Apple Health for Workers with Disabilities

Clarifying Information

To encourage people with disabilities to work, increase their self-sufficiency, and enhance the quality of their lives, Congress passed legislation that made an additional SSI-related Medicaid option available to states to support such employment. Under HWD, enrollees are able to earn and save more money and to purchase health care coverage with monthly premiums based on a sliding scale. HWD provides the only eligibility group for SSI-related coverage for those working at or above the substantial gainful activity (SGA) level who do not have Medicaid protections under Section 1619 of the Social Security Act, or no longer receive Title 2 cash benefits, such as SSDI. Also, HWD does not have a resource test.

Apple Health for Workers with Disabilities (HWD)

Some people may be eligible for HWD, who are not eligible for other SSI-related medical programs, due to:

1. Gross monthly earnings at or above the Substantial Gainful Activity (SGA) level; or
2. Countable income or resources that exceed other program standards, including the L22 coverage group used when eligibility is determined under "institutional" rules.

For more information go to the Apple Health SSI-related overview.

HWD Option for DDA and HCS Waiver Services

A person eligible for HWD, if functionally eligible for them may also receive services from the Developmental Disabilities Administration (DDA) or Home and Community Services (HCS). An HWD enrollee pays only a monthly premium for medical benefits and doesn't participate in the cost of services under "institutional" rules; the enrollee does continue to pay room and board, if living in an alternate living facility. As a result, the individual who is working may be able to keep more of his/her earned income. DDD case managers review cases of their individuals on an individual basis to determine which option is better for them and communicate this information to designated HWD staff, using the DSHS 15-345 CSO/DDD Communication.

Note: Waiver services received under HWD are subject to transfer of asset, annuity declaration, and excess home equity provisions that are specific to institutional programs (L22). MPC program services, however, are not subject to those provisions.

Note: Clients living in an ALF who enroll in HWD continue to pay room and board which is not a service covered by Medicaid programs. The room and board amount is not deducted when determining eligibility or calculating the HWD premium amount.

For Additional information about HWD and DDA/HCS Services, click on Working Clients and LTC.

HWD and other Insurance Coverage

Like clients approved for coverage under other Apple Health programs, HWD clients may have access to other health insurance coverage. Some may even pay for such coverage out-of-pocket or have it taken out of their earnings. These costs may not be used to reduce countable income for determining eligibility or the monthly premium amount. However, the department may be able to pay the monthly premium for the other insurance after HWD is approved. For related information, see Third Party Liability (TPL).

Clarifying Information

Employment - Basic Coverage Group (BCG)

Individuals do not have to work a certain number of hours or earn a minimum amount of income to be eligible for HWD coverage under the BCG. Individuals who want to participate in the HWD program must provide proof they have earned income.

To satisfy the program requirement of being employed or self-employed, a person must provide proof that the work activity they perform is generating income subject to federal income tax rules. Individuals can meet this requirement by providing evidence that FICA and payroll taxes are taken out of their earnings.

Note: If a person works for an employer that by law is not required to withhold FICA or payroll taxes or is prohibited from doing so, such as tribal governments or certain sheltered workshops, HWD coverage may still be approved.

Self-employment

Individuals who are self-employed can meet this requirement by providing business records and a copy of Internal Revenue Services (IRS) forms completed and filed, e.g. IRS Schedule SE or IRS Form 1040, Schedule C or Schedule F, showing entries for net earnings or losses. If the person hasn't been in business long enough to file a tax return, detailed records, such as a combination of ledger sheets, receipt books, self-employment worksheets for tracking potential tax liability must be provided. A business license does not in and of itself provide evidence of self-employment.

Self- Employment Tax

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Payments of SE tax contribute to an individual's coverage under the social security system. Social security coverage provides retirement, disability, survivor, and hospital insurance (Medicare) benefits. All deductions allowed by the IRS, including depreciation, may be used.

An individual must pay SE tax and file Schedule SE (Form 1040), if the individual has:

• Net earnings from self-employment of $400 or more or
• Church employee income of $108.28 or more

Self- Employment Definition - Examples

The following examples are taken from the Social Security Administration (SSA) Program Operations Manual System to help determine whether a person meets the program requirement of employment.

Example: #3 - Mrs. Bell reports she started babysitting for her grandchild while her daughter works. Sometimes the child comes to her home, but usually, she goes to her daughter's home because the child's toys and other items are there. She does not baby sit for anyone else. She receives about $20 a week from her daughter.

Although a caregiver is a recognized occupation, Mrs. Bell is not holding herself out as a provider of daycare services, nor does she have intent to produce income. Therefore, Mrs. Bell is not considered self-employed when determining whether she meets the program requirement of employment

Example: #4 - Mrs. Simon files for SSA benefits. When asked about any income she receives, she says she does baby sit for various neighbors and friends, but does not consider herself as self-employed. She files no tax forms for this income. She began babysitting when her own children were young to make some extra money. She gets new business by word of mouth. Although Mrs. Simon does not consider herself to be in the daycare business, she meets all of the factors indicating the existence of a trade or business. Therefore, Mrs. Simon is considered to be self-employed when determining whether she meets the program requirement of employment.

Example: #5 - Mr. Lyons, an SSDI recipient, reports that since he needed extra money to meet his rent and food expenses, he started collecting aluminum cans from the street. He redeems them at the recycle center for cash. Sometimes his neighbors or local organizations call him to pick up their cans. He does not file any tax returns, but he thinks he makes about $200 a month.

Since this is an ongoing, regular activity that includes some third party collection pickups and was established with the intent of producing income, it is determined that Mr. Lyons is self-employed. To establish and document this eligibility criteria, Mr. Lyons must provide completed IRS forms or legitimate business records as described above.

Example: #6 - Mr. Kent reports that he earned some money cutting the lawn for one of his neighbors. His car needed some repairs and he did not have the money. His neighbor told Mr. Kent that he could cut his lawn for the month of July for $80. Since he needed the cash to pay for the repair, he decided to cut the lawn. Mr. Kent is not holding himself out as a lawn service. Further, this is not an ongoing regular activity nor does Mr. Kent plan to do this activity to make a profit. He only did it to earn enough to pay for the car repair. Therefore, Mr. Kent is not considered to be self-employed when determining whether he meets the program requirement of employment.

Employment - Medical Improvement Group (MIG)

When reviewing for continued HWD coverage under the MIG group, the 40 hours (per month) work requirement does not apply. They must continue to meet the employment requirements of the Basic Coverage Group (BCG).