New
Mexico Register / Volume XXXI, Issue 15 / August 11, 2020
NOTICE
OF RULEMAKING
The
Human Services Department (the Department), through the Medical Assistance
Division (MAD), is proposing to amend the New
Mexico Administrative Code (NMAC) rule 8.291.430,
Medicaid Eligibility - Affordable Care, Financial Responsibility Requirements.
Section 9-8-6 NMSA 1978, authorizes the
Department Secretary to promulgate rules and regulations that may be necessary
to carry out the duties of the Department and its divisions.
Notice Date: August 11, 2020
Hearing Date: September 11, 2020
Adoption Date: Proposed as December 1, 2020
Technical Citations: Section 53103 and 40203 of the Bipartisan
Budget Act of 2018 (BBA of 2018), 1902(e)(14) of the Social Security Act (SSA),
Section 2113 of the SSA, Section 3004 of the HEALTHY KIDS Act, Section 11051,
11031, 11049 of the Tax Cuts and Jobs Act (TCJA)
The
Department is proposing to amend the rule as follows:
Background
The
Centers for Medicare and Medicaid Services (CMS) issued guidance on August 22,
2019 regarding the counting of qualified lottery and gambling winnings in
Modified Adjusted Gross Income (MAGI)-based methods. Per 42 CFR 435.603(e)(1), found at
8.291.430.15(B)(1) NMAC, an amount received as a lump sum is counted as income
only in the month received and a resource in subsequent months. Section 53103 of the BBA of 2018 supersedes
the regulatory rule found at 42 CFR 435.603(e)(1) in
the case of “qualified lottery winnings” and “qualified lump sum income” (i.e.
gambling) of $80,000 or greater. Section
53103 requires that covered lottery and gambling winnings of $80,000 or
greater, which are received in a single payout, be counted not only in the
month received, but over a period of up to 120 months. Section 53103 provides a formula for
determining this period, depending on the amount of the winnings. States are required to apply this formula to
qualified lottery or gambling winnings received beginning on or after January
1, 2018.
Section
1902e(14)(K)(v) of the SSA included in this rule defines “qualified lottery
winnings” as winnings from a sweepstakes, lottery, or pool or winnings from “a
lottery operated by a multistate or multijurisdictional lottery
association.” Multijurisdictional
lotteries include those that include multiple entities of government.
While
lottery winners generally have a choice between receiving a single payment or
an annuity that pays out in installments over a period of time, the definition
of “qualified lottery winnings” per the SSA applies to the single payout
option. Lottery winnings paid out in
installments are not required to be considered as “qualified lottery
winnings.” Lottery winnings paid in
installments would be treated the same as other types of recurring income per
42 CFR 435.603(e). Non-cash prizes
continue to be counted as lump sum income in the month in which they are
received and are not counted as “qualified lottery winnings.”
Section
1902(e)(14)(K)(vi) of the SSA defines “qualified lump
sum income” as “income that is received as a lump sum from monetary winnings
from gambling. Gambling activities
include: betting pools; wagers placed
through bookmakers; slot machines; roulette wheels; dice tables, lotteries; and
bolita or numbers games, or the selling of chances
therein.” Non-cash prizes are not
counted as qualified lump sum income.
For
qualified winnings from lotteries or gambling activities occurring on or after
January 1, 2018, states must count the winnings according to the following
formula:
Winnings
less than $80,000 are counted in the month received. Winnings of $80,000 but less than $90,000 are
counted as income over two months, with an equal amount counted in each month. For every additional $10,000 one month is
added to the period over which total winnings are divided, in equal
installments, and counted as income. The
maximum period of time over which winnings may be counted is 120 months, which
would apply to winnings of $1,260,000 and above.
Under
section 53103(b)(2) of the BBA of 2018 the requirement
to count qualified lottery and gambling winnings in household income over
multiple months applies only to the individuals receiving the winnings. The determination of household income for
other members of the individual’s household is not affected. Thus, for example, the total amount of
qualified lottery or gambling winnings of a spouse or parent continues to count
only in the month received in determining the eligibility of the other spouse
and children.
States
may accept self-attestation or require other verification of lottery and
gambling winnings. If a state requires
other verification, per regulations at 42 CFR 435.952(c), the agency will
access electronic data sources (such as a state lottery) winner database, if
available, and may accept self-attestation of lottery and gambling winnings
before requesting documentation from the individual.
Section
1902(e)(14)(K)(iii) of the SSA requires that states establish an “undue medical
or financial hardship” exemption through a procedure and based on a standard
established by the state for individuals impacted by the new treatment of
lottery and gambling winnings. States
should develop a procedure and establish a reasonable standard for this hardship
exemption.
Applicants
and beneficiaries affected by the counting of lottery or gambling winnings
maintain their ability to request a determination on a non-MAGI basis. The SSA specifies that the state agency
provide notice to affected individuals of the date on which the lottery or
gambling winnings no longer will be counted for the purpose of Medicaid or CHIP
eligibility. States are required to
notify affected individuals of the hardship exemption.
The
August 22, 2019 CMS guidance letter references other changes to countable
income regarding the exclusion of parent mentor compensation, alimony received,
and discharged student loan debt.
Changes to deductions are referenced regarding moving expenses, alimony
paid, and tuition and fees. These
changes have been incorporated into the proposed rules.
Section 8
The
current mission statement is being added.
Section
10
Section
10 is revised to reflect the new Federal Poverty Level amounts that go into
effect on April 01, 2020.
Section
15 Changes to Countable Income
Paragraph (1) of Subsection B is revised to
reference qualified lottery and gambling winnings as an exception to lump sum
counted as income only in the month received.
Section 15 is revised to add a new Subsection
D regarding counting qualified lottery and gambling winnings in MAGI-based
income in accordance with the CMS guidance.
The Department will require verification of lottery winnings, but will
access electronic data sources, if available, before requesting documentation. In terms of a hardship exemption the
Department will apply a medical exemption if the individual can demonstrate
that the counting of lottery or gambling winnings may deprive the individual of
medical care such that the individual’s health or life would be
endangered. A medical exemption request
must be made in writing and submitted to the Medical Assistance Division for
review. Exemption request details will
be included in the Notice of Case Action (NOCA) along with the other notice
requirement to provide the date on which the lottery or gambling winnings will
no longer be counted.
Section 15 is revised to add a new Subsection
E regarding the exclusion of a nominal amount of Parent Mentor
Compensation. A “parent mentor” is a
parent or guardian of a Medicaid or CHIP-eligible child who is “trained to
assist families with children who have no health insurance coverage with
respect to improving the social determinants of the health of such children.”
Section 3004 of the HEALTHY KIDS Act amends section 1902(e)(14)
of the SSA to exclude parent mentor compensation from their MAGI-based
household income. Any nominal amount
received by an individual as compensation, including a stipend, for
participation as a “parent mentor” in a grant-funded program under section 2113
of the SSA shall be disregarded for purposes of determining income eligibility
of such individual for medical assistance.
The disregard of parent mentor income applies only in the case of parent
mentors working with a grantee organization under section 2113 of the SSA. The Department is defining a nominal amount
as $1,600 per month. Parent mentor
income above $1,600 per month is counted in the MAGI calculation.
Section 15 is revised to add a new Subsection
F regarding discharged student loan debt.
Student loan debt that is discharged, forgiven or cancelled is generally
treated as taxable income to the borrower, and therefore the amount of
discharged debt is included in MAGI-based income. Under section 11031 of the TCJA discharged
student loan debt is not included in the income (and not counted in the
MAGI-based income) of a borrower for tax years 2018 through 2025 if the debt is
discharged on account of the death or the permanent and total disability of the
student. The borrower and the student
may or may not be the same person.
Student loan debt discharged under the foregoing circumstances is not
counted as income in determining household income for other members of the
borrower’s household.
Section 15 is revised to add a new Subsection
G regarding alimony received. Section
11051 of the TCJA modified the alimony rules.
Under the TCJA, alimony payments received under separation or divorce
agreements finalized after December 31, 2018, or pre-existing agreements
modified after December 31, 2018, are not included in the income of the
recipient. For individuals with alimony
agreements finalized on or before December 31, 2018, alimony continues to be
included in the income of the recipient for the duration of the agreement or
until the agreement is modified. Self-attestation
is accepted for the verification of the date of execution of separation or
divorce agreements that include the provision of alimony.
Section
15 Changes to Deductions
Section 15 is revised to add a new Subsection
H regarding alimony paid. Under the TCJA,
alimony payments under separation or divorce agreements finalized after
December 31, 2018 or pre-existing agreements modified after December 31, 2018,
are not deductible by the payer. For
individuals with alimony agreements finalized on or before December 31, 2018
alimony payments continue to be deductible.
Self-attestation is accepted for the verification of the date of
execution of separation or divorce agreements that include the provision of
alimony.
Section 15 is revised to add a new Subsection
I regarding moving expenses. Section
11049 of the TCJA eliminates the deduction for qualified moving expenses for
tax years 2018 through 2025. Moving expenses, including expenses incurred by
the individual as well as reimbursements from an employer, should no longer be
deducted in calculating MAGI. This
change does not apply to active duty members of the military who are ordered to
move or change duty station.
Section 15 is revised to add a new Subsection
J regarding the payment of tuition and fees for qualified education expenses
for postsecondary education. Amounts
paid for these expenses for the taxpayer, spouse or tax dependent typically
could be deducted in computing adjusted gross income. Section 40203 of the BBA of 2018 eliminates
this deduction effective January 1, 2018.
Such tuition and fees paid are no longer deductible in calculating MAGI,
effective January 1, 2018.
The
register for these proposed amendments to this rule will be available August
11, 2020 on the HSD website at http://www.hsd.state.nm.us/LookingForInformation/registers.aspx
or at http://www.hsd.state.nm.us/2017-comment-period-open.aspx. If you do not have Internet access, a copy of
the proposed rule may be requested by contacting MAD in Santa Fe at
505-827-1337.
The Department proposes to implement
these rules effective December 1, 2020.
A public hearing will be held via conference call on
September 11, 2020 at 9:00 a.m., Mountain Time (MT). Conference phone number: 1-800-747-5150. Access Code:
2284263.
Interested
parties may submit written comments directly to: Human Services Department, Office of the
Secretary, ATT: Medical Assistance Division Public Comments, P.O. Box 2348,
Santa Fe, New Mexico 87504-2348.
If
you are a person with a disability and you require this information in an
alternative format or require a special accommodation to participate in the
public hearing, please contact MAD in Santa Fe at 505-827-1337. The Department requests at least ten (10)
days advance notice to provide requested alternative formats and special
accommodations.
Copies
of all comments will be made available by the MAD upon request by providing
copies directly to a requestor or by making them available on the MAD website
or at a location within the county of the requestor.