

Medicaid and CHIP programs to extend 

coverage until the end of the month in 

which coverage is terminated could 

help promote continuity of coverage, 

and requested comments on whether the 

benefits of doing so outweigh the costs 

of imposing such a requirement. Current 

Medicaid and CHIP regulations are 

silent regarding whether a State must 

end eligibility on the day that an 

individual is determined no longer 

eligible for assistance, subject to the 

Medicaid and CHIP notice provisions, 

or whether coverage may continue until 

the end of the month, although in 

practice we believe many States 

continue coverage until the end of the 

month. 

Comment: Comments on this issue 

were mixed, with some commenters 

expressing support for and others 

opposition to a policy requiring 

coverage to the end of the month in 

which eligibility otherwise would 

terminate. Numerous commenters 

voiced strong support for a policy of 

extending coverage to align with 

Exchange coverage months to prevent 

gaps in coverage. The commenters noted 

that even small disruptions in coverage 

can have significant medical and 

financial consequences, especially for 

individuals with chronic conditions 

and/or needing medication. Some 

commenters stated that additional time 

would also allow States to correct for 

inaccurate terminations (for example, if 

a pre-populated renewal form goes to 

the wrong address). A few commenters 

noted that many States already operate 

in this manner for managed care 

enrollees. One commenter stated that 

there are precedents for such a policy, 

already including pregnant women, 

whose coverage extends at least 60 days 

post-partum; parents who are provided 

Transitional Medical Assistance (TMA) 

for several months after becoming 

ineligible; and children in States with 

continuous eligibility policies. Some 

commenters familiar with States that 

already have a health insurance 

exchange urged extending the coverage 

month, citing communication and 

systems problems for individuals 

moving between Medicaid and an 

Exchange and urged that Medicaid 

coverage be extended until the 

individual is actually enrolled in the 

Exchange. Several commenters cited to 

churning studies. One commenter 

suggested that extending coverage was 

consistent with Medicaid’s role as a 

safety net provider. 

Conversely, several commenters 

stated that States must have flexibility 

to end coverage at any time during the 

month. They were concerned that the 

costs could be significant if we required 

otherwise. One commenter urged that 

the Federal government provide 100 

percent FFP for gaps in coverage if 

Medicaid is extended to smooth 

transitions. Another commenter 

suggested we adopt exceptions to any 

coverage month requirement in the 

event of beneficiary death, fraud 

(allowing termination with a 5-day 

notice as in current policy), extension of 

eligibility pending appeal if the 

beneficiary does not prevail in the 

appeal (immediate termination), 

incarceration, when an individual 

moves out of State has been determined 

eligible in the new State, and if private 

insurance is available and the person 

can be enrolled in such coverage. 

Finally, some commenters gave 

alternative suggestions to solve the 

potential gap in coverage. Some 

commenters suggested extending the 

notice period for termination—so that 

termination does not take effect until at 

least the last day of the current month, 

if such notice is provided prior to the 

12th, or the last day of the subsequent 

month if notice is on the 12th or later. 

One commenter also suggested that 

CMS offer to defray medical expenses 

for patients who experience gaps in 

coverage when they move from 

Medicaid to the Exchange. The same 

commenter also suggested requiring 

Exchange coverage to begin the day after 

Medicaid coverage terminates, rather 

than the first day of the subsequent 

month—even if the individual forgoes 

premium credits or cost-sharing until 

the following month. Another 

commenter suggested allowing 

individuals ineligible for Medicaid but 

eligible for premium subsidies to 

continue enrollment in their Medicaid 

health plan on an opt-out basis, even 

after a determination of ineligibility for 

Medicaid, without requiring the plan to 

meet Exchange requirements to 

minimize disruptions in coverage. 

Response: The final Exchange rule has 

been revised at 45 CFR 155.420(b)(2)(ii) 

to allow an individual to enroll in an 

Exchange plan, regardless of what point 

in the prior month the individual has 

been terminated, will partially close the 

coverage gap. In this final rule, we will 

not require the extension of Medicaid 

and CHIP through the end of the month, 

but we encourage States to fill the gap 

by providing coverage through the end 


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of the month that an individual is 

terminated from coverage, as many 

States do today. We note that for States 

that choose to do this, FFP at the 

applicable match rate will be available 

for this extended coverage. 

Comment: One commenter requested 

that CMS consider allowing extensions 

of coverage through the end of the 

month for individuals terminated from 

Exchange coverage who become 

Medicaid eligible. Allowing a recipient 

to remain in the Exchange until the end 

of the month and permitting Medicaid 

to start at the beginning of the next 

calendar month would prevent 

duplication in eligibility periods and 

possible double payment of Federal 

funds. 

Response: The Exchange final rule at 

45 CFR 155.430(d)(2)(iv) provides that 

the last day of coverage is the day before 

coverage in Medicaid, CHIP, or the BHP 

if applicable begins. This rule is 

intended to minimize gaps in coverage 

for individuals moving from Exchange 

coverage to Medicaid. 

Comment: One commenter suggested 

that retroactive coverage is no longer 

needed and that CMS should remove 

this requirement. 

Response: The Affordable Care Act 

did not make any change to the 

retroactive coverage provisions in the 

Act. For MAGI populations applying for 

Medicaid coverage, retroactive 

eligibility means that the effective date 

of such coverage can be up to three 

months prior to the date of the 

application if covered services have 

been rendered at any time during that 

time period, in accordance with 

§ 435.914. 

H. Verification of Income and Other 

Eligibility Criteria (§ 435.940, § 435.945, 

§ 435.948, § 435.949, § 435.952, and 

§ 435.956) 

In the Medicaid Eligibility proposed 

rule, we proposed amendments to 42 

CFR part 435 subpart J to make 

verification processes more efficient, 

modern, and also coordinated with the 

Exchange policies in proposed 45 CFR 

155.315 and 155.320 (76 FR 51231 

through 51234). In general, our 

proposed rules maximized reliance on 

electronic data sources, shifted certain 

verification responsibilities to the 

Federal government, and provided 

States flexibility in how and when they 

verify information needed to determine 

Medicaid eligibility. The proposed 

changes drew from successful State 

verification systems and strategies. The 

major changes proposed included: 

• In accordance with section 1413(c) 

of the Affordable Care Act, all insurance 

affordability programs will use an 

electronic service established by the 

Secretary (‘‘Federal data services hub’’) 

through which they can corroborate or 

verify certain information with other 

Federal agencies (for example, 

citizenship with the Social Security 

Administration (SSA), immigration 

status through the Department of 

Homeland Security (DHS), and income 

data from the IRS). 

• Consistent with current policy, 

State Medicaid agencies may accept 

self-attestation of all eligibility criteria, 

with the exception of citizenship and 

immigration status. States would 

continue to comply with the 

requirements of section 1137 of the Act 

to request information from data sources 

when determined useful by the State to 

verifying financial eligibility. (In this 

final rule, we also clarify that selfattestation would not be permitted in 

contravention of any legal requirement.) 

• In verifying eligibility States would 

rely, to the maximum extent possible, 

on electronic data matches with trusted 

third party data sources rather than on 

documentation provided by applicants 

and beneficiaries. Additional 

information, including documentation, 

may be requested from individuals only 

when information cannot be obtained 

through an electronic data source or is 

not ‘‘reasonably compatible’’ with 

information provided by the individual. 

• A new provision at § 435.956 

relating to verification of non-financial 

eligibility criteria was added that 

similarly places primacy on electronic 

third party data sources. 

• A number of prescriptive provisions 

in current regulations as to when or how 

often States must query certain data 

sources, or when certain State wage 

agencies must provide data to the State 

Medicaid agency were deleted. 

These and other proposed revisions 

are discussed in more detail at 76 FR 

51162 through 51165. 

Comment: One commenter believed 

that the verification requirements for 

predictable changes in income in 

§ 435.603(h) should be no more 

cumbersome than those required for 

income at initial application or 

redetermination, and recommended that 

individuals be able to provide 

verification through such means as a 

signed employment contract or a history 

of fluctuations (for example, past smallbusiness revenue statements). 

Response: The verification regulations 

apply both to current, as well as 

predictable future changes in income so 

States should apply the same standards 

to both. In appropriate circumstances, 

and depending on State policies, the 

verification suggested by the commenter 

would be permitted under the 

regulation. 

Comment: One commenter suggested 

that the final regulations should 

expressly permit States to use Express 

Lane eligibility for adults, as well as 

children, and that there should be no 

sunset to the option. 

Response: Section 1902(e)(13) of the 

Act provides States with an option to 

accept findings relating to a factor of 

eligibility made by an ‘‘Express Lane 

agency’’ in determining the eligibility of 

a child for Medicaid. Findings of 

income made by an Express Lane 

agency under this option are excepted 

from application of MAGI-based 

methodologies in section 

1902(e)(14)(D)(i)(I) of the Act, codified 

at § 435.603(j)(1) in the final rule. The 

authority under section 1902(e)(13) of 

the Act is scheduled to sunset on 

September 30, 2013. Extending this 

authority to adults or beyond the sunset 

date provided in the Act is not 

authorized by the statute, and therefore, 

is beyond the scope of this regulation; 

however, subject to CMS approval, 

States may be able to develop a process 

similar to that provided under section 

1902(e)(13) of the Act through a 

demonstration if the requirements of 

section 1115 of the Act are met. 

Comment: We received many 

comments that paragraph (a) under 

§ 435.945 should be removed because 

restating the objective of program 

integrity in such broad terms weakens 

the regulation by allowing a broad and 

vague exception to all provisions of the 

regulation if any program integrity 

interest can be identified by a State. 

While the commenters support program 

integrity, they are concerned that a State 

could use proposed § 435.945(a) to 

justify creating burdensome barriers in 

enrollment procedures, such as 

requiring paper documentation, which 

may result in preventing even larger 

numbers of eligible individuals from 

obtaining coverage. A number of other 

commenters suggested that any State 

which chooses to not implement 

provisions in the verification 

regulations to maintain program 

integrity should be required to 

demonstrate that program integrity is 

threatened, document how the 

alternative process will improve 

program integrity, and get approval from 

the Secretary. 

Response: Compliance with the 

verification regulations is not at State 

option and we do not believe reference 

to existing program integrity provisions 

in these regulations will in any way 

undermine the verification regulations. 

However, to make it clear that program 

integrity regulations apply broadly and 


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independently and do not undermine 

the regulations relating to verification, 

we have moved the reference to program 

integrity to § 435.940 in the final rule 

and redesignated the paragraphs in 

§ 435.945 accordingly. We also added 

language at § 435.940 that States must 

provide for methods of administration 

that are in the best interest of applicants 

and beneficiaries and are necessary for 

the proper and efficient operation of the 

plan, consistent with § 431.15 of this 

subchapter and section 1902(a)(19) of 

the Act. We also have added provisions 

to clarify the intent of the Medicaid 

Eligibility proposed rule that electronic 

sources be consulted where possible 

and available—this policy limits use of 

documentation only to situations when 

necessary and appropriate and we 

revised § 435.952 accordingly, as 

discussed below. 

Comment: Some commenters believed 

that the Medicaid Eligibility proposed 

rule requires reliance on self-attestation 

and electronic data sources to a greater 

extent than is required today and that 

this will undermine program integrity 

and impede States’ ability to achieve 

local policy and operational objectives, 

as well as meet Federal error rate 

standards. Other commenters support 

the express permission to rely on selfattestation provided in the proposed 

regulations, and many believed that the 

regulations did not go far enough in 

limiting the use of paper or other 

documentation, especially for 

vulnerable populations, and that States 

should have to show a program integrity 

concern before requesting paper 

documentation. One commenter urged 

that we provide guidance on how a 

highly automated eligibility system can 

function in the absence of a 

considerable degree of self-attestation. 

Response: Within the boundaries 

established under the statute and these 

regulations, States retain flexibility to 

establish verification procedures to be 

applied in their States. However, selfattestation should not be permitted 

where the law would not permit it. We 

have modified our regulations so that 

States would have the option, but are 

not mandated to accept self-attestation 

unless the statute requires other 

procedures (such as in the case of 

citizenship and immigration status). As 

explained further below, self-attestation 

would be required for pregnancy, for 

which a State may seek additional 

information only if it has information 

not reasonably compatible with the 

individual’s attestation. 

The proposed regulations would place 

greater reliance on data-based 

verification as opposed to 

documentation required from 

individuals, consistent with the 

direction that many States have been 

taking and the requirements in the 

Affordable Care Act for a streamlined 

and efficient eligibility determination 

system. The increased availability of 

electronic data matching together with 

the 90 percent Federal match that may 

be available if certain conditions are met 

for systems investment under 75 FR 

21950, and the provisions in the 

Affordable Care Act to create a 

coordinated and efficient eligibility and 

enrollment system across insurance 

affordability programs, all support 

increased reliance on electronic 

verification. States that simply fail to 

access or pay for access to electronic 

data sources, even when cost effective 

and efficient, may undermine this 

policy of electronic primacy, and 

continue a reliance on paper 

documentation in a way that was not 

envisioned by either our Medicaid 

Eligibility proposed rule or section 1413 

of the Affordable Care Act and section 

1943 of the Act. 

Therefore, in this final rule, we are 

revising § 435.952(c)(2) to clarify that 

requests for documentation from the 

individual, whether in hard (paper) 

copy or in other formats, are to be 

limited to cases where the State has 

determined that verification using an 

electronic data match, (including with 

another State agency) would not be 

effective, considering such factors as the 

administrative costs associated with 

establishing and using the data match, 

the administrative costs associated with 

relying on documentation, and the 

impact on program integrity and error 

rates in terms of the potential both for 

ineligible individuals to be approved, as 

well as for eligible individuals to be 

denied coverage. We have also removed 

the reference to ‘‘paper’’ in § 435.945(a), 

as redesignated in the final rule. These 

modifications are consistent with the 

policies we proposed to modernize 

verification systems and align them 

with the systems used to verify 

eligibility for APTC. 

Comment: Many commenters 

recommended that the regulation 

provide specific protections, such as 

requiring States to accept selfattestation, for vulnerable populations 

who may not have documents and for 

whom the State may not be able to 

verify information using electronic 

sources. 

Response: Under the regulations, 

States may accept self-attestation, 

except for where the law would require 

a separate set of procedures (such as in 

the case of citizenship and immigration 

status) for individuals who do not have 

documentation and the State cannot 

verify the individual’s information 

using electronic data sources. 

Comment: A number of commenters 

were concerned about the interaction of 

these regulations with PERM. The 

commenters believed that, absent audit 

and quality control protection being 

afforded in these regulations, States 

often would need to verify income using 

paper documentation. One commenter 

recommended that States submit a plan 

to notify the Secretary of the data 

sources it will use in verifying 

eligibility, which the commenter 

believed would help to address State 

concerns about compliance with PERM. 

Response: As noted above, we intend 

to ensure alignment of PERM and other 

program integrity rules and procedures 

with the new eligibility rules. As 

explained in the State Exchange 

Implementation Question and Answers 

published on November 29, 2011, 

available at http://www.medicaid.gov/ 

Federal-Policy-Guidance/CIB-11-29- 

2011.pdf, under the recently modified 

PERM rules, as long as federallyapproved State procedures are followed, 

the PERM rules classify the case as an 

accurate determination. Thus, if a State 

relies on self-attestation to establish 

certain facts regarding eligibility 

consistent with Federal rules, PERM 

audits also rely on the self-attestations 

provided. If federally-approved State 

policies require additional verifications 

and data collection, auditors will review 

cases against those standards. 

We also are adding a new paragraph 

§ 435.945(j), under which State 

Medicaid agencies will develop, and 

update as appropriate, a verification 

plan describing the agency’s verification 

policies and procedures, including the 

standards applied by the State in 

determining the usefulness of the 

financial information described in 

§ 435.948(a). The verification plans 

must be available to the Secretary upon 

request, thereby enabling appropriate 

oversight of State implementation of the 

standards established in the regulations 

and assuring policies adopted by the 

State will serve as the basis of PERM 

reviews. 

Comment: One commenter questioned 

if States are expected to maintain 

electronic information from the data 

match from trusted third party sources 

for income verification for some period 

of time for PERM/MEQC verification of 

eligibility determination. 

Response: Current regulations at 

§ 435.913(a) require the Medicaid 

agency to include in each applicant’s 

case record facts to support the agency 

decision on the application, which 

would include information obtained 

from a data match. 


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Comment: Two commenters suggested 

that accepting self-attestation could 

result in retroactive liability for States 

and managed care organizations if, later, 

some eligibility determinations were 

found to be erroneous. One commenter 

recommended that CMS hold States 

harmless through 2014 for all quality 

control and audit errors in the event that 

the annual reconciliation for the APTC 

conducted by the IRS uncovers 

inconsistencies about which the State 

had no way of knowing. Another 

commenter suggested that if States 

accept self-attestation, they should be 

allowed to recover funds if subsequent 

verification shows the individual was 

not eligible for Medicaid. One 

commenter expressed concern that 

applicants will be approved, without 

delay, pending receipt of verifications, 

and if later are determined ineligible, 

the agency must give them proper notice 

while receiving coverage at the taxpayer 

expense. 

Response: States are accountable to 

ensure that eligibility determinations 

are made accurately and in accordance 

with State and Federal policies, and 

their success in doing so is measured in 

accordance with the MEQC and PERM 

programs. Under our regulations at 

§ 431.980(d), States are not held liable 

for eligibility determinations made in 

accordance with the State’s documented 

policies and procedures, including selfattestation, and supported by 

information in the case record. This 

rulemaking does not alter these 

regulations or establish any new 

liability for States for FFP claimed on 

behalf of individuals erroneously 

determined eligible for Medicaid and 

enrolled in the program because the 

State did not take into account 

information not available to it at the 

time of the determination. For 

individuals’ rights and responsibilities, 

under current regulations, once an 

individual is determined eligible, the 

agency must provide proper notice and 

hearing rights prior to termination in 

accordance with 42 CFR part 431 

subpart E. Recovery from individuals 

erroneously determined eligible is 

generally not permitted, with the 

possible exception of fraud on the part 

of the individual, or in the case listed 

under § 431.230(b). In the case of 

potential fraud, the regulations at 42 

CFR part 455 subpart A would continue 

to apply. Regulations at 42 CFR part 431 

subpart E and part 455 subpart A are not 

affected by this rulemaking. 

Comment: One commenter indicated 

that the rules are not clear as to whether 

the Medicaid agency may make a 

determination based on self-attested 

information or whether the self-attested 

financial information must first be 

verified through the data matches 

described in § 435.948 and § 435.949. 

The commenters requested clarification 

that a determination may be made based 

on self-attested information subject to a 

later request for further information if 

financial information cannot otherwise 

be verified. Another commenter 

suggested that data resources be utilized 

at initial application to support selfattested statements. 

Response: The regulations provide 

States with the flexibility to decide the 

usefulness, frequency and time-frame 

for conducting electronic data matches. 

Thus, a State may approve eligibility 

based on self-attested financial 

information without requesting further 

information (including documentation 

from the individual) and follow up with 

data matching in accordance with 

§ 435.948 after enrollment, or the State 

can choose to conduct the match prior 

to finalizing the eligibility 

determination, subject to timeliness 

standards established in accordance 

with § 435.912. Section 435.945(a) 

permits States to accept self-attestation 

of most elements of Medicaid eligibility; 

§ 435.945(b) provides that States must 

request and use information relevant to 

determining eligibility in accordance 

with § 435.948 through § 435.956. (See 

our above response regarding our 

amendments to clarify that selfattestation will not be permitted when 

the law would require a separate set of 

procedures.) 

Comment: Another commenter had 

concerns regarding the level of 

subjectivity that will be permissible if 

the applicant is not required to enter 

any specific income information into an 

application as a first step in the 

verification process. The commenter 

was concerned that the income retrieved 

from the Federal data services hub or 

other electronic data sources no longer 

would be verified against data entered 

by applicant. 

Response: We are working to develop 

tools for individuals and States to use to 

determine current MAGI-based income 

based on the information obtained as 

part of the application process. We 

anticipate that the process and sequence 

by which this occurs could be 

structured in different ways, including 

by asking an individual for income 

information up front and confirming it 

with electronic sources afterward, or by 

asking an individual to confirm 

information that the agency obtains 

electronically. 

Comment: One commenter indicated 

that the 90-day timeframe for resolving 

discrepancies conflicts with rules for 

other public assistance programs, and 

could have a significant administrative 

impact on States. One commenter 

recommended that the rule should 

specify that Medicaid is to be 

considered correctly paid and no 

recovery should be sought during the 

time period that the Medicaid agency 

enrolls an applicant for 90 days while 

awaiting information to resolve an 

incompatibility through to the effective 

date of proper notification in instances 

resulting in a discontinuance of 

coverage. 

Response: There is no 90-day 

reasonable opportunity period 

addressed in this regulation. The 90-day 

reasonable opportunity period related to 

the APTCs is addressed in the Exchange 

final rule at 45 CFR 155.315(f). 

Comment: A number of commenters 

suggested that the regulations encourage 

States to explore alternatives such as 

self-attestation of income and/or assets 

for applicants whose eligibility is not 

based on MAGI methodologies. A few 

commenters also suggested that the data 

matching required under § 435.948 

apply to applicants being evaluated for 

eligibility on a basis other than MAGI. 

Response: The verification regulations 

at § 435.940 through § 435.956 apply to 

the determination of eligibility of all 

individuals; they are not specific to 

individuals whose financial eligibility is 

based on MAGI methodologies. 

Comment: A few commenters 

recommended allowing for acceptance 

of self-attestation of citizenship and 

immigration status. One commenter 

expressed concern that the Medicaid 

and Exchange regulations were 

inconsistent with regards to verification 

of citizenship. 

Response: Verification of citizenship 

and immigration status were not 

addressed in our Medicaid Eligibility 

proposed rule. However, we note that 

such verification is governed by sections 

1902(a)(46), 1903(x), and 1137(d) of the 

Act, which require verification of 

citizenship and immigration status. 

Also, under our final rule, where 

citizenship and immigration status can 

be verified with the SSA or DHS 

through the electronic service to be 

established by the Secretary under 

§ 435.949, the rule requires use of that 

service. 

Comment: One commenter believed 

that proposed § 435.945(b) implied that 

paper documentation of citizenship and 

satisfactory immigration status is always 

required for Medicaid when, in fact, 

citizenship may be established based on 

data matches with SSA or State birth 

certificate records, without the 

applicant providing any paper 

documentation. 


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Response: Section 435.945(a), as 

redesignated in this final rule states that 

self-attestation alone can never be used 

for citizenship or immigration status, 

verification of which are governed by 

sections 1137, 1902(a)(46) and 1903(x) 

of the Act which require either 

electronic verification or other 

documentation (not paper 

documentation exclusively). 

Comment: We received many 

comments that the regulation should 

clarify that, while electronic data 

matching is required at initial 

application and redeterminations, such 

data matching is not required on an ongoing basis, as this could be 

burdensome for States. One commenter 

suggested that State Medicaid agencies 

only be required to act on changes in 

household size, State residency and loss 

or gain of employment that impact 

eligibility. 

Response: The regulations do not 

change current policy, under which 

States have flexibility to determine the 

frequency of data matches between 

regular eligibility renewals. States are 

not required to conduct data matches on 

an ongoing basis. States are subject to all 

the verification requirements of 

§ 435.952 when responding to changes 

in an individual’s circumstances. Under 

§ 435.916(d), for MAGI-based 

determinations, when an individual 

reports a change in circumstance that 

affects their eligibility, the State must 

limit its review of third-party data 

sources to eligibility factors affected by 

the changed circumstances. 

Comment: One commenter 

recommended that proposed 

§ 435.945(d) be modified to allow the 

child support enforcement unit more 

freedom to share information with the 

Medicaid agency, and that other 

necessary changes be made to permit 

the Office of Child Support Enforcement 

(OCSE) to release information from the 

National Directory of New Hires to the 

agency, as intended by the CHIPRA 

legislation. 

Response: While our final regulations 

allow State Medicaid agencies to rely on 

additional data from other agencies, as 

long as the requirements of § 435.945(e) 

through (i), as redesignated in the final 

rule, are met, we believe that rules 

governing release of information by the 

OCSE are beyond the scope of this rule. 

Comment: One commenter questioned 

whether § 435.945(e) ensures that 

beneficiaries will not bear the costs of 

any information matching conducted by 

the State Medicaid agency. 

Response: Section 435.945(e) relates 

to the financial responsibility of 

different agencies to bear the cost of 

data matching requested by them. 

Beneficiaries cannot be asked to bear 

any of the costs for data matching; this 

is an administrative cost. 

Comment: One commenter questioned 

why the States must reimburse another 

agency for reasonable costs incurred for 

furnishing information to another 

agency. 

Response: The reimbursement is for 

costs incurred by the other agencies in 

providing information to the Medicaid 

agency, and is required under section 

1137 of the Act. 

Comment: Many commenters 

inquired or made specific 

recommendations about the content and 

format of the information that must be 

provided to individuals under proposed 

§ 435.945(f) prior to initiating an 

electronic request for data. The 

recommendations included providing 

written information in plain language, 

providing an explanation of the 

alternative data sources (if any) and 

consequences should the individual 

choose not to have one of the data 

sources contacted, and that notices be 

easily accessible. Another commenter 

requested clarification about how States 

are supposed to notify individuals prior 

to initiating an electronic data match. 

Response: The regulation requires that 

individuals be informed of the ways and 

circumstance in which the agency may 

be requesting information, as is the case 

under current regulations. This 

information must be provided in a 

manner that is simple and accessible. 

States are not required under the 

regulation to provide the required 

information to individuals every time 

the State wants to initiate a data match. 

A State could, for example, provide the 

required information at application and 

regular renewals of eligibility. 

Comment: One commenter asked if an 

individual can decline to have States 

check IRS data because they know it is 

inaccurate or want to keep it private and 

instead provide income verification to 

the agency. 

Response: As part of the application 

process, under section 1137 of the Act, 

applicants must provide their SSN and 

must be advised how the SSN will be 

used, including obtaining IRS data. 

Applicants do not have an opportunity 

to decline that process, but do have an 

opportunity to present alternative 

documentation if IRS data do not reflect 

their current circumstances. Nonapplicants are not required to provide 

an SSN to enable an IRS match, 

although they may do so voluntarily. 

Statutory privacy and confidentiality 

protections apply to the disclosure, use, 

and maintenance of the IRS data. 

Comment: Many commenters were 

concerned that individuals would not 

have an opportunity to review and 

either validate or correct data that is 

imported into their application. 

Response: Under § 435.952(d), States 

may not deny or terminate eligibility 

based on information obtained through 

data matches without providing the 

individual with an opportunity to 

validate or dispute such information. 

Comment: Many commenters 

supported the requirement in proposed 

§ 435.945(h) regarding information 

exchanged between the Medicaid 

agency and other agencies and 

programs, but recommended that the 

regulation specify that information can 

only be requested, shared or used for 

purposes strictly relevant to eligibility 

verifications, and that the use of such 

information meet existing requirements 

relating to the confidentiality, 

disclosure and maintenance of 

information regardless of the source 

from which it is received. Another 

commenter strongly recommended that 

any confidential or especially sensitive 

information sought, such as information 

relating to specific diagnoses, illnesses, 

treatments or disability, should have 

protections built in and an exceptions 

process for the individual to avoid 

having that information accessed and 

potentially subject to wider data 

sharing. Another commenter 

recommended that the obligation to 

provide secure interfaces for datamatching be explicitly codified by 

reference to specific statutes that 

prohibit requesting unnecessary 

information, such as the Privacy Act of 

1974, throughout these regulations. 

Many commenters commended the 

requirement under § 435.945(i) that 

States establish formal agreements to 

protect information but recommended 

that information can only be used for 

narrow and relevant verification 

purposes, and meet confidentiality 

thresholds to earn trust in the system. 

Response: Confidentiality of 

information is essential. Existing 

regulations at 42 CFR part 431 subpart 

F protect the confidentiality and 

safeguarding of applicant, non-applicant 

and beneficiary information, including 

medical information, and we have 

added a cross reference to these 

regulations in § 435.945(c). Recognizing 

the specific confidentiality and security 

requirements that attach to MAGI 

information obtained from the IRS 

under section 6103(l)(21) of the IRC, as 

added by section 1414 of the Affordable 

Care Act, we have also revised 

§ 431.305(b)(6) to clarify that data from 

SSA and IRS must be safeguarded 

according to the requirements of the 

agency that furnished the data, which 

includes provisions of section 6103 of 


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the IRC as applicable. We also update 

the basis for the regulations at 42 CFR 

part 431 in § 431.300 (adding a new 

paragraph (d)) and clarify that the 

reference to section 6103(l) of the IRC in 

§ 431.300(c)(1), as redesignated in this 

final rule, is limited to section 

6103(l)(7). Finally we updated the cross 

references in § 431.300(c) and 

§ 431.305(b)(6) to § 435.945 through 

§ 435.956 to reflect all the relevant 

regulations. We are issuing the revisions 

to § 431.300(c)(1), § 431.300(d), and 

§ 431.305(b)(6) as an interim final rule 

and are soliciting comments on these 

provisions. 

Section 435.945(h) requires that 

information exchanged electronically 

between programs must be sent and 

received through a secure electronic 

interface. In addition, § 435.945(i), as 

redesignated in the final rule, requires 

the Medicaid agency and other entities 

to enter into written agreements which 

must provide for appropriate safeguards 

limiting the use and disclosure of 

information as is required by State and 

Federal law or regulations, including, as 

applicable, the requirements under the 

Health Insurance Portability and 

Accountability Act of 1996 (Pub. L. 

104–191, enacted on August 21, 1996) 

(HIPAA), the Privacy Act, and section 

1942 of the Act, as well as 42 CFR part 

431 subpart F and the Exchange final 

regulations at 45 CFR 155.260. 

Comment: Many commenters 

recommended that the reporting 

required by § 435.945(g) for the 

purposes of determining compliance 

with regulations and evaluating the 

effectiveness of the income and 

eligibility verification system be made 

publicly available and include a 

consumer and consumer advocate 

survey component as to the 

effectiveness of the verification process. 

One commenter suggested that the 

reported information also address 

whether the income and eligibility 

verification system results in eligible 

persons being denied eligibility as a 

result of gaps, omissions, time lags or 

other failings or inaccuracies of the 

queried databases. 

Response: We will take the comments 

under advisement in considering what 

information can and should be made 

available to the public. 

Comment: One commenter questioned 

why the regulations require written 

agreements under proposed § 435.945(i). 

Instead, they recommended that 

protections could be built into the 

regulations. Another commenter 

questioned if the written agreements 

between the Medicaid agency and the 

Exchange will allow both entities to 

exchange taxpayer information or other 

information, such as protected health 

information, for the purposes of 

administering eligibility for the 

programs. 

Response: Use of written agreements 

between agencies exchanging 

information is a commonly accepted 

way to ensure that required 

confidentiality and privacy protections 

are provided, including those set forth 

in existing regulations in part 431 

subpart F. The written agreements 

between the Medicaid agency and 

Exchange should allow both entities to 

share information which is needed to 

determine eligibility or for other 

purposes directly related to the 

administration of the respective 

programs. Section 1137 of the Act 

ensures that necessary safeguards are in 

place for information exchanged among 

agencies. In addition, 45 CFR 155.260 in 

the Exchange final rule provides for 

privacy, information security, and data 

sharing requirements for Exchanges. 

Comment: Many commenters 

commended the requirement under 

§ 435.948(a) that State agencies must 

request financial eligibility information 

from other agencies. However, they 

expressed concern that by providing 

States with discretion to not make these 

requests if the State deems that they are 

not ‘‘useful,’’ the rule creates too broad 

an exception and places undue burden 

on individuals. Some recommended 

that the authority to determine 

usefulness should remain with the 

Secretary. Others recommended that 

States be required to collect information 

from other agencies ‘‘unless there is no 

information materially relevant to an 

eligibility determination’’ and that the 

language ‘‘relating to financial 

eligibility’’ be changed to ‘‘necessary for 

financial eligibility determinations.’’ 

Still other commenters recommended 

that the final rule provide stronger 

parameters or minimum standards for 

States in determining when to use data 

sources to process eligibility so that 

States do not define ‘‘useful’’ in such a 

way that all available databases are not 

tapped. Some commenters 

recommended replacing the word 

‘‘useful’’ in paragraph (a) with 

‘‘available, accurate, and timely.’’ One 

other commenter was concerned that 

many eligible individuals will be denied 

coverage in real time simply because the 

databases to be used in verifying wages 

and other income do not rely on ‘‘point 

in time’’ information, are out-of-date, 

incomplete, or inaccurate. Other 

commenters supported the flexibility 

afforded by the regulations for States to 

determine what is ‘‘useful.’’ 

Response: We do not believe it is 

possible or preferable for the Secretary 

to prescribe all the situations in which 

financial data sources are useful and 

believe that States are in the best 

position to make such a determination. 

States currently use wage data that lags 

behind in making eligibility 

determinations and the data often is 

sufficient, notwithstanding the time lag, 

for the State to confirm the information 

provided by the applicant. The 

requirements at § 435.952(d) ensure that 

individuals will not be denied eligibility 

simply because available wage data may 

not be up to date, as States must request 

additional information if necessary 

before denying or terminating eligibility 

based upon a data match. 

The time lag in the availability of 

quarterly wage data would not justify a 

State concluding that such data is not 

useful to verifying income eligibility 

and routinely relying instead on 

documentation provided by the 

individual. Conversely, a State could 

determine that accessing quarterly wage 

data is not useful if income data 

received from the IRS is reasonably 

compatible with information provided 

by the individual. In that situation, the 

agency would have obtained reliable 

verification of income. 

Comment: One commenter sought 

confirmation that States may consider 

the cost effectiveness of a data match in 

determining its usefulness under 

§ 435.948(a). 

Response: We agree that costeffectiveness is an appropriate 

consideration in determining the 

usefulness of electronic data matches 

under § 435.948(a) of the regulations. 

States cannot be expected to obtain all 

possible electronic data, but, at the same 

time, State agencies should rely on 

electronic data when it is cost-effective 

to do so. Under proposed § 435.952(c) 

documentation from an individual is 

permitted only when electronic data are 

not available or information obtained 

from an electronic data source is not 

reasonably compatible with information 

provided by or on behalf of an 

individual. In the final rule, we are 

clarifying this provision to provide that, 

in determining whether electronic data 

are available, States need to consider the 

costs of establishing and using the 

matching capability against the cost of 

requiring, receiving, and reviewing 

documentation, as well as the impact on 

program integrity in terms of the 

potential for ineligible individuals to be 

approved, as well as for eligible 

individuals to be denied coverage. 

Comment: One commenter believed 

that § 435.948 is unduly narrow because 

it limits data-based verification required 

of States to financial elements of 

Medicaid eligibility, rather than 


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including all other eligibility elements, 

such as State residence. The commenter 

believed that this limitation is 

inconsistent with section 1413(c)(3)(A) 

of the Affordable Care Act, which 

requires the use of data matches to 

establish eligibility to the maximum 

extent practicable, without any 

limitation to the financial components 

of eligibility. 

Response: Section 435.948 codifies 

section 1137 of the Act, which requires 

specific data matching arrangements in 

verifying financial eligibility for several 

Federal means-tested benefit programs, 

including for purposes of Medicaid. 

Section 435.956 of our regulations 

addresses verification of non-financial 

criteria. Section § 435.952 applies to 

both financial and non-financial 

verification, and section (c) of the 

Medicaid Eligibility proposed rule 

required that, if self-attestation is not 

accepted for criteria other than 

citizenship/immigration status, States 

must access available electronic data 

bases prior to requiring additional 

information (including documentation) 

in verifying all factors of eligibility. 

Comment: A few commenters 

recommended that States be required to 

accept income information verified by 

SNAP to determine Medicaid income 

eligibility. 

Response: Section 435.948(a)(2) 

requires States to request information 

related to financial eligibility from 

SNAP when useful to verifying financial 

eligibility. The standards set out in 

these rules establish an appropriate 

basis for States to assess the usefulness 

of SNAP, as well as other data in 

verifying financial eligibility. We note 

that the reference to the Title IV–A 

program (TANF) was inadvertently 

admitted from § 435.945(a)(2) in the 

Medicaid Eligibility proposed rule so 

we have added it back in this final rule. 

Comment: One commenter proposed 

that the data sources under § 435.948(a) 

include the Breast and Cervical Cancer 

Prevention and Treatment Act 

(BCCPTA). 

Response: The Medicaid agency does 

not need to conduct an income 

determination for individuals eligible 

for Medicaid as a result of being covered 

under the BCCPTA eligibility group (see 

section 1902(aa) of the Act). Therefore, 

this would be an unnecessary addition 

to § 435.948(a). 

Comment: One commenter believed it 

is confusing to include Public 

Assistance Reporting Information 

System (PARIS) in § 435.948(a) in the 

list of possible data sources. Since 

States must conduct data matching with 

PARIS, they have no discretion to 

determine it is not useful to do so. 

Response: PARIS is not necessarily 

related to income verification. 

Therefore, we have moved the 

requirement related to PARIS to a new 

§ 435.945(d). 

Comment: One commenter noted that 

changes that affect eligibility must still 

be reported within 10 calendar days but 

there is no electronic database that will 

provide current income. 

Response: We are unsure of what 10- 

day requirement the commenter is 

referring to; perhaps this relates to a 

particular State’s rules. Under existing 

Federal regulations, States need to 

establish procedures to ensure that 

beneficiaries make timely and accurate 

reports of changes that may affect their 

eligibility; this is retained in 

§ 435.916(c). Under § 435.952, States 

must evaluate any such information 

received, consistent with the standards 

and protections established in that 

section. 

Comment: Many commenters 

suggested that proposed § 435.948(c) be 

revised to reflect that the agency ‘‘must’’ 

obtain the information directly from the 

appropriate agency or program 

consistent with the requirements in 

§ 435.945 of this subpart when such 

information is not available through the 

Federal data services hub described at 

§ 435.949. 

Response: Information needed to 

verify eligibility which is available 

through the Federal data services hub 

described in § 435.949 must be obtained 

through that service. If needed 

information is not available through that 

service but can be obtained through an 

electronic match directly from another 

agency or program, as is the case with 

the information described in § 435.948, 

the State must obtain the information 

from such agency or program. To avoid 

any confusion that the proposed 

regulation may have caused, we have 

deleted proposed § 435.948(c), as we 

believe these requirements are already 

included in other parts of the regulation 

(that is if information cannot be 

obtained through the hub, then it would 

be obtained directly from the agency or 

program). We also have moved the 

provisions at proposed § 435.948(d) and 

proposed § 435.949(c) to a new 

§ 435.945(k) in the final rule, which 

allows, subject to Secretarial approval, 

States to adopt alternative data sources 

to those listed in § 435.948(a), or to 

obtain needed information through a 

mechanism other than the Federal data 

services hub described in § 435.949(a), 

to ensure that the goals of maximizing 

administrative accuracy and efficiency, 

minimizing consumer burden, meeting 

confidentiality requirements, and 

promoting coordination. 

Comment: We received a number of 

comments related to the provision of an 

SSN by non-applicant household 

members. One commenter believed it 

would be difficult to verify the 

dependent status of a child without the 

parent’s SSN. A few commenters were 

also concerned that if non-applicant 

SSNs may not be required it will be 

difficult to verify income and suggested 

that proof of income by non-applicants 

be required. Others were concerned 

about undue burden on applicants if 

non-applicant household members do 

not provide an SSN. 

Response: We are codifying this 

current policy at § 435.907(e) and as 

discussed in section III.E. of the 

preamble, States are prohibited from 

requiring non-applicants’ SSNs as a 

condition of another household 

member’s eligibility for Medicaid or 

CHIP. In the case of non-applicant 

household members, such as a parent, 

who do not provide an SSN and whose 

income is material to the eligibility 

determination of the applicant, States 

are directed in § 435.948(c) to use other 

personally identifying information in 

conducting data matches if it is possible 

to do so. In order for the IRS to return 

income information relating to any 

individual, including a non-applicant, 

the individual’s SSN is required. If data 

matches are not possible, States may 

accept self-attestation or request 

additional information to verify income 

or tax dependency status, consistent 

with the regulations. The IRS will not 

return information which can be used to 

verify the dependent status of a child. 

Comment: One commenter questioned 

how discrepancies will be resolved 

when an SSN cannot be validated 

through a data match or is validated as 

someone else’s SSN. 

Response: The requirement to validate 

an applicant’s SSN with the SSA is not 

new and is currently codified at 

§ 435.910(g), though States must utilize 

the Federal data services hub described 

in § 435.949 for this purpose if the 

information is available through such 

service. The Affordable Care Act did not 

change the process for resolving 

inconsistencies. Individuals may also 

continue to contact SSA to resolve any 

discrepancies with their SSN that could 

not be resolved by the State Medicaid 

agency. 

Comment: Many commenters 

recommended that we provide in the 

regulation text a reference to § 435.910, 

which requires States to assist 

individuals in obtaining an SSN. One 

commenter suggested that the 

requirement to furnish an SSN only 

apply to those who are eligible for an 

SSN, and that the State not be required 


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to assist individuals who are not eligible 

for SSNs because the requirement to 

apply for an SSN creates an 

administrative burden. Many 

commenters believed States should be 

required to assist lawfully-residing 

individuals not eligible for a regular 

SSN with obtaining a ‘‘non-work’’ SSN. 

Response: Under existing regulations 

at § 435.910, individuals seeking 

coverage are required, as a condition of 

eligibility, to furnish an SSN, unless the 

individual has a well-established 

religious objection to obtaining an SSN. 

States have long had the responsibility 

under § 435.910(e) to assist individuals 

who do not have an SSN with obtaining 

one, and may not deny or delay benefits 

pending the issuance of such a number. 

To clarify, we have revised the crossreference to § 435.910 in § 435.956(d) to 

clarify that States not only must verify 

SSNs in accordance with § 435.910(f) 

and (g), but are subject to all the 

requirements in § 435.910. 

The requirement to furnish and verify 

an SSN only applies to individuals 

eligible for an SSN, and note that 

individuals not eligible for an SSN 

cannot be denied eligibility on that 

basis, and have revised § 435.910 

accordingly in the final rule, but still 

must meet the requirements related to 

citizenship. States have long been 

permitted to provide an exception to the 

SSN requirement for individuals with a 

well-established religious objection to 

obtaining an SSN. While SSA will issue 

an SSN for a non-work reason, in 

accordance with 20 CFR 422.104, to 

individuals not otherwise eligible for a 

‘‘work-related’’ or ‘‘regular’’ SSN, the 

purpose of requiring an SSN is to 

facilitate verification of income, 

citizenship and other eligibility criteria. 

Since an SSN issued for a non-work 

reason cannot be used to obtain data 

from other programs or agencies needed 

to verify eligibility for Medicaid, there 

is no practical purposes to requiring that 

individuals eligible only for a non-work 

SSN obtain such an SSN, or that State 

Medicaid agencies assist the individual 

in doing so. Therefore, based on our 

understanding of current practice in 

many States, we are codifying in this 

final rule that the exception to 

furnishing an SSN set forth in paragraph 

(h) of § 435.910 applies also in the case 

of individuals who are not eligible to 

receive any SSN as well as to 

individuals who do not have an SSN 

and are only eligible to receive an SSN 

issued for a non-work reason. We have 

also revised the language in paragraph 

(h) to clarify that the exceptions in 

paragraph (h) mean, not only that the 

agency may issue a different 

identification number to someone 

excepted from the requirement to 

provide an SSN, but also that 

individuals described in paragraph (h) 

are excepted from the requirement to 

furnish an SSN as a condition of 

eligibility, as otherwise required in 

§ 435.910(a). (The current regulation at 

§ 435.910(h) only references the 

permissibility of the agency to issue a 

different identification number for the 

individuals described.) Conforming 

revisions are made to the general 

requirement to furnish an SSN in 

§ 435.910(a). In addition, we have made 

small modifications to § 435.910(f) and 

(g) to clarify that such an individual 

would not need an SSN verified and 

that the general rule that a State should 

not delay or deny an otherwise eligible 

individual for Medicaid, would also 

apply to an individual who is not 

eligible for an SSN or who does not 

have an SSN and may only be issued an 

SSN for a valid non-work reason. We 

have also clarified in § 435.910(g) that a 

State is only required to verify the SSN 

of those who must furnish one. We are 

not changing or limiting the 

responsibility of States to assist 

individuals seeking coverage in 

applying for an SSN that can be used for 

work. Nor does this change affect the 

requirement that citizenship and 

immigration status be verified. 

Comment: A few commenters 

recommended that the regulation 

explain how alternative sources under 

proposed § 435.948(d) would be used. A 

number of commenters also indicated 

that it is unclear whether agencies 

would be approved to use alternative 

data sources under § 435.948(d) for all 

applicants, on a case-by-case basis, or 

only when other data sources do not 

yield useable results. Some 

recommended that the regulation 

explicitly allow the agency to contact 

the individual’s employer to obtain 

financial information when such 

information is not available through the 

Federal data services hub or through the 

sources mentioned in § 435.948(a). 

Others also recommended that proposed 

§ 435.948(d) include and cross-reference 

proposed § 435.945(f), which requires 

individuals be notified of the 

information States will request from 

other agencies and how it will be used. 

Many commenters recommended that 

the regulation at proposed § 435.949(c) 

clarify that States should not be able to 

use an alternative process to verify 

information available through the hub if 

doing so would be more burdensome for 

individuals. Other commenters believed 

that States should be able to use 

alternative processes or sources as long 

as the information is as accurate and 

timely as, or can be obtained more 

efficiently than, that provided through 

the Federal data services hub described 

in § 435.949. One commenter 

recommended that the process for 

obtaining Secretary approval to use 

alternative data sources required under 

§ 435.948(d) be streamlined and 

efficient. 

Response: As mentioned above, we 

have moved the proposed regulations at 

§ 435.948(d) and § 435.949(c) to a new 

§ 435.945(k). States may utilize 

alternative sources in lieu of those listed 

in § 435.948(a) or an alternative 

mechanism other than the Federal data 

services hub described in § 435.949(a) if 

such alternative source or mechanism 

will reduce the administrative costs and 

burdens on individuals and States while 

maximizing accuracy, minimizing 

delay, meeting applicable requirements 

relating to the confidentiality, 

disclosure, maintenance, and use of 

information, and promoting 

coordination with other insurance 

affordability programs. 

States may seek approval to use such 

alternative sources either across-theboard or in specific circumstances. 

Under § 435.945(j), States would 

describe the circumstances for using 

alternative sources or mechanisms in 

their verification plans. States are not 

required to seek approval from the 

Secretary to access data sources in 

addition to those identified in § 435.948. 

The notice required under § 435.945(f) 

of this final rule applies to the entire 

subpart—that is, to all data matching 

conducted by the agency. We do not 

believe it is necessary to include a 

specific cross-reference to § 435.945(f) 

in § 435.945(k). 

Comment: One commenter suggested 

that, given the uncertainty regarding the 

information that will be available to 

States through the Federal data services 

hub and States’ experience using 

alternative data sources, we should not 

issue further regulations, but should 

permit States maximum flexibility in 

utilizing data sources of their choice. 

One commenter believed that States 

should be permitted to continue to use 

existing electronic interfaces with SSA 

and DHS that provide the necessary data 

matches and should not be required to 

use the Federal data services hub. 

Response: We are establishing a 

federally-managed data services hub to 

support information exchanges between 

States (Exchanges, Medicaid and CHIP 

agencies) and relevant Federal agencies. 

In many cases, Federal agencies other 

than CMS will be providing information 

through the hub. Additional information 

about the services available through the 

hub and the terms for accessing those 

services is under development. Under 


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the regulations, if verification of 

particular information is not available 

through the Federal data services hub, 

States may continue to utilize existing 

electronic interfaces. We have revised 

the regulation text to clarify that, should 

the data services hub establish a secure 

interface with other Federal, State or 

other data bases, States would then use 

such interface to access such additional 

data sources when needed. We will 

provide additional guidance should 

such additional electronic interfaces be 

established. 

Comment: A few commenters asked 

whether the mandated use of the 

Federal data services hub established by 

the Secretary will be provided free of 

charge to the States. One commenter 

indicated that the development of the 

electronic transfer by the States could be 

very costly so CMS should provide 

reimbursement or a cost-effective 

mechanism to States. Two commenters 

questioned how the Federal data 

services hub will affect existing State 

agreements to access information from 

SSA or from DHS through SAVE. 

Response: While the agency is 

considering the treatment of charges for 

fiscal year 2014, we do not anticipate 

charging Exchanges or State Medicaid or 

CHIP programs for the use of the hub. 

Section 435.949(a) clearly delineates the 

agencies (IRS, SSA and DHS) with 

which States will obtain certain 

electronic information through the 

Federal data services hub, under section 

1413(c) of the Affordable Care Act. 

Comment: Many commenters asked 

us to clarify whether the Federal data 

services hub would provide all the 

necessary income and household 

composition information for States to 

determine an applicant’s MAGI. One 

questioned whether IRS data can be 

used to verify residency. One 

commenter also requested further 

guidance regarding IRS security 

requirements, and whether these may 

limit States’ access to and utilization of 

the data. 

Response: As explained in the State 

Exchange Implementation Questions 

and Answers issued November 29, 2011, 

available at http://www.medicaid.gov/ 

Federal-Policy-Guidance/CIB–11–29– 

2011.pdf, the IRS will provide the MAGI 

of parents or other head of household 

and for certain dependents who had 

enough income to have been required to 

file a tax return. This information will 

be taken from the most recent return 

(within the 2 previous years) on file. 

The IRS will also provide information 

about the size of the household shown 

on the returns and coding to help the 

State understand the information being 

provided and instances in which 

information may not be available. The 

IRS will not return information which 

can be used to verify the dependent 

status of a child. 

In the Medicaid Eligibility proposed 

rule, we proposed to codify widespread 

State practice of accepting attestation of 

household composition, to promote 

coordination of eligibility rules and 

procedures with the Exchange. Due to 

the uncertainty flagged by the 

commenters, which may sometimes 

exist regarding the tax filing and tax 

dependency status of individuals for the 

tax year in which Medicaid is sought, 

we are removing the requirement that 

States must accept self-attestation of 

household size. Instead, verification of 

household size is now contained in 

§ 435.956(f) with age and date of birth. 

An individual’s address is not among 

the information which will be provided 

by the IRS. Return information, as such 

term is defined by section 6103(b)(2) of 

the IRC, is kept confidential under 

section 6103 of the IRC. The disclosure, 

use, and maintenance of return 

information is strictly governed by 

section 6103. 

Comment: One commenter believed 

that States should not be required to 

continue reconciling PARIS matches 

because this process currently must be 

done manually and is burdensome for 

States and PARIS does not return 

information about whether Medicaid 

eligibility is correctly established in 

other States. 

Response: Data matches with PARIS 

are required as a condition of FFP under 

section 1903(r) of the Act. 

Comment: One commenter 

interpreted § 435.952(a) to mean that 

eligibility must be determined promptly 

using electronic verifications identified 

under sections § 435.940 through 

§ 435.960 and that § 435.945 of the 

proposed regulation appears to allow 

self-attestation for identity, whereas, 

§ 435.407(e) of the current regulations 

requires verification of identity other 

than by self-attestation. One commenter 

questioned whether the use of electronic 

data matches removes the requirement 

for applicants to verify identity. 

Response: Section 435.407 pertains to 

verification of identity when it is a 

component of verifying citizenship. 

Reliance on self-attestation of 

citizenship is not permitted under 

§ 435.945(a), as redesignated in the final 

rule, or the underlying statutory 

provision at section 1902(a)(46)(B) of 

the Act. States will be required to verify 

citizenship in the first instance through 

the Federal data services hub under 

§ 435.949. To the extent that such 

verification fails, States would employ 

the verification processes established 

under sections 1902(ee) or 1903(x) of 

the Act and § 435.407 of the regulations. 

Changes to these statutory and 

regulatory provisions enacted in 

CHIPRA will be addressed in 

subsequent rulemaking. 

Comment: Many commenters 

expressed concern with the deletion of 

the requirement in § 435.952 for States 

to request verification within 45 days of 

when new information is received. 

Commenters are concerned that without 

timeliness standards, access to coverage 

could be delayed and there will be no 

accountability for States. Some 

commenters asked what it means to 

‘‘promptly evaluate information 

received’’ in the context of real-time 

eligibility determinations. A few 

commenters recommended that the 

States be required to complete 

verifications as quickly as possible, not 

to exceed 30 days. One commenter 

questioned whether deletion of the 45- 

day requirement would preclude States 

from setting their own timeliness 

requirements, and whether States will 

be able to set different time standards 

for different populations or 

circumstances. One commenter 

requested that CMS define parameters 

within which States would have 

flexibility to establish policies and 

procedures for real-time eligibility 

determinations. 

Response: First, we note that 45 and 

90 days relating to timely eligibility 

determinations at redesignated 

§ 435.912 remains, and that additional 

parameters relating to the timely 

determination of eligibility are included 

in the final rule (see discussion in 

section III.D. of the preamble). However, 

we removed the 45-day standard to 

request verification and determine 

whether the information affects 

eligibility from § 435.952 because we 

expect the verification process to occur 

faster, often in real time where 

electronic verification is available. 

Beyond the timeliness standards which 

States establish in accordance with 

§ 435.912, we are not providing 

additional specific timeliness standards 

in these regulations for the verification 

of new information received by States 

under § 435.952, but will consider, with 

input from States and stakeholders, 

such standards in developing broader 

performance metrics relative to State 

eligibility and enrollment systems. 

Comment: One commenter questioned 

how Medicaid requirements regarding 

third party liability can be 

operationalized in the context of ‘‘real 

time’’ eligibility and enrollment 

determinations. 

Response: Third party liability is 

primarily governed by sections 


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1902(a)(25) and 1912 of the Act, and 42 

CFR part 433 subpart D and § 435.610 of 

the regulations. The Affordable Care Act 

did not alter these provisions, which 

will remain in effect in 2014. Based on 

State experience today, compliance with 

third party liability rules, which can be 

handled following a determination of 

eligibility, should not impede prompt 

processing of applications. 

Comment: Many commenters 

including States, as well as consumer 

advocates, supported the concept of 

reasonable compatibility in § 435.952(b) 

but recommended that CMS further 

define how this concept should be 

applied. Some commenters were 

concerned that the language in the 

Medicaid Eligibility proposed rule was 

too broad, and that States could 

interpret it in an overly restrictive way. 

Many of these commenters 

recommended that when the 

information provided by or on behalf of 

the individual is different from that 

obtained through electronic sources, but 

does not affect the eligibility, the 

information should be considered 

reasonably compatible. One commenter 

emphasized the need to interpret the 

reasonable compatibility standard 

consistently across States and insurance 

affordability programs to facilitate 

administrative simplicity and ensure 

comparable treatment of applicants 

regardless of where they submit their 

application. 

Response: To maintain State 

flexibility while providing greater 

consistency, we have revised 

§ 435.952(c) to provide that household 

income information obtained through an 

electronic data match is reasonably 

compatible with income information 

provided by or on behalf of an 

individual if both are above or both are 

at or below the applicable income 

standard or other relevant income 

threshold. As discussed above, we also 

are adding a new paragraph § 435.945(j), 

under which Medicaid agencies will set 

forth their policies in verification plans 

which will include the circumstances in 

which information obtained through an 

electronic data match is considered by 

the State to be reasonably compatible 

with information provided by or on 

behalf of an applicant or beneficiary, or 

obtained through another source. We 

will be working with States to develop 

a template for such plans. 

Comment: A few commenters 

recommended that States should not be 

permitted to ask individuals for 

additional information if the State’s data 

match that triggered the apparent 

incompatibility is more than 90 days 

old. 

Response: Data that is more than 90 

days old (such as IRS data) may be 

relied upon to verify eligibility criteria 

if reasonably compatible with an 

individual’s attestation. Where such 

data is not reasonably compatible, the 

regulations do not require States to 

accept the attested information. Instead, 

States may accept a reasonable 

explanation provided by the individual 

explaining the discrepancy (for 

example, that there has been a change 

in circumstances) or, where other 

electronic data is not available under 

the standard set forth at 

§ 435.952(c)(2)(ii), the State may request 

additional information from the 

individual. 

Comment: A number of commenters 

urged that otherwise eligible individuals 

be provided benefits during a 

‘‘reasonable opportunity period’’ in 

which the agency works with the 

individual to resolve any discrepancies 

when information obtained through 

electronic data matching is not 

reasonably compatible with that 

provided on the application. Some 

suggested that the ‘‘reasonable period’’ 

referenced in § 435.952 be 90 days to be 

consistent with the Exchange; one 

commenter recommended 30 days. A 

number of commenters indicated the 

Medicaid and Exchange verification 

rules should be identical in allowing for 

a good-faith extension. 

Response: Section 1411(e)(3) and (4) 

of the Affordable Care Act requires that 

to the extent there is an inconsistency 

between the data obtained by the 

Exchange and applicant information, 

the Exchange provide an applicant with 

a ‘‘reasonable opportunity period’’ of 90 

days during which he or she may 

present documentation to resolve such 

inconsistency, and provide the 

applicant with advance payments of the 

premium tax credit and cost-sharing 

reductions to which he or she has 

attested. 

However, for purposes of Medicaid 

eligibility, this ‘‘reasonable opportunity 

period’’ does not apply to all eligibility 

criteria. 

The reasonable period referenced in 

our proposed § 435.952 does not require 

the provision of benefits pending receipt 

of additional information requested by 

the agency from the individual nor does 

it specify a 90-day period. We do not 

believe it is necessary for inter-program 

coordination to align the length of this 

period with the 90-day ‘‘reasonable 

opportunity’’ provided in the Exchange 

regulations at 45 CFR 155.315(f), and 

therefore, are retaining the discretion 

afforded States to determine the length 

of this period. 

Comment: A few commenters 

recommended that when attestation is 

not possible, Medicaid agencies need to 

accept different types of documentation, 

such as letters from employers, or 

applicant-approved telephone contact 

with a reliable third party, and 

applicants must be able to submit 

documentation online, by phone, mail 

or fax, in person, or other electronic 

means such as sending photographs of 

documents from a smart phone. 

Response: In accordance with section 

1943 of the Act, section 1413 of the 

Affordable Care Act, and sections 

1902(a)(4) and 1902(a)(19) of the Act, 

individuals must be able to submit 

documents needed for verification 

purposes in the same manner as the 

application. We have revised 

§ 435.907(a) accordingly. 

Comment: One commenter believed 

that proposed § 435.952(d) means that 

the States cannot use the electronic 

verification sources as true verification 

if it results in eligibility because this 

section states that an agency may not 

deny or terminate eligibility based on an 

electronic verification source unless the 

agency has requested additional 

information from the individual and 

provided proper notice. 

Response: Section § 435.952(d) cites 

all the verification regulations, not just 

the ones requiring matches with 

electronic data sources. This section 

provides that States may not deny or 

terminate an individual’s eligibility 

based on the information obtained 

through the verification process unless 

and until the State has provided an 

opportunity for the individual to 

provide additional information, and 

proper notice and hearing rights to the 

individual in accordance with part 431. 

It does not preclude States from 

approving eligibility based on electronic 

data sources. 

Comment: Many commenters 

recommended that the word ‘‘delay’’ be 

added to § 435.952(d), so that this 

paragraph would provide, ‘‘The agency 

may not deny, reduce, delay or 

terminate eligibility * * * for any 

individual on the basis of information 

received * * * unless the agency has 

sought additional information from the 

individual * * * and provided proper 

notice and hearing rights * * *’’ The 

commenters believed this is particularly 

important given the proposed change to 

the 45-day eligibility determination 

timeline and to allow States very broad 

flexibility in the verification process. 

Response: We have provided 

additional guidance at redesignated 

§ 435.912 regarding the timeliness 

standards which States are required to 

establish. We note also that current 


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regulations at § 435.911(e), redesignated 

at paragraph (g) of § 435.912 in this final 

rule, already provide that any time 

standards adopted by the State agency 

may not be used as a waiting period to 

delay eligibility. Therefore, we do not 

think it is necessary to add ‘‘delay’’ to 

the § 435.952(d). 

Comment: Many commenters 

recommended maintaining language 

from the deleted § 435.955(f)—that ‘‘the 

agency must certify to the Federal 

agency that it will not take adverse 

action against an individual until the 

information has been independently 

verified and until 10 days (or sooner if 

permitted by § 431.213 or § 431.214) 

after the individual has been notified of 

the findings and given an opportunity to 

contest.’’ 

Response: The language cited by the 

commenters is maintained in 

§ 435.952(d), which provides that the 

agency may not deny or terminate 

eligibility or reduce benefits for any 

individual unless it has sought 

information from the individual, and 

provided proper notice and hearing 

rights in accordance with subpart E of 

part 431 of the regulations. Section 

§ 431.211 of that subpart contains the 

protection at issue in the comment. 

Comment: A few commenters 

recommended that when applicants or 

beneficiaries fail to respond to a request 

for information in accordance with 

§ 435.952(d), they should be suspended 

rather than terminated from eligibility. 

Response: The appropriate process is 

outlined in this provision and also 

through the notice and hearing 

provisions in 42 CFR part 431 subpart 

E. We do not believe it is appropriate to 

require States to suspend rather than 

terminate Medicaid eligibility once 

timely and appropriate notice has been 

provided. If a beneficiary seeks a timely 

hearing, benefits are continued in 

accordance with § 431.230. 

Comment: Many commenters 

supported the prohibition on State 

agencies from relying on immigration 

status to determine lack of State 

residency. To avoid confusion many 

commenters further recommended that 

we delete the word ‘‘alone’’ from 

§ 435.956(c)(2). 

Response: We have struck the word 

‘‘alone’’ from § 435.956(c)(2) of this final 

rule. We also clarify that this provision 

applies generally to evidence of 

immigration status, removing the 

reference to ‘‘a document,’’ as a State 

may obtain such information from an 

electronic data match or other source. 

We have also revised the language to 

clarify that, although a State cannot use 

such evidence to determine someone is 

not a State resident, nothing in these 

regulations prevents an individual from 

being able to present evidence of 

immigration status to prove their State 

residency, for example, by providing an 

immigration document that indicates 

their address. States may request 

additional information in accordance 

with § 435.952 to verify residency if an 

immigration document gives a State 

reason to question an individual’s 

residency. 

Comment: Some commenters 

expressed concern that § 435.956(c) 

allows parents in a shared custody 

situation to attest to where a child 

resides. The commenters were 

concerned that parents who live in 

different States both could attest to the 

child residing in their State, potentially 

resulting in Medicaid eligibility being 

approved in two States. 

Response: Self-attestation of residency 

is permitted today and is currently 

utilized in many States, even in shared 

custody situations. States may enter into 

interstate agreements and access data 

sources, such as PARIS. Further as, 

permitted under the regulations, States 

may seek further information if the State 

has information indicating potential 

residency in another State. 

Comment: Many commenters 

supported self-attestation for pregnancy; 

however, one commenter suggested that 

for States that provide full Medicaid 

benefits to this population, verification 

of pregnancy should be an option. One 

commenter disagreed with allowing 

self-attestation for pregnancy. 

Response: To promote a streamlined 

system, we maintain self-attestation of 

pregnancy as a requirement for States 

regardless of the benefit package 

provided by the State; however under 

§ 435.956(e) if a State has information 

that is not reasonably compatible with 

the attestation, the State may verify 

pregnancy in a manner consistent with 

§ 435.952. States have flexibility 

whether to accept self-attestation of 

multiple births which relates to 

household size, verification of which is 

codified at § 435.956(f) of this final rule. 

Comment: One commenter noted that 

the proposed Exchange regulation 

requires the Exchange to verify through 

electronic data sources that an applicant 

is not incarcerated, but the Medicaid 

rule is silent on this topic. The 

commenter urged that self-attestation of 

incarceration of a family member be 

sufficient so that children will not be 

subject to delays in coverage due to a 

parent’s incarceration. 

Response: Incarceration is not a factor 

of eligibility which needs to be verified 

for purposes of determining eligibility, 

and therefore, is not addressed in the 

verification rules. However, as 

discussed below, payment for medical 

services provided to individuals during 

incarceration is generally prohibited 

under subparagraph (A) of the matter 

following section 1905(a)(29) of the Act. 

I. Periodic Renewal of Medicaid 

Eligibility (§ 435.916) 

In the Medicaid Eligibility proposed 

rule, we proposed to amend the 

provision entitled ‘‘Periodic 

Redetermination of Medicaid 

Eligibility’’ to establish simplified, datadriven renewal policies and procedures 

for individuals whose eligibility is 

based on MAGI, consistent with 

assuring program integrity. In this final 

rule, we have altered the title of this 

section by replacing the word 

‘‘redetermination’’ with the word 

‘‘renewal’’ and making corresponding 

language edits in the regulation text. 

The use of the word renewal rather than 

redetermination is consistent with the 

usage in many States. We also received 

the following comments concerning the 

proposed periodic renewal of Medicaid 

eligibility provisions. 

Comment: Many commenters 

supported the requirement for an annual 

redetermination no more often than 

once every 12 months. One commenter 

wrote that States should have discretion 

to decide how often to evaluate newly 

eligible individuals. Some commenters 

suggested that we be more explicit by 

adding the word ‘‘only’’ to 

§ 435.916(a)(1). 

Response: As explained in the 

preamble of the Medicaid Eligibility 

proposed rule, scheduling regular 

renewals no more often than once every 

12 months for beneficiaries whose 

eligibility is based on MAGI is 

consistent with current practice for 

parents and children in most States and 

aligns with the annual renewal process 

for individuals who are eligible for 

APTCs through the Exchange. We have 

revised § 435.916(a) to clarify that the 

renewal policy described in that 

paragraph applies to all Medicaid 

beneficiaries whose eligibility is based 

on MAGI methods, rather than just 

those beneficiaries described in 

§ 435.911(c)(1) who are eligible on the 

basis of the applicable MAGI standard. 

In response to comments, we have 

revised the regulation text at 

§ 435.916(a)(1) to clarify that eligibility 

must be renewed once every 12 months, 

and no more frequently than once every 

12 months under that paragraph. We 

chose this wording to clarify that 

renewals do need to occur on an annual 

basis. We note that as provided in 

§ 435.916(d), eligibility should be 

renewed more frequently if a beneficiary 

reports a change in circumstance that 


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may affect eligibility, or if the agency 

receives information that suggests the 

need to review eligibility. 

Comment: Many commenters 

supported the proposed annual renewal 

process in § 435.916(a)(2), which 

requires Medicaid agencies to use 

electronic data to renew eligibility if 

sufficient information is available. Some 

commenters expressed concerns about 

the reliability of the data sources 

available to the State for this purpose. 

Others expressed concern that if 

renewals are performed on the basis of 

data-matching without requiring a 

response from the individual, the State 

is more likely to be liable for 

inappropriate costs or experience poor 

results on quality control measures and 

audits. Two commenters wrote that, for 

all beneficiaries, State Medicaid 

agencies should pre-populate renewal 

forms and ask for response annually, to 

match up with the process proposed for 

the Exchange. Some commenters 

requested that the Medicaid Eligibility 

proposed rule clarify the interaction of 

the renewal process with program 

integrity measures such as PERM. 

Response: Proposed § 435.916(a)(2) 

sought to codify a longstanding policy, 

explained in a letter to State Medicaid 

Directors on April 7, 2000, available at 

http://www.cms.gov/smdl/downloads/ 

smd040700.pdf, that States must rely on 

information that is available and that 

the State considers to be accurate to 

renew eligibility. However, if available 

information suggests that a beneficiary 

is no longer eligible, if information is 

subject to change is missing, or if the 

State has information that suggests that 

available information is inaccurate, then 

a State must seek information from the 

individual before renewing eligibility. 

For example, if a family has recently 

verified income, household size, and 

residency as part of a recent SNAP 

review, then the Medicaid agency 

would typically use that information to 

renew Medicaid eligibility. However, if 

the SNAP review indicates a different 

household size, or income information 

is not available from SNAP or another 

human service program, State wage 

reporting or IRS data the State would 

follow the process in § 435.916(a)(3) to 

request needed information from the 

individual. As stated in the Medicaid 

Eligibility proposed rule, a State’s 

decision on whether to conduct a 

renewal without requesting further 

information from the individual may 

depend on the State’s verification policy 

on certain eligibility criteria, such as 

residency. States that follow procedures 

outlined in the regulations will not be 

cited for a PERM error for lack of further 

documentation. As discussed in section 

III.H. of the preamble, PERM regulations 

issued in 2010 provide that PERM will 

measure errors relative to the State’s 

own policies and procedures as long as 

those policies and procedures are 

consistent with Federal policy and 

regulations. As also noted, we will 

continue to review and analyze all of 

our error rate measurement programs to 

ensure consistency between these 

programs and regulations covering 

eligibility and enrollment. 

Comment: Many commenters 

supported the proposal at 

§ 435.916(a)(3) that, in cases where 

sufficient electronic information is 

unavailable, States must send a renewal 

notice that is pre-populated with any 

information already known to the 

agency and require Medicaid 

beneficiaries to respond with 

information that is missing or incorrect. 

Some commenters requested State 

flexibility on the timelines and 

procedures for sending a pre-populated 

form, as well as flexibility on what that 

form may include. One commenter 

inquired whether States may require 

individuals to provide information 

regarding third party liability at 

renewal. 

Response: We have added language to 

§ 435.916(a)(3)(i)(A) to clarify that the 

pre-populated renewal forms may only 

request additional information needed 

to renew eligibility. Information and 

documentation of eligibility criteria 

subject to change need not be requested 

if it can be obtained from a reliable data 

source available to the State. For 

example, a State would not request 

additional income information from the 

beneficiary if income information at the 

initial determination was verified fully 

by a quarterly wage report, and the 

quarterly wage report for the most 

recent quarter remains reasonably 

compatible with income at the initial 

determination. Nothing related to 

assignment of rights and third party 

liability is altered by the Affordable 

Care Act nor by these regulations. 

Today, many States use contractors to 

determine information regarding third 

party liability and such an approach 

may facilitate a State’s ability to limit 

the information asked of beneficiaries at 

renewal. We will be providing 

additional guidance. 

Comment: Many commenters 

supported our proposal that 

beneficiaries have the option to respond 

to renewals via any of the submission 

modes used at initial application. Some 

commenters requested clarification on 

when a signature is required and the 

submission modes that can be used. 

Some commenters requested additional 

flexibility for States to require 

signatures from all applicants at 

renewal. 

Response: We are retaining the 

proposed policy that if the agency has 

data available that are sufficient to 

continue eligibility, then no signature 

may be required. If available data is not 

sufficient to continue eligibility, then 

the beneficiary must sign and return a 

form with missing or corrected 

information. The individual must be 

able to submit and sign the renewal 

form via the same modes available at 

application-that is, through the internet 

Web site, mail, telephone, in person, or 

other electronic means as described in 

§ 435.907(a). 

Comment: Some commenters 

suggested that specific information be 

included in notices sent to beneficiaries 

in advance of a renewal. Several 

commenters advised that an eligibility 

worker’s name and a telephone number 

to call for information or questions 

should be required on the notice. One 

commenter wrote that if an individual is 

determined ineligible for Medicaid at 

renewal, the individual should be 

notified of his or her eligibility for other 

insurance affordability programs. Some 

commenters recommended specifically 

that agencies should request health 

status updates on renewal forms to 

screen for non-MAGI categories at 

renewal, while another commenter 

requested that no protected health 

information be contained in a prepopulated renewal form. One 

commenter also inquired about the 

effect on the appeals process of using 

the data-driven renewal system. 

Response: We will take these 

suggestions into account in future 

guidance we are developing on notices 

and appeals. We have added 

§ 435.916(e) to clarify that the agency 

may not request information at renewal 

which is not necessary to redetermine 

eligibility. We have added a new 

paragraph to § 435.916(f)(1), to clarify 

that, in accordance with longstanding 

policy the agency must consider all 

bases of eligibility when conducting a 

renewal of eligibility. To meet this 

requirement, renewal forms will need to 

include basic screening questions, 

similar to those that will need to be on 

the single streamlined application, to 

indicate potential eligibility based on 

disability or other basis other than the 

applicable MAGI standard. We note that 

the addition of paragraph (f)(1) to 

§ 435.916 is consistent with the 

application in the final rule of the MAGI 

screen regulations at § 435.911 to the 

eligibility renewal process, discussed in 

section III.E of the preamble. 

Comment: We received comments 

that there should be a specified 


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reconsideration period following a 

termination of Medicaid eligibility at 

renewal. Most commenters supported 

the codification of the 90-day 

reconsideration period suggested in the 

preamble to the Medicaid Eligibility 

proposed rule. Some commenters 

requested a 120-day reconsideration 

period, while other commenters 

suggested making the definition of a 

time period a State option. One 

commenter questioned whether a 

reconsideration period would be 

required even when discontinuance was 

for ‘‘good cause.’’ 

Response: We have altered the 

proposed § 435.916(a)(3)(iii) to provide 

a minimum of 90 days as a period when 

the State would reconsider eligibility 

without a new application and renew 

eligibility if necessary information is 

provided. States may adopt a longer 

reconsideration period if desired. 

Reconsideration periods are only 

required for beneficiaries who did not 

return the pre-populated renewal form 

as described in § 435.916(a)(3) or the 

required documentation and are 

terminated on that basis. At State 

option, agencies may adopt 

reconsideration periods for other types 

of terminations as well. 

Comment: Some commenters asked 

questions about termination and 

retroactive eligibility during the 

reconsideration period. One commenter 

suggested that eligibility be suspended, 

rather than terminated, during a 

reconsideration period. 

Response: During a reconsideration 

period, an individual may not be 

required to submit a full new 

application to be determined eligible for 

benefits, which avoids unnecessary 

application processing for the 

individual, as well as the agency. 

During the 90-day period (or a longer 

period at State option), the individual 

only needs to supply the information 

requested in the pre-populated renewal 

form (including missing documentation, 

if any), and may do so by mail, phone, 

in person, or through electronic means. 

The renewal form in this case serves as 

an application, and an individual who 

regains coverage during a 

reconsideration period is entitled to 

retroactive coverage under § 435.915 

(redesignated from § 435.914 prior to 

issuance of this final rule) to the same 

extent and in the same way as if a new 

application had been filed. With a 90 

day reconsideration period, we would 

expect that in most cases, retroactive 

coverage will extend back to the date of 

the termination. States have flexibility 

in how they design their eligibility 

systems to implement this provision for 

the suspension versus termination of 

eligibility during the reconsideration 

period. 

Comment: Some commenters 

recommended that the final rule clarify 

that States continue to be subject to the 

current requirement that Medicaid 

agencies are required to screen any 

individual who loses Medicaid coverage 

for eligibility under any other Medicaid 

eligibility categories. Some commenters 

suggested that for individuals 

transitioning out of MAGI eligibility, the 

State should be required to continue 

Medicaid coverage during the pendency 

of a Medicaid application for non-MAGI 

Medicaid coverage. Several commenters 

asked questions about transfers to other 

programs when Medicaid eligibility is 

terminated, and suggested that Medicaid 

coverage continue until enrollment in 

another program can be implemented. 

Response: In response to these 

comments, we are finalizing § 435.916(f) 

to codify our longstanding policy that 

beneficiaries must be considered for all 

Medicaid categories prior to 

termination. This addition also 

conforms to the policy for executing 

appropriate eligibility determinations as 

established at § 435.911. For example, 

when an individual loses eligibility 

under a MAGI-based Medicaid 

eligibility group due to an increase in 

income, the individual must not be 

terminated from Medicaid before it is 

determined whether the individual is 

eligible under another eligibility group. 

If it is determined that the individual is 

not eligible under other Medicaid 

categories and Medicaid eligibility is 

terminated, then § 435.916(f) provides 

that the agency must assess potential 

eligibility for other insurance 

affordability programs and transmit data 

pertaining to potentially eligible 

individuals to the appropriate program. 

As noted above, the renewal form will 

need to contain basic screening 

questions to enable such assessment. 

The rules regarding transfers of 

beneficiaries’ electronic accounts to 

other insurance affordability programs 

are at § 435.1200. As described in 

regulations at 45 CFR 155.420(b)(2)(ii), 

the Exchange must ensure coverage on 

the first day of the next month for 

qualified individuals who have selected 

a QHP. Medicaid agencies are allowed 

to extend Medicaid coverage to the end 

of the month in which notice of 

termination is given and note that State 

agencies can receive FFP to do so. States 

have broad flexibility to design their 

process for renewals and terminations 

in ways that promote seamless coverage 

among eligible individuals. 

Comment: Some commenters noted 

that some populations, such as people 

who are homeless may need an 

extended deadline to return the forms. 

Another commenter noted that some 

beneficiaries may need agencies to send 

their renewal forms to authorized 

representatives. 

Response: Section 435.916(a)(3)(i) 

provides that beneficiaries must be 

provided a minimum of 30 days to 

return the pre-populated renewal form. 

States have the authority to increase that 

time period for all beneficiaries or for 

particular populations and to design 

other strategies to assure ongoing 

coverage of eligible individuals. As 

noted in Section III. E of the preamble, 

applicants may designate an authorized 

representative who may act on behalf of 

the applicant including through receipt 

and submission of renewal forms. 

Comment: Though the Medicaid 

Eligibility proposed rule did not make 

substantial changes to existing 

provisions regarding change reporting 

and agency action on available data 

between annual renewals, we received 

many comments on whether such 

reporting and action should be limited. 

Many commenters suggested that 

Medicaid beneficiaries should continue 

to be required to report all changes to 

household size and residency, but that 

Medicaid beneficiaries should not need 

to report all income changes. Some 

suggested that the State should notify 

the beneficiary that he or she only needs 

to report income changes that cause 

household income to exceed a threshold 

in the form of a dollar amount specified 

by the agency. One commenter 

suggested that reports should not be 

required until income changes 

substantially. Another commenter 

recommended that if the State’s initial 

income determination was based on an 

annual income prediction, then it 

should not be necessary to report actual 

changes that have already been 

accounted for at the time of the initial 

eligibility determination. 

Response: We believe we have struck 

the appropriate balance in § 435.916(c), 

which provides that beneficiaries must 

report changes that affect their 

eligibility. It would be reasonable for 

States to identify a dollar threshold or 

other general rule as a way to help 

families know when to report material 

changes in income. However, the agency 

may not discourage reporting of a 

change in income that could affect a 

beneficiary’s eligibility, benefits, or costsharing. In addition, States should not 

remove all change reporting 

requirements, except with respect to 

circumstances that cannot affect 

eligibility, such as income changes for 

children in States which have adopted 

continuous eligibility for children. We 

note that some changes, such as a 


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change in address, or addition of a 

family member, are critical to ensuring 

that the family remains eligible and is 

able to access services. To be consistent 

with the new 12-month renewal policy, 

in between regular renewals, States 

must limit any review triggered by a 

change in circumstance to the eligibility 

factor(s) affected by the changed 

circumstances, and additional factors 

for which information is readily 

available. The agency must wait until 

the next regularly scheduled renewal to 

request information from beneficiaries 

regarding eligibility factors not related 

to the change in circumstance, as 

provided in § 435.916(d)(1) of this final 

rule. For example, if a parent reports 

new earnings 3 months after the family’s 

most recent renewal, the State must 

assess whether the individuals in the 

family continue to be eligible for 

Medicaid in light of the new earnings. 

It must wait until the next regularly 

scheduled renewal to review other 

factors of eligibility if it does not have 

sufficient information available to it to 

review those other factors. However, if 

the agency does have enough 

information to adjudicate all factors of 

eligibility at the time when the change 

in circumstances is reported without 

seeking more information from the 

family, the State may conduct a full 

renewal and, if the individuals in the 

family remain eligible, schedule the 

next regular renewal to occur 12 months 

later. 

Comment: Some commenters 

expressed concern about the 

requirement at proposed § 435.916(d)(2) 

that agencies act on information they 

have received when it indicates a 

change to eligibility or anticipated 

changes to eligibility. We received many 

comments requesting limits on data 

matching, or elimination of the 

requirements at § 435.916(d). Some 

commenters requested that the rule 

specify that data must be used when 

available, timely, and accurate. Other 

commenters wrote that if a State 

conducts data matching in addition to 

the 12-month renewal, it must be 

required to use the same third-party 

sources to verify income as it uses as 

part of the annual renewal process. 

Response: Section 435.916(d) requires 

the agency to act on information that 

becomes available that may affect 

eligibility, in accordance with 

regulations at § 435.952. States must 

have flexibility to determine whether it 

is useful to obtain electronic data as 

described in § 435.948 between 

regularly-scheduled renewals, and 

whether some sources of data are useful 

at different times, although States 

should check data sources both at and 

between scheduled renewals when there 

is an indication of fraud. 

Comment: Some commenters 

suggested a continuous eligibility model 

wherein changes may be reported but 

not acted upon. A few commenters 

believed that there was authority to do 

so because section 1137 of the Act does 

not specify the frequency of the use of 

data from the sources identified in the 

statute. The commenters also believed 

the Secretary has rulemaking authority 

under section 1102 of the Act to 

authorize a State plan option for 

continuous eligibility for adults. One 

commenter referenced SNAP rules, 

which provide that the State may 

choose not to act on a change that 

reduces benefits, but must act on a 

change that increases benefits. Another 

commenter requested clarification on 

whether or not States are required to use 

point-in time income verifications for 

annual renewals. 

Response: Continuous eligibility is a 

State plan option for maintaining 

continuous coverage and retention for 

eligible children in Medicaid and CHIP 

and remains in effect under the 

Affordable Care Act, but there is no 

statutory authority for providing 

continuous eligibility for adults. We 

also note the option, discussed in 

section III.B of the preamble, that under 

§ 435.603(h)(2), a State agency may 

choose to base continued financial 

eligibility for current beneficiaries on 

either projected annual income or on 

current monthly income. 

Comment: We received many 

comments on whether renewal of 

eligibility for individuals whose 

Medicaid eligibility is determined on a 

basis other than MAGI should follow 

the procedures outlined in § 435.916(a). 

Many commenters wrote that these 

simplified processes are beneficial to 

beneficiaries and State agencies and 

should be extended to all Medicaid 

beneficiaries. Other commenters 

suggested such an extension should be 

a State option or should only apply to 

certain categories of non-MAGI 

eligibles. Some commenters wrote that 

portions of the process, including the 

need to check databases and the right to 

reconsideration without a new 

application, should apply to all 

beneficiaries. 

Response: We have revised 

§ 435.916(b) to codify the longstanding 

policy that the agency must renew 

eligibility for all beneficiaries using 

information available to the agency 

without asking for additional 

information from the individual, if that 

available information is sufficient to 

support continued eligibility. We also 

have revised § 435.916(b) to provide 

that, in cases where sufficient 

information is not available to continue 

eligibility, the State has the option to 

adopt the same procedures set forth at 

§ 435.916(a)(3) applicable to individuals 

eligible on the basis of MAGI to 

beneficiaries eligible on non-MAGI 

bases. 

Comment: One commenter expressed 

a concern that a data-driven renewal 

process will not be possible because a 

data matching system is as yet 

undeveloped, and the system may not 

be functional at the time of the 

implementation of the new rules. 

Response: Data matching is not new 

and many States have data-driven 

enrollment and renewal processes. 

States currently are required to conduct 

data matching, in accordance with 

section 1137 of the Act, and most States 

already do much of the data matching 

that will be needed to implement datadriven processes, including matches 

with CHIP, SNAP, TANF, SSA, and 

State Unemployment Compensation and 

Wage Reporting. However, systems 

modernization will be needed in many 

States, and we note that any State 

expenditures before the end of 2015 for 

system changes necessary to adopt the 

renewal procedures described in 

§ 435.916 are eligible for the 90 percent 

Federal matching rate outlined in the in 

the Federal Funding for Medicaid 

Eligibility Determination and 

Enrollment Activities final rule 

published in the April 19, 2011 Federal 

Register (76 FR 21950), provided these 

systems meet the standards and 

conditions set forth in that rule. 

Comment: One commenter suggested 

that States create systems that enable 

beneficiaries to opt for on-going income 

reporting on a weekly or monthly basis 

by phone or online. 

Response: The regulation text at 

§ 435.916(c) states that individuals must 

report changes that affect their 

eligibility, and must be able to do so 

through all the submission modes 

described at § 435.907(a). States may not 

routinely require monthly or weekly 

income reporting, but individuals have 

the obligation to submit changes that 

may affect eligibility. We will be 

working with States and the Exchange 

to explore ways for simple reporting. 

Comment: One commenter wrote that 

to prevent wrongful terminations, an 

automatic termination should not be 

allowed without a human touch review 

by the agency. 

Response: We believe that the 

regulations set forth in § 435.916 and 

§ 435.952 provide beneficiaries with 

appropriate protections against 

wrongful termination. In addition, 

under current rules at § 431.210 and 


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§ 431.211, States must provide advance 

notice of termination and the reason. 

Under § 431.10(c)(3) published in this 

rule, the Medicaid agency must assure 

that eligibility determinations are made 

properly and timely and are consistent 

with the Medicaid agency’s rules. If 

there is a pattern of incorrect 

terminations, the Medicaid agency is 

responsible for taking corrective action. 

Beneficiaries also have the right to 

appeal any termination that they believe 

is erroneous, as described in § 431.220. 

We note that the coordinated 

streamlined system calls for an 

increased use of technology and that 

with proper oversight automated 

processes can be a part of an eligibility 

system that works well for both agencies 

and beneficiaries. 

Comment: One commenter wrote that 

the final rule should also provide 

safeguards to ensure that Medicaid 

enrollees do not lose coverage for failure 

to comply with requirements of another 

program, such as SNAP. 

Response: Under longstanding policy 

and Medicaid regulations, States are 

required to maintain eligibility for 

beneficiaries who meet Medicaid 

eligibility criteria. While a change in 

circumstances affecting eligibility under 

another program may also affect ongoing 

Medicaid eligibility, an individual’s 

decision not to receive benefits from 

another program or his or her 

noncompliance with the requirements 

of another program may not serve as 

grounds for termination of Medicaid 

eligibility. 

Comment: One commenter questioned 

whether it will be acceptable for the 

State to assume that no changes to 

household composition have occurred 

unless the household has contacted the 

agency. A few commenters expressed 

questions and concerns about the 

liability for recovery from beneficiaries 

who do not report changes and no 

longer meet Medicaid eligibility criteria. 

Response: Our rules do not prescribe 

if or when a State must conduct data 

matching between scheduled renewals. 

Nothing in the Affordable Care Act 

changes Medicaid rules regarding 

liability and recovery for overpayments, 

which are outside the scope of this 

regulation. 

J. Coordination of Eligibility and 

Enrollment Among Insurance 

Affordability Programs—Medicaid 

Agency Responsibilities (§ 435.1200) 

We proposed to implement section 

1943 of the Act and sections 

2102(b)(3)(B) and (c)(2) of the 

Affordable Care Act that involve 

coordination between Medicaid and 

other insurance affordability programs, 

including a new requirement to 

delineate the State Medicaid agency’s 

responsibilities in effectuating such 

coordination. This new provision also 

included policies previously included 

in § 431.636, Coordination of Medicaid 

with the State CHIP. These and other 

proposed revisions are discussed in 

more detail in the Medicaid Eligibility 

proposed rule (76 FR 51166 through 

51169). 

Comment: Many commented on the 

responsibility of the Medicaid agency 

for determining individuals’ Medicaid 

eligibility based on MAGI when the 

single, streamlined application is 

submitted to the Exchange and many 

supported the coordination policies 

outlined in the Medicaid Eligibility 

proposed rule. Some commenters 

believed that State Medicaid agencies 

should retain responsibility over all 

Medicaid determinations. Others 

emphasized the importance of the 

Medicaid agency exercising supervision 

and oversight over Exchange 

determinations of Medicaid eligibility, 

at times focusing particularly on 

situations involving an Exchange 

operated by a private agency. Other 

commenters supported a fully integrated 

system in which all eligibility 

determinations are performed by a 

single entity. 

Response: As discussed in the State 

Exchange Implementation Questions 

and Answers issued by CMS on 

November 29, 2011, and consistent with 

the Exchange final rule at 45 CFR 

155.305 and 45 CFR 155.345, State 

Medicaid and CHIP agencies and 

Exchanges will have two ways of 

coordinating eligibility determinations. 

State Medicaid and CHIP agencies may 

make the final Medicaid and CHIP 

eligibility determination based on the 

Exchange’s initial review; or the State 

Medicaid and CHIP agencies may accept 

a final eligibility determination made by 

an Exchange that uses State eligibility 

rules and standards. 

We are revising § 435.1200(c), 

accordingly, to reflect this new 

flexibility and to establish the standards 

and guidelines to ensure a simple, 

coordinated and timely eligibility 

determination process and accurate 

eligibility determinations regardless of 

the option elected by the State. 

Consistent with the discussion in the 

preamble to § 431.10 and § 431.11, we 

are revising paragraph (c) to require, in 

States in which the Exchange will make 

Medicaid eligibility determinations, that 

the State Medicaid agency shall comply 

with provisions at revised § 435.10 to 

ensure it maintains the oversight for the 

Medicaid program. We also are revising 

paragraph (c), consistent with revised 

§ 435.911 to ensure that individuals 

determined eligible for Medicaid by the 

Exchange based on the applicable MAGI 

standard are considered by the agency 

for eligibility on other bases which may 

be more advantageous to the individual, 

as appropriate. 

To ensure a highly coordinated 

system of eligibility and enrollment 

regardless of whether the Exchange or 

the Medicaid agency makes the final 

eligibility determination, we are 

amending paragraphs (b) and (d) of 

§ 435.1200. Specifically, we are 

amending paragraph (b)(3), which 

requires an agreement between the 

agency and the Exchange and other 

insurance affordability programs, to 

include a delineation of the 

responsibilities of each program to 

minimize burden on individuals, as 

well as to ensure timely determinations 

of eligibility and enrollment in the 

appropriate program based on the date 

the application is submitted to any 

insurance affordability program and 

compliance with paragraphs (d) through 

(f) and, if applicable, § 435.1200(c) to 

achieve a coordinated system of 

eligibility and enrollment among the 

programs. Paragraph (d), which 

describes the transfer of applications 

from an insurance affordability program 

to the State Medicaid agency, includes 

procedures to ensure that the Medicaid 

agency benefits from the information 

already collected by the other program 

and does not request information or 

documentation already provided, 

determines Medicaid eligibility of the 

individual promptly and without undue 

delay, consistent with the timeliness 

standards established under § 435.912 

and in accordance with § 435.911, 

without requiring submission of another 

application; accepts findings of specific 

eligibility criteria made by the other 

insurance affordability program without 

further verification if such findings were 

made in accordance with the same 

policies and procedures applied by the 

agency (as would be the case where the 

Exchange makes a finding based on 

verification received through the hub) or 

approved by it; and notifies the 

insurance affordability program of the 

receipt of the individual’s account 

information. 

Because coordination between 

insurance affordability programs is 

equally important at renewals of 

eligibility, we have amended § 435.1200 

to clarify its applicability to renewal 

processes. We also have added a 

definition of ‘‘eligibility determination’’ 

at § 435.4 to include an initial 

determination of eligibility for 

applicants, a renewal of eligibility for 

beneficiaries, and a redetermination of 


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eligibility for beneficiaries based on a 

change reported or identified. 

Consequently, the provisions set forth in 

paragraphs (b) and (d) apply not only to 

eligibility determination at initial 

application, but also at renewal and 

when a change in eligibility criteria is 

reported or identified. 

For the reasons set forth in section V. 

of the preamble, § 435.1200 is being 

published as an interim final rule. We 

are soliciting comments on the 

provisions in this section to ensure a 

seamless and coordinated eligibility 

determination process regardless of the 

implementation choices exercised by 

the State. 

Comment: One commenter wrote that 

the Exchange should consider all 

categories of potential Medicaid 

eligibility, including working disabled, 

medically needy, and transitional 

Medicaid, before determining that the 

applicant should not be enrolled in 

Medicaid. Other commenters believed 

that the Exchange should not make 

Medicaid determinations on a basis 

other than MAGI. One commenter stated 

that a basic screening by the Exchange 

for non-MAGI eligibility is futile 

because it will either be too broad or too 

narrow. One commenter wrote that any 

individual who submits an application 

to the Exchange should receive the same 

basic screening as would occur if the 

application were submitted to the 

Medicaid agency, including individuals 

who are ineligible for subsidies such as 

applicants over the age of 65. 

Response: Under the final rule, the 

Exchange would not be required to 

perform a detailed evaluation of all 

Medicaid eligibility categories even if 

the Exchange is making final Medicaid 

eligibility determinations based on the 

applicable MAGI standard. However, 

these rules do not prevent States from 

designing its system in a way that 

enables one entity to make all eligibility 

determinations for all insurance 

affordability programs. Otherwise the 

Exchange will be responsible for 

transferring the electronic account of an 

individual whom it screens as 

potentially eligible for Medicaid on a 

basis other than MAGI to the State 

Medicaid agency for a full assessment, 

as described in 45 CFR 155.345(b). In 

addition, per 45 CFR 155.345(c), 

applicants who submit a single, 

streamlined application to the Exchange 

will be informed of the option to 

undergo a full Medicaid evaluation, and 

assisted in doing so using the same 

coordinated and streamlined procedures 

and without the need to submit 

duplicate information. 

Comment: A few commenters wrote 

that Medicaid and CHIP agencies should 

be able to make binding eligibility 

decisions for all insurance affordability 

determinations. 

Response: There is no statutory 

authority to require Medicaid and CHIP 

agencies to make binding 

determinations of Exchange and APTC 

eligibility; however the Exchange may 

contract with the Medicaid or CHIP 

agency to make such determinations per 

45 CFR 155.110(a)(2). 

Comment: A few commenters wrote 

that Medicaid agencies should be 

required to enter into agreements with 

other insurance affordability programs. 

Some commenters asked for CMS to 

provide model agreements. Others 

requested clarification on 

§ 435.1200(c)(3), under which Sates 

must certify criteria needed by the 

Exchange to determine Medicaid 

eligibility. Some commenters requested 

that we articulate the importance of a 

‘‘CMS compliance review’’ when other 

insurance affordability programs are 

determining potential Medicaid 

eligibility. 

Response: The Medicaid agency must 

enter into an agreement with the 

Exchange operating in the State under 

§ 435.1200(c). We have moved the 

requirement that the agency certify 

eligibility criteria needed by the 

Exchange to determine Medicaid 

eligibility to paragraph (b). We note that 

this provision is also identified in the 

Exchange final rule at 45 CFR 

155.305(c). Ensuring assessments of 

potential eligibility for all insurance 

affordability programs will be 

considered in the development of 

process standards and measures for the 

coordinated eligibility system. 

Comment: Two commenters 

recommended that States be able to set 

an annual open enrollment period for 

Medicaid to align with the Exchange. 

Response: The statute does not permit 

restricting enrollment in Medicaid to an 

annual open enrollment period. 

Individuals have the right to apply for 

Medicaid and can be determined 

eligible for Medicaid at any time. 

Comment: A number of commenters 

suggested that, to ensure that 

beneficiaries do not get lost in the 

transition between programs, the 

program to which the beneficiary is 

transferred should be required to 

acknowledge receipt of the information 

and enrollment of the individual, once 

completed. 

Response: In the case where one 

eligibility system is being used to 

support adjudication for all programs, 

such acknowledgment may be 

unnecessary. However, where the 

system for adjudicating eligibility for 

Medicaid, CHIP, and the Exchange are 

not fully integrated, is important. 

Accordingly, we are amending 

§ 435.1200(d) to incorporate the 

recommendation. 

Comment: One commenter suggested 

that if the State Medicaid or CHIP 

agency determines an individual is 

ineligible for coverage based on 

evidence of fraud, no further eligibility 

screening for other insurance 

affordability programs need be 

completed for that individual. 

Response: States are required to 

terminate eligibility in situations 

involving erroneous determinations of 

eligibility based on inaccurate 

information, as in cases involving fraud. 

In such circumstances, the agency 

would be able to reliably assess 

potential eligibility for another 

insurance affordability program, and 

therefore, it would not be consistent 

with the regulations for it to transfer the 

individual’s application to another 

program. 

Comment: We received several 

comments supporting the required 

coordination among insurance 

affordability programs, but also 

advocating that we require adoption of 

a shared eligibility service to eliminate 

the need for electronic transferring of an 

individual’s account information among 

programs. 

Response: In accordance with 

§ 435.1200, States must adopt a 

coordinated business process and 

supporting systems to permit an 

efficient and seamless evaluation of an 

individual’s eligibility for APTCs and 

reduced cost sharing through the 

Exchange, Medicaid, CHIP and the Basic 

Health Plan if applicable. This could be 

accomplished through the use of a 

common system or shared eligibility 

service to adjudicate placement of most 

individuals. We have issued guidance 

about how programs should allocate 

costs for shared systems and services. 

We are supporting multiple 

architectures and pathways which 

reflect both States’ intentions regarding 

their Exchanges, the current architecture 

and performance of existing eligibility 

systems, desire for integrated solutions 

that include other State programs, and 

other considerations. 

Comment: One commenter requested 

that States be required to obtain 

permission from an individual before 

any individual information is 

transferred to another insurance 

affordability program for evaluation of 

eligibility for such program. 

Response: Applicants filing a single, 

streamlined application have the option 

of applying only for enrollment in a 

qualified plan in an Exchange without 

an APTC. If the applicant seeks a 


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determination of eligibility for an 

insurance affordability program, he or 

she must apply for all insurance 

affordability programs and will be 

informed that information may be 

shared with such programs. 

Comment: Many commenters 

supported providing the opportunity for 

applicants to enroll in other insurance 

affordability programs while a 

determination of Medicaid eligibility on 

a non-MAGI basis is pending. A few 

commenters opposed this policy and a 

few others requested clarification of the 

interaction of Exchange coverage 

pending determination of Medicaid 

eligibility based on disability with 

retroactive Medicaid eligibility. One 

commenter questioned whether an 

insurer could recoup payments made on 

behalf of an individual and bill 

Medicaid for those costs when someone 

who has been enrolled through the 

Exchange is subsequently determined to 

be eligible for Medicaid and is eligible 

for retroactive eligibility. 

Response: Individuals who are 

eligible for Medicaid on the basis of 

MAGI but may be eligible on another 

basis should have access to coverage 

pending completion of a sometimes 

more time-consuming process of 

determining Medicaid based on such 

basis. Therefore, we are retaining the 

policy at § 435.1200(e)(2) of this final 

rule to enable individuals who are 

otherwise eligible for coverage through 

the Exchange and other insurance 

affordability programs to enroll in such 

coverage while a determination of 

Medicaid eligibility is pending. Once 

determined, the effective date of 

Medicaid eligibility is defined in 

accordance with current regulations at 

renumbered § 435.915, including up to 

3 months of retroactive eligibility prior 

to the month of application, as 

applicable under current law. During 

such period of retroactive coverage, 

customary rules regarding third party 

liability apply and Medicaid would 

serve as a secondary payer to the 

coverage provided through the 

Exchange. The QHP in which the 

individual has been enrolled will not be 

able to recoup payments from the 

Medicaid program. 

Comment: Some commenters wrote 

that the proposal to provide Exchange 

coverage pending a determination based 

on disability should be extended to all 

pending determinations of Medicaid 

eligibility on a basis other than the 

applicable MAGI standard. 

Response: We have revised 

§ 435.1200(e)(2) to permit State agencies 

to transmit to other insurance 

affordability programs the electronic 

accounts of individuals undergoing 

eligibility determinations on any basis 

other than the applicable MAGI 

standard as appropriate. 

Comment: One commenter wrote that 

we should issue guidance that any 

‘‘insurance affordability assistance,’’ 

including APTCs and cost sharing 

subsidies, be counted toward meeting 

spend down requirements under 

Medicaid. 

Response: Incurred medical expenses 

are defined as Medicare and other 

health insurance premiums, deductibles 

and coinsurance charges, as well as 

medical and remedial care, that are not 

subject to payment by a third party. In 

other words, an incurred medical 

expense is an expense the individual 

has a legal obligation to pay. The only 

exception is for expenses paid entirely 

with State or local program funds, 

which can be considered to be incurred 

medical expenses for spend-down 

purposes. Assistance such as APTCs 

and cost-sharing subsidies are not 

expenses for which an individual has 

incurred an obligation to pay. However, 

expenses for premiums and other cost 

sharing obligations that an individual is 

liable to pay for obtaining coverage 

through the Exchange may be 

considered an incurred medical expense 

for purposes of spend-down. 

Comment: We received many 

comments on the Internet Web site 

described at proposed § 435.1200(d), 

redesignated as § 435.1200(f). Many 

commenters wrote that we should 

require a single enrollment Web site 

with information on all insurance 

affordability programs rather than allow 

multiple Web sites with information 

from an array of entities. Some 

commenters suggested specific Web site 

functions such as portals to 

personalized application assistance and 

plan enrollment capacity. Another 

commenter requested model Web site 

content. One commenter suggested that 

our regulation should include all 

functions listed in section 1561 of the 

Affordable Care Act. 

Response: The Affordable Care Act 

provides that Web sites shall be 

accessible and support the range of 

applicant and beneficiary services 

required, including accessing 

information on the insurance 

affordability programs available in the 

State, and applying for and renewing 

coverage. States can and are encouraged 

to operate a single Web site, but are not 

required to do so as long as the Web 

sites of the different insurance 

affordability programs are linked to 

enable individuals to access the 

information and range of services 

required. We believe that States can 

adhere to the regulations in 

§ 435.1200(f) in conjunction with 

complying with the recommendations 

adopted by the Secretary in September 

2010 on the interoperable and secure 

standards and protocols that facilitate 

electronic enrollment, as required by 

section 1561 of the Act. Additional 

guidance will be released on standards. 

We also note that § 435.908(b) requires 

States to make application assistance 

available through an Internet Web site, 

among other venues. 

Comment: Some commenters 

expressed preferences for the plan 

enrollment process after Medicaid 

eligibility had been determined. One 

commenter suggested that the Exchange 

be required to support informed choice 

of a Medicaid health plan if it has made 

the Medicaid eligibility determination. 

A few commenters requested that 

agencies be required to provide an 

online plan enrollment option, 

regardless of which entity makes the 

Medicaid determination. Some 

commenters requested that the 

enrollment process be clearly separated 

from the application process. 

Response: The responsibility of the 

Medicaid agency over enrollment 

activities is addressed at § 431.10. While 

we encourage States to maximize the 

accessibility and simplicity of the plan 

enrollment process, plan enrollment 

activities are beyond the scope of this 

rule. 

Comment: One commenter suggested 

that because Exchanges do not require 

SSNs of non-applicants, the agency 

would not have an appropriate personal 

identifier, complicating the ability to 

establish interfaces to share data 

between different insurance 

affordability programs. 

Response: The requirements for a 

transfer of an electronic account as 

described in § 435.1200(f) and (g)(2) are 

to transmit all relevant information 

related to an applicant which is 

obtained by the agency through the 

application, including information 

obtained through the verification 

process and any relevant non-applicant 

information. The lack of an SSN for a 

non-applicant member of the applicant’s 

household should not affect the transfer 

of applicant information. 

Comment: A number of commenters 

noted the importance of readability and 

understandability particularly for the 

Web site in our Medicaid Eligibility 

proposed rule at § 435.1200(d), and 

suggested that the Web site should be 

written at no greater than a 4–5th grade 

reading level. 

Response: We will consider it as we 

develop guidance that will address 

readability and literacy standards. 


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Comment: Many commenters 

articulated the importance of 

accessibility of the Web site for persons 

who are limited English proficient, as 

well as people with a disability in 

accordance with the Americans with 

Disabilities Act and section 504 of the 

Rehabilitation Act. Many commenters 

recommended that the Web site should 

be available in languages other than 

English, including Spanish, and the 

second most prevalent language in 

service area. Commenters also suggested 

that vital documents should be 

translated, depending on the numbers of 

limited English proficient persons 

served and importance of the 

information provided, and that the Web 

site include tag lines to obtain oral 

interpretation of what is on the Web 

site. Other commenters stated that Web 

sites and kiosks should meet disability 

accessibility standards. 

Response: We have provided that 

information be conveyed accessibly for 

individuals who are limited English 

proficient and individuals with 

disabilities in § 435.1200(f) by 

referencing revised language at 

§ 435.905(b), discussed in section III.E. 

of the preamble We had noted in the 

preamble of the Medicaid Eligibility 

proposed rule that Web sites, interactive 

kiosks and other information systems 

would be viewed as being in 

compliance with section 504 if such 

technologies meet or exceed section 508 

of the Rehabilitation Act standards. We 

encourage States to review Web Content 

Accessibility Guidelines (WCAG) 2.0 

level AA Web site standards when 

designing their Web sites and other 

systems. These standards promote 

increased accessibility in information 

and communication technology for 

people with disabilities and thus, have 

been considered for adoption as section 

508 standards in the recent proposed 

rule issued by the Architectural and 

Transportation Barriers Compliance 

Board (Access Board) (76 FR 76640, 

December 8, 2011). See http:// 

www.gpo.gov/fdsys/pkg/FR–2011–12– 

08/pdf/2011–31462.pdf#page=1. 

Comment: A number of commenters 

expressed concern about the treatment 

of incarcerated individuals. Some 

commenters believed that greater 

alignment between the eligibility of 

incarcerated individuals under the 

Medicaid and Exchange regulations 

should be achieved. Several 

commenters noted that incarceration is 

not a factor of eligibility, and suggested 

that State Medicaid agencies be required 

to suspend Medicaid eligibility rather 

than terminate individuals who are 

incarcerated. One commenter suggested 

States be required to automatically 

reinstate eligibility once incarcerated 

individuals are discharged. Other 

commenters believed that we should 

achieve alignment with the Exchange 

rules by amending § 435.1010 to provide 

that an individual is not considered to 

be ‘‘an inmate of a public institution’’ 

for purposes of § 435.1009 if he or she 

is in a public institution pending 

disposition of charges. One commenter 

requested clarification on the 

availability of FFP in expenditures for 

treatment provided to incarcerated 

individuals outside of the prison 

system. 

Response: The issues raised by the 

commenters are beyond the scope of 

this rulemaking. Subparagraph (A) of 

the matter following section 1905(a)(29) 

of the Act excludes from the definition 

of ‘‘medical assistance’’ payments for 

care or services for any individual who 

is an inmate of a public institution, 

except as a patient in a medical 

institution. Therefore, FFP is available 

only for inpatient services in a medical 

institution that is not part of the penal 

system. An individual is considered an 

inmate when serving time for a criminal 

offense or confined involuntarily in 

State or Federal prisons, jails, detention 

facilities, or other penal facilities, 

regardless of adjudication status. 

Nothing in the Affordable Care Act 

alters this section of the Act. 

Comment: Several commenters 

suggested that we amend § 435.907 to 

expressly provide that ‘‘other authorized 

persons acting on behalf of an 

applicant’’ includes corrections 

department employees and others 

working on behalf of incarcerated 

individuals. 

Response: Corrections department 

employees and others working on behalf 

of incarcerated individuals are not 

precluded from serving as an authorized 

representative of incarcerated 

individuals for purposes of submitting 

an application on such individual’s 

behalf. § 435.908 of the regulations 

provides that the agency must allow any 

individual of the applicant’s choice to 

assist in the application or renewal 

process. 

Comment: One commenter requested 

clarification regarding the inclusion of 

incarcerated individuals in the 

household of other family members. 

Response: Incarcerated individuals 

are treated no differently than nonincarcerated individuals in determining 

the household composition of 

individuals seeking coverage. 

K. Single State Agency (§ 431.10 and 

§ 431.11) 

We proposed to allow Medicaid 

agencies to delegate to Exchanges that 

are public agencies authority to make 

Medicaid eligibility determinations as 

long as the single State Medicaid agency 

retains authority to issue policies, rules 

and regulations on program matters and 

to exercise discretion in the 

administration or supervision of the 

plan. Our proposal was based in part on 

the Exchange proposed rule, which 

provided that Exchanges would make 

Medicaid eligibility determinations to 

implement section 1943(b)(1)(B) of the 

Act. We note that this is still a relevant 

consideration although in the Exchange 

final rule, Exchanges may make 

Medicaid eligibility determinations, or 

Medicaid agencies may make such 

determinations, subject to certain 

policies designed to ensure a timely and 

coordinated eligibility determination 

that are set forth in § 435.1200 of our 

final rule. 

In the Medicaid Eligibility proposed 

rule (76 FR 51169), we noted that if 

Exchanges are established as a nongovernmental entity as allowed by the 

Affordable Care Act, the coordination 

provisions in the law may be more 

challenging and, for example, could 

require the co-location of Medicaid 

State workers at Exchanges or other 

accommodations to ensure coordination 

is accomplished. We solicited comment 

on approaches to accommodate the 

statutory option for a State to operate an 

Exchange through a private entity, 

including whether such entities should 

be permitted to conduct Medicaid 

eligibility determinations consistent 

with the law. 

Comment: Commenters provided a 

wide spectrum of comments regarding 

the single State agency requirement. In 

general, commenters supported some 

delegation to Exchanges of authority to 

make Medicaid eligibility 

determinations. However, many 

commenters expressed the view that 

eligibility determinations are inherently 

governmental (involving confidential 

information and having fiscal 

implications) and that the final rule 

should prohibit non-profit Exchanges, 

or any private entities under contract to 

Exchanges, from making Medicaid 

eligibility determinations. They stated 

that the eligibility and enrollment 

function should be conducted by State 

or county agencies utilizing merit 

system personnel protections and/or 

that non-profit Exchanges should 

contract with State Medicaid agencies to 

conduct Medicaid eligibility 

determinations. They commented that if 

a Medicaid agency delegates eligibility 

to private entities, it will not be in a 

position to resume the function if 

anything goes acutely wrong; and that 

eligibility determinations necessarily 


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require worker discretion. One 

commenter advocated that for program 

integrity and fairness, only government 

employees should make Medicaid 

eligibility determinations. However, 

other commenters advocated modifying 

the current single State agency policy to 

allow non-governmental entities, 

including nonprofits, to make Medicaid 

eligibility determinations. They sought 

maximum flexibility for State Exchanges 

to use private contractors. They further 

wanted clarification that the single State 

agency responsibility does not 

compromise the ability of Exchanges, 

including quasi-governmental entities, 

to make eligibility determinations. 

These commenters strongly endorsed a 

coordinated system such as having one 

application, and one verification 

process for multiple programs and noted 

that not allowing Exchanges operating 

as a nonprofit to make Medicaid 

eligibility determinations would 

undermine coordination. One 

commenter requested that we delete the 

requirement for merit system protection 

employees to make eligibility 

determinations. Another urged HHS to 

consider options for allowing nonprofit 

operated Exchanges and other third 

parties to make final Medicaid 

eligibility determinations without the 

requirement of State employee colocation. 

Response: We anticipate that States 

that are establishing Exchanges will 

employ various organizational 

structures, including non-profits and 

quasi-governmental organizations, and 

that those entities may employ private 

contractors that are ‘‘eligible entities’’ in 

accordance with section 1311(f)(3) of 

the Affordable Care Act and 45 CFR 

155.110(a) for some eligibility functions. 

To promote coordination and a positive 

customer experience and ensure that 

Exchanges are able to make Medicaid 

eligibility determinations, even when 

they are non-governmental, we are 

adding a new § 431.10(c)(3) to allow the 

delegation of Medicaid eligibility 

determinations to Exchanges, whether 

they are governmental or nongovernmental organizations. However, if 

the Exchange is operated by a nongovernmental entity, the authority to 

delegate Medicaid eligibility 

determinations is limited to MAGI cases 

only. Similarly, we are also extending 

authority for Exchanges that contract 

with private entities in § 431.10(c)(3) to 

conduct eligibility determinations for 

MAGI cases. We believe that the 

simplified eligibility policies and 

processes applicable to MAGI 

determinations support this policy, 

particularly as we anticipate that much 

of the process will be automated. 

As is true whenever a single State 

agency delegates authority to another 

entity to make eligibility 

determinations, we continue to require 

that the single State agency must 

supervise the administration of the plan, 

is responsible for making the rules and 

regulations for administering the plan, 

and is accountable for the proper 

administration of the program. These 

are inherently governmental aspects of 

Medicaid program administration. In 

light of the new types of delegations that 

may arise and the importance of 

oversight and protections, we have also 

added provisions to the regulation that 

require the single State agency to assure 

that eligibility determinations are made 

consistent with State policies and in the 

best interests of applicants and 

beneficiaries, including by prohibiting 

improper incentives and avoiding 

conflict of interests. For example, 

compensation for entities making such 

determinations may not be linked to a 

pre-set target for eligibility 

determinations. The delegation 

authority also applies to any Exchange 

operated by the Federal government, in 

which case the federally-facilitated 

Exchange (FFE), like any other entity 

with delegated authority, would follow 

the single State agency’s eligibility 

rules. If the Exchange is a public entity, 

the single State agency will be allowed 

to delegate eligibility determination to 

the Exchange for MAGI-excepted 

individuals. Alternatively, whether the 

Exchange is a public or 

nongovernmental entity, the single State 

agency may arrange to have the 

Exchange screen for possible Medicaid 

eligibility for MAGI-excepted 

individuals as set forth in § 435.911 and 

coordinate the transfer of the 

application to the Medicaid agency, as 

set forth in § 435.1200. 

To conform the rules, we also broaden 

the requirement in § 431.10(e) to 

include nongovernmental entities 

(including contractors and agents) 

performing services for the Medicaid 

agency. 

Comment: The overwhelming 

majority of commenters sought rules 

that strengthen the oversight role of the 

single State agency in any delegation 

situations, whether Medicaid delegated 

eligibility determination functions to 

another governmental or to a nongovernmental entity. They noted that 

even when determinations are made by 

government-operated Exchanges, it will 

be important for the single State agency 

to set the policies and to assume 

responsibility for accurate 

determinations in accordance with its 

policies and urge the Secretary to assure 

that this happens. They sought 

regulatory language that ensures that the 

single State agency ban fiscal incentives 

that discourage enrollment (including 

standards to ensure that eligibility is not 

influenced by differences in available 

Federal matching rates), ensure that 

improper incentives/outcomes are not 

permitted to monitor the entities’ 

performance to identify any such 

improprieties, and if found, that they be 

properly addressed. They sought colocation requirements for public 

employees if eligibility functions are 

being conducted by non-governmental 

entities. They urged requirements that 

Medicaid eligibility determinations be 

made by State merit system personnel, 

and that there be transparency regarding 

staff making determinations, as well as 

for any guidance issued by the single 

State agency for a delegated entity. 

In addition, many commenters 

wanted to see a larger role for CMS 

oversight in cases where the single State 

agency delegates its eligibility function 

to another entity, including ensuring 

that CMS review compliance with this 

provision in its oversight and audits of 

States, as well as including compliance 

with this provision in future 

performance standards CMS will be 

issuing. One commenter sought a 

requirement for the single State agency 

to obtain HHS approval of a plan that 

details how eligibility determinations 

will be made. Several commenters 

sought a requirement that States submit 

all contracts with a value exceeding $5 

million to CMS for approval as is done 

by SNAP. Commenters further sought 

mechanisms for advocates to provide 

information to CMS on the status of 

State compliance with the Federal 

requirements. 

Response: We are strengthening 

applicable safeguards in § 431.10, which 

would apply whether governmental or 

non-governmental entities are making 

eligibility determinations. The 

regulations intend to ensure that State 

agencies maintain their responsibility to 

oversee eligibility activities and ensure 

that Medicaid eligibility rules are 

implemented properly. These 

provisions apply not just when 

Exchanges conduct Medicaid eligibility 

determinations, but also when State 

Medicaid agencies allow other State 

agencies or county agencies, for 

example, to make eligibility 

determinations. In particular, 

§ 431.10(c)(4) will require the single 

State agency to be responsible for 

ensuring that eligibility determinations 

are made consistent with its policies, 

and if there is a pattern of incorrect, 

inconsistent, or delayed determinations 


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that corrective actions are promptly 

instituted and/or the delegation, or 

contract, is terminated. In this context, 

oversight and corrective actions would 

pertain to the overall implementation of 

the single State agency’s rules by the 

entity making eligibility determinations, 

not to case-by-case reviews. This could 

include corrective action plans, 

financial sanctions, and even 

termination of agreements if warranted. 

As previously described, 

§ 431.10(c)(5) will require that the single 

State agency be responsible for assuring 

eligibility determinations will be made 

in the best interest of applicants and 

beneficiaries and specifically for 

assuring that there is no conflict of 

interest by any entity making eligibility 

determinations, whether by delegation 

or contract; and improper incentives 

and/or outcomes are prohibited, 

monitored, and if found properly and 

promptly addressed through corrective 

actions. Thus, the rule is prohibiting 

any arrangements that link the results of 

eligibility determination dispositions to 

remuneration. Moreover, the agreement 

between the Medicaid agency and 

Federal or State and local agencies is 

being broadened to include agreements 

with ‘‘entities’’ as well, to account for 

non-governmental entities. To ensure 

accountability, we are requiring that 

such agreements be in writing and 

available upon request. Such 

agreements may be subject to State 

FOIA laws that require disclosure, but 

to ensure uniform accountability for 

such arrangements, we are including 

this requirement in our regulation. We 

believe that transparency will 

strengthen program operations. To 

ensure that each parties’ responsibilities 

are clearly designated, we are setting out 

the following minimum components of 

such agreements: 

• The relationships and respective 

responsibilities of the parties (including 

responsibilities regarding identification 

of potential and transfer of non-MAGI 

cases); 

• The quality control and oversight 

plans by the single State agency to 

review determinations made by the 

delegee to ensure that overall 

determinations are made consistent 

with the State agencies’ eligibility 

polices; 

• The reporting requirements from 

the delegee making Medicaid eligibility 

determinations to the single State 

agency to permit such oversight. 

• An assurance that the delegee will 

comply with all confidentiality and 

security requirements in accordance 

with sections 1902(a)(7) and 1942 of the 

Act and part 431, subpart F, for all 

applicant and beneficiary data; and 

• An assurance that merit system 

personnel protection principles are 

employed by the entity responsible for 

the Medicaid eligibility determination. 

In light of the provisions described 

above, which will support the integrity 

and accuracy of the Medicaid eligibility 

process, we do not agree that requiring 

physical co-location for public 

employees is necessary. However, States 

may provide for co-location if they 

choose to do so. While we are not 

requiring that public employees review 

each determination, coordination 

between other entities and the single 

State agency staff can help the State 

agency implement its oversight role 

when it delegates eligibility 

determinations. Moreover, we are 

adding a requirement to the agreements 

between the single State agency and the 

entity that has been delegated eligibility 

for ‘‘an assurance that applicants and 

beneficiaries are made aware of how 

they can directly contact and obtain 

information from the single State 

agency’’ to respond to commenters 

concerns about applicant and 

beneficiary access to public employees. 

Finally, we are making conforming 

changes at § 431.11(d) to already 

existing requirements to include 

situations when eligibility has been 

delegated to non-governmental 

Exchanges and/or private contractors 

that are providing eligibility services. 

State plans will still require explicit 

descriptions of the staff and functions of 

the entity that is being delegated 

eligibility determinations as they must 

today. 

Comment: Some commenters 

questioned the rules regarding using 

automated eligibility systems to make 

Medicaid eligibility determinations. 

They sought clarification that States be 

permitted to use automated systems to 

apply Medicaid validated logic through 

system-based eligibility algorithms to 

make Medicaid eligibility 

determinations based on MAGI. One 

commenter opposed using ‘‘co-location 

policies’’ and wanted Medicaid agencies 

to have the flexibility to employ the 

merit protection principles by 

approving a system-based eligibility 

algorithm developed and implemented 

by a private or non-profit entity 

contracting for eligibility determinations 

with periodic sampling of Medicaid 

determinations by public employees. 

Response: Whether conducted by a 

public or private entity, we anticipate 

that eligibility determinations using 

MAGI-based standards will be highly 

automated, utilizing business rules 

developed by the State Medicaid 

agency. In the most simplified cases, 

which can be determined without 

human intervention or discretion, we 

are clarifying that automated systems 

can generate Medicaid eligibility 

determinations, without suspending the 

case and waiting for an eligibility 

worker (public or private) to finalize the 

determination, provided that the 

Medicaid agency retains oversight 

responsibilities for all decisions made 

through the automated system. We will 

be issuing future guidance on this topic. 

Comment: One commenter requested 

clarification on the range of public 

agencies that can perform MAGI and 

non-MAGI eligibility determinations. 

Response: Our regulations provide 

that public agencies, including 

Exchanges, may make MAGI and nonMAGI eligibility determinations. 

Longstanding Medicaid regulations have 

allowed Medicaid agencies to delegate 

to other State agencies (such as agencies 

administering TANF and SNAP 

programs) as well as to local Medicaid 

offices (such as those administered by 

counties). These delegations will 

continue to be permitted under our final 

rule, although the Single State agency’s 

authority and oversight responsibilities 

are identified with greater specificity. 

Comment: One commenter requested 

that we clarify what ‘‘best interest’’ of 

the applicant/beneficiaries and 

‘‘improper outcomes’’ mean in 

§ 431.10(c)(4). Another requested detail 

on the term ‘‘corrective action’’ and 

‘‘conflict of interest.’’ 

Response: ‘‘Best interest of applicants 

and beneficiaries,’’ and ‘‘corrective 

action’’ are not new terms for the 

Medicaid program. They are not used as 

technical terms but to connote their 

plain meaning. How these terms apply 

may depend on circumstances. 

‘‘Improper outcomes’’ and ‘‘conflict of 

interest’’ are intended to convey certain 

specific circumstances that are not in 

the best interest of applicants and 

beneficiaries, and may require 

corrective action. We believe States 

have experience with and are able to 

properly interpret these provisions but 

will continue to work with States in the 

context of implementing this final rule. 

Comment: One commenter requested 

that CMS resolve the conflict with 

SNAP that prohibits private eligibility 

determinations. 

Response: We will work with States 

and the SNAP program to consider ways 

to promote coordination. 

Comment: One commenter sought a 

clearer statement that FFEs would be 

required to follow State eligibility rules 

and policies. 

Response: Under the Exchange 

eligibility rule at § 155.305, Exchanges 

will be able to make final Medicaid 

eligibility determinations, provided that 


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they follow the policies set forth by the 

single State agency. This applies equally 

to State-based Exchanges and to FFEs. 

L. Implementing Application of MAGI to 

CHIP (§ 457.10, § 457.301, § 457.305, 

§ 457.315, and § 457.320) 

We proposed that States base income 

eligibility for CHIP on MAGI consistent 

with section 1902(e)(14) of the Act. 

Because section 2107(e)(1)(F) of the 

Affordable Care Act applies MAGI 

methodologies to CHIP ‘‘in the same 

manner’’ as they are applied to 

Medicaid, we proposed applying the 

Medicaid MAGI methodologies to CHIP 

without modification. 

We outlined proposed changes to 

following existing sections of the CHIP 

regulations: 

• Definitions and use of terms 

(§ 457.10). 

• Definitions and use of terms 

(§ 457.301). 

• State plan provisions (§ 457.305). 

• Other eligibility standards 

(§ 457.320). 

In addition, we proposed the addition 

of new ‘‘Application of MAGI and 

household’’ section (§ 457.315), to 

implement the CHIP MAGI components 

of the law. These proposed revisions are 

discussed in more detail in the 

Medicaid Eligibility proposed rule (76 

FR 51170 through 51171). 

Comment: We received several 

general comments concerning the 

proposed application of MAGI to CHIP 

that mirrored comments concerning the 

proposed application of MAGI to 

Medicaid. Some commenters expressed 

support for the proposed MAGI 

definitions, including the exception to 

MAGI provided for Express Lane 

eligibility determinations. One 

commenter noted a general concern 

about the complexity of the MAGI 

definition, and other commenters raised 

concerns about the potential impact of 

the proposed MAGI rules on families in 

particular circumstances, such as 

families with stepparent income. 

Response: Our responses to general 

comments on the application of MAGI 

to Medicaid apply also to CHIP. See 

section III.B of this preamble. 

Comment: We received several 

comments requesting that the proposed 

grace period for applying the MAGI 

methodology to current Medicaid 

enrollees described in § 435.603(a) 

should equally apply to CHIP enrollees. 

One commenter requested 

clarification about whether CHIP 

children who become eligible for 

Medicaid in 2014 would be entitled to 

12 months of continuous eligibility if 

the CHIP plan offers continuous 

eligibility, but the Medicaid plan does 

not. 

Response: We are adding a paragraph 

to § 457.315 to clarify that the MAGI 

grace period for Medicaid described in 

§ 435.603(a)(3) applies equally to CHIP. 

This section clarifies that ongoing 

eligibility for children determined 

eligible for CHIP on or before December 

31, 2013, will not be determined 

according to MAGI until March 31, 2014 

or the next regularly-scheduled renewal, 

whichever is later. 

Regarding 12 months of continuous 

eligibility, a child who is enrolled in 

CHIP with 12- month continuous 

eligibility as of January 1, 2014 would 

be able to retain CHIP coverage until the 

end of their 12 month continuous 

eligibility period, as that is when the 

child’s next regular renewal would 

occur. 

Subsequent renewals for Medicaideligible children would be conducted in 

accordance with § 435.916. 

Comment: We received several 

comments regarding the conversion of 

CHIP income standards to a MAGIbased income standard. Some 

commenters recommended that CMS 

limit the ability of States to set their 

own income standards and that the 

income standard conversion ensure that 

no child who would have been eligible 

under current CHIP income standards 

would become ineligible under the new 

MAGI standard. 

Additionally, a few commenters 

recommended that CMS indicate that 

the Affordable Care Act’s maintenance 

of effort (MOE) provision requires that 

the CHIP MAGI standard be greater than 

or equal to the income level applied as 

of March 23, 2010. Some commenters 

also recommended that the CHIP 

regulations include a provision to 

clarify that the Medicaid MAGI standard 

must be greater than or equal to the 

standard applied on March 23, 2010. 

Response: Guidance regarding the 

process for converting current income 

standards under Medicaid and CHIP to 

MAGI-equivalent standards is beyond 

the scope of this rule and will be 

provided in future guidance, which will 

require States to convert net income 

standards to MAGI-equivalent standards 

in a manner that ensures that affected 

populations, in the aggregate, do not 

lose coverage. Issues around 

applicability of the MOE are outside the 

scope of this Medicaid Eligibility 

proposed rule. 

Comment: We received some general 

comments about the provision of 

continued coverage for children made 

ineligible for Medicaid as a result of the 

MAGI conversion under section 2101(f) 

of the Affordable Care Act, as proposed 

in § 457.310(b)(1)(iv). Some commenters 

recommended that pre-MAGI coverage 

levels be continued indefinitely, but one 

commenter felt that this approach 

would undermine the consistency in 

eligibility standards and methods 

envisioned under the Affordable Care 

Act. 

Response: Section 2101(f) of the 

Affordable Care Act provides that States 

maintain coverage under a separate 

CHIP program for children who lose 

Medicaid eligibility due to the 

elimination of income disregards as a 

result of the conversion to MAGI. The 

statute limits the application of section 

2101(f) of the Affordable Care Act to 

individuals who are made ineligible for 

Medicaid directly ‘‘as a result’’ of the 

elimination of income disregards under 

MAGI-based financial methods. We 

interpret this provision as relating to 

children enrolled in Medicaid as of 

December 31, 2013, so that the 

protection afforded under section 

2102(f) will take effect on the date of the 

child’s Medicaid first renewal, after the 

MAGI grace period described in 

§ 435.603(b)(3). This provision does not 

apply to individuals made ineligible for 

a separate CHIP as a result of the 

elimination of income disregards. Thus, 

the eligibility of children who become 

eligible for CHIP under section 2101(f) 

of the Affordable Care Act will be 

protected from the impact of the 

elimination of disregards under MAGI 

methods until the child’s first renewal 

of CHIP eligibility in accordance with 

§ 457.343 (that is, one year after the 

child’s enrollment in CHIP). 

We have deleted § 457.310(b)(1)(iv) 

and added a new paragraph § 457.310(d) 

to provide additional clarification 

regarding the protection afforded by 

section 2101(f) of the Affordable Care 

Act. 

Comment: We received a few 

comments requesting clarification about 

the applicability of the CHIP enhanced 

FMAP rate after the conversion to 

MAGI. Several commenters requested 

clarification on whether States that 

currently claim the CHIP enhanced 

FMAP for child health expenditures for 

children with incomes above 300 

percent of the FPL may continue to do 

so after the MAGI conversion or 

whether these States will be subject to 

the requirements at section 2105(c)(8) of 

the Act, which limits the CHIP FMAP 

rate for expansions of CHIP above 300 

percent of the FPL after February 4, 

2009. 

One commenter asked CMS to clarify 

whether block of income disregards 

applied to the CHIP income standard 

prior to 2014 will be incorporated into 

a State’s MAGI CHIP income standard, 


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and whether this would be considered 

permissible in light of the preclusion of 

block of income disregards under the 

Affordable Care Act after 2014. 

One commenter recommended that all 

CHIP children who become eligible for 

Medicaid as a result of the conversion 

to MAGI and the expansion of Medicaid 

coverage for children up to 133 percent 

of the FPL should be eligible for CHIP 

enhanced FMAP. Another commenter 

specifically recommended that CHIP 

children made eligible for Medicaid 

because of changes in Sneede vs. Kizer 

budgeting should retain Title XXI funds. 

Response: States that currently claim 

the CHIP enhanced matching rate for 

coverage of children with effective 

family income above 300 percent of the 

FPL, based on State plan provisions in 

effect on February 4, 2009, will continue 

to be eligible for CHIP enhanced FMAP 

for such children after the conversion to 

MAGI even if the converted MAGI 

income standard exceeds 300 percent of 

the FPL. States that have expanded 

CHIP through the use of block of income 

disregards prior to 2014 will continue to 

cover these children because the law 

requires that the MAGI-converted 

income standard take into account 

existing disregards, including block of 

income disregards. 

In terms of the claiming of Title XXI 

funds for separate CHIP children who 

become eligible for Medicaid, CHIP 

enhanced FMAP will continue to be 

available for children whose income is 

greater than the Medicaid applicable 

income level (defined in § 457.301 and 

based on the 1997 Medicaid income 

standard for children), regardless of 

whether those children are enrolled in 

Medicaid or CHIP. This standard will be 

converted for MAGI and States will 

qualify for CHIP enhanced FMAP for 

expenditures on behalf of children 

whose MAGI-based household income 

is above the converted MAGI standard. 

Guidance about the conversion of the 

Medicaid applicable income level for 

MAGI will be provided in the future. 

M. Residency for CHIP Eligibility 

(§ 457.320) 

We proposed to modify the definition 

of residency under CHIP for noninstitutionalized children who are not 

wards of the State to reference the 

Medicaid definition for children at 

proposed § 435.403(i) for individuals 

under age 21. Aligning residency 

standards was proposed to ensure 

coordination between all insurance 

affordability programs, including 

advanced premium tax credits. 

Comment: Many commenters 

supported our efforts to align residency 

definitions for all insurance 

affordability programs. Some 

commenters provided suggestions 

similar to those made regarding the 

Medicaid residency definition to 

achieve further alignment. One 

commenter specifically recommended 

more clarity on how the residency 

definition would be applied in States 

that adopted 12-month continuous 

eligibility in CHIP. 

Response: We have kept residency 

definitions aligned in the final rule. To 

promote further alignment, we have also 

adopted the Medicaid residency 

standards for adults for any adult 

pregnant women determined eligible 

under the CHIP State plan. Our 

responses to general comments on 

residency regulations for Medicaid also 

apply to CHIP. See section III.C of this 

preamble. 

Changes in State residency (that is, a 

move out of State) are an acceptable 

exception to a 12-month continuous 

eligibility period, as described in our 

December 16, 2009 State Health Official 

Letter regarding CHIPRA Performance 

Bonus Payments, available at http:// 

www.cms.gov/smdl/downloads/ 

sho09015.pdf. 

Comment: One commenter 

recommended that we use the term ‘‘in 

the custody and care of a State’’ rather 

than ‘‘ward of the State’’ to align our 

terminology with the Administration for 

Children and Families. 

Response: We do not believe this 

change is necessary and we are 

concerned that it could be seen as 

reflecting an unintended change in the 

current meaning of the regulation. Thus, 

we will be retaining the term ‘‘ward of 

the State’’ to avoid any confusion. 

N. CHIP Coordinated Eligibility and 

Enrollment Process (§ 457.330, 

§ 457.340, § 457.343, § 457.348, 

§ 457.350, § 457.353, and § 457.380) 

We proposed to implement section 

2107(e)(1)(O) of the Affordable Care Act 

which applies to CHIP the same 

enrollment simplification standards 

described for Medicaid under the new 

section 1943 of the Act, including 

standards for applications, coordination 

with other insurance affordability 

programs, renewals, and verification. 

These standards build on existing 

practices and provisions in section 

2102(b)(3)(B) of the Affordable Care Act 

relating to coordinated eligibility and 

enrollment between Medicaid and 

CHIP. The regulatory amendments 

proposed correspond to proposed 

changes and additions to Medicaid at 

§ 435.905 through § 435.908, § 435.916, 

§ 435.940 through § 435.956, and 

§ 435.1200 (these proposed provisions 

are discussed fully in the Medicaid 

Eligibility proposed rule (76 FR 51160 

through 51162; 51165 through 51166; 

and 51170)). 

We note that any references to ‘‘State’’ 

in this section refer to the CHIP agency, 

and that any references to ‘‘enrollee’’ in 

CHIP have the same meaning as 

‘‘beneficiary’’ in Medicaid. 

Comment: We received several 

comments about the application and 

enrollment process in CHIP that 

mirrored comments concerning the 

application and enrollment process for 

Medicaid, including comments about 

meaningful access for individuals with 

limited English proficiency, the Internet 

Web site, use of the single, streamlined 

application for multi-benefit 

applications, and the timeliness of 

application processing. Many 

commenters supported the overall 

establishment of a unified application 

and enrollment process for all insurance 

affordability programs. 

Response: We recognize the value of 

clear guidance and consistent standards 

and procedures to support this 

alignment without limiting State 

flexibility to design implementation 

strategies, and in this final rule, we 

retained alignment of the application 

and enrollment procedures between 

insurance affordability programs. Our 

responses to general comments on 

application and enrollment procedures 

for Medicaid apply also to CHIP. See 

sections III.D and H of this preamble. 

Changes that have been made to the 

Medicaid standards for applications and 

enrollment in the final rule generally 

apply to CHIP through cross-reference, 

but we have also updated CHIP 

language where appropriate to ensure 

continued alignment. Specifically, we 

have added and/or revised definitions 

for ‘‘Advance payments of the premium 

tax credit (APTC),’’ ‘‘application,’’ 

‘‘eligibility determination,’’ and ‘‘nonapplicant.’’ Moreover, we have adopted 

the term ‘‘renewal’’ instead of 

‘‘redetermination,’’ consistent with 

Medicaid. Also, we have added crossreferences to § 435.906 and § 435.908 to 

replace proposed text at § 457.340(a) 

and have moved § 457.335 to 

§ 457.340(a) to further clarify the 

alignment of standards for application 

and renewal assistance. As described in 

section III.D of this preamble, we are 

adding additional standards for timely 

eligibility determinations for Medicaid 

at § 435.912. These also are adopted for 

CHIP by cross-reference in § 457.340(d) 

in the final rule. 

Consistent with our request for 

comments on the interim final Medicaid 

regulations at § 435.912 and § 435.1200, 

we are soliciting additional comment 

and issuing as an interim final rule 


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paragraphs (c)(1) and (d) of § 431.300, 

paragraph (b)(6) of § 431.305, paragraph 

(d) of § 457.340, § 457.348, and the 

paragraphs (a), (b), (c), (f), (i), (j), and (k) 

of § 457.350 that are added or revised in 

this rule. 

Comment: Several commenters 

expressed concerns with the proposal in 

§ 457.340(b) to require SSNs as a 

condition of eligibility in CHIP because 

of the potential barriers it could impose 

on some individuals. A few commenters 

noted that this requirement may be 

problematic for States that have elected 

the CHIP option to provide prenatal care 

for pregnant women. Commenters 

recommended that CMS continue to 

retain State flexibility regarding the SSN 

requirements in CHIP, or at a minimum, 

that CMS clarify that SSN requirements 

only apply to individuals who have 

SSNs. One commenter supported the 

requirement for an SSN and expressed 

concern that data systems might not be 

able to process applications in real time 

without this information. We also 

received comments about the use of 

SSNs for non-applicants in CHIP, which 

mirrored comments about the use of 

SSNs for non-applicants in Medicaid. 

Response: We do not believe that 

aligning the SSN policy for CHIP with 

the policy in Medicaid will pose a 

significant burden on families or States. 

In fact, many separate CHIPs have 

successfully implemented SSN 

requirements without imposing a 

significant burden on families. The 

Medicaid regulations at § 435.910(e) and 

(f), incorporated by cross-references in 

the CHIP regulations at § 457.340(b), 

clarify procedures for applicants who 

have not yet been issued an SSN and 

emphasize that the State may not deny 

or delay services to otherwise eligible 

applicants pending the issuance of a 

SSN. SSNs are not required from 

individuals who are not eligible for an 

SSN. 

Our responses to general comments 

on the use of SSNs of non-applicants in 

Medicaid apply also to CHIP. See 

section III.D of this preamble. Changes 

that have been made to the Medicaid 

regulations regarding non-applicant 

SSNs in the final rule are adopted for 

CHIP via cross-reference at § 457.340(b). 

Comment: We received one comment 

concerning our proposal to remove the 

mention of enrollment caps in 

§ 457.340(a). The commenter requested 

confirmation that States are able to 

retain their authority to implement 

enrollment caps and recommended that 

CMS issue additional clarification about 

the extent of application assistance that 

CHIP agencies are required to provide if 

CHIP enrollment is capped. 

Response: Nothing in the Medicaid 

Eligibility proposed rule addresses a 

State’s ability to implement enrollment 

caps. However, the existence of an 

enrollment cap does not relieve a CHIP 

agency to accept the single streamlined 

application and screen for all insurance 

affordability programs regardless of 

whether CHIP enrollment is capped, or 

to otherwise comply with the 

regulations regarding CHIP’s role in the 

coordinated eligibility and enrollment 

system. 

Comment: We received several 

general comments about coordination 

between insurance affordability 

programs, including concerns about the 

process for transferring application data, 

suggestions for screening metrics and 

requests for clarification about the 

implication of the Medicaid Eligibility 

proposed rule on a State’s PERM. These 

comments mirrored comments that were 

received on the corresponding Medicaid 

provisions and are addressed in section 

III.J. of the preamble. 

In addition, we received several CHIPspecific comments. Some commenters 

requested that CMS require CHIP 

agencies to allow Medicaid agencies to 

make CHIP determinations to reduce 

potential gaps in coverage. One 

commenter was concerned about the 

allocation of the CHIP enhanced FMAP 

for children who were enrolled in CHIP 

but subsequently determined eligible for 

Medicaid on a basis other than MAGI, 

according to the process outlined in 

§ 457.350(j). One commenter 

recommended a slight rewording of 

§ 457.350(i) and (j) to clarify that 

screening for Medicaid eligibility is 

required before an individual is found 

potentially eligible for other insurance 

affordability programs. One commenter 

questioned whether States needed to 

give applicants a choice to enroll in 

CHIP or the Exchange. 

Response: Our responses to general 

comments on the coordination among 

other insurance affordability programs 

for Medicaid apply also to CHIP. See 

section III.J of this preamble. We have 

also revised the final CHIP regulations 

where appropriate to ensure continued 

alignment with Medicaid regulations, 

including revisions to § 457.348 to 

provide further flexibility for States in 

developing their implementation 

strategies with respect to the 

determination of eligibility for CHIP by 

the Exchange. As we noted, we are 

soliciting additional comment and 

issuing as interim final § 457.348 and 

the paragraphs of § 457.350 that are 

added or revised in this rule. 

States already permit Medicaid 

agencies to make CHIP eligibility 

determinations to promote coordination 

between programs. We do not have the 

authority to require that States must 

enable their Medicaid agencies to make 

final CHIP eligibility determinations 

and, under the final regulation, States 

will continue to have flexibility in this 

regard. Other provisions of the 

regulation will help to ensure seamless 

coordination between Medicaid and 

CHIP. 

Regarding the Federal reimbursement 

rates for children enrolled in a separate 

CHIP who are identified according to 

§ 457.350(j) as potentially eligible for 

Medicaid on a basis other than MAGI, 

States are able to claim the CHIP 

enhanced FMAP for these children 

pending final determination of 

Medicaid eligibility. 

We have also revised § 457.350(i) and 

(j) for improved clarity and alignment 

with Medicaid and the Exchange. As 

noted in the Medicaid Eligibility 

proposed rule, these provisions apply 

not only to children but also to all 

parents and other household members 

applying for coverage on the single, 

streamlined application. 

Finally, regarding the coordination 

between CHIP and the Exchange, the 

Affordable Care Act does not permit 

giving applicants a choice between 

receiving the APTC available for 

coverage obtained through the Exchange 

and receiving CHIP coverage. 

Individuals who are eligible for CHIP 

are not eligible for APTCs although, 

individuals who are eligible for CHIP 

may choose to enroll into a QHP in an 

Exchange without an APTC. We also 

note that there are several ways that 

States can promote the ability of 

families to enroll in the same plan. 

States may contract with the same plans 

that participate as QHPs in the 

Exchange to deliver covered services in 

their CHIP programs. States also may 

offer CHIP eligible individuals the 

choice of receiving premium assistance 

through a QHP offered in the Exchange 

consistent with the standards and 

requirements of section 2105(c)(3) of the 

Act. Guidance about the use of premium 

assistance and coordination of coverage 

with QHPs in Exchanges is forthcoming. 

Comment: We received comments 

about our proposal for CHIP to adopt the 

coverage month policy proposed in 45 

CFR 155.410 of the Exchange proposed 

rule, which mirrored comments related 

to coverage months in Medicaid. Some 

commenters offered specific 

recommendations regarding our 

proposal to update the definition of the 

effective date of coverage in CHIP in 

§ 457.340(f) to promote better 

coordination across insurance 

affordability programs. One commenter 

recommended that we explicitly require 


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that the application date be the effective 

date of coverage, rather than retain 

flexibility for States. One commenter 

recommended that we delete the word 

‘‘unnecessary’’ from § 457.340(f) and 

§ 457.80(c), and add additional 

clarifying language to emphasize that 

gaps in eligibility or coverage are not 

permissible. This commenter also 

wanted CMS to clarify that in addition 

to eligibility, CHIP coverage must be 

furnished promptly. 

Response: Our responses to general 

comments on coverage month for 

Medicaid also apply to CHIP. See 

section III.G of this preamble. We 

encourage CHIP programs to continue to 

use existing flexibility to continue 

coverage until the end of the month to 

reduce gaps in coverage, but we are not 

requiring a specific approach at this 

time. 

We note that some States use this 

flexibility to minimize gaps in coverage 

in different ways. For example, some 

States retroactively enroll children to 

the beginning of the month of 

application. The phrase ‘‘furnish CHIP 

promptly’’ in § 457.348 refers to both 

CHIP eligibility and CHIP benefits. 

Comment: One commenter raised 

several concerns related to coverage of 

pregnant women and deemed newborns 

covered in CHIP. First, the commenter 

requested that CMS clarify that part 457 

applies in full when CHIP services are 

received by a pregnant women through 

the CHIP State plan or a waiver of the 

plan. The commenter also expressed 

concern that the deletion of existing 

§ 457.350(b)(2) could create problems 

for determining eligibility for families 

with deemed newborns. Lastly, the 

commenter recommended that § 457.343 

be modified to require that States 

routinely renew eligibility near the 

expected delivery date of a pregnant 

woman to avoid gaps in coverage, or 

retroactive disenrollment, particularly 

for pregnant women eligible for CHIP 

coverage under the prenatal expansion 

option. 

Response: The option to provide CHIP 

to pregnant women under the CHIP 

State plan or waiver of the State plan is 

beyond the scope of this rule. However, 

we direct readers to our May 11, 2009 

State Health Official Letter, available at 

http://www.cms.gov/SMDL/downloads/ 

SHO051109.pdf, for guidance on this 

issue. 

The specific screening objectives 

identified in existing regulations at 

§ 457.350(b) are encompassed in the 

broader screening objectives reflected in 

§ 457.340(b) of this final rule, which 

direct CHIP agencies to conduct broader 

screening for potential Medicaid 

eligibility both based on the applicable 

MAGI standard for children, pregnant 

women, parents, and other non-elderly 

adults as well as on other bases. Deemed 

newborn eligibility for babies born to 

mothers eligible for CHIP will be 

addressed in future guidance. 

Finally, as suggested, we would 

expect States to routinely renew 

eligibility near the expected delivery 

date of a pregnant women based on the 

standard in § 435.916(d)(2), as cross 

referenced to CHIP at § 457.343, which 

requires States to renew eligibility at the 

appropriate time if the agency has 

information about anticipated changes 

in an enrollee’s circumstances that may 

affect her eligibility. 

Comment: We received several 

general comments about verification of 

eligibility for CHIP that mirrored 

comments received on the verification 

process in Medicaid, such as concerns 

about the ability to access data through 

the electronic service established by the 

Secretary, requests for clarification 

regarding the time period to furnish 

documentation, and questions regarding 

the use of alternative data sources. 

Many commenters expressed strong 

support for our proposed policy to allow 

States to accept self-attestation of most 

eligibility information, and some 

commenters recommended that we 

require all States to accept selfattestation of income. One commenter 

recommended that the CHIP regulation 

text regarding self-attestation be more 

closely aligned with proposed 

§ 435.945(b). Other commenters wanted 

CMS to clarify that self-attestation of 

pregnancy was acceptable. One 

commenter requested that CMS clarify 

whether it was necessary for States to 

accept self-attested data if subsequent 

third-party data contradicted the 

applicant’s statement. 

We also received some comments 

about § 457.380(h), regarding the 

interaction between our verification 

policies and program integrity 

requirements. Some commenters 

indicated that this paragraph was 

unnecessary and other commenters 

thought that this policy could have 

adverse consequences for enrollees. 

Response: Our responses to general 

comments on verification for Medicaid 

also apply to CHIP. See section III.H of 

this preamble. Changes that have been 

made to the Medicaid standards in the 

final rule generally apply to CHIP via 

cross-reference, but we have also 

updated CHIP language where 

appropriate to ensure alignment. 

Specifically, we have revised the 

language of § 457.380(e) to remove the 

requirement to accept self-attestation of 

household size, consistent with 

revisions to the Medicaid regulations at 

§ 435.956; we have cross-referenced 

paragraph (f) to § 435.952 to ensure an 

alignment of standards between 

Medicaid and CHIP; and we have added 

paragraph (j) to § 457.380 to require 

States to develop a verification plan 

similar to the verification plan required 

by Medicaid agencies in § 435.945(j). 

We are modifying our regulation text 

to mirror Medicaid to further ensure 

consistency. The acceptance of selfattestation is an option for States (unless 

not permitted by law), with the one 

exception that States must accept selfattestation of pregnancy for purposes of 

Medicaid and CHIP eligibility unless the 

State has information that is not 

reasonably compatible with the 

attestation. 

As discussed in section III.H of this 

preamble, we will be reviewing and 

analyzing all of our error rate 

measurement program rules and 

procedures to ensure consistency with 

the streamlined eligibility and 

enrollment rules established in this 

regulation, and will provide additional 

guidance as needed. We are revising 

§ 457.380(h) to reflect the changes made 

to proposed § 435.945(a) (moved to 

§ 435.940 in this final rule) and will 

work with States to ensure that program 

integrity policies at the Federal and 

State levels support the goals of 

minimizing consumer and State 

administrative burden while also 

ensuring accurate eligibility 

determinations. 

Comment: We received several 

comments expressing concern that the 

Department of Treasury’s proposed 

rules for the premium tax credit could 

adversely affect families with children 

in CHIP. These commenters noted that 

Treasury’s definition of affordable 

employer-based coverage, in which the 

affordability test for the entire family 

would be determined based on the 

premium cost for self-only coverage for 

the primary taxpayer, would result in 

many families not qualifying for 

premium tax credits. Also, commenters 

noted that the Treasury’s rules for 

calculating the premium tax credit do 

not consider the cost of CHIP premiums 

and would consequently impose an 

additional premium burden on families 

that are split between CHIP and the 

Exchange. Some commenters 

recommended that if the Department of 

Treasury does not modify its proposed 

rule, then CMS should require States to 

waive CHIP premiums for children 

whose parents are enrolled in the 

Exchange or take other measures to 

minimize the financial burden placed 

on families with children in CHIP. 

Response: Under the existing CHIP 

statute and regulations, States may vary 


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premiums for different groups of 

children and may elect not to impose 

premiums for children who have 

parents that are enrolled in the 

Exchange, consistent with § 457.530, 

and we encourage States to consider the 

impact of all premiums paid by the 

family in designing their CHIP premium 

policies. However, consistent with the 

flexibility accorded States under the 

Act, we are not requiring this approach. 

Rules relating to the calculation of the 

premium tax credit are beyond the 

scope of this rule, but will be discussed 

in the final rule to be promulgated by 

the Department of the Treasury. 

Comment: Several commenters noted 

a variety of CHIP specific issues that 

were not addressed in this regulation, 

such as the policy for waiting periods, 

maintenance of effort requirements, 

essential health benefits, the increase in 

the CHIP FMAP in 2014, and the 

possibility for future expansions in 

CHIP coverage after 2014. 

Response: These comments are 

outside the scope of this rule, but we 

will consider the comments in future 

guidance. 

O. FMAP for Newly Eligible Individuals 

and for Expansion States (§ 433.10, 

§ 433.206, § 433.210, and § 433.212) 

In the Medicaid Eligibility proposed 

rule, we proposed to implement section 

1905(y) of the Act that provides for a 

significant increase in the Federal 

Medical Assistance Percentage (FMAP) 

for medical expenditures for individuals 

determined eligible under the new adult 

group in the State and who will be 

considered to be ‘‘newly eligible’’ in 

2014, as defined in section 1905(y)(2)(A) 

of the Act. Specifically, we proposed to 

add new provisions for the ‘‘Rates of 

FFP for program services’’ to indicate 

the increases to the FMAPs as available 

to States under the Affordable Care Act. 

We also proposed that States may elect 

one of three options as a methodology 

for calculating the newly eligible FMAP: 

(1) 2009 Eligibility Standard 

Threshold. 

(2) Statistically Valid Sampling 

Methodology (§ 433.210). 

(3) Use of a FMAP Methodology 

Based on Reliable Data Sources 

(§ 433.212). 

These and other proposed provisions 

are discussed in more detail in the 

Medicaid Eligibility proposed rule (76 

FR 51172 through 51178). We received 

a number of comments concerning the 

proposed FMAP methodologies for 

newly eligible individuals and for 

expansion States provisions. 

We are in the process of performing 

additional research on this topic and are 

working with States to better 

understand which approaches will 

ensure an accurate method for 

implementing the FMAP and further the 

simplification goals of the Affordable 

Care Act. Given that this work is 

continuing, we will finalize the FMAP 

methodology for newly eligibles in 

future rulemaking. 

IV. Provisions of the Final Regulations 

This final rule incorporates many of 

the provisions set forth in the Medicaid 

Eligibility proposed rule. The provisions 

of this final rule that substantively differ 

from the Medicaid Eligibility proposed 

rule are as follows: 

A. Revised § 435.4 as follows: 

• Revised the definition of the 

following terms: ‘‘advance payment of 

the premium tax credit (APTC),’’ 

‘‘Affordable Insurance Exchanges 

(Exchanges),’’ ‘‘agency,’’ and ‘‘tax 

dependent.’’ 

• Added the definition of the 

following terms: ‘‘Affordable Care Act,’’ 

‘‘applicable modified adjusted gross 

income (MAGI) standard,’’ ‘‘applicant,’’ 

‘‘application,’’ ‘‘beneficiary,’’ ‘‘eligibility 

determination,’’ ‘‘family size,’’ ‘‘Federal 

Poverty Level (FPL),’’ ‘‘non-applicant,’’ 

and ‘‘shared eligibility service.’’ 

• Revised the definition of ‘‘caretaker 

relative’’ to specify the degree of 

relationship to the dependent child, for 

consistency with section 406(a) of the 

Act as in effect prior to enactment of the 

PRWORA and to provide the option for 

States to consider other relatives to be 

caretaker relatives. 

• Revised the definition of ‘‘caretaker 

relative’’ to provide the option for States 

to include the domestic partner of the 

parent or other caretaker relative or to 

include another adult with whom the 

child is living and who assumes 

primary responsibility for the 

dependent child’s care. 

• Revised the definition of 

‘‘dependent child’’ to add another 

reason for a child to be considered 

deprived of parental support. Clarified 

which 18 year old, full-time students are 

included under this definition, for 

consistency with the definition of 

‘‘dependent child’’ in section 406(a) of 

the Act as in effect prior to passage of 

PRWORA, and clarified that it is a State 

option rather than a requirement to 

consider 18 year old full-time students 

as dependent children. 

B. Other Revisions 

• Revised § 431.10 to allow the 

Medicaid agency to delegate eligibility 

determinations to an Exchange (whether 

operated by a public authority, nongovernmental entity or private 

contractor) or to a private entity, for 

MAGI populations and strengthens 

safeguards that the single State agency 

must have in place when it delegates or 

contracts eligibility. 

• Clarified in § 431.10 certain terms 

for agreements with delegees/ 

contractors. Adds a requirement that the 

Medicaid agreements with delegees 

and/or with its private contractors be 

available to the public upon request. 

• Revised language at § 431.300(b) to 

clarify that non-applicant information is 

protected under confidentiality rules, 

just as information concerning 

applicants and beneficiaries is 

protected. 

• Removed subparts A and E from 

part 433–State Fiscal Administration, 

‘‘FMAP for Newly Eligible Individuals 

and for Expansion States (§ 433.10, 

§ 433.206, § 433.210, and § 433.212)’’ 

from the final rule. These issues will be 

addressed in future rulemaking. 

• Revised the description of 

pregnancy-related services at 

§ 435.116(d)(3) by referencing 

§ 440.210(a)(2), which defines the 

requirements for coverage of pregnancyrelated services. 

• Revised § 435.218(b)(1)(iii) to 

clarify that an individual is not eligible 

under this optional group if the 

individual is eligible and enrolled for 

optional coverage under sections 

1902(a)(10)(A)(ii)(I) through (XIX) of the 

Act. 

• Revised § 435.403 to confirm that 

an individual must be living in the State 

to be eligible for Medicaid and to clarify 

that State residency for individuals who 

receive State supplementary payments 

or title IV–E assistance are addressed in 

paragraphs (f) and (g) of this section, 

respectively. 

• Revised § 435.603 (and § 435.911) 

regarding how MAGI rules apply to 

individuals with disabilities and those 

needing long-term services and supports 

to enable them to enroll under an 

optional Medicaid eligibility group 

which better meets their needs if they 

meet eligibility requirements. 

• Revised § 435.603(a)(3) to clarify 

that MAGI does not apply to 

beneficiaries eligible and enrolled for 

Medicaid on or before December 31, 

2013 until the later of March 31, 2014 

or the next regularly-scheduled renewal. 

• Revised § 435.603(b) to specify that 

the family size for pregnant women 

includes the woman plus the number of 

children she is expecting and that the 

family size of other individuals when a 

pregnant women is included in their 

household counts the pregnant woman, 

at State option, as either one or two 

person(s) or as herself plus the number 

of children she is expected to deliver. 


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• Revised § 435.603(d)(2) to add a 

heading for this paragraph of ‘‘Income of 

children and tax dependents’’ and to 

add paragraphs (i) and (ii) with revised 

policy for consideration of income of 

children and tax dependents who are 

not expected to be required to file a tax 

return and are included in the 

household of the individual’s parent or 

a taxpayer other than the individual’s 

parent or spouse. Also revised the 

language to replace ‘‘is not required’’ 

with ‘‘is not expected to require’’ to file 

a tax return for the taxable year in 

which eligibility for Medicaid is 

determined. 

• Revised § 435.603(d)(3) to make 

counting cash support, exceeding 

nominal amounts, a State option rather 

than a requirement for tax dependents 

receiving such support from a taxpayer 

other than the individual’s parent. 

• Revised § 435.603(e)(2) to add 

awards as a type of income excluded 

from MAGI-based income, if used for 

education purposes. 

• Revised § 435.603(e)(3) to clarify 

the types of income received by 

American Indians and Alaska Natives 

excluded from MAGI-based income. 

• Revised § 435.603(f)(1), (f)(2), and 

(f)(3) to replace the language ‘‘file’’ with 

‘‘expects to file’’ a tax return and 

‘‘claimed as a tax dependent’’ with 

‘‘expects to claim as a tax dependent’’ 

for the taxable year in which an initial 

determination or renewal of eligibility is 

being made. 

• Revised § 435.603(f)(2)(ii) to 

address children who expect to be 

claimed by one parent as a tax 

dependent and are living with both 

parents who do not expect to file a joint 

tax return, regardless of whether the 

parents are married. 

• Added definition of ‘‘custodial 

parent’’ to § 435.603(f)(2)(iii) to resolve 

ambiguity of rules for children claimed 

as a tax dependent by a non-custodial 

parent in cases involving shared 

custody. This definition is the same as 

that used by the IRS for purposes of 

claiming a child as a qualifying child. 

• Revised § 435.603(f)(3)(ii) and (iii) 

and (f)(3)(ii) and (iii) and added a new 

(f)(3)(iv) to provide States with the 

option to include under these policies 

for children, 19 and 20-year old fulltime students living in their parents’ 

household. 

• Added new § 435.603(f)(5) relating 

to household composition to provide 

that, when tax dependency for purposes 

of applying 36B rules at the point of 

application cannot be determined with 

reasonable certainty, non-filer rules at 

paragraph (f)(3) are applied. 

• Revised § 435.603(h)(2) to clarify 

that beneficiaries’ projected annual 

household income, if a State elects this 

option, is determined for the remainder 

of the current calendar year, not for the 

full calendar year. 

• Revised § 435.603(h)(3) to clarify 

that a State may also adopt a reasonable 

method to project a reasonably 

predictable future increase or decrease 

in income and/or family size. 

• Added a new paragraph (i) to 

§ 435.603 to use 36B financial 

methodologies and determine an 

individual Medicaid-eligible if the 

individual is ineligible for Medicaid 

using MAGI-based household income 

and also ineligible for APTC based on 

MAGI income below 100 percent FPL. 

• Renumbered § 435.603(i) as (j), 

which specifies the eligibility categories 

for which MAGI-based methods do not 

apply. 

• Revised § 435.603(j)(2) to exempt 

individuals age 65 or older from 

application of MAGI-based methods in 

determinations of eligibility for which 

age is a condition of eligibility. 

• Added language at § 435.905(b) 

clarifying that information must be 

provided accessibly and in a timely 

manner for persons who are limited 

English proficient and persons who 

have a disability. We made small 

modifications to § 435.907, § 435.916, 

and § 435.1200 to ensure that the 

application, renewal form, web sites, 

kiosks, or other information systems 

will be provided accessibly. 

• Removed the requirement for 

agencies to accept applications via 

facsimile in § 435.907(a), and signatures 

via facsimile in § 435.907(g) in favor of 

acceptance via other commonly 

available electronic means. 

• Revised § 435.907(c)(2)(i) to provide 

that applications and forms for nonMAGI populations must be submitted to 

the Secretary and meet the criteria 

established by the Secretary for such 

applications and forms, but do not need 

approval prior to use. 

• Added language to § 435.907(d) and 

§ 435.916 to specify that the agency may 

not require individuals to complete an 

in-person interview as part of an 

application or renewal process for an 

eligibility determination based on MAGI 

methods. 

• Modified language at § 435.907(e) to 

clarify that a State may only require 

information that is necessary to make an 

eligibility determination or that is 

directly related to the administration of 

the State plan. 

• Revised § 435.910(a) and (h) to 

clarify the SSN requirement for 

applicants that individuals who are not 

eligible for an SSN or do not have one 

and are only able to be issued an SSN 

for a non-work purpose, do not need to 

provide it. Modified § 435.910(f) and (g) 

to clarify that such an individual would 

not need an SSN verified, but would 

need citizenship or immigration status 

verified, and that the general rule that 

a State should not delay or deny an 

otherwise eligible individual for 

Medicaid, also applies to such 

individuals. 

• Added § 435.912 to specify 

timeliness standards for making 

eligibility determinations. The revised 

regulations at § 435.912 are published as 

an interim final regulation, and we 

welcome comments on them. 

• In § 435.916, added a provision to 

generally allow but not require States to 

adopt renewal simplifications for 

applicants being determined using 

financial methods other than MAGI; 

codified at § 435.916(f) the agency must 

renew eligibility on the basis of 

available information for non-MAGI 

based renewals as well as MAGI-based 

renewals. 

• Added provisions to 

§ 435.916(a)(3)(iii) and § 435.916(f) to 

clarify that the agency must consider all 

bases of eligibility in accordance with 

§ 435.911. 

• Added language at § 435.916 (d)(1) 

to clarify that for Medicaid beneficiaries 

whose financial eligibility is based on 

MAGI methods when a State receives 

new information between regular 

renewals that relates to an eligibility 

factor, the State may request additional 

information from the individual only 

with respect to such factor to determine 

ongoing eligibility. However, if the State 

otherwise has access to information 

needed to recertify all other eligibility 

criteria, the State may begin a new 12- 

month renewal period for that 

individual. 

• Clarified at § 435.916(e), that 

agencies may only ask for information 

necessary for renewal; also added a 

provision at § 435.907(e) to apply the 

limitations related to non-applicants to 

renewals. 

• Added a new paragraph to 

§ 435.945(j) that directs to describe, 

update, and submit, upon request, 

verification policies and procedures 

adopted by the State agency to 

implement the provisions set forth in 

§ 435.940 through § 435.956. 

• Moved the language in § 435.948(a) 

related to program integrity to § 435.940 

and added language that a State must 

provide for methods of administration 

that are in the best interest of applicants 

and beneficiaries and are necessary for 

the proper and efficient operation of the 

Medicaid State plan. Redesignated the 

paragraphs in § 435.945 accordingly. 

• Added paragraphs to § 435.952(c)(2) 

to clarify that paper documentation may 


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be requested by the State only to the 

extent electronic data are not available 

and establishing a data match would not 

be effective. 

• Removed the word ‘‘alone’’ from 

§ 435.956(c)(2) to clarify that States 

cannot rely on immigration status to 

determine lack of State residency. States 

may request additional information in 

accordance with § 435.952 to verify 

residency if evidence of immigration 

status gives the State reason to question 

an individual’s residency. 

• Removed the requirement in 

§ 435.956(e) that States must accept selfattestation of household size. Moved 

verification of household size to 

§ 435.956(f) along with age and date of 

birth, which may be verified in 

accordance with § 435.945(a), including 

the option to accept self-attestation, or 

through other reasonable verification 

procedures consistent with 

requirements in § 435.952. 

• In § 435.1200(b), added that the 

agreement between the Medicaid agency 

and the Exchange must include a clear 

delineation of the responsibilities of 

each program to (i) minimize the burden 

on individuals; (ii) ensure compliance 

with the other requirements established 

in paragraphs (d) through (f) of this 

section, and if applicable paragraph (c); 

and (iii) ensure prompt determinations 

of eligibility and enrollment in the 

appropriate program without undue 

delay, consistent with timeliness 

standards established under § 435.912. 

• In § 435.1200, specified that if an 

agency accepts a determination of 

Medicaid eligibility by another 

insurance affordability program, the 

agency must comply with the provisions 

of § 435.911 to the same extent as if the 

individual had submitted an application 

directly to the Medicaid agency and 

comply with the provision of § 435.10 to 

ensure it maintains the oversight for the 

Medicaid program. 

• In § 435.1200, added provisions to 

address cases where an agency makes 

the final determination of Medicaid 

eligibility for applications submitted to 

the Exchange or other insurance 

affordability programs. 

• Modified all relevant CHIP 

provisions in subpart 457 to align with 

Medicaid policy changes and final 

provisions. 

• Modified § 457.310 to specify that 

the scope and applicability of separate 

CHIP coverage for children who lose 

Medicaid due to the elimination of 

income disregards under MAGI. 

• Added to § 457.315 to clarify that 

the MAGI grace period described in 

§ 435.603(a)(3) applies to CHIP. 

• At § 457.320, for CHIP, added a 

definition of residency for a targeted 

low-income pregnant woman enrolling 

in CHIP to mirror Medicaid residency 

definition for adults. 

• Clarified at § 457.340 that 

enrollment assistance for CHIP should 

be provided at application and renewal. 

Clarified the SSN requirement with 

Medicaid regulation at § 435.910. 

• At § 457.348, clarified that the State 

may accept final determinations of CHIP 

eligibility made by the Exchange and set 

standards regarding agreements with 

other insurance affordability programs, 

consistent with Medicaid. 

• At § 457.350, streamlined language 

regarding screen and enroll standards to 

promote clarity and better coordination 

with Medicaid. 

• At § 457.380, made changes to CHIP 

to align with the changes in Medicaid 

verification, including the standards for 

a State verification plan. 

V. Waiver of Proposed Rulemaking 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register and invite public comment on 

the proposed rule. The notice of 

proposed rulemaking includes a 

reference to the legal authority under 

which the rule is proposed, and the 

terms and substances of the proposed 

rule or a description of the subjects and 

issues involved. However, this 

procedure can be waived if an agency 

finds good cause that a notice-andcomment procedure is impracticable, 

unnecessary, or contrary to the public 

interest and incorporates a statement of 

the finding and its reasons in the rule 

issued. 

In light of the magnitude and scope of 

the Medicaid expansion and the 

changes in the eligibility determination 

system required by the Affordable Care 

Act, and the statutory implementation 

date of January 1, 2014, it is critical to 

provide final rules to guide States in 

making necessary program changes to 

prepare for implementation. States will 

need to make changes to their electronic 

and manual systems, will need to 

amend their Medicaid State plans, and 

may need to enact authorizing 

legislation on the State level. Because of 

the short time needed to make necessary 

changes, we find that it would be 

contrary to the public interest to delay 

issuance of comprehensive final rules. 

In considering the public comments 

received in response to the Medicaid 

Eligibility proposed rule, however, we 

found that the commenters identified 

options and policies that we did not 

specifically address in the proposed 

rule, in the areas of eligibility 

determination, coordination with the 

Affordable Insurance Exchanges, and 

timeliness and performance standards. 

While the comments indicated that 

these options and policies were a logical 

outgrowth of the proposed rule, we are 

concerned that there could be a 

perception that we did not provide a 

full and fair opportunity for public 

input since the issues were not 

specifically addressed in the proposed 

rule. We have thus determined to 

provide an additional opportunity for 

public comment by issuing the affected 

provisions as an interim final rule with 

opportunity for comment within the 

context of the overall comprehensive 

rule. We are adopting this approach 

because we find that it would be 

contrary to the public interest to delay 

issuance of comprehensive final rules in 

order to issue a new proposed rule to 

address issues that we may not have 

specifically addressed in the proposed 

rule. We believe that the public interest 

is served by issuing a single 

consolidated rule instead of issuing a 

separate proposed rule, to enable 

readers to see the context and 

interrelationships in the overall 

regulatory framework. There will be no 

adverse effect from this approach 

because the new requirements will not 

be effective until January 1, 2014. And 

there will be a full and fair opportunity 

prior to the effective date for public 

comment and any necessary revisions to 

the interim final provisions. As this 

approach will provide an equivalent 

opportunity for public comment, we 

also believe that issuance of a separate 

proposed rule is unnecessary. 

In sum, in light of the time constraints 

for States to implement system changes 

to implement the required Medicaid 

expansion, we have found that it would 

be contrary to the public interest to 

delay the issuance of comprehensive 

final rules, and to fragment the 

regulatory framework, to address 

potential concerns that certain policies 

or options were not specifically 

addressed in the Medicaid Eligibility 

proposed rule. We also have found that 

issuance of a new proposed rule would 

be unnecessary in light of the approach 

we have adopted, which will provide a 

full and fair opportunity for public 

comment, and any necessary revisions, 

prior to the effective date of new 

regulatory requirements. We are thus 

instead issuing certain provisions as an 

interim final rule, and are soliciting 

comments on the specific issues listed 

in the ‘‘Comment Date’’ section of this 

final rule. 

Therefore, for the reasons stated 

above, we find good cause to waive the 

notice of proposed rulemaking and to 

issue a portion of this final rule as an 

interim final rule. Certain provisions of 

this final rule are being issued as 


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interim final, and we will consider 

comments that we receive by May 7, 

2012. 

VI. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval to fairly evaluate whether an 

information collection should be 

approved by OMB, section 3506(c)(2)(A) 

of the Paperwork Reduction Act of 1995 

requires that we solicit comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

In the Medicaid Eligibility proposed 

rule, we solicited public comments for 

60 days on the information collection 

requirements (ICRs). No PRA-related 

comments were received. This final rule 

implements provisions of the Affordable 

Care Act that expand access to health 

coverage through improvements in 

Medicaid and CHIP; ensure 

coordination between Medicaid, CHIP, 

and the new Affordable Insurance 

Exchanges (which are included in a 

separate final rule under RIN 0938– 

AR25); and simplify the enrollment and 

renewal processes. Although there are 

short-term burdens associated with 

implementation of these provisions, 

over time the Medicaid program will be 

made substantially easier for States to 

administer and for individuals to 

navigate by streamlining Medicaid 

eligibility, simplifying Medicaid and 

CHIP eligibility rules for most 

individuals, and creating a coordinated 

process that results in a seamless 

enrollment experience across Medicaid, 

CHIP, and the new Affordable Insurance 

Exchanges. 

Information collection requirements 

(ICRs) are outlined below that involve 

Medicaid and CHIP eligibility 

determinations and enrollment. We 

used data from the Bureau of Labor 

Statistics to derive average costs for all 

estimates of salary in establishing the 

information collection requirements. 

Salary estimates include the cost of 

fringe benefits, calculated at 35 percent 

of salary, which is based on the March 

2011 Employer Costs for Employee 

Compensation report by the U.S. Bureau 

of Labor Statistics. 

The following provisions of this final 

rule will have their PRA implications 

reviewed under CMS–10398, OMB 

0938–1148: 

Medicaid and CHIP State Plans: 

§§ 431.10(c) and (d); 431.11(d); 

435.110(b); 435.116(b); 435.118(b); 

435.119(b); 435.218(b); 435.403(h) and 

(i); 435.603(a); 435.908, 435.916, 

457.305(a) and (b); 457.310(b); 457.315, 

457.320(d); 457.340(f); 457.343; and 

457.350. 

We will also be addressing items 

related to the development and 

adoption of the single streamlined 

application as well as alternate 

applications and supplemental forms for 

the Exchanges, Medicaid and CHIP 

under a separate PRA package. 

Provisions of this final rule that will be 

addressed in that package include, 

§ 435.907, § 435.910, § 457.330; 

§ 457.340. Information collection 

requests for these sections are under 

development and there will be a 

separate opportunity for public notice 

and comment on these materials once 

they have been developed. 

A. ICRs Regarding Disclosure of 

Program Information (§§ 435.1200(f) 

and 457.340(a)) 

Amendments to § 435.1200(f) for 

Medicaid and § 457.340(a) for CHIP 

require Medicaid and CHIP State 

agencies to disclose program 

information to the public electronically. 

These provisions are necessary to 

ensure that Medicaid and CHIP program 

information is available on the internet 

Web site where individuals and families 

can explore their coverage options and 

submit an application. 

In a review of State Web sites, we 

found that all 50 States and the District 

of Columbia currently have Web sites 

for Medicaid and CHIP and that nearly 

every State already provides the 

information specified in this final rule. 

We also found that all States offer access 

to their health insurance applications 

online. 

While these provisions are subject to 

the PRA, we believe that the 

requirement above is a usual and 

customary practice under 5 CFR 

1320.3(b)(2) and, as such, the burden 

associated with it is exempt from the 

PRA. States have always been required 

to assure that applicants, providers, 

other interested parties, and the general 

public have access to information about 

Medicaid and CHIP eligibility 

requirements, available Medicaid 

services, and the rights and 

responsibilities of applicants and 

beneficiaries. 

B. ICRs Regarding Verification and 

Verification Plans (§§ 435.945, 435.948, 

435.949, 435.952, 435.956, and 457.380) 

This final rule includes guidelines for 

the verification of certain financial and 

non-financial information to determine 

Medicaid and CHIP eligibility (for 

example, income, State residency, and 

SSNs). These amendments in 

§§ 435.945, 435.948, 435.949, 435.952, 

435.956, and 457.380 are necessary to 

facilitate the determination of eligibility 

with minimal paper documentation 

required from individuals. States will 

need to analyze current verification 

procedures to determine the policy and 

systems modifications that will be 

needed in order for States to achieve 

this streamlined verification process. 

In § 435.945(j) and § 457.380(j) the 

agency must develop, and update as 

modified, a verification plan that 

describes the verification policies and 

procedures adopted by the State agency 

to implement the provisions set forth in 

§ 435.940–§ 435.956 for Medicaid and in 

§ 457.380 for CHIP. The Secretary will 

prescribe the format and elements of the 

plan, and such plans must be submitted 

to the Secretary upon request. These 

amendments are necessary to facilitate 

the determination of eligibility with 

minimal documentation required from 

individuals. 

We estimate 53 Medicaid agencies 

(the 50 States, District of Columbia, 

Northern Mariana Islands, and 

American Samoa) and an additional 43 

CHIP agencies (States that have a 

separate or combination CHIP) will be 

subject to the provision above, for a total 

of 96 agencies. 

We estimate that it will take each 

Medicaid and CHIP agency 20 hours to 

analyze current verification procedures, 

make policy and systems modifications, 

and develop, review, and submit the 

verification plan. For the purpose of the 

cost burden, we estimate it will take a 

health policy analyst 17 hours at $43 an 

hour, and a senior manager 3 hours at 

$77 an hour, to complete the 

verification plan. The estimated cost for 

each agency is $962 ([17 × 43] + [3 × 

$77]). The total estimated cost is 

$92,352 (96 × $962). Taking into 

account the Federal contribution, the 

total estimated State costs would be 

$46,176 ($92,352 × 50 percent). 

C. ICRs Regarding Periodic Renewal of 

Medicaid and CHIP Eligibility 

(§§ 435.916, 457.343 and 457.350) 

The final rule sets out the renewal 

process for individuals whose eligibility 

is based on MAGI. These provisions are 


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necessary to facilitate the accurate and 

efficient renewal of Medicaid and CHIP 

eligibility. 

We estimate 53 Medicaid agencies 

(the 50 States, District of Columbia, 

Northern Mariana Islands, and 

American Samoa) and an additional 43 

CHIP agencies (States that have a 

separate or combination CHIP) will be 

subject to the provision above, for a total 

of 96 agencies. 

The burden associated with this 

provision is the time and effort 

necessary for the State to develop and 

automate renewal notices and perform 

the revised recordkeeping related to 

renewing eligibility. Individuals whose 

eligibility is based on MAGI would need 

to provide any additional information 

for the State to complete a 

redetermination of eligibility. 

Research has indicated that 33–50 

percent of people experience a change 

in circumstance that may impact their 

eligibility for coverage (Sommers and 

Rosenbaum, Health Affairs 2011). Based 

on this research we conservatively 

estimate that of the approximately 51 

million individuals enrolled in 

Medicaid and CHIP whose eligibility 

will be based on MAGI, half (25.5 

million individuals) will have their 

eligibility renewed using the 

information already available to the 

agency. 

We estimate that it will take each 

Medicaid and CHIP agency 16 hours 

annually to develop, automate and 

distribute the notice of eligibility 

determination based on use of existing 

information. For the purpose of the cost, 

we estimate it will take a health policy 

analyst 10 hours, at $43 an hour, and a 

senior manager 6 hours, at $77 an hour, 

to complete the notice. The estimated 

cost for each agency is $892 [(10 × $43) 

+ (6 × $77)]. The total estimated cost 

burden is $85,632 [96 × $892], and the 

total annual hour burden is 1,536 hours 

[(10 + 6) × 96]. Taking into account the 

Federal contribution, the total estimated 

State costs would be $42,816 [$85,632 × 

50 percent]. 

The remaining half of the individuals 

(25.5 million) will need to provide 

additional information to the State so 

that their eligibility can be renewed. We 

estimate that it will take an individual 

20 minutes to complete the streamlined 

renewal process. The total annual hour 

burden is 8.5 million hours [(20 minutes 

× 25.5 million individuals)/60 minutes] 

for 25.5 million individuals. Note that 

this is shorter than the time taken to 

complete the renewal process in most 

States today. 

States will keep records of each 

renewal that is processed in Medicaid 

and CHIP. The amount of time for 

recordkeeping will be the same for 

renewals based on information available 

to the agency and renewals that require 

additional information from 

individuals. In addition, States will 

have to program and distribute the prepopulated renewal form every year at 

renewal time. We estimate that it will 

take the State agency 15 minutes (0.25 

hours) at a rate of $25 per hour for the 

average State eligibility worker to 

conduct the required record keeping for 

each of the 51 million renewals. The 

total estimated annual hour burden is 

12,750,000 hours or 132,812.5 hours per 

agency [12,750,000/96]. At a rate of $25 

per hour the total estimated cost for 

recordkeeping is $318,750,000 

[12,750,000 × $25] or $3,320,312.5 per 

agency [$318,750,000/96]. Taking into 

account the Federal contribution, the 

total estimated State share of the costs 

would be $159,375,000 [$318,750,000 × 

50 percent]. 

D. ICRs Regarding Web Sites (§ 435.1200 

and § 457.335) 

Sections 435.1200 and 457.335 

require Medicaid and separate CHIP 

agencies to have a Web site that 

performs the functions described in this 

rule. 

We estimate that 53 Medicaid 

agencies and an additional 43 CHIP 

agencies (in States that have a separate 

or combination CHIP) would be subject 

to the provisions above. To achieve 

efficiency, we assume that States will 

develop only one Web site to perform 

the required functions. Therefore, we 

base our estimates on 50 States, the 

District of Columbia, the Northern 

Mariana Islands, and American Samoa 

(53 agencies) and do not include the 43 

separate CHIP programs. 

The burden associated with this ICR 

for information disclosure is the time 

and effort necessary for the State to 

develop and disclose information on the 

Web site, develop and automate the 

required notices, and transmit (report) 

the application data to the appropriate 

insurance affordability program. 

We know that all States have Web 

sites and printable applications online 

and that 19 States have some ability to 

enable individuals to renew their 

coverage online. We estimate that it will 

take each State an average of 320 hours 

to develop the additional functionality 

to meet these requirements, including 

developing an online application, 

automating the renewal process and 

adding a health plan selection function. 

We estimate that it will take a health 

policy analyst 85 hours (at $43 an hour), 

a senior manager 50 hours (at $77 an 

hour), and various network/computer 

administrators or programmers 185 

hours (at $54 an hour) to meet the 

reporting requirements under this 

subpart. We estimate the total cost for a 

State to be $17,495 [(85 × $43) + (50 × 

$77) + (185 × $54)] for a total estimated 

burden of $927,235 [53 × $17,495] and 

a total annual hour burden of 16,960 

hours for all 53 entities [(85 + 50 + 185) 

× 53]. Taking into account the Federal 

contribution to Medicaid and CHIP 

systems development and 

administration efforts, we estimate that 

the total State share of costs would be 

$463,618 [$927,235 × 50 percent] at 

most. We estimate that it will take each 

State entity 16 hours annually to 

develop and automate each of the two 

required notices (32 total hours). For the 

purpose of the cost, we estimate it will 

take a health policy analyst 10 hours, at 

$43 an hour, and a senior manager 6 

hours, at $77 an hour, to complete each 

notice. The estimated cost of two 

notices for each agency is $1,784 [$892 

× 2]. The total estimated cost is $94,552 

[$1,784 × 53], and the total annual hour 

burden is 1,696 hours [16 × 2 × 53] for 

the notices. 

We estimate that it will take network/ 

computer administrators or 

programmers 150 hours (at $54 an hour) 

to transmit the application data of 

ineligible individuals to the appropriate 

insurance affordability program and 

meet this information reporting 

requirement for each State (53). The 

estimated cost for each agency is $8,100 

[150 × $54]. The total estimated cost for 

53 States is $429,300 [53 × $8,100], and 

the total annual hour burden is 7,950 

hours [150 × 53]. Taking into account 

the Federal contribution, the estimated 

total State share of costs would be 

$214,650 [$429,300 × 50 percent]. 

The total estimated cost of the 

provisions described above is 

$1,451,087 [$927,235 + $94,552 + 

$429,300], and the total annual hour 

burden is 26,606 hours [16,960 + 1,696 

+ 7,950]. 


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Federal Register / Vol. 77, No. 57 / Friday, March 23, 2012 / Rules and Regulations 17199 

1OACT’s original estimates for the financial 

impact of the expansion of Medicaid eligibility 

under the Affordable Care Act are documented in 

an April 22, 2010 memorandum, ‘‘Estimated 

Financial Effects of the Patient Protection and 

Affordable Care Act, as Amended,’’ available at 

https://www.cms.gov/ActuarialStudies/downloads/ 

PPACA_2010-04-22.pdf. 

TABLE 1—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS

Regulation section(s) Respondents Responses 

Burden per 

response 

(hours) 

Total annual 

burden 

(hours) 

Labor 

cost of 

reporting 

($) 

Total cost 

($) 

State share of 

costs 

($) 

Medicaid and CHIP State Plan provisions regarding §§ 431.10(c) and (d); 431.11(d); 435.110(b); 435.116(b); 435.118(b); 435.119(b); 

435.218(b); 435.403(h) and (i); 435.603(a); 435.908; 435.916; 457.305(a) and (b); 457.310(b); 457.315; 457.320(d); 457.340(f); 457.343; 

and 457.350 are under development and will be submitted to OMB for review/approval under control number 0938–1148 (CMS–10398). 

§§ 435.907, 457.330, and 

457.340(b).

These information collections are currently under development. A separate notice and comment process for information collections required under these sections will be conducted at a later date. 

§§ 435.945, 435.948, 

435.956, 457.350, and 

457.380.

96 ................ 1 .................... 20 1,060 ........... 962 92,352 46,176 

§§ 435.916 and 457.343 ... 96 ................ 1 .................... 16 1,536 ........... 892 85,632 46,816 

§§ 435.916 and 457.343 ... 25.5 million .. 1 .................... .33 8.5 million .... ........................ ........................ ........................

§§ 435.916 and 457.343 ... 96 ................ 51 million ....... .25 12,750,000 .. 3,320,313 318,750,000 159,375,000 

§§ 435.1200 and 457.335 53 ................ 1 .................... 502 26,606 ......... 27,379 1,451,087 725,543 

Total ........................... ..................... ....................... ........................ ..................... ........................ 320,379,071 160,193,535 

Notes: All collections are new therefore the OMB Control Number is omitted from the table. 

There are no capital or maintenance costs incurred by the collections, therefore it is omitted from the table. Capital costs resulting from the development or improvement of new electronic systems were addressed in the Federal Funding for Medicaid Eligibility Determination and Enrollment Activities final rule (76 FR 21950). 

Labor Cost figures are indicated here on a per Respondent basis. 

The 1.4 average responses per agency (that is, Respondent) are based on the total estimated number of agreements divided by the number 

of respondents. The number of actual agreements will vary by State based on the governance structure of the State’s Medicaid, CHIP, and Exchange programs. 

We have submitted a copy of this final 

rule to the OMB for its review of the 

rule’s information collection and 

recordkeeping requirements. These 

requirements are not effective until they 

have been approved by the OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

paperwork collections referenced above, 

access CMS’ Web site at http:// 

www.cms.hhs.gov/ 

Paperwork@cms.hhs.gov, or call the 

Reports Clearance Office at 410–786– 

1326. 

VII. Summary of Regulatory Impact 

Analysis 

The summary analysis of benefits and 

costs included in this final rule is drawn 

from the detailed Regulatory Impact 

Analysis (RIA), available at 

www.Medicaid.gov/AffordableCareAct/ 

downloads/CMS-2349-FRegulatoryImpactAnalysis.pdf. 

A. Summary of Comments and Changes 

We received no comments on the 

anticipated effects of the Medicaid 

Eligibility proposed rule. Overall, the 

major provisions included in the 

Medicaid Eligibility proposed rule are 

maintained in the final rule. The only 

significant change in this impact 

statement reflects the enactment of 

Public Law 112–56, signed into law on 

November 21, 2011, changing the MAGI 

definition of income to include all 

Social Security benefits. Previously, 

nontaxable Social Security benefits were 

not included when calculating MAGI for 

Medicaid eligibility. In addition, this 

RIA utilizes revised estimates from the 

CMS Office of the Actuary (OACT). 

These estimates have been updated with 

the most recent economic and health 

care expenditure and enrollment data 

and projected trends and with further 

refinements to the methodology. 

B. Introduction 

The Office of Management and Budget 

has determined that this rule is 

‘‘economically significant’’ for the 

purposes of Executive Order 12866. 

Therefore, we have prepared an RIA that 

presents the costs and benefits of this 

rulemaking. 

C. Need for This Regulation 

This final rule will implement 

provisions of the Affordable Care Act 

related to Medicaid eligibility, 

enrollment and coordination with the 

Exchanges, CHIP, and other insurance 

affordability programs. It also addresses 

the current complexity of and barriers to 

enrollment in Medicaid and CHIP 

which contributes to millions of eligible 

low-income Americans remaining 

uninsured. 

D. Summary of Costs and Benefits 

The RIA uses the estimates of OACT 

and the estimates prepared by the 

Congressional Budget Office (CBO) and 

the staff of the Joint Committee on 

Taxation. It provides both estimates to 

illustrate the uncertainty inherent in 

projections of future Medicaid financial 

operations. Analysis by OACT indicates 

that the final rule will result in an 

estimated additional 24 million newly 

eligible and currently eligible 

individuals enrolling in Medicaid by 

2016, including approximately 2–3 

million individuals with primary health 

insurance coverage through employersponsored plans who would enroll in 

Medicaid for supplemental coverage.1

This is the same estimate as was in the 

regulatory impact analysis of the 

Medicaid Eligibility proposed rule 

(August 2011). OACT notes that such 

estimates are uncertain, since they 

depend on future economic, 

demographic, and other factors that 

cannot be precisely determined in 

advance. Similarly, the actual behavior 

of individuals and the actual operation 

of the new enrollment processes and 

Exchanges will affect enrollment and 

costs. The CBO has estimated a net 

increase of 16 million newly and 

previously eligible people enrolled in 

Medicaid and CHIP in 2016 as a result 

of the new law, less 500,000 to 1 million 

due to the change in the definition of 


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17200 Federal Register / Vol. 77, No. 57 / Friday, March 23, 2012 / Rules and Regulations 

2CBO. Analysis of Major Health Care Legislation 

Enacted in March 2010. Statement of Douglas W. 

Elmendorf. March 30, 2011—http://www.cbo.gov/ 

ftpdocs/121xx/doc12119/03-30- 

HealthCareLegislation.pdf The CBO estimates 

exclude individuals with primary coverage through 

employer-sponsored plans who enroll in Medicaid 

for supplemental coverage. See also CBO Cost 

Estimate. H.R. 2576: A bill to amend the Internal 

Revenue Code of 1986 to modify the calculation of 

modified adjusted gross income for purposes of 

determining eligibility for certain healthcare-related 

programs. October 14, 2011. http://cbo.gov/ftpdocs/ 

124xx/doc12484/hr2576.pdf. 

4SK Long, et al., ‘‘How Well Does Medicaid Work 

in Improving Access to Care?’’ HSR: Health Services 

Research 40:1 (February 2005). 

5Henry J. Kaiser Family Foundation, ‘‘Children’s 

Health—Why Health Insurance Matters.’’ 

Washington, DC: KFF, 2002. 

5C. Keane, et al., ‘‘The impact of Children’s 

Health Insurance Program by age,’’ Pediatrics 104:5 

(1999). 

6 Institute of Medicine, Care without coverage: too 

little, too late (National Academies Press, 2002). 

7Amy Finkelstein, et al, ‘‘The Oregon Health 

Insurance Experiment: Evidence from the First 

Year,’’ National Bureau of Economic Research 

Working Paper No. 17190, July 2011. 

8FY 2013 President’s Budget. 

9CBO. Analysis of the Major Health Care 

Legislation Enacted in March 2010. Statement of 

Douglas W. Elmendorf. March 30, 2011—http:// 

www.cbo.gov/ftpdocs/121xx/doc12119/03-30- 

HealthCareLegislation.pdf. 

10CBO Cost Estimate. H.R. 2576: A bill to amend 

the Internal Revenue Code to modify the calculation 

of modified adjusted gross income for purposes of 

determining eligibility for certain healthcare-related 

programs. October 14, 2011. http://cbo.gov/ftpdocs/ 

124xx/doc12484/hr2576.pdf. 

11CBO did not publish the impact on States by 

year, so estimates for a comparable period are not 

available. 

12FY 2013 President’s Budget. We note that these 

estimates are dependent upon which States are 

ultimately determined to be expansion States under 

the Affordable Care Act. 

13M. Buettgens et al., ‘‘Consider savings as well 

as costs: State governments would spend at least 

$90 billion less with the Affordable Care Act than 

without it from 2014 to 2019,’’ The Urban Institute, 

July 2011. Available at www.urban.org/ 

uploadedpdf/412361-consider-savings.pdf. 

14CBO’s specific take-up assumptions are not 

available. Researchers at the Urban Institute have 

approximated the participation rate assumed by 

CBO. The Kaiser Family Foundation has 

characterized this assumption as follows: ‘‘These 

results assume moderate levels of participation 

similar to current experience among those made 

newly eligible for coverage and little additional 

participation among those currently eligible. This 

scenario assumes 57 percent participation among 

the newly eligible uninsured and lower 

participation across other coverage groups.’’ J. 

Holahan and I. Headen, ‘‘Medicaid coverage and 

spending in health reform: National and State-byState results for adults at or below 133 percent 

FPL,’’ Kaiser Commission on Medicaid and the 

Uninsured, May 2010, available online at http:// 

www.kff.org/healthreform/upload/MedicaidCoverage-and-Spending-in-Health-ReformNational-and-State-By-State-Results-for-Adults-ator-Below-133-FPL.pdf. 

MAGI to include Social Security 

income.2

Overall, we do not expect that the 

conversion to MAGI rules will result in 

many currently eligible individuals 

losing eligibility. However, there may be 

a relatively small number of currently 

eligible individuals who would no 

longer be eligible based on the MAGI 

methodology. For these individuals, 

there will be a cost of obtaining 

coverage through Exchanges, but this 

cost could be mitigated by premium tax 

credits and cost-sharing reductions. At 

the same time, the use of the MAGI 

definition of income may have the effect 

of increasing Medicaid eligibility for a 

small number of individuals and 

families who would not have been 

previously eligible. We anticipate no 

substantial net gain or loss in 

enrollment due to conversion to MAGI 

rules. 

For new enrollees, eligibility for 

Medicaid will improve access to 

medical care, resulting in improved 

health outcomes and greater financial 

security. Research demonstrates that 

when uninsured individuals obtain 

coverage (including Medicaid), the rate 

at which they obtain needed care 

increases substantially.345 Individuals 

with insurance coverage are more likely 

to have regular checkups, recommended 

health screenings, and a usual source of 

care to help manage their health.6 In 

addition, people with health insurance 

coverage have less out of pocket costs 

and are less likely to have unpaid 

medical bills.7

OACT estimates that Federal 

spending on Medicaid for newly and 

currently eligible individuals who 

enroll as a result of the changes made 

by the Affordable Care Act would 

increase by a total of $164 billion from 

FY 2012 through 2016.8 Reflecting 

different data, assumptions, and 

methodology, CBO estimates an increase 

in Federal spending of $162 billion over 

the same period of time, less $7.9 billion 

resulting from the November 2011 

legislative changes to the definition of 

MAGI.9 10 OACT estimates that State 

expenditures for individuals, who 

choose to enroll as a result of changes 

implemented by the Affordable Care 

Act, will total approximately $14 billion 

for FYs 2012 through 2016.11 (While the 

increased FMAP for expansion States is 

not included in this final rule, it is 

estimated that $9.1 billion will be 

transferred from the Federal government 

to the relevant States between FY 2012 

and 2016, reducing the net impact of the 

Medicaid coverage provisions on those 

States.12) These estimates do not 

consider offsetting savings to States that 

will result, to a varying degree 

depending on the State, from this final 

rule. 

This final rule will benefit States and 

providers by improving the health of 

their residents and patients, reducing 

uncompensated care costs, and allowing 

States to receive FFP on spending for 

health coverage that currently is paid for 

with State and local funds. In addition, 

the simplified Medicaid eligibility 

policies will, over time, reduce 

administrative burdens on State 

Medicaid agencies. An Urban Institute 

analysis estimates that the costs to 

States from Medicaid expansion will be 

more than fully offset by other effects of 

the legislation, for net savings to States 

of $92 to $129 billion from 2014 to 

2019.13

E. Methods of Analysis 

OACT prepared its estimate using 

data on individuals and families, 

together with their income levels and 

insured status, from the Current 

Population Survey and the Medical 

Expenditure Panel Survey. In addition, 

OACT made assumptions as to the 

actions of individuals in response to the 

new coverage options under the 

Affordable Care Act and the operations 

of the new enrollment processes and the 

Exchanges. The estimated Medicaid 

coverage and financial effects are 

particularly sensitive to these latter 

assumptions. Among those newlyeligible for Medicaid under the 

expanded eligibility criteria established 

by the Affordable Care Act, and who 

would not otherwise have health 

insurance, OACT assumed that 95 

percent would enroll. This assumption, 

which is significantly higher than 

current enrollment percentages, reflects 

OACT’s consideration of the experience 

with health insurance reform in 

Massachusetts and its expectation that 

the streamlined enrollment process and 

enrollment assistance available to 

people through the Affordable Insurance 

Exchanges will be very effective in 

helping eligible individuals and families 

become enrolled. Researchers have 

approximated the participation rate 

assumed by CBO at a much lower 

level.14

F. Regulatory Options Considered 

Alternative approaches to 

implementing the Medicaid eligibility, 

enrollment and coordination 

requirements in the Affordable Care Act 

were considered in developing this final 

rule. Because the majority of provisions 

in this rule are statutorily required, we 

did not have significant flexibility to 

choose alternative policies. However, 

based on comments, we did revise the 

policy regarding the relationship 

between Medicaid and the Exchange 


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Federal Register / Vol. 77, No. 57 / Friday, March 23, 2012 / Rules and Regulations 17201 

15 J. Holahan and I. Headen, ‘‘Medicaid coverage 

and spending in health reform: National and Stateby-State results for adults at or below 133 percent 

FPL,’’ Kaiser Commission on Medicaid and the 

Uninsured, May 2010, available online at http:// 

www.kff.org/healthreform/upload/MedicaidCoverage-and-Spending-in-Health-ReformNational-and-State-By-State-Results-for-Adults-ator-Below-133-FPL.pdf. 

give States additional flexibility for 

eligibility determinations based on 

MAGI. 

G. Accounting Statement 

For full documentation and 

discussion of these estimated costs and 

benefits, see the detailed RIA, available 

at www.Medicaid.gov/ 

AffordableCareAct/downloads/CMS2349-F-RegulatoryImpactAnalysis.pdf. 

TABLE 2—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED NET COSTS, FROM FY 2012 TO FY 2016 

(In millions) 

Category 

Transfers 

Year dollar Units discount rate 

Period covered 

2012 7% 3% 

Annualized Monetized Transfers from Federal 

Government to States on Behalf of Beneficiaries.

Primary Estimate ....................... $30,211 $31,705 FYs 2012–2016. 

Annualized Monetized Transfers from States 

on Behalf of Beneficiaries.

Primary Estimate ....................... $2,568 $2,694 FYs 2012–2016. 

Source: CMS Office of the Actuary. 

H. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2011, that threshold is approximately 

$136 million. However, it is important 

to understand that the UMRA does not 

address the total cost of a rule. Rather, 

it focuses on certain categories of cost, 

mainly costs resulting from (A) 

imposing enforceable duties on State, 

local, or Tribal governments, or on the 

private sector, or (B) increasing the 

stringency of conditions in, or 

decreasing the funding of, State, local, 

or Tribal governments under 

entitlement programs. 

We believe that States can take 

actions that will largely offset the 

increased medical assistance spending 

for newly enrolled persons. Because the 

net effects are uncertain and the overall 

costs significant, we have drafted the 

RIA to meet the requirements for 

analysis imposed by UMRA, together 

with the rest of the preamble. The 

extensive consultation with States we 

describe later in this analysis was aimed 

at the requirements of both UMRA and 

Executive Order 13132 on Federalism. 

1. State and Local Governments 

Our discussion of the potential 

expected impact on States is provided 

in the benefits, costs, and transfers 

section of the RIA. As noted previously, 

the Affordable Care Act requires States 

that participate in the Medicaid program 

to cover adults with incomes below 133 

percent of the Federal poverty level, and 

provides substantial new Federal 

support to nearly offset the costs of 

covering that population. 

2. Private Sector and Tribal 

Governments 

We do not believe this final rule will 

impose any unfunded mandates on the 

private sector. As we explain in more 

detail in the Regulatory Flexibility Act 

analysis, the provisions of the 

Affordable Care Act implemented by the 

final rule deal with eligibility and 

enrollment for the Medicaid and CHIP 

programs, and as such are directed 

toward State governments rather than 

toward the private sector. Since the final 

rule will impose no mandates on the 

private sector, we conclude that the cost 

of any possible unfunded mandates 

would not meet the threshold amounts 

discussed previously that would 

otherwise require an unfunded mandate 

analysis for the private sector. We also 

conclude that an unfunded mandate 

analysis is not needed for Tribal 

governments since the final rules will 

not impose mandates on Tribal 

governments. 

I. Regulatory Flexibility Act (RFA) 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities if a final rule will have a 

significant economic impact on a 

substantial number of small entities. 

Few of the entities that meet the 

definition of a small entity as that term 

is used in the RFA (for example, small 

businesses, nonprofit organization, and 

small governmental jurisdictions with a 

population of less than 50,000) will be 

impacted directly by this final rule. 

Individuals and States are not included 

in the definition of a small entity. There 

are some States in which counties or 

cities share in the costs of Medicaid. 

OACT has estimated that between FY 

2012 and FY 2016 the Federal 

government will pay about 92 percent of 

the costs of benefits for new Medicaid 

enrollees with the States paying the 

remaining 8 percent. An Urban Institute 

and Kaiser Family Foundation study 

estimated that the Federal government 

will bear between 92 and 95 percent of 

the overall costs of the new coverage 

provided as a result of the Affordable 

Care Act, with the States shouldering 

the remaining five to eight percent of 

the costs.15 To the extent that States 

require counties to share in these costs, 

some small jurisdictions could be 

affected by the requirements of this final 

rule. However, nothing in this rule will 

constrain States from making changes to 

alleviate any adverse effects on small 

jurisdictions. 

Because this final rule is focused on 

eligibility and enrollment in public 

programs, it does not contain provisions 

that would have a significant direct 

impact on hospitals, and other health 

care providers that are designated as 

small entities under the RFA. However, 

the provisions in this final rule may 

have a substantial, positive indirect 

effect on hospitals and other health care 

providers due to the substantial increase 

in the prevalence of health coverage 

among populations who are currently 

unable to pay for needed health care, 

leading to lower rates of uncompensated 

care at hospitals. 

Section 1102(b) of the Act requires us 

to prepare a regulatory impact analysis 

if a final rule may have a significant 

economic impact on the operations of a 

substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 604. For 


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17202 Federal Register / Vol. 77, No. 57 / Friday, March 23, 2012 / Rules and Regulations 

purposes of section 1102(b) of the Act, 

we define a small rural hospital as a 

hospital that is located outside of a 

metropolitan statistical area and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because the Secretary has 

determined that this final rule will not 

have a direct economic impact on the 

operations of a substantial number of 

small rural hospitals. As indicated in 

the preceding discussion, there may be 

indirect positive effects from reductions 

in uncompensated care. 

J. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a final 

rule that imposes substantial direct 

effects on States, preempts State law, or 

otherwise has Federalism implications. 

As discussed previously, the Affordable 

Care Act and this final rule have 

significant direct effects on States. 

The Affordable Care Act requires 

major changes in the Medicaid and 

CHIP programs, which will require 

changes in the way States operate their 

individual programs. While these 

changes are intended to benefit 

beneficiaries and enrollees by 

improving coordination between 

programs, they are also designed to 

reduce the administrative burden on 

States by simplifying and streamlining 

systems. 

We have received input from States 

on how the various Affordable Care Act 

provisions codified in this final rule 

will affect them. We have participated 

in a number of conference calls and in 

person meetings with State officials in 

the months before and since the law was 

enacted. These discussions have 

enabled the States to share their 

thinking and questions about how the 

Medicaid changes in the legislation 

would be implemented. The conference 

calls and meetings also furnished 

opportunities for State Medicaid 

Directors to comment informally on 

implementation issues and plans 

(although to be considered comments on 

the Medicaid Eligibility proposed rule, 

written comments using the process 

described in the Medicaid Eligibility 

proposed rule were required). 

We continue to engage in ongoing 

consultations with Medicaid and CHIP 

Technical Advisory Groups (TAGs), 

which have been in place for many 

years and serve as a staff level policy 

and technical exchange of information 

between CMS and the States. In 

particular, we have had discussions 

with the Eligibility TAG (E–TAG) and 

the Children’s Coverage TAG. The E– 

TAG is a group of State Medicaid 

officials with specific expertise in the 

field of eligibility policy under the 

Medicaid program. The Children’s 

Coverage TAG is a combination of 

Medicaid and CHIP officials that 

convene to discuss issues that affect 

children enrolled in those programs. 

Through meetings with these TAGs, we 

have been able to get input from States 

specific to issues surrounding the 

changes in eligibility groups and rules 

that will become effective in 2014. 

List of Subjects 

42 CFR Part 431 

Grant programs—health, Health 

facilities, Medicaid, Privacy, Reporting 

and recordkeeping requirements. 

42 CFR Part 435 

Aid to Families with Dependent 

Children, Grant programs—health, 

Medicaid, Reporting and recordkeeping 

requirements, Supplemental Security 

Income (SSI), Wages. 

42 CFR Part 457 

Administrative practice and 

procedure, Grant programs—health, 

Health insurance, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR 

chapter IV as set forth below: 

PART 431—STATE ORGANIZATION 

AND GENERAL ADMINISTRATION 

■ 1. The authority citation for part 431 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act, (42 U.S.C. 1302). 

■ 2. Section 431.10 is amended by— 

■ A. Adding paragraphs (c)(3), (c)(4), 

and (c)(5). 

■ B. Revising paragraphs (d) and (e)(3). 

The revisions and additions read as 

follows: 

§ 431.10 Single State agency. 

* * * * * 

(c) * * * 

(3) The plan must specify whether the 

entity that determines eligibility is an 

Exchange established under sections 

1311(b)(1) or 1321(c)(1) of the 

Affordable Care Act (Pub. L. 111–148), 

provided that if the Exchange is 

operated as a nongovernmental entity as 

permitted under 45 CFR 155.110(c), or 

contracts with a private entity for 

eligibility services, as permitted under 

1311(f)(3) of the Affordable Care Act 

and 45 CFR 155.110(a), final 

determinations of eligibility are limited 

to determinations using MAGI-based 

methods as set forth in § 435.603 of this 

subchapter. 

(4) The single State agency is 

responsible for ensuring eligibility 

determinations are made consistent 

with its policies, and if there is a pattern 

of incorrect, inconsistent, or delayed 

determinations for ensuring that 

corrective actions are promptly 

instituted. 

(5) The single State agency is 

responsible for ensuring that eligibility 

determinations are made in the best 

interest of applicants and beneficiaries, 

and specifically ensuring that: 

(i) There is no conflict of interest by 

any entity delegated the responsibility 

to make eligibility determinations or 

performing eligibility services; and 

(ii) Improper incentives and/or 

outcomes are prohibited, monitored, 

and if found, properly and promptly 

addressed through corrective actions. 

(d) Agreement with Federal or State 

and local entities. The plan must 

provide for agreements between the 

Medicaid agency and the Federal or 

other State or local agencies or 

nongovernmental entities that 

determine Medicaid eligibility on behalf 

of the Medicaid agency. Such 

agreements, which shall be in writing 

and available upon request, must 

include provisions for: 

(1) The relationships and respective 

responsibilities of the parties; 

(2) The quality control and oversight 

plans by the single State agency to 

review determinations made by the 

delegee or its contractor to ensure that 

overall determinations are made 

consistent with the State agencies’ 

eligibility policies; 

(3) The reporting requirements from 

the delegee making Medicaid eligibility 

determinations to the single State 

agency to permit such oversight; 

(4) An assurance that the delegee and 

its contractors will comply with the 

confidentiality and security 

requirements in accordance with 

sections 1902(a)(7) and 1942 of the Act 

and subpart F of this part for all 

applicant and beneficiary data; 

(5) An assurance that merit system 

personnel protection principles are 

employed by the entity responsible for 

the Medicaid eligibility determination 

and for any contractor performing 

eligibility services; and 

(6) An assurance that applicants and 

beneficiaries are made aware of how 

they can directly contact and obtain 

information from the single State 

agency. 

(e) * * * 

(3) If other Federal, State, local 

agencies or offices or non-governmental 

entities (including their contractors) 

perform services for the Medicaid 

agency, they must not have the 


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authority to change or disapprove any 

administrative decision of, or otherwise 

substitute their judgment for that of the 

Medicaid agency with respect to the 

application of policies, rules and 

regulations issued by the Medicaid 

agency. 

■ 3. Section 431.11 is amended by 

revising paragraph (d) to read as 

follows: 

§ 431.11 Organization for administration. 

* * * * * 

(d) Eligibility determined by other 

entities. If eligibility is determined by 

Federal or State agencies other than the 

Medicaid agency or by local agencies 

under the supervision of other State 

agencies, or by nongovernmental 

entities, or if eligibility functions are 

performed by an Exchange contractor, 

the plan must include a description of 

the staff designated by those other 

entities and the functions they perform 

in carrying out their responsibilities. 

■ 4. Section 431.300 is amended by: 

■ A. Redesignating paragraph (b) as 

paragraph (c). 

■ B. Adding a new paragraph (b). 

■ C. Revising newly designated 

paragraphs (c) introductory text and 

(c)(1). 

■ D. Adding a new paragraph (d). 

The revisions and additions read as 

follows: 

§ 431.300 Basis and purpose. 

* * * * * 

(b) For purposes of this subpart, 

information concerning an applicant or 

beneficiary includes information on a 

non-applicant, as defined in § 435.4 of 

this subchapter. 

(c) Section 1137 of the Act, which 

requires agencies to exchange 

information to verify the income and 

eligibility of applicants and 

beneficiaries (see § 435.940 through 

§ 435.965 of this subchapter), requires 

State agencies to have adequate 

safeguards to assure that— 

(1) Information exchanged by the 

State agencies is made available only to 

the extent necessary to assist in the 

valid administrative needs of the 

program receiving the information, and 

information received under section 

6103(l)(7) of the Internal Revenue Code 

is exchanged only with agencies 

authorized to receive that information 

under that section of the Code; and 

* * * * * 

(d) Section 1943 of the Act and 

section 1413 of the Affordable Care Act. 

■ 5. Section 431.305 is amended by— 

■ A. Revising paragraph (b)(6). 

■ B. Adding paragraph (b)(8). 

The revisions and addition read as 

follows: 

§ 431.305 Types of information to be 

safeguarded. 

* * * * * 

(b) * * * 

(6) Any information received for 

verifying income eligibility and amount 

of medical assistance payments (see 

§ 435.940 through § 435.965 of this 

subchapter). Income information 

received from SSA or the Internal 

Revenue Service must be safeguarded 

according to the requirements of the 

agency that furnished the data, 

including section 6103 of the Internal 

Revenue Code, as applicable. 

* * * * * 

(8) Social Security Numbers. 

■ 6. Section 431.306 is amended by 

revising paragraph (g) to read as follows: 

§ 431.306 Release of information. 

* * * * * 

(g) Before requesting information 

from, or releasing information to, other 

agencies to verify income, eligibility and 

the amount of assistance under 

§ 435.940 through § 435.965 of this 

subchapter, the agency must execute 

data exchange agreements with those 

agencies, as specified in § 435.945(i) of 

this subchapter. 

* * * * * 

§ 431.636 [Removed] 

■ 7. Remove § 431.636. 

PART 435—ELIGIBILITY IN THE 

STATES, DISTRICT OF COLUMBIA, 

THE NORTHERN MARIANA ISLANDS, 

AND AMERICAN SAMOA 

■ 8. The authority citation for part 435 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302). 

■ 9a. Remove the term ‘‘family income’’ 

wherever it appears in part 435 and add 

in its place the term ‘‘household 

income’’. 

■ 9b. Section 435.4 is amended by— 

■ A. Adding the definitions of 

‘‘Advance payments of the premium tax 

credit (APTC),’’ ‘‘Affordable Care Act,’’ 

‘‘Affordable Insurance Exchanges 

(Exchanges),’’ ‘‘Agency,’’ ‘‘Applicable 

modified adjusted gross income (MAGI) 

standard,’’ ‘‘Applicant,’’ ‘‘Application,’’ 

‘‘Beneficiary,’’ ‘‘Caretaker relative,’’ 

‘‘Dependent child,’’ ‘‘Effective income 

level,’’ ‘‘Electronic account,’’ ‘‘Eligibility 

determination,’’ ‘‘Family size,’’ ‘‘Federal 

poverty level (FPL),’’ ‘‘Household 

income,’’ ‘‘Insurance affordability 

program,’’ ‘‘MAGI-based income,’’ 

‘‘Minimum essential coverage,’’ 

‘‘Modified adjusted gross income 

(MAGI),’’ ‘‘Non-applicant,’’ ‘‘Pregnant 

woman,’’ ‘‘Secure electronic interface,’’ 

‘‘Shared eligibility service,’’ and ‘‘Tax 

dependent’’ in alphabetical order. 

■ B. Removing the definition of 

‘‘Families and children.’’ 

The additions read as follows: 

§ 435.4 Definitions and use of terms. 

* * * * * 

Advance payments of the premium 

tax credit (APTC) has the meaning given 

the term in 45 CFR 155.20. 

* * * * * 

Affordable Care Act means the Patient 

Protection and Affordable Care Act of 

2010 (Pub. L. 111–148), as amended by 

the Health Care and Education 

Reconciliation Act of 2010 (Pub. L. 111– 

152), as amended by the Three Percent 

Withholding Repeal and Job Creation 

Act (Pub. L. 112–56). 

Affordable Insurance Exchanges 

(Exchanges) has the meaning given the 

term ‘‘Exchanges’’ in 45 CFR 155.20. 

Agency means a single State agency 

designated or established by a State in 

accordance with § 431.10(b) of this 

subchapter. 

Applicable modified adjusted gross 

income (MAGI) standard has the 

meaning provided in § 435.911(b)(1) of 

this part. 

Applicant means an individual who is 

seeking an eligibility determination for 

himself or herself through an 

application submission or a transfer 

from another agency or insurance 

affordability program. 

Application means the single 

streamlined application described at 

§ 435.907(b) of this part or an 

application described in § 435.907(c)(2) 

of this part submitted by or on behalf of 

an individual. 

* * * * * 

Beneficiary means an individual who 

has been determined eligible and is 

currently receiving Medicaid. 

Caretaker relative means a relative of 

a dependent child by blood, adoption, 

or marriage with whom the child is 

living, who assumes primary 

responsibility for the child’s care (as 

may, but is not required to, be indicated 

by claiming the child as a tax dependent 

for Federal income tax purposes), and 

who is one of the following— 

(1) The child’s father, mother, 

grandfather, grandmother, brother, 

sister, stepfather, stepmother, 

stepbrother, stepsister, uncle, aunt, first 

cousin, nephew, or niece. 

(2) The spouse of such parent or 

relative, even after the marriage is 

terminated by death or divorce. 

(3) At State option, another relative of 

the child based on blood (including 

those of half-blood), adoption, or 

marriage; the domestic partner of the 


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parent or other caretaker relative; or an 

adult with whom the child is living and 

who assumes primary responsibility for 

the dependent child’s care. 

* * * * * 

Dependent child means a child who 

meets both of the following criteria: 

(1) Is under the age of 18, or, at State 

option, is age 18 and a full-time student 

in secondary school (or equivalent 

vocational or technical training), if 

before attaining age 19 the child may 

reasonably be expected to complete 

such school or training. 

(2) Is deprived of parental support by 

reason of the death, absence from the 

home, physical or mental incapacity, or 

unemployment of at least one parent, 

unless the State has elected in its State 

plan to eliminate such deprivation 

requirement. A parent is considered to 

be unemployed if he or she is working 

less than 100 hours per month, or such 

higher number of hours as the State may 

elect in its State plan. 

Effective income level means the 

income standard applicable under the 

State plan for an eligibility group, after 

taking into consideration any disregard 

of a block of income applied in 

determining financial eligibility for such 

group. 

Electronic account means an 

electronic file that includes all 

information collected and generated by 

the State regarding each individual’s 

Medicaid eligibility and enrollment, 

including all documentation required 

under § 435.914 of this part. 

Eligibility determination means an 

approval or denial of eligibility in 

accordance with § 435.911 as well as a 

renewal or termination of eligibility in 

accordance with § 435.916 of this part. 

Family size has the meaning provided 

in § 435.603(b) of this part. 

Federal poverty level (FPL) means the 

Federal poverty level updated 

periodically in the Federal Register by 

the Secretary of Health and Human 

Services under the authority of 42 

U.S.C. 9902(2), as in effect for the 

applicable budget period used to 

determine an individual’s eligibility in 

accordance with § 435.603(h) of this 

part. 

Household income has the meaning 

provided in § 435.603(d) of this part. 

Insurance affordability program 

means a program that is one of the 

following: 

(1) A State Medicaid program under 

title XIX of the Act. 

(2) A State children’s health insurance 

program (CHIP) under title XXI of the 

Act. 

(3) A State basic health program 

established under section 1331 of the 

Affordable Care Act. 

(4) A program that makes coverage in 

a qualified health plan through the 

Exchange with advance payments of the 

premium tax credit established under 

section 36B of the Internal Revenue 

Code available to qualified individuals. 

(5) A program that makes available 

coverage in a qualified health plan 

through the Exchange with cost-sharing 

reductions established under section 

1402 of the Affordable Care Act. 

MAGI-based income has the meaning 

provided in § 435.603(e) of this part. 

* * * * * 

Minimum essential coverage means 

coverage defined in section 5000A(f) of 

subtitle D of the Internal Revenue Code, 

as added by section 1401 of the 

Affordable Care Act, and implementing 

regulations of such section issued by the 

Secretary of the Treasury. 

Modified adjusted gross income 

(MAGI) has the meaning provided at 26 

CFR 1.36B–1(e)(2). 

Non-applicant means an individual 

who is not seeking an eligibility 

determination for himself or herself and 

is included in an applicant’s or 

beneficiary’s household to determine 

eligibility for such applicant or 

beneficiary. 

* * * * * 

Pregnant woman means a woman 

during pregnancy and the post partum 

period, which begins on the date the 

pregnancy ends, extends 60 days, and 

then ends on the last day of the month 

in which the 60-day period ends. 

Secure electronic interface means an 

interface which allows for the exchange 

of data between Medicaid and other 

insurance affordability programs and 

adheres to the requirements in part 433, 

subpart C of this chapter. 

Shared eligibility service means a 

common or shared eligibility system or 

service used by a State to determine 

individuals’ eligibility for insurance 

affordability programs. 

* * * * * 

Tax dependent has the same meaning 

as the term ‘‘dependent’’ under section 

152 of the Internal Revenue Code, as an 

individual for whom another individual 

claims a deduction for a personal 

exemption under section 151 of the 

Internal Revenue Code for a taxable 

year. 

Subpart B—Mandatory Coverage 

■ 10. The heading for subpart B is 

revised as set forth above. 

■ 11. Section 435.110 is revised to read 

as follows: 

§ 435.110 Parents and other caretaker 

relatives. 

(a) Basis. This section implements 

sections 1931(b) and (d) of the Act. 

(b) Scope. The agency must provide 

Medicaid to parents and other caretaker 

relatives, as defined in § 435.4, and, if 

living with such parent or other 

caretaker relative, his or her spouse, 

whose household income is at or below 

the income standard established by the 

agency in the State plan, in accordance 

with paragraph (c) of this section. 

(c) Income standard. The agency must 

establish in its State plan the income 

standard as follows: 

(1) The minimum income standard is 

a State’s AFDC income standard in 

effect as of May 1, 1988 for the 

applicable family size. 

(2) The maximum income standard is 

the higher of— 

(i) The effective income level in effect 

for section 1931 low-income families 

under the Medicaid State plan or waiver 

of the State plan as of March 23, 2010 

or December 31, 2013, if higher, 

converted to a MAGI-equivalent 

standard in accordance with guidance 

issued by the Secretary under section 

1902(e)(14)(A) and (E) of the Act; or 

(ii) A State’s AFDC income standard 

in effect as of July 16, 1996 for the 

applicable family size, increased by no 

more than the percentage increase in the 

Consumer Price Index for all urban 

consumers between July 16, 1996 and 

the effective date of such increase. 

■ 12. Revise the undesignated center 

heading that is immediately before 

§ 435.116 to read as follows: 

Mandatory Coverage of Pregnant 

Women, Children Under 19, and 

Newborn Children 

■ 13. Section 435.116 is revised to read 

as follows: 

§ 435.116 Pregnant women. 

(a) Basis. This section implements 

sections 1902(a)(10)(A)(i)(III) and (IV); 

1902(a)(10)(A)(ii)(I), (IV), and (IX); and 

1931(b) and (d) of the Act. 

(b) Scope. The agency must provide 

Medicaid to pregnant women whose 

household income is at or below the 

income standard established by the 

agency in its State plan, in accordance 

with paragraph (c) of this section. 

(c) Income standard. The agency must 

establish in its State plan the income 

standard as follows: 

(1) The minimum income standard is 

the higher of: 

(i) 133 percent FPL for the applicable 

family size; or 

(ii) Such higher income standard up 

to 185 percent FPL, if any, as the State 

had established as of December 19, 1989 


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for determining eligibility for pregnant 

women, or, as of July 1, 1989, had 

authorizing legislation to do so. 

(2) The maximum income standard is 

the higher of— 

(i) The highest effective income level 

in effect under the Medicaid State plan 

for coverage under the sections 

specified at paragraph (a) of this section, 

or waiver of the State plan covering 

pregnant women, as of March 23, 2010 

or December 31, 2013, if higher, 

converted to a MAGI-equivalent 

standard in accordance with guidance 

issued by the Secretary under section 

1902(e)(14)(A) and (E) of the Act; or 

(ii) 185 percent FPL. 

(d) Covered services. (1) Pregnant 

women are covered under this section 

for the full Medicaid coverage described 

in paragraph (d)(2) of this section, 

except that the agency may provide only 

pregnancy-related services described in 

paragraph (d)(3) of this section for 

pregnant women whose income exceeds 

the applicable income limit established 

by the agency in its State plan, in 

accordance with paragraph (d)(4) of this 

section. 

(2) Full Medicaid coverage consists of 

all services which the State is required 

to cover under § 440.210(a)(1) of this 

subchapter and all services which it has 

opted to cover under § 440.225 and 

§ 440.250(p) of this subchapter. 

(3) Pregnancy-related services consists 

of services covered under the State plan 

consistent with § 440.210(a)(2) and 

§ 440.250(p) of this subchapter. 

(4) Applicable income limit for full 

Medicaid coverage of pregnant women. 

For purposes of paragraph (d)(1) of this 

section— 

(i) The minimum applicable income 

limit is the State’s AFDC income 

standard in effect as of May 1, 1988 for 

the applicable family size. 

(ii) The maximum applicable income 

limit is the highest effective income 

level for coverage under section 

1902(a)(10)(A)(i)(III) of the Act or under 

section 1931(b) and (d) of the Act in 

effect under the Medicaid State plan or 

waiver of the State plan as of March 23, 

2010 or December 31, 2013, if higher, 

converted to a MAGI-equivalent 

standard. 

■ 14. Section 435.118 is added to read 

as follows: 

§ 435.118 Infants and children under age 

19. 

(a) Basis. This section implements 

sections 1902(a)(10)(A)(i)(III), (IV), (VI), 

and (VII); 1902(a)(10)(A)(ii)(IV) and (IX); 

and 1931(b) and (d) of the Act. 

(b) Scope. The agency must provide 

Medicaid to children under age 19 

whose household income is at or below 

the income standard established by the 

agency in its State plan, in accordance 

with paragraph (c) of this section. 

(c) Income standard. (1) The 

minimum income standard is the higher 

of— 

(i) 133 percent FPL for the applicable 

family size; or 

(ii) For infants under age 1, such 

higher income standard up to 185 

percent FPL, if any, as the State had 

established as of December 19, 1989 for 

determining eligibility for infants, or, as 

of July 1, 1989 had authorizing 

legislation to do so. 

(2) The maximum income standard 

for each of the age groups of infants 

under age 1, children age 1 through age 

5, and children age 6 through age 18 is 

the higher of— 

(i) 133 percent FPL; 

(ii) The highest effective income level 

for each age group in effect under the 

Medicaid State plan for coverage under 

the applicable sections of the Act listed 

at paragraph (a) of this section or waiver 

of the State plan covering such age 

group as of March 23, 2010 or December 

31, 2013, if higher, converted to a 

MAGI-equivalent standard in 

accordance with guidance issued by the 

Secretary under section 1902(e)(14)(A) 

and (E) of the Act; or 

(iii) For infants under age 1, 185 

percent FPL. 

■ 15. Revise the undesignated center 

heading that is before § 435.119 to read 

as follows: 

Mandatory Coverage for Individuals 

Age 19 Through 64 

■ 16. Section 435.119 is revised to read 

as follows: 

§ 435.119 Coverage for individuals age 19 

or older and under age 65 at or below 133 

percent FPL. 

(a) Basis. This section implements 

section 1902(a)(10)(A)(i)(VIII) of the Act. 

(b) Eligibility. The agency must 

provide Medicaid to individuals who: 

(1) Are age 19 or older and under age 

65; 

(2) Are not pregnant; 

(3) Are not entitled to or enrolled for 

Medicare benefits under part A or B of 

title XVIII of the Act; 

(4) Are not otherwise eligible for and 

enrolled for mandatory coverage under 

a State’s Medicaid State plan in 

accordance with subpart B of this part; 

and 

(5) Have household income that is at 

or below 133 percent FPL for the 

applicable family size. 

(c) Coverage for dependent children. 

(1) A State may not provide Medicaid 

under this section to a parent or other 

caretaker relative living with a 

dependent child if the child is under the 

age specified in paragraph (c)(2) of this 

section, unless such child is receiving 

benefits under Medicaid, the Children’s 

Health Insurance Program under 

subchapter D of this chapter, or 

otherwise is enrolled in minimum 

essential coverage as defined in § 435.4 

of this part. 

(2) For the purpose of paragraph (c)(1) 

of this section, the age specified is 

under age 19, unless the State had 

elected as of March 23, 2010 to provide 

Medicaid to individuals under age 20 or 

21 under § 435.222 of this part, in which 

case the age specified is such higher age. 

Subpart C—Options for Coverage 

■ 17. The heading for subpart C is 

revised to read as set forth above. 

■ 18. Section 435.218 is added to read 

as follows: 

§ 435.218 Individuals with MAGI-based 

income above 133 percent FPL. 

(a) Basis. This section implements 

section 1902(a)(10)(A)(ii)(XX) of the Act. 

(b) Eligibility—(1) Criteria. The agency 

may provide Medicaid to individuals 

who: 

(i) Are under age 65; 

(ii) Are not eligible for and enrolled 

for mandatory coverage under a State’s 

Medicaid State plan in accordance with 

subpart B of this part; 

(iii) Are not otherwise eligible for and 

enrolled for optional coverage under a 

State’s Medicaid State plan in 

accordance with section 

1902(a)(10)(A)(ii)(I) through (XIX) of the 

Act and subpart C of this part, based on 

information available to the State from 

the application filed by or on behalf of 

the individual; and 

(iv) Have household income that 

exceeds 133 percent FPL but is at or 

below the income standard elected by 

the agency and approved in its 

Medicaid State plan, for the applicable 

family size. 

(2) Limitations. (i) A State may not, 

except as permitted under an approved 

phase-in plan adopted in accordance 

with paragraph (b)(3) of this section, 

provide Medicaid to higher income 

individuals described in paragraph 

(b)(1) of this section without providing 

Medicaid to lower income individuals 

described in such paragraph. 

(ii) The limitation on eligibility of 

parents and other caretaker relatives 

specified in § 435.119(c) of this section 

also applies to eligibility under this 

section. 

(3) Phase-in plan. A State may phase 

in coverage to all individuals described 

in paragraph (b)(1) of this section under 

a phase-in plan submitted in a State 


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plan amendment to and approved by the 

Secretary. 

■ 19. Section 435.403 is amended by— 

■ A. Redesignating paragraphs (h) and 

(i) as paragraphs (i) and (h), 

respectively. 

■ B. Adding introductory text for newly 

redesignated paragraphs (h) and (i). 

■ C. Further redesignating newly 

redesignated paragraphs (h)(2), (h)(3), 

and (h)(4) as paragraphs (h)(3), (h)(4), 

and (h)(5), respectively. 

■ D. Adding new paragraph (h)(2). 

■ E. Revising newly redesignated 

paragraphs (h)(1) and (h)(5). 

■ F. Revising newly redesignated 

paragraphs (i)(1) and (i)(2). 

■ G. Removing newly redesignated 

paragraph (i)(3). 

■ H. Further redesignating newly 

redesignated paragraph (i)(4) as 

paragraph (i)(3). 

■ I. Amending paragraph (l)(2) by 

removing the phrase ‘‘paragraph (h)’’ 

and adding the phrase ‘‘paragraph (i)’’ 

in its place. 

The revisions and addition read as 

follows: 

§ 435.403 State residence. 

* * * * * 

(h) Individuals age 21 and over. 

Except as provided in paragraph (f) of 

this section, with respect to individuals 

age 21 and over — 

(1) For an individual not residing in 

an institution as defined in paragraph 

(b) of this section, the State of residence 

is the State where the individual is 

living and— 

(i) Intends to reside, including 

without a fixed address; or 

(ii) Has entered the State with a job 

commitment or seeking employment 

(whether or not currently employed). 

(2) For an individual not residing in 

an institution as defined in paragraph 

(b) of this section who is not capable of 

stating intent, the State of residency is 

the State where the individual is living. 

* * * * * 

(5) For any other institutionalized 

individual, the State of residence is the 

State where the individual is living and 

intends to reside. 

(i) Individuals under age 21. For an 

individual under age 21 who is not 

eligible for Medicaid based on receipt of 

assistance under title IV–E of the Act, as 

addressed in paragraph (g) of this 

section, and is not receiving a State 

supplementary payment, as addressed 

in paragraph (f) of this section, the State 

of residence is as follows: 

(1) For an individual who is capable 

of indicating intent and who is 

emancipated from his or her parent or 

who is married, the State of residence is 

determined in accordance with 

paragraph (h)(1) of this section. 

(2) For an individual not described in 

paragraph (i)(1) of this section, not 

living in an institution as defined in 

paragraph (b) of this section and not 

eligible for Medicaid based on receipt of 

assistance under title IV–E of the Act, as 

addressed in paragraph (g) of this 

section, and is not receiving a State 

supplementary payment, as addressed 

in paragraph (f) of this section, the State 

of residence is: 

(i) The State where the individual 

resides, including without a fixed 

address; or 

(ii) The State of residency of the 

parent or caretaker, in accordance with 

paragraph (h)(1) of this section, with 

whom the individual resides. 

* * * * * 

§ 435.407 [Amended] 

■ 20. Amend § 435.407(k) by removing 

the reference ‘‘and 435.911’’ and adding 

in its place the reference ‘‘and 435.912’’. 

§ 435.541 [Amended] 

■ 21. Amend § 435.541(a)(2) by 

removing the reference ‘‘§ 435.911’’ and 

adding in its place the reference 

‘‘§ 435.912’’. 

■ 22. Section 435.603 is added to read 

as follows: 

§ 435.603 Application of modified adjusted 

gross income (MAGI). 

(a) Basis, scope, and implementation. 

(1) This section implements section 

1902(e)(14) of the Act. 

(2) Effective January 1, 2014, the 

agency must apply the financial 

methodologies set forth in this section 

in determining the financial eligibility 

of all individuals for Medicaid, except 

for individuals identified in paragraph 

(j) of this section and as provided in 

paragraph (a)(3) of this section. 

(3) In the case of determining ongoing 

eligibility for beneficiaries determined 

eligible for Medicaid coverage to begin 

on or before December 31, 2013, 

application of the financial 

methodologies set forth in this section 

will not be applied until March 31, 2014 

or the next regularly-scheduled renewal 

of eligibility for such individual under 

§ 435.916 of this part, whichever is later. 

(b) Definitions. For purposes of this 

section— 

Code means the Internal Revenue 

Code. 

Family size means the number of 

persons counted as members of an 

individual’s household. In the case of 

determining the family size of a 

pregnant woman, the pregnant woman 

is counted as herself plus the number of 

children she is expected to deliver. In 

the case of determining the family size 

of other individuals who have a 

pregnant woman in their household, the 

pregnant woman is counted, at State 

option, as either 1 or 2 person(s) or as 

herself plus the number of children she 

is expected to deliver. 

Tax dependent has the meaning 

provided in § 435.4 of this part. 

(c) Basic rule. Except as specified in 

paragraph (i) and (j) of this section, the 

agency must determine financial 

eligibility for Medicaid based on 

‘‘household income’’ as defined in 

paragraph (d) of this section. 

(d) Household income—(1) General 

rule. Except as provided in paragraphs 

(d)(2) and (d)(3) of this section, 

household income is the sum of the 

MAGI-based income, as defined in 

paragraph (e) of this section, of every 

individual included in the individual’s 

household, minus an amount equivalent 

to 5 percentage points of the Federal 

poverty level for the applicable family 

size. 

(2) Income of children and tax 

dependents. (i) The MAGI-based income 

of an individual who is included in the 

household of his or her natural, adopted 

or step parent and is not expected to be 

required to file a tax return under 

section 6012(a)(1) of the Code for the 

taxable year in which eligibility for 

Medicaid is being determined, is not 

included in household income whether 

or not the individual files a tax return. 

(ii) The MAGI-based income of a tax 

dependent described in paragraph 

(f)(2)(i) of this section who is not 

expected to be required to file a tax 

return under section 6012(a)(1) of the 

Code for the taxable year in which 

eligibility for Medicaid is being 

determined is not included in the 

household income of the taxpayer 

whether or not such tax dependent files 

a tax return. 

(3) In the case of individuals 

described in paragraph (f)(2)(i) of this 

section, household income may, at State 

option, also include actually available 

cash support, exceeding nominal 

amounts, provided by the person 

claiming such individual as a tax 

dependent. 

(e) MAGI-based income. For the 

purposes of this section, MAGI-based 

income means income calculated using 

the same financial methodologies used 

to determine modified adjusted gross 

income as defined in section 

36B(d)(2)(B) of the Code, with the 

following exceptions— 

(1) An amount received as a lump 

sum is counted as income only in the 

month received. 

(2) Scholarships, awards, or 

fellowship grants used for education 


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purposes and not for living expenses are 

excluded from income. 

(3) American Indian/Alaska Native 

exceptions. The following are excluded 

from income: 

(i) Distributions from Alaska Native 

Corporations and Settlement Trusts; 

(ii) Distributions from any property 

held in trust, subject to Federal 

restrictions, located within the most 

recent boundaries of a prior Federal 

reservation, or otherwise under the 

supervision of the Secretary of the 

Interior; 

(iii) Distributions and payments from 

rents, leases, rights of way, royalties, 

usage rights, or natural resource 

extraction and harvest from— 

(A) Rights of ownership or possession 

in any lands described in paragraph 

(e)(3)(ii) of this section; or 

(B) Federally protected rights 

regarding off-reservation hunting, 

fishing, gathering, or usage of natural 

resources; 

(iv) Distributions resulting from real 

property ownership interests related to 

natural resources and improvements— 

(A) Located on or near a reservation 

or within the most recent boundaries of 

a prior Federal reservation; or 

(B) Resulting from the exercise of 

federally-protected rights relating to 

such real property ownership interests; 

(v) Payments resulting from 

ownership interests in or usage rights to 

items that have unique religious, 

spiritual, traditional, or cultural 

significance or rights that support 

subsistence or a traditional lifestyle 

according to applicable Tribal Law or 

custom; 

(vi) Student financial assistance 

provided under the Bureau of Indian 

Affairs education programs. 

(f) Household—(1) Basic rule for 

taxpayers not claimed as a tax 

dependent. In the case of an individual 

who expects to file a tax return for the 

taxable year in which an initial 

determination or renewal of eligibility is 

being made, and who does not expect to 

be claimed as a tax dependent by 

another taxpayer, the household 

consists of the taxpayer and, subject to 

paragraph (f)(5) of this section, all 

persons whom such individual expects 

to claim as a tax dependent. 

(2) Basic rule for individuals claimed 

as a tax dependent. In the case of an 

individual who expects to be claimed as 

a tax dependent by another taxpayer for 

the taxable year in which an initial 

determination or renewal of eligibility is 

being made, the household is the 

household of the taxpayer claiming such 

individual as a tax dependent, except 

that the household must be determined 

in accordance with paragraph (f)(3) of 

this section in the case of— 

(i) Individuals other than a spouse or 

a biological, adopted, or step child who 

expect to be claimed as a tax dependent 

by another taxpayer; 

(ii) Individuals under the age 

specified by the State under paragraph 

(f)(3)(iv) of this section who expect to be 

claimed by one parent as a tax 

dependent and are living with both 

parents but whose parents do not expect 

to file a joint tax return; and 

(iii) Individuals under the age 

specified by the State under paragraph 

(f)(3)(iv) of this section who expect to be 

claimed as a tax dependent by a noncustodial parent. For purposes of this 

section— 

(A) A court order or binding 

separation, divorce, or custody 

agreement establishing physical custody 

controls; or 

(B) If there is no such order or 

agreement or in the event of a shared 

custody agreement, the custodial parent 

is the parent with whom the child 

spends most nights. 

(3) Rules for individuals who neither 

file a tax return nor are claimed as a tax 

dependent. In the case of individuals 

who do not expect to file a Federal tax 

return and do not expect to be claimed 

as a tax dependent for the taxable year 

in which an initial determination or 

renewal of eligibility is being made, or 

who are described in paragraph (f)(2)(i), 

(f)(2)(ii), or (f)(2)(iii) of this section, the 

household consists of the individual 

and, if living with the individual— 

(i) The individual’s spouse; 

(ii) The individual’s natural, adopted 

and step children under the age 

specified in paragraph (f)(3)(iv) of this 

section; and 

(iii) In the case of individuals under 

the age specified in paragraph (f)(3)(iv) 

of this section, the individual’s natural, 

adopted and step parents and natural, 

adoptive and step siblings under the age 

specified in paragraph (f)(3)(iv) of this 

section. 

(iv) The age specified in this 

paragraph is either of the following, as 

elected by the agency in the State plan— 

(A) Age 19; or 

(B) Age 19 or, in the case of full-time 

students, age 21. 

(4) Married couples. In the case of a 

married couple living together, each 

spouse will be included in the 

household of the other spouse, 

regardless of whether they expect to file 

a joint tax return under section 6013 of 

the Code or whether one spouse expects 

to be claimed as a tax dependent by the 

other spouse. 

(5) For purposes of paragraph (f)(1) of 

this section, if, consistent with the 

procedures adopted by the State in 

accordance with § 435.956(f) of this 

part, a taxpayer cannot reasonably 

establish that another individual is a tax 

dependent of the taxpayer for the tax 

year in which Medicaid is sought, the 

inclusion of such individual in the 

household of the taxpayer is determined 

in accordance with paragraph (f)(3) of 

this section. 

(g) No resource test or income 

disregards. In the case of individuals 

whose financial eligibility for Medicaid 

is determined in accordance with this 

section, the agency must not— 

(1) Apply any assets or resources test; 

or 

(2) Apply any income or expense 

disregards under sections 1902(r)(2) or 

1931(b)(2)(C), or otherwise under title 

XIX of the Act, except as provided in 

paragraph (d)(1) of this section. 

(h) Budget period—(1) Applicants and 

new enrollees. Financial eligibility for 

Medicaid for applicants, and other 

individuals not receiving Medicaid 

benefits at the point at which eligibility 

for Medicaid is being determined, must 

be based on current monthly household 

income and family size. 

(2) Current beneficiaries. For 

individuals who have been determined 

financially-eligible for Medicaid using 

the MAGI-based methods set forth in 

this section, a State may elect in its 

State plan to base financial eligibility 

either on current monthly household 

income and family size or income based 

on projected annual household income 

and family size for the remainder of the 

current calendar year. 

(3) In determining current monthly or 

projected annual household income and 

family size under paragraphs (h)(1) or 

(h)(2) of this section, the agency may 

adopt a reasonable method to include a 

prorated portion of reasonably 

predictable future income, to account 

for a reasonably predictable increase or 

decrease in future income, or both, as 

evidenced by a signed contract for 

employment, a clear history of 

predictable fluctuations in income, or 

other clear indicia of such future 

changes in income. Such future increase 

or decrease in income or family size 

must be verified in the same manner as 

other income and eligibility factors, in 

accordance with the income and 

eligibility verification requirements at 

§ 435.940 through § 435.965, including 

by self-attestation if reasonably 

compatible with other electronic data 

obtained by the agency in accordance 

with such sections. 

(i) If the household income of an 

individual determined in accordance 

with this section results in financial 

ineligibility for Medicaid and the 


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household income of such individual 

determined in accordance with 26 CFR 

1.36B–1(e) is below 100 percent FPL, 

Medicaid financial eligibility will be 

determined in accordance with 26 CFR 

1.36B–1(e). 

(j) Eligibility Groups for which MAGIbased methods do not apply. The 

financial methodologies described in 

this section are not applied in 

determining the Medicaid eligibility of 

individuals described in this paragraph. 

The agency must use the financial 

methods described in § 435.601 and 

§ 435.602 of this subpart. 

(1) Individuals whose eligibility for 

Medicaid does not require a 

determination of income by the agency, 

including, but not limited to, 

individuals receiving Supplemental 

Security Income (SSI) eligible for 

Medicaid under § 435.120 of this part, 

individuals deemed to be receiving SSI 

and eligible for Medicaid under 

§ 435.135, § 435.137 or § 435.138 of this 

part and individuals for whom the State 

relies on a finding of income made by 

an Express Lane agency, in accordance 

with section 1902(e)(13) of the Act. 

(2) Individuals who are age 65 or 

older when age is a condition of 

eligibility. 

(3) Individuals whose eligibility is 

being determined on the basis of being 

blind or disabled, or on the basis of 

being treated as being blind or disabled, 

including, but not limited to, 

individuals eligible under § 435.121, 

§ 435.232 or § 435.234 of this part or 

under section 1902(e)(3) of the Act, but 

only for the purpose of determining 

eligibility on such basis. 

(4) Individuals who request coverage 

for long-term services and supports for 

the purpose of being evaluated for an 

eligibility group under which long-term 

services and supports are covered. 

‘‘Long-term services and supports’’ 

include nursing facility services, a level 

of care in any institution equivalent to 

nursing facility services; home and 

community-based services furnished 

under a waiver or State plan under 

sections 1915 or 1115 of the Act; home 

health services as described in sections 

1905(a)(7) of the Act and personal care 

services described in sections 

1905(a)(24) of the Act. 

(5) Individuals who are being 

evaluated for eligibility for Medicare 

cost sharing assistance under section 

1902(a)(10)(E) of the Act, but only for 

purposes of determining eligibility for 

such assistance. 

(6) Individuals who are being 

evaluated for coverage as medically 

needy under subparts D and I of this 

part, but only for the purpose of 

determining eligibility on such basis. 

§ 435.831 [Amended] 

■ 23. Amend § 435.831(a)(2) by 

removing the reference ‘‘§ 435.914’’ and 

adding in its place the reference 

‘‘§ 435.915’’. 

■ 24. Section 435.905 is revised to read 

as follows: 

§ 435.905 Availability of program 

information. 

(a) The agency must furnish the 

following information in electronic and 

paper formats (including through the 

Internet Web site described in 

§ 435.1200(f) of this part), and orally as 

appropriate, to all applicants and other 

individuals who request it: 

(1) The eligibility requirements; 

(2) Available Medicaid services; and 

(3) The rights and responsibilities of 

applicants and beneficiaries. 

(b) Such information must be 

provided to applicants and beneficiaries 

in plain language and in a manner that 

is accessible and timely to— 

(1) Individuals who are limited 

English proficient through the provision 

of language services at no cost to the 

individual; and 

(2) Individuals living with disabilities 

through the provision of auxiliary aids 

and services at no cost to the individual 

in accordance with the Americans with 

Disabilities Act and section 504 of the 

Rehabilitation Act. 

■ 25. Section 435.907 is revised to read 

as follows: 

§ 435.907 Application. 

(a) Basis and implementation. In 

accordance with section 1413(b)(1)(A) of 

the Affordable Care Act, the agency 

must accept an application from the 

applicant, an adult who is in the 

applicant’s household, as defined in 

§ 435.603(f), or family, as defined in 

section 36B(d)(1) of the Code, an 

authorized representative, or if the 

applicant is a minor or incapacitated, 

someone acting responsibly for the 

applicant, and any documentation 

required to establish eligibility— 

(1) Via the internet Web site described 

in § 435.1200(f) of this part; 

(2) By telephone; 

(3) Via mail; 

(4) In person; and 

(5) Through other commonly available 

electronic means. 

(b) The application must be— 

(1) The single, streamlined 

application for all insurance 

affordability programs developed by the 

Secretary; or 

(2) An alternative single, streamlined 

application for all insurance 

affordability programs, which may be no 

more burdensome on the applicant than 

the application described in paragraph 

(b)(1) of this section, approved by the 

Secretary. 

(c) For individuals applying, or who 

may be eligible, for assistance on a basis 

other than the applicable MAGI 

standard in accordance with 

§ 435.911(c)(2) of this part, the agency 

may use either— 

(1) An application described in 

paragraph (b) of this section and 

supplemental forms to collect additional 

information needed to determine 

eligibility on such other basis; or 

(2) An application designed 

specifically to determine eligibility on a 

basis other than the applicable MAGI 

standard. Such application must 

minimize burden on applicants. 

(3) Any MAGI-exempt applications 

and supplemental forms in use by the 

agency must be submitted to the 

Secretary. 

(d) The agency may not require an inperson interview as part of the 

application process for a determination 

of eligibility using MAGI-based income. 

(e) Limits on information. (1) The 

agency may only require an applicant to 

provide the information necessary to 

make an eligibility determination or for 

a purpose directly connected to the 

administration of the State plan. 

(2) The agency may request 

information necessary to determine 

eligibility for other insurance 

affordability or benefit programs. 

(3) The agency may request a nonapplicant’s SSN provided that— 

(i) Provision of such SSN is voluntary; 

(ii) Such SSN is used only to 

determine an applicant’s or 

beneficiary’s eligibility for Medicaid or 

other insurance affordability program or 

for a purpose directly connected to the 

administration of the State plan; and 

(iii) At the time such SSN is 

requested, the agency provides clear 

notice to the individual seeking 

assistance, or person acting on such 

individual’s behalf, that provision of the 

non-applicant’s SSN is voluntary and 

information regarding how the SSN will 

be used. 

(f) The agency must require that all 

initial applications are signed under 

penalty of perjury. Electronic, including 

telephonically recorded, signatures and 

handwritten signatures transmitted via 

any other electronic transmission must 

be accepted. 

(g) Any application or supplemental 

form must be accessible to persons who 

are limited English proficient and 

persons who have disabilities, 

consistent with § 435.905(b) of this 

subpart. 

■ 26. Section 435.908 is revised to read 

as follows: 


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§ 435.908 Assistance with application and 

renewal. 

(a) The agency must provide 

assistance to any individual seeking 

help with the application or renewal 

process in person, over the telephone, 

and online, and in a manner that is 

accessible to individuals with 

disabilities and those who are limited 

English proficient, consistent with 

§ 435.905(b) of this subpart. 

(b) The agency must allow 

individual(s) of the applicant or 

beneficiary’s choice to assist in the 

application process or during a renewal 

of eligibility. 

■ 27. Section 435.910 is amended by— 

■ A. Redesignating paragraphs (h)(2) 

and (h)(3), as (h)(3) and (h)(4), 

respectively. 

■ B. Adding a new paragraph (h)(2). 

■ C. Revising paragraphs (a), (f), (g), and 

(h)(1) to read as follows: 

§ 435.910 Use of Social Security number. 

(a) Except as provided in paragraph 

(h) of this section, the agency must 

require, as a condition of eligibility, that 

each individual (including children) 

seeking Medicaid furnish each of his or 

her Social Security numbers (SSN). 

* * * * * 

(f) The agency must not deny or delay 

services to an otherwise eligible 

individual pending issuance or 

verification of the individual’s SSN by 

SSA or if the individual meets one of 

the exceptions in paragraph (h) of this 

section. 

(g) The agency must verify the SSN 

furnished by an applicant or beneficiary 

to insure the SSN was issued to that 

individual, and to determine whether 

any other SSNs were issued to that 

individual. 

(h) Exception. (1) The requirement of 

paragraph (a) of this section does not 

apply and a State may give a Medicaid 

identification number to an individual 

who— 

(i) Is not eligible to receive an SSN; 

(ii) Does not have an SSN and may 

only be issued an SSN for a valid nonwork reason in accordance with 20 CFR 

422.104; or 

(iii) Refuses to obtain an SSN because 

of well-established religious objections. 

(2) The identification number may be 

either an SSN obtained by the State on 

the applicant’s behalf or another unique 

identifier. 

* * * * * 

■ 28. Redesignate § 435.911 through 

§ 435.914 as § 435.912 through § 435.915 

respectively. 

■ 29. Add new § 435.911 to read as 

follows: 

§ 435.911 Determination of eligibility. 

(a) Statutory basis. This section 

implements sections 1902(a)(4), (a)(8), 

(a)(10)(A), (a)(19), and (e)(14) and 

section 1943 of the Act. 

(b)(1) Applicable modified adjusted 

gross income standard means 133 

percent of the Federal poverty level or, 

if higher— 

(i) In the case of parents and other 

caretaker relatives described in 

§ 435.110(b) of this part, the income 

standard established in accordance with 

§ 435.110(c) of this part; 

(ii) In the case of pregnant women, the 

income standard established in 

accordance with § 435.116(c) of this 

part; 

(iii) In the case of individuals under 

age 19, the income standard established 

in accordance with § 435.118(c) of this 

part; 

(iv) The income standard established 

under § 435.218(b)(1)(iv) of this part, if 

the State has elected to provide coverage 

under such section and, if applicable, 

coverage under the State’s phase-in plan 

has been implemented for the 

individual whose eligibility is being 

determined. 

(2) [Reserved] 

(c) For each individual who has 

submitted an application described in 

§ 435.907 or whose eligibility is being 

renewed in accordance with § 435.916 

and who meets the non-financial 

requirements for eligibility (or for whom 

the agency is providing a reasonable 

opportunity to provide documentation 

of citizenship or immigration status, in 

accordance with sections 1903(x), 

1902(ee) or 1137(d) of the Act), the State 

Medicaid agency must comply with the 

following— 

(1) The agency must, promptly and 

without undue delay consistent with 

timeliness standards established under 

§ 435.912, furnish Medicaid to each 

such individual who is under age 19, 

pregnant, or age 19 or older and under 

age 65 and not entitled to or enrolled for 

Medicare benefits under part A or B of 

title XVIII of the Act, and whose 

household income is at or below the 

applicable modified adjusted gross 

income standard. 

(2) For each individual described in 

paragraph (d) of this section, the agency 

must collect such additional 

information as may be needed 

consistent with § 435.907(c), to 

determine whether such individual is 

eligible for Medicaid on any basis other 

than the applicable modified adjusted 

gross income standard, and furnish 

Medicaid on such basis. 

(3) For individuals not eligible on the 

basis of the applicable modified 

adjusted gross income standard, the 

agency must comply with the 

requirements set forth in § 435.1200(e) 

of this part. 

(d) For purposes of paragraph (c)(2) of 

this section, individuals described in 

this paragraph include: 

(1) Individuals whom the agency 

identifies, on the basis of information 

contained in an application described in 

§ 435.907(b) of this part, or renewal 

form described in § 435.916(a)(3) of this 

part, or on the basis of other information 

available to the State, as potentially 

eligible on a basis other than the 

applicable MAGI standard; 

(2) Individuals who submit an 

alternative application described in 

§ 435.907(c) of this part; and 

(3) Individuals who otherwise request 

a determination of eligibility on a basis 

other than the applicable MAGI 

standard as described in § 435.603(j) of 

this part. 

■ 30. Newly redesignated § 435.912 is 

amended by— 

■ A. Revising paragraphs (a) and (b). 

■ B. Redesignating paragraphs (c), (d), 

and (e) as paragraphs (e), (f), and (g), 

respectively. 

■ C. Adding new paragraphs (c) and (d). 

The revisions and additions read as 

follows: 

§ 435.912 Timely determination of 

eligibility. 

(a) For purposes of this section— 

(1) ‘‘Timeliness standards’’ refer to the 

maximum period of time in which every 

applicant is entitled to a determination 

of eligibility, subject to the exceptions 

in paragraph (e) of this section. 

(2) ‘‘Performance standards’’ are 

overall standards for determining 

eligibility in an efficient and timely 

manner across a pool of applicants, and 

include standards for accuracy and 

consumer satisfaction, but do not 

include standards for an individual 

applicant’s determination of eligibility. 

(b) Consistent with guidance issued 

by the Secretary, the agency must 

establish in its State plan timeliness and 

performance standards for, promptly 

and without undue delay— 

(1) Determining eligibility for 

Medicaid for individuals who submit 

applications to the single State agency 

or its designee. 

(2) Determining potential eligibility 

for, and transferring individuals’ 

electronic accounts to, other insurance 

affordability programs pursuant to 

§ 435.1200(e) of this part. 

(3) Determining eligibility for 

Medicaid for individuals whose 

accounts are transferred from other 

insurance affordability programs, 

including at initial application as well 

as at a regularly-scheduled renewal or 

due to a change in circumstances. 


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(c)(1) The timeliness and performance 

standards adopted by the agency under 

paragraph (b) of this section must cover 

the period from the date of application 

or transfer from another insurance 

affordability program to the date the 

agency notifies the applicant of its 

decision or the date the agency transfers 

the individual to another insurance 

affordability program in accordance 

with § 435.1200(e) of this part, and must 

comply with the requirements of 

paragraph (c)(2) of this section, subject 

to additional guidance issued by the 

Secretary to promote accountability and 

consistency of high quality consumer 

experience among States and between 

insurance affordability programs. 

(2) Timeliness and performance 

standards included in the State plan 

must account for— 

(i) The capabilities and cost of 

generally available systems and 

technologies; 

(ii) The general availability of 

electronic data matching and ease of 

connections to electronic sources of 

authoritative information to determine 

and verify eligibility; 

(iii) The demonstrated performance 

and timeliness experience of State 

Medicaid, CHIP and other insurance 

affordability programs, as reflected in 

data reported to the Secretary or 

otherwise available; and 

(iv) The needs of applicants, 

including applicant preferences for 

mode of application (such as through an 

internet Web site, telephone, mail, inperson, or other commonly available 

electronic means), as well as the relative 

complexity of adjudicating the 

eligibility determination based on 

household, income or other relevant 

information. 

(3) Except as provided in paragraph 

(e) of this section, the determination of 

eligibility for any applicant may not 

exceed— 

(i) Ninety days for applicants who 

apply for Medicaid on the basis of 

disability; and 

(ii) Forty-five days for all other 

applicants. 

(d) The agency must inform 

applicants of the timeliness standards 

adopted in accordance with this section. 

* * * * * 

■ 31. Section 435.916 is revised to read 

as follows: 

§ 435.916 Periodic renewal of Medicaid 

eligibility. 

(a) Renewal of individuals whose 

Medicaid eligibility is based on 

modified adjusted gross income 

methods (MAGI). (1) Except as provided 

in paragraph (d) of this section, the 

eligibility of Medicaid beneficiaries 

whose financial eligibility is determined 

using MAGI-based income must be 

renewed once every 12 months, and no 

more frequently than once every 12 

months. 

(2) Renewal on basis of information 

available to agency. The agency must 

make a redetermination of eligibility 

without requiring information from the 

individual if able to do so based on 

reliable information contained in the 

individual’s account or other more 

current information available to the 

agency, including but not limited to 

information accessed through any data 

bases accessed by the agency under 

§ 435.948, § 435.949 and § 435.956 of 

this part. If the agency is able to renew 

eligibility based on such information, 

the agency must, consistent with the 

requirements of this subpart and subpart 

E of part 431 of this chapter, notify the 

individual— 

(i) Of the eligibility determination, 

and basis; and 

(ii) That the individual must inform 

the agency, through any of the modes 

permitted for submission of applications 

under § 435.907(a) of this subpart, if any 

of the information contained in such 

notice is inaccurate, but that the 

individual is not required to sign and 

return such notice if all information 

provided on such notice is accurate. 

(3) Use of a pre-populated renewal 

form. If the agency cannot renew 

eligibility in accordance with paragraph 

(a)(2) of this section, the agency must— 

(i) Provide the individual with— 

(A) A renewal form containing 

information, as specified by the 

Secretary, available to the agency that is 

needed to renew eligibility. 

(B) At least 30 days from the date of 

the renewal form to respond and 

provide any necessary information 

through any of the modes of submission 

specified in § 435.907(a) of this part, 

and to sign the renewal form in a 

manner consistent with § 435.907(f) of 

the part; 

(C) Notice of the agency’s decision 

concerning the renewal of eligibility in 

accordance with this subpart and 

subpart E of part 431 of this chapter; 

(ii) Verify any information provided 

by the beneficiary in accordance with 

§ 435.945 through § 435.956 of this part; 

(iii) Reconsider in a timely manner 

the eligibility of an individual who is 

terminated for failure to submit the 

renewal form or necessary information, 

if the individual subsequently submits 

the renewal form within 90 days after 

the date of termination, or a longer 

period elected by the State, without 

requiring a new application; 

(iv) Not require an individual to 

complete an in-person interview as part 

of the renewal process. 

(b) Redetermination of individuals 

whose Medicaid eligibility is determined 

on a basis other than modified adjusted 

gross income. The agency must 

redetermine the eligibility of Medicaid 

beneficiaries excepted from modified 

adjusted gross income under 

§ 435.603(j) of this part, for 

circumstances that may change, at least 

every 12 months. The agency must make 

a redetermination of eligibility in 

accordance with the provisions of 

paragraph (a)(2) of this section, if 

sufficient information is available to do 

so. The agency may adopt the 

procedures described at § 435.916(a)(3) 

for individuals whose eligibility cannot 

be renewed in accordance with 

paragraph (a)(2) of this section. 

(1) The agency may consider 

blindness as continuing until the 

reviewing physician under § 435.531 of 

this part determines that a beneficiary’s 

vision has improved beyond the 

definition of blindness contained in the 

plan; and 

(2) The agency may consider 

disability as continuing until the review 

team, under § 435.541 of this part, 

determines that a beneficiary’s disability 

no longer meets the definition of 

disability contained in the plan. 

(c) Procedures for reporting changes. 

The agency must have procedures 

designed to ensure that beneficiaries 

make timely and accurate reports of any 

change in circumstances that may affect 

their eligibility and that such changes 

may be reported through any of the 

modes for submission of applications 

described in § 435.907(a) of this part. 

(d) Agency action on information 

about changes. (1) Consistent with the 

requirements of § 435.952 of this part, 

the agency must promptly redetermine 

eligibility between regular renewals of 

eligibility described in paragraphs (b) 

and (c) of this section whenever it 

receives information about a change in 

a beneficiary’s circumstances that may 

affect eligibility. 

(i) For renewals of Medicaid 

beneficiaries whose financial eligibility 

is determined using MAGI-based 

income, the agency must limit any 

requests for additional information from 

the individual to information relating to 

such change in circumstance. 

(ii) If the agency has enough 

information available to it to renew 

eligibility with respect to all eligibility 

criteria, the agency may begin a new 12- 

month renewal period under paragraphs 

(a) or (b) of this section. 

(2) If the agency has information 

about anticipated changes in a 


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beneficiary’s circumstances that may 

affect his or her eligibility, it must 

redetermine eligibility at the 

appropriate time based on such changes. 

(e) The agency may request from 

beneficiaries only the information 

needed to renew eligibility. Requests for 

non-applicant information must be 

conducted in accordance with 

§ 435.907(e) of this part. 

(f) Determination of ineligibility and 

transmission of data pertaining to 

individuals no longer eligible for 

Medicaid. 

(1) Prior to making a determination of 

ineligibility, the agency must consider 

all bases of eligibility, consistent with 

§ 435.911 of this part. 

(2) For individuals determined 

ineligible for Medicaid, the agency must 

determine potential eligibility for other 

insurance affordability programs and 

comply with the procedures set forth in 

§ 435.1200(e) of this part. 

(g) Any renewal form or notice must 

be accessible to persons who are limited 

English proficient and persons with 

disabilities, consistent with § 435.905(b) 

of this subpart. 

■ 32. Section 435.940 is revised to read 

as follows: 

§ 435.940 Basis and scope. 

The income and eligibility 

verification requirements set forth at 

§ 435.940 through § 435.960 of this 

subpart are based on sections 1137, 

1902(a)(4), 1902(a)(19), 1903(r)(3) and 

1943(b)(3) of the Act and section 1413 

of the Affordable Care Act. Nothing in 

the regulations in this subpart should be 

construed as limiting the State’s 

program integrity measures or affecting 

the State’s obligation to ensure that only 

eligible individuals receive benefits, 

consistent with parts 431 and 455 of this 

subchapter, or its obligation to provide 

for methods of administration that are in 

the best interest of applicants and 

beneficiaries and are necessary for the 

proper and efficient operation of the 

plan, consistent with § 431.15 of this 

subchapter and section 1902(a)(19) of 

the Act. 

■ 33. Section 435.945 is revised to read 

as follows: 

§ 435.945 General requirements. 

(a) Except where the law requires 

other procedures (such as for 

citizenship and immigration status 

information), the agency may accept 

attestation of information needed to 

determine the eligibility of an 

individual for Medicaid (either selfattestation by the individual or 

attestation by an adult who is in the 

applicant’s household, as defined in 

§ 435.603(f) of this part, or family, as 

defined in section 36B(d)(1) of the 

Internal Revenue Code, an authorized 

representative, or, if the individual is a 

minor or incapacitated, someone acting 

responsibly for the individual) without 

requiring further information (including 

documentation) from the individual. 

(b) The agency must request and use 

information relevant to verifying an 

individual’s eligibility for Medicaid in 

accordance with § 435.948 through 

§ 435.956 of this subpart. 

(c) The agency must furnish, in a 

timely manner, income and eligibility 

information, subject to regulations at 

part 431 subpart F of this chapter, 

needed for verifying eligibility to the 

following programs: 

(1) To other agencies in the State and 

other States and to the Federal programs 

both listed in § 435.948(a) of this 

subpart and identified in section 

1137(b) of the Act; 

(2) Other insurance affordability 

programs; 

(3) The child support enforcement 

program under part D of title IV of the 

Act; and 

(4) SSA for OASDI under title II and 

for SSI benefits under title XVI of the 

Act. 

(d) All State eligibility determination 

systems must conduct data matching 

through the Public Assistance Reporting 

Information System (PARIS). 

(e) The agency must, as required 

under section 1137(a)(7) of the Act, and 

upon request, reimburse another agency 

listed in § 435.948(a) of this subpart or 

paragraph (c) of this section for 

reasonable costs incurred in furnishing 

information, including new 

developmental costs. 

(f) Prior to requesting information for 

an applicant or beneficiary from another 

agency or program under this subpart, 

the agency must inform the individual 

that the agency will obtain and use 

information available to it under this 

subpart to verify income and eligibility 

or for other purposes directly connected 

to the administration of the State plan. 

(g) Consistent with § 431.16 of this 

subchapter, the agency must report 

information as prescribed by the 

Secretary for purposes of determining 

compliance with § 431.305 of this 

subchapter, subpart P of part 431, 

§ 435.910, § 435.913, and § 435.940 

through § 435.965 of this subpart and of 

evaluating the effectiveness of the 

income and eligibility verification 

system. 

(h) Information exchanged 

electronically between the State 

Medicaid agency and any other agency 

or program must be sent and received 

via secure electronic interfaces as 

defined in § 435.4 of this part. 

(i) The agency must execute written 

agreements with other agencies before 

releasing data to, or requesting data 

from, those agencies. Such agreements 

must provide for appropriate safeguards 

limiting the use and disclosure of 

information as required by Federal or 

State law or regulations. 

(j) Verification plan. The agency must 

develop, and update as modified, and 

submit to the Secretary, upon request, a 

verification plan describing the 

verification policies and procedures 

adopted by the State agency to 

implement the provisions set forth in 

§ 435.940 through § 435.956 of this 

subpart in a format and manner 

prescribed by the Secretary. 

(k) Flexibility in information 

collection and verification. Subject to 

approval by the Secretary, the agency 

may request and use information from a 

source or sources alternative to those 

listed in § 435.948(a) of this subpart, or 

through a mechanism other than the 

electronic service described in 

§ 435.949(a) of this subpart, provided 

that such alternative source or 

mechanism will reduce the 

administrative costs and burdens on 

individuals and States while 

maximizing accuracy, minimizing 

delay, meeting applicable requirements 

relating to the confidentiality, 

disclosure, maintenance, or use of 

information, and promoting 

coordination with other insurance 

affordability programs. 

■ 34. Section 435.948 is revised to read 

as follows: 

§ 435.948 Verifying financial information. 

(a) The agency must in accordance 

with this section request the following 

information relating to financial 

eligibility from other agencies in the 

State and other States and Federal 

programs to the extent the agency 

determines such information is useful to 

verifying the financial eligibility of an 

individual: 

(1) Information related to wages, net 

earnings from self-employment, 

unearned income and resources from 

the State Wage Information Collection 

Agency (SWICA), the Internal Revenue 

Service (IRS), the Social Security 

Administration (SSA), the agencies 

administering the State unemployment 

compensation laws, the Stateadministered supplementary payment 

programs under section 1616(a) of the 

Act, and any State program 

administered under a plan approved 

under Titles I, X, XIV, or XVI of the Act; 

and 

(2) Information related to eligibility or 

enrollment from the Supplemental 

Nutrition Assistance Program, the State 


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program funded under part A of title IV 

of the Act, and other insurance 

affordability programs. 

(b) To the extent that the information 

identified in paragraph (a) of this 

section is available through the 

electronic service established in 

accordance with § 435.949 of this 

subpart, the agency must obtain the 

information through such service. 

(c) The agency must request the 

information by SSN, or if an SSN is not 

available, using other personally 

identifying information in the 

individual’s account, if possible. 

■ 35. Section 435.949 is added to read 

as follows: 

§ 435.949 Verification of information 

through an electronic service. 

(a) The Secretary will establish an 

electronic service through which States 

may verify certain information with, or 

obtain such information from, Federal 

agencies and other data sources, 

including SSA, the Department of 

Treasury, and the Department of 

Homeland Security. 

(b) To the extent that information 

related to eligibility for Medicaid is 

available through the electronic service 

established by the Secretary, States must 

obtain the information through such 

service, subject to the requirements in 

subpart C of part 433 of this chapter, 

except as provided for in § 435.945(k) of 

this subpart. 

■ 36. Section 435.952 is revised to read 

as follows: 

§ 435.952 Use of information and requests 

of additional information from individuals. 

(a) The agency must promptly 

evaluate information received or 

obtained by it in accordance with 

regulations under § 435.940 through 

§ 435.960 of this subpart to determine 

whether such information may affect the 

eligibility of an individual or the 

benefits to which he or she is entitled. 

(b) If information provided by or on 

behalf of an individual (on the 

application or renewal form or 

otherwise) is reasonably compatible 

with information obtained by the agency 

in accordance with § 435.948, § 435.949 

or § 435.956 of this subpart, the agency 

must determine or renew eligibility 

based on such information. 

(c) An individual must not be 

required to provide additional 

information or documentation unless 

information needed by the agency in 

accordance with § 435.948, § 435.949 or 

§ 435.956 of this subpart cannot be 

obtained electronically or the 

information obtained electronically is 

not reasonably compatible, as provided 

in the verification plan described in 

§ 435.945(j) with information provided 

by or on behalf of the individual. 

(1) Income information obtained 

through an electronic data match shall 

be considered reasonably compatible 

with income information provided by or 

on behalf of an individual if both are 

either above or at or below the 

applicable income standard or other 

relevant income threshold. 

(2) If information provided by or on 

behalf of an individual is not reasonably 

compatible with information obtained 

through an electronic data match, the 

agency must seek additional 

information from the individual, 

including— 

(i) A statement which reasonably 

explains the discrepancy; or 

(ii) Other information (which may 

include documentation), provided that 

documentation from the individual is 

permitted only to the extent electronic 

data are not available and establishing a 

data match would not be effective, 

considering such factors as the 

administrative costs associated with 

establishing and using the data match 

compared with the administrative costs 

associated with relying on paper 

documentation, and the impact on 

program integrity in terms of the 

potential for ineligible individuals to be 

approved as well as for eligible 

individuals to be denied coverage; 

(iii) The agency must provide the 

individual a reasonable period to 

furnish any additional information 

required under paragraph (c) of this 

section. 

(d) The agency may not deny or 

terminate eligibility or reduce benefits 

for any individual on the basis of 

information received in accordance with 

regulations under § 435.940 through 

§ 435.960 of this subpart unless the 

agency has sought additional 

information from the individual in 

accordance with paragraph (c) of this 

section, and provided proper notice and 

hearing rights to the individual in 

accordance with this subpart and 

subpart E of part 431. 

§ 435.953 [Removed] 

■ 37. Section 435.953 is removed. 

§ 435.955 [Removed] 

■ 38. Section 435.955 is removed. 

■ 39. Section 435.956 is added to read 

as follows: 

§ 435.956 Verification of other nonfinancial information. 

(a) [Reserved] 

(b) [Reserved] 

(c) State residency. (1) The agency 

may verify State residency in 

accordance with § 435.945(a) of this 

subpart or through other reasonable 

verification procedures consistent with 

the requirements in § 435.952 of this 

subpart. 

(2) Evidence of immigration status 

may not be used to determine that an 

individual is not a State resident. 

(d) Social Security numbers. The 

agency must verify Social Security 

numbers (SSNs) in accordance with 

§ 435.910 of this subpart. 

(e) Pregnancy. The agency must 

accept self-attestation of pregnancy 

unless the State has information that is 

not reasonably compatible with such 

attestation, subject to the requirements 

of § 435.952 of this subpart. 

(f) Age, date of birth and household 

size. The agency may verify date of birth 

and the individuals that comprise an 

individual’s household, as defined in 

§ 435.603(f) of this part, in accordance 

with § 435.945(a) of this subpart or 

through other reasonable verification 

procedures consistent with the 

requirements in § 435.952 of this 

subpart. 

§ 435.1002 [Amended] 

■ 40. Amend § 435.1002(b) by removing 

the reference ‘‘§§ 435.914 and’’ and 

adding in its place the reference 

‘‘§§ 435.915 and’’. 

§ 435.1102 [Amended] 

■ 41. Amend § 435.1102(a) by removing 

the term ‘‘family income’’ and adding in 

its place the term ‘‘household income’’. 

■ 42. Subpart M is added to read as 

follows: 

Subpart M—Coordination of Eligibility 

and Enrollment Between Medicaid, 

CHIP, Exchanges and Other Insurance 

Affordability Programs 

§ 435.1200 Medicaid agency 

responsibilities. 

(a) Statutory basis and purpose. This 

section implements sections 1943 and 

2102(b)(3)(B) of the Affordable Care Act 

to ensure coordinated eligibility and 

enrollment among insurance 

affordability programs. 

(b) General requirements. The State 

Medicaid agency must— 

(1) Fulfill the responsibilities set forth 

in paragraphs (d) and (e) and, if 

applicable, paragraph (c) of this section 

in partnership with other insurance 

affordability programs. 

(2) Certify for the Exchange and other 

insurance affordability programs the 

criteria applied in determining 

Medicaid eligibility. 

(3) Enter into and, upon request, 

provide to the Secretary one or more 

agreements with the Exchange and the 

agencies administering other insurance 


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affordability programs as are necessary 

to fulfill the requirements of this 

section, including a clear delineation of 

the responsibilities of each program to— 

(i) Minimize burden on individuals; 

(ii) Ensure compliance with 

paragraphs (d) through (f) of this section 

and, if applicable, paragraph (c) of this 

section; 

(iii) Ensure prompt determinations of 

eligibility and enrollment in the 

appropriate program without undue 

delay, consistent with timeliness 

standards established under § 435.912, 

based on the date the application is 

submitted to any insurance affordability 

program. 

(c) Provision of Medicaid for 

individuals found eligible for Medicaid 

by another insurance affordability 

program. If the agency has entered into 

an agreement in accordance with 

§ 431.10(d) of this subchapter under 

which the Exchange or other insurance 

affordability program makes final 

determinations of Medicaid eligibility, 

for each individual determined so 

eligible by the Exchange or other 

program, the agency must— 

(1) Establish procedures to receive, 

via secure electronic interface, the 

electronic account containing the 

determination of Medicaid eligibility; 

(2) Comply with the provisions of 

§ 435.911 of this part to the same extent 

as if the application had been submitted 

to the Medicaid agency; and 

(3) Comply with the provisions of 

§ 431.10 of this subchapter to ensure it 

maintains oversight for the Medicaid 

program. 

(d) Transfer from other insurance 

affordability programs to the State 

Medicaid agency. For individuals for 

whom another insurance affordability 

program has not made a determination 

of Medicaid eligibility, but who have 

been screened as potentially Medicaid 

eligible, the agency must— 

(1) Accept, via secure electronic 

interface, the electronic account for the 

individual; 

(2) Not request information or 

documentation from the individual 

already provided to another insurance 

affordability program and included in 

the individual’s electronic account or 

other transmission from the other 

program. 

(3) Promptly and without undue 

delay, consistent with timeliness 

standards established under § 435.912, 

determine the Medicaid eligibility of the 

individual, in accordance with 

§ 435.911 of this part, without requiring 

submission of another application. 

(4) Accept any finding relating to a 

criterion of eligibility made by such 

program, without further verification, if 

such finding was made in accordance 

with policies and procedures which are 

the same as those applied by the agency 

or approved by it in the agreement 

described in paragraph (b) of this 

section; 

(5) Notify such program of the receipt 

of the electronic account. 

(6) Notify such program of the final 

determination of eligibility made by the 

agency for individuals who enroll in the 

other insurance affordability program 

pending completion of the 

determination of Medicaid eligibility. 

(e) Evaluation of eligibility for other 

insurance affordability programs—(1) 

Individuals determined not eligible for 

Medicaid. For each individual who 

submits an application or renewal form 

to the agency which includes sufficient 

information to determine Medicaid 

eligibility, or whose eligibility is being 

renewed pursuant to a change in 

circumstance in accordance with 

§ 435.916(d) of this part, and whom the 

agency determines is not eligible for 

Medicaid, the agency must, promptly 

and without undue delay, consistent 

with timeliness standards established 

under § 435.912 of this part, determine 

potential eligibility for, and, as 

appropriate, transfer via a secure 

electronic interface the individual’s 

electronic account to, other insurance 

affordability programs. 

(2) Individuals undergoing a Medicaid 

eligibility determination on a basis other 

than MAGI. In the case of an individual 

with household income greater than the 

applicable MAGI standard and for 

whom the agency is determining 

eligibility in accordance with 

§ 435.911(c)(2) of this part, the agency 

must promptly and without undue 

delay, consistent with timeliness 

standards established under § 435.912 of 

this part, determine potential eligibility 

for, and as appropriate transfer via 

secure electronic interface, the 

individual’s electronic account to, other 

insurance affordability programs and 

provide timely notice to such other 

program— 

(i) That the individual is not Medicaid 

eligible on the basis of the applicable 

MAGI standard, but that a final 

determination of Medicaid eligibility is 

still pending; and 

(ii) Of the agency’s final 

determination of eligibility or 

ineligibility for Medicaid. 

(3) The agency may enter into an 

agreement with the Exchange to make 

determinations of eligibility for advance 

payments of the premium tax credit and 

cost sharing reductions, consistent with 

45 CFR 155.110(a)(2). 

(f) Internet Web site. (1) The State 

Medicaid agency must make available to 

current and prospective Medicaid 

applicants and beneficiaries a Web site 

that— 

(i) Operates in conjunction with or is 

linked to the Web site described in 

§ 457.340(a) of this subchapter and to 

the Web site established by the 

Exchange under 45 CFR 155.205; and 

(ii) Supports applicant and 

beneficiary activities, including 

accessing information on the insurance 

affordability programs available in the 

State, applying for and renewing 

coverage, and other activities as 

appropriate. 

(2) Such Web site, any interactive 

kiosks and other information systems 

established by the State to support 

Medicaid information and enrollment 

activities must be in plain language and 

be accessible to individuals with 

disabilities and persons who are limited 

English proficient, consistent with 

§ 435.905(b) of this subpart. 

PART 457—ALLOTMENTS AND 

GRANTS TO STATES 

■ 43. The authority citation for part 457 

continues to read as follows: 

Authority: Section 1102 of the Social 

Security Act (42 U.S.C. 1302) 

■ 44a. In part 457, remove the term 

‘‘family income’’ wherever it appears 

and add in its place the term 

‘‘household income’’. 

■ 44b. In part 457, remove the term 

‘‘Family income’’ wherever it appears 

and add in its place the term 

‘‘Household income’’. 

■ 45. In part 457 remove ‘‘SCHIP’’ 

wherever it appears and add in its place 

‘‘CHIP’’. 

■ 46. Section § 457.10 is amended by— 

■ A. Removing the definition of 

‘‘Medicaid applicable income level.’’ 

■ B. Adding the following definitions in 

alphabetical order ‘‘Advanced payments 

of the premium tax credit (APTC),’’ 

‘‘Affordable Insurance Exchange 

(Exchange),’’ ‘‘Application,’’ ‘‘Electronic 

account,’’ ‘‘Household income,’’ 

‘‘Insurance affordability program,’’ 

‘‘Secure electronic interface,’’ and 

‘‘Shared eligibility service.’’ 

The additions read as follows: 

§ 457.10 Definitions and use of terms. 

* * * * * 

Advanced payments of the premium 

tax credit (APTC) has the meaning given 

the term in 45 CFR 155.20. 

Affordable Insurance Exchange 

(Exchange) has the meaning given the 

term ‘‘Exchange’’ in 45 CFR 155.20. 

Application means the single, 

streamlined application form that is 

used by the State in accordance with 


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§ 435.907(b) of this chapter and 45 CFR 

155.405 for individuals to apply for 

coverage for all insurance affordability 

programs. 

* * * * * 

Electronic account means an 

electronic file that includes all 

information collected and generated by 

the State regarding each individual’s 

CHIP eligibility and enrollment, 

including all documentation required 

under § 457.380 of this part. 

* * * * * 

Household income is defined as 

provided in § 435.603(d) of this chapter. 

Insurance affordability program is 

defined as provided in § 435.4 of this 

chapter. 

* * * * * 

Secure electronic interface is defined 

as provided in § 435.4 of this chapter. 

Shared eligibility service is defined as 

provided in § 435.4 of this chapter. 

* * * * * 

■ 47. Section § 457.80 is amended by 

revising paragraph (c)(3) to read as 

follows: 

§ 457.80 Current State child health 

insurance coverage and coordination. 

* * * * * 

(c) * * * 

(3) Ensure coordination with other 

insurance affordability programs in the 

determination of eligibility and 

enrollment in coverage to ensure that all 

eligible individuals are enrolled in the 

appropriate program, including through 

use of the procedures described in 

§ 457.305, § 457.348 and § 457.350 of 

this part. 

■ 48. Section 457.300 is amended by— 

■ A. Republishing paragraph (a) 

introductory text. 

■ B. Adding paragraphs (a)(4) and (a)(5) 

■ C. Revising paragraph (c). 

The addition and revision reads as 

follows: 

§ 457.300 Basis, scope, and applicability. 

(a) Statutory basis. This subpart 

interprets and implements— 

* * * * * 

(4) Section 2107(e)(1)(O) of the 

Affordable Care Act, which relates to 

coordination of CHIP with the 

Exchanges and the State Medicaid 

agency. 

(5) Section 2107(e)(1)(F) of the 

Affordable Care Act, which relates to 

income determined based on modified 

adjusted gross income. 

* * * * * 

(c) Applicability. The requirements of 

this subpart apply to child health 

assistance provided under a separate 

child health program. Regulations 

relating to eligibility, screening, 

applications and enrollment that are 

applicable to a Medicaid expansion 

program are found at § 435.4, § 435.229, 

§ 435.905 through § 435.908, § 435.1102, 

§ 435.940 through § 435.958, § 435.1200, 

§ 436.3, § 436.229, and § 436.1102 of 

this chapter. 

■ 49. Section 457.301 is amended by— 

■ A. Adding the definitions of 

‘‘Eligibility determination,’’ ‘‘Family 

size,’’ ‘‘Medicaid applicable income 

level,’’ and ‘‘Non-applicant’’ in 

alphabetical order. 

■ B. Removing the definition of ‘‘Joint 

application.’’ 

The additions read as follows: 

§ 457.301 Definitions and use of terms. 

* * * * * 

Eligibility determination means an 

approval or denial of eligibility in 

accordance with§ 457.340 as well as a 

renewal or termination of eligibility 

under § 457.343 of this subpart. 

Family size is defined as provided in 

§ 435.603(b) of this chapter. 

Medicaid applicable income level 

means, for a child, the effective income 

level (expressed as a percentage of the 

Federal poverty level and converted to 

a modified adjusted gross income 

equivalent level in accordance with 

guidance issued by the Secretary under 

section 1902(e)(14)(A) and (E) of the 

Act) specified under the policies of the 

State plan under title XIX of the Act as 

of March 31, 1997 for the child to be 

eligible for Medicaid under either 

section 1902(l)(2) or 1905(n)(2) of the 

Act, or under a section 1115 waiver 

authorized by the Secretary (taking into 

consideration any applicable income 

methodologies adopted under the 

authority of section 1902(r)(2) of the 

Act). 

Non-applicant means an individual 

who is not seeking an eligibility 

determination for him or herself and is 

included in an applicant’s or enrollee’s 

household to determine eligibility for 

such applicant or enrollee. 

* * * * * 

■ 50. Section 457.305 is revised to read 

as follows: 

§ 457.305 State plan provisions. 

The State plan must include a 

description of— 

(a) The standards, consistent with 

§ 457.310 and § 457.320 of this subpart, 

and financial methodologies consistent 

with § 457.315 of this subpart used to 

determine the eligibility of children for 

coverage under the State plan. 

(b) The State’s policies governing 

enrollment and disenrollment; 

processes for screening applicants for 

and, if eligible, facilitating their 

enrollment in other insurance 

affordability programs; and processes 

for implementing waiting lists and 

enrollment caps (if any). 

■ 51. Section 457.310 is amended by— 

■ A. Republishing paragraph (b) 

introductory text. 

■ B. Revising paragraphs (b)(1)(i), 

(b)(1)(ii), (b)(1)(iii) introductory text, 

and (b)(1)(iii)(B). 

■ C. Adding paragraph (d). 

The revisions and addition read as 

follows: 

§ 457.310 Targeted low-income child. 

* * * * * 

(b) Standards. A targeted low-income 

child must meet the following 

standards: 

(1) * * * 

(i) Has a household income, as 

determined in accordance with 

§ 457.315 of this subpart, at or below 

200 percent of the Federal poverty level 

for a family of the size involved; 

(ii) Resides in a State with no 

Medicaid applicable income level; 

(iii) Resides in a State that has a 

Medicaid applicable income level and 

has a household income that either— 

* * * * * 

(B) Does not exceed the income level 

specified for such child to be eligible for 

medical assistance under policies of the 

State plan under title XIX on June 1, 

1997. 

* * * * * 

(d) A targeted low-income child must 

also include any child enrolled in 

Medicaid on December 31, 2013 who is 

determined to be ineligible for Medicaid 

as a result of the elimination of income 

disregards as specified under 

§ 435.603(g) of this chapter, regardless 

of any other standards set forth in this 

section except those in paragraph (c) of 

this section. Such a child shall continue 

to be a targeted low-income child under 

this paragraph until the date of the 

child’s next renewal under § 457.343 of 

this subpart. 

■ 52. Section 457.315 is added to read 

as follows: 

§ 457.315 Application of modified adjusted 

gross income and household definition. 

(a) Effective January 1, 2014, the State 

must apply the financial methodologies 

set forth in paragraphs (b) through (i) of 

§ 435.603 of this chapter in determining 

the financial eligibility of all individuals 

for CHIP. The exception to application 

of such methods for individuals for 

whom the State relies on a finding of 

income made by an Express Lane 

agency at § 435.603(j)(1) of this subpart 

also applies. 

(b) In the case of determining ongoing 

eligibility for enrollees determined 


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eligible for CHIP on or before December 

31, 2013, application of the financial 

methodologies set forth in this section 

will not be applied until March 31, 2014 

or the next regularly-scheduled renewal 

of eligibility for such individual under 

§ 457.343, whichever is later. 

■ 53. Section 457.320 is amended by— 

■ A. Removing paragraphs (a)(4) and 

(a)(6). 

■ B. Redesignating paragraphs (a)(5), 

(a)(7), (a)(8), (a)(9), and (a)(10) as 

paragraphs (a)(4), (a)(5), (a)(6), (a)(7), 

and (a)(8), respectively. 

■ C. Revising paragraph (d). 

■ D. Removing and reserving paragraph 

(e)(2). 

The revisions read as follows: 

§ 457.320 Other eligibility standards. 

* * * * * 

(d) Residency. (1) Residency for a 

non-institutionalized child who is not a 

ward of the State must be determined in 

accordance with § 435.403(i) of this 

chapter. 

(2) Residency for a targeted lowincome pregnant woman defined at 

2112 of the Act must be determined in 

accordance with § 435.403(h) of this 

chapter. 

(3) A State may not— 

(i) Impose a durational residency 

requirement; 

(ii) Preclude the following individuals 

from declaring residence in a State— 

(A) An institutionalized child who is 

not a ward of a State, if the State is the 

State of residence of the child’s 

custodial parent or caretaker at the time 

of placement; or 

(B) A child who is a ward of a State, 

regardless of where the child lives 

(4) In cases of disputed residency, the 

State must follow the process described 

in § 435.403(m) of this chapter. 

(e) * * * 

(2) [Reserved] 

■ 54. Section 457.330 is added to read 

as follows: 

§ 457.330 Application. 

The State shall use the single, 

streamlined application used by the 

State in accordance with paragraph (b) 

of § 435.907 of this chapter, and 

otherwise comply with such section, 

except that the terms of § 435.907(c) of 

this chapter (relating to applicants 

seeking coverage on a basis other than 

modified adjusted gross income) do not 

apply. 

■ 55. Section 457.340 is amended by— 

■ A. Revising the section heading. 

■ B. Revising paragraphs (a), (b), (d), 

and (f). 

The revisions read as follows: 

§ 457.340 Application for and enrollment in 

CHIP. 

(a) Application and renewal 

assistance, availability of program 

information, and Internet Web site. The 

terms of § 435.905, § 435.906, § 435.908, 

and § 435.1200(f) of this chapter apply 

equally to the State in administering a 

separate CHIP. 

(b) Use of Social Security number. 

The terms of § 435.910 and § 435.907(e) 

of this chapter regarding the provision 

and use of Social Security Numbers and 

non-applicant information apply 

equally to the State in administering a 

separate CHIP. 

* * * * * 

(d) Timely determination of eligibility. 

(1) The terms in § 435.912 of this 

chapter apply equally to CHIP, except 

that standards for transferring electronic 

accounts to other insurance affordability 

programs are pursuant to § 457.350 and 

the standards for receiving applications 

from other insurance affordability 

programs are pursuant to § 457.348 of 

this part. 

(2) In applying timeliness standards, 

the State must define ‘‘date of 

application’’ and must count each 

calendar day from the date of 

application to the day the agency 

provides notice of its eligibility 

decision. 

* * * * * 

(f) Effective date of eligibility. A State 

must specify a method for determining 

the effective date of eligibility for CHIP, 

which can be determined based on the 

date of application or through any other 

reasonable method that ensures 

coordinated transition of children 

between CHIP and other insurance 

affordability programs as family 

circumstances change and avoids gaps 

or overlaps in coverage. 

■ 56. Section 457.343 is added to read 

as follows: 

§ 457.343 Periodic renewal of CHIP 

eligibility. 

The renewal procedures described in 

§ 435.916 of this chapter apply equally 

to the State in administering a separate 

CHIP, except that the State shall verify 

information needed to renew CHIP 

eligibility in accordance with § 457.380 

of this subpart, shall provide notice 

regarding the State’s determination of 

renewed eligibility or termination in 

accordance with § 457.340(e) of this 

subpart and shall comply with the 

requirements set forth in § 457.350 of 

this subpart for screening individuals 

for other insurance affordability 

programs and transmitting such 

individuals’ electronic account and 

other relevant information to the 

appropriate program. 

■ 57. Section 457.348 is added to read 

as follows: 

§ 457.348 Determinations of Children’s 

Health Insurance Program eligibility by 

other insurance affordability programs. 

(a) Agreements with other insurance 

affordability programs. The State must 

enter into and, upon request, provide to 

the Secretary one or more agreements 

with the Exchange and the agencies 

administering other insurance 

affordability programs as are necessary 

to fulfill the requirements of this 

section, including a clear delineation of 

the responsibilities of each program to— 

(1) Minimize burden on individuals; 

(2) Ensure compliance with paragraph 

(c) of this section, § 457.350, and if 

applicable, paragraph (b) of this section; 

(3) Ensure prompt determination of 

eligibility and enrollment in the 

appropriate program without undue 

delay, consistent with the timeliness 

standards established under 

§ 457.340(d), based on the date the 

application is submitted to any 

insurance affordability program. 

(b) Provision of CHIP for individuals 

found eligible for CHIP by another 

insurance affordability program. If a 

State accepts final determinations of 

CHIP eligibility made by another 

insurance affordability program, for 

each individual determined so eligible 

by the other insurance affordability 

program, the State must— 

(1) Establish procedures to receive, 

via secure electronic interface, the 

electronic account containing the 

determination of CHIP eligibility; and 

(2) Comply with the provisions of 

§ 457.340 of this subpart to the same 

extent as if the application had been 

submitted to the State. 

(3) Maintain proper oversight of the 

eligibility determinations made by the 

other program. 

(c) Transfer from other insurance 

affordability programs to CHIP. For 

individuals for whom another insurance 

affordability program has not made a 

determination of CHIP eligibility, but 

who have been screened as potentially 

CHIP eligible, the State must— 

(1) Accept, via secure electronic 

interface, the electronic account for the 

individual. 

(2) Not request information or 

documentation from the individual 

already provided to the other insurance 

affordability program and included in 

the individual’s electronic account or 

other transmission from the other 

program; 

(3) Promptly and without undue 

delay, consistent with the timeliness 

standards established under 

§ 457.340(d) of this subpart, determine 


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the CHIP eligibility of the individual, in 

accordance with § 457.340 of this 

subpart, without requiring submission 

of another application; 

(4) Accept any finding relating to a 

criterion of eligibility made by such 

program, without further verification, if 

such finding was made in accordance 

with policies and procedures which are 

the same as those applied by the State 

in accordance with § 457.380 of this 

subpart or approved by it in the 

agreement described in paragraph (a) of 

this section; 

(5) Notify such program of the receipt 

of the electronic account. 

(d) Certification of eligibility criteria. 

The State must certify for the Exchange 

and other insurance affordability 

programs the criteria applied in 

determining CHIP eligibility. 

■ 58. Section 457.350 is amended by— 

■ A. Revising the section heading. 

■ B. Revising paragraphs (a), (b), (c), and 

(f). 

■ C. Removing and reserving paragraph 

(d). 

■ D. Adding paragraphs (i), (j), and (k). 

The additions and revisions read as 

follows: 

§ 457.350 Eligibility screening and 

enrollment in other insurance affordability 

programs. 

(a) State plan requirement. The State 

plan shall include a description of the 

coordinated eligibility and enrollment 

procedures used, at an initial and any 

follow-up eligibility determination, 

including any periodic redetermination, 

to ensure that: 

(1) Only targeted low-income children 

are furnished CHIP coverage under the 

plan; and 

(2) Enrollment is facilitated for 

applicants and enrollees found to be 

potentially eligible for other insurance 

affordability programs in accordance 

with this section. 

(b) Screening objectives. A State must 

promptly and without undue delay, 

consistent with the timeliness standards 

established under § 457.340(d) of this 

subpart, identify any applicant, 

enrollee, or other individual who 

submits an application or renewal form 

to the State which includes sufficient 

information to determine CHIP 

eligibility, or whose eligibility is being 

renewed under a change in 

circumstance in accordance with 

§ 457.343 of this subpart, and whom the 

State determines is not eligible or CHIP, 

but who is potentially eligible for: 

(1) Medicaid on the basis of having 

household income at or below the 

applicable modified adjusted gross 

income standard, as defined in 

§ 435.911(b) of this chapter; 

(2) Medicaid on another basis, as 

indicated by information provided on 

the application or renewal form 

provided; 

(3) Eligibility for other insurance 

affordability programs. 

(c) Income eligibility test. To identify 

the individuals described in paragraphs 

(b)(1) and (b)(3) of this section, a State 

must apply the methodologies used to 

determine household income described 

in § 457.315 of this subpart or such 

methodologies as are applied by such 

other programs. 

(d) [Reserved] 

* * * * * 

(f) Applicants found potentially 

eligible for Medicaid based on modified 

adjusted gross income. For individuals 

identified in paragraph (b)(1) of this 

section, the State must— 

(1) Promptly and without undue 

delay, consistent with the timeliness 

standards established under 

§ 457.340(d) of this subpart, transfer the 

individual’s electronic account to the 

Medicaid agency via a secure electronic 

interface; and 

(2) Except as provided in § 457.355 of 

this subpart, find the applicant 

ineligible, provisionally ineligible, or 

suspend the applicant’s application for 

CHIP unless and until the Medicaid 

application for the applicant is denied; 

and 

(3) Determine or redetermine 

eligibility for CHIP, consistent with the 

timeliness standards established under 

§ 457.340(d) of this subpart, if— 

(i) The State is notified, in accordance 

with § 435.1200(d)(5) of this chapter 

that the applicant has been found 

ineligible for Medicaid; or 

(ii) The State is notified prior to the 

final Medicaid eligibility determination 

that the applicant’s circumstances have 

changed and another screening shows 

that the applicant is no longer 

potentially eligible for Medicaid. 

* * * * * 

(i) Applicants found potentially 

eligible for other insurance affordability 

programs. For individuals identified in 

paragraph (b)(3) of this section, the State 

must promptly and without undue 

delay, consistent with the timeliness 

standards established under 

§ 457.340(d) of this subpart, transfer the 

electronic account to the applicable 

program via a secure electronic 

interface. 

(j) Applicants potentially eligible for 

Medicaid on a basis other than modified 

adjusted gross income. For individuals 

identified in paragraph (b)(2) of this 

section, the State must— 

(1) Promptly and without undue 

delay, consistent with the timeliness 

standards established under 

§ 457.340(d) of this subpart, transfer the 

electronic account to the Medicaid 

agency via a secure electronic interface; 

(2) Complete the determination of 

eligibility for CHIP in accordance with 

§ 457.340 of this subpart; and 

(3) Disenroll the enrollee from CHIP if 

the State is notified in accordance with 

§ 435.1200(d)(5) of this chapter that the 

applicant has been determined eligible 

for Medicaid. 

(k) A State may enter into an 

arrangement with the Exchange for the 

entity that determines eligibility for 

CHIP to make determinations of 

eligibility for advanced premium tax 

credits and cost sharing reductions, 

consistent with 45 CFR 155.110(a)(2). 

■ 59. Section 457.353 is revised to read 

as follows: 

§ 457.353 Monitoring and evaluation of 

screening process. 

States must establish a mechanism 

and monitor to evaluate the screen and 

enroll process described at § 457.350 of 

this subpart to ensure that children who 

are: 

(a) Screened as potentially eligible for 

other insurance affordability programs 

are enrolled in such programs, if 

eligible; or 

(b) Determined ineligible for other 

insurance affordability programs are 

enrolled in CHIP, if eligible. 

■ 60. Section 457.380 is revised to read 

as follows: 

§ 457.380 Eligibility verification. 

(a) General requirements. Except 

where law requires other procedures 

(such as for citizenship and immigration 

status information), the State may 

accept attestation of information needed 

to determine the eligibility of an 

individual for CHIP (either selfattestation by the individual or 

attestation by an adult who is in the 

applicant’s household, as defined in 

§ 435.603(f) of this subchapter, or 

family, as defined in section 36B(d)(1) 

of the Internal Revenue Code, an 

authorized representative, or if the 

individual is a minor or incapacitated, 

someone acting responsibly for the 

individual) without requiring further 

information (including documentation) 

from the individual. 

(b) [Reserved] 

(c) State residents. If the State does 

not accept self-attestation of residency, 

the State must verify residency in 

accordance with § 435.956(c) of this 

chapter. 

(d) Income. If the State does not 

accept self-attestation of income, the 

State must verify the income of an 

individual by using the data sources and 


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following standards and procedures for 

verification of financial eligibility 

consistent with § 435.945(a), § 435.948 

and § 435.952 of this chapter. 

(e) Verification of other factors of 

eligibility. For eligibility requirements 

not described in paragraphs (c) or (d) of 

this section, a State may adopt 

reasonable verification procedures, 

consistent with the requirements in 

§ 435.952 of this chapter, except that the 

State must accept self-attestation of 

pregnancy unless the State has 

information that is not reasonably 

compatible with such attestation. 

(f) Requesting information. The terms 

of § 435.952 of this chapter apply 

equally to the State in administering a 

separate CHIP. 

(g) Electronic service. Except to the 

extent permitted under paragraph (i) of 

this section, to the extent that 

information sought under this section is 

available through the electronic service 

described in § 435.949 of this chapter, 

the State must obtain the information 

through that service. 

(h) Interaction with program integrity 

requirements. Nothing in this section 

should be construed as limiting the 

State’s program integrity measures or 

affecting the State’s obligation to ensure 

that only eligible individuals receive 

benefits or its obligation to provide for 

methods of administration that are in 

the best interest of applicants and 

enrollees and are necessary for the 

proper and efficient operation of the 

plan. 

(i) Flexibility in information collection 

and verification. Subject to approval by 

the Secretary, the State may modify the 

methods to be used for collection of 

information and verification of 

information as set forth in this section, 

provided that such alternative source 

will reduce the administrative costs and 

burdens on individuals and States while 

maximizing accuracy, minimizing 

delay, meeting applicable requirements 

relating to the confidentiality, 

disclosure, maintenance, or use of 

information, and promoting 

coordination with other insurance 

affordability programs. 

(j) Verification plan. The State must 

develop, and update as modified, and 

submit to the Secretary, upon request, a 

verification plan describing the 

verification policies and procedures 

adopted by the State to implement the 

provisions set forth in this section in a 

format and manner prescribed by the 

Secretary. 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

Dated: March 2, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: March 5, 2012. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2012–6560 Filed 3–16–12; 11:15 am] 

BILLING CODE 4120–01–P 


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