Kansas Department of Health & Environment

Kansas Family Medical Assistance

Manual (KFMAM)

Eligibility Policy - 8/21/2019

01000 >>> 01300 >>> 1333 >>> 1333.04

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1333.04 Income - 1333.04 Income - Unless otherwise indicated, income must be verified. See also 6122 (Reasonable Compatibility) and 6120 (Budgeting Method).

(1) Self-employment Income - Self-employment income must be verified. It is verified through either the tax return or the KC5150 Self-Employment worksheet as indicated below.

When the applicant indicates they have filed taxes, a copy of their tax return is required. If it is after April 15th and the applicant has not filed their tax return, the prior year's return may be used if they have filed an extension with the IRS. Verification of the extension is not required.

The KC5150 Self-Employment Worksheet is used to request income and expenses for the 12 months prior to the month of application. This form is generated off-system by staff and mailed locally. It is used in the following circumstances:

a) It is a new business and a tax return has not yet been filed

b) It is an existing business, but the applicant has not (or will not) file a tax return.

c) A change in the amount of self-employment income is reported.

d) The tax return is no longer representative of the self-employment income. The reason for the discrepancy must be clearly documented and is only allowed when there is a definitive change in the amount or type of business. When the applicant indicates their tax return is not representative of the existing self-employment income, both the tax return and the KC5150 Self-Employment Worksheet are required.

(2) Unearned Income - Tier One payer interfaces are used to verify SSA income and Unemployment Compensation. Because this information is directly from the source, the amount verified through the interface shall be used regardless of what has been reported by the applicant.

For unearned income types not verifiable through Tier One, self-attestation is accepted as verification of all unearned income with the exception of the following types:

a) Annuity Income

b) Trust Income

c) Contract Sales

d) Insurance Payments

e) Oil Royalties and Mineral Rights

f) Railroad Retirement

(3) Earned Income – Verification of earned income is required for all individuals. When earnings have not been reported, they are verified against available earned income data sources, as outlined below in section (4).
No Tier One interfaces exist to verify earnings. The Reasonable Compatibility test is used in Tier Two. See 6122 for Reasonable Compatibility. When income is not determined to be Reasonably Compatible and the Both Below is not applicable, the following Tier Three sources are used in the order presented and should always be used prior to requesting verification from the applicant.

a) The Work Number - When the Work Number data is not successful in establishing reasonable compatibility, the income details may be used to verify income reported. Staff will obtain the TALX Monthly Income Amount from the Reasonable Compatibility Test Detail in KEES and use this for the determination.

b) Hard-copy Wage Verifications - Staff shall review the medical case file to determine if hard copy verification has been submitted by the applicant. This could be in the form of paystubs or a statement from an employer. The date of wage verification must be within the three months prior to the month of application when processing a new application. When processing a review or case change, the income must be from the three months prior to when the initial RC test was run.

c) DCF Images - A manual search of the DCF case records shall be completed for usable images to satisfy verification requirements if a consumer was part of a DCF case for a relevant time period. If verification cannot be obtained from DCF images, proceed to collateral contact.

d) Collateral Contact – Collateral contact shall be made to verify the reported information, when deemed appropriate. If verification cannot be made via collateral contact, proceed to Tier 4 level verification.

e) Request Information - If the earnings cannot be verified using the above methods, Tier 4 verification is used. A request for information is sent to the applicant and "the last 30 days of income" is requested as proof.

(4) Zero Earnings – It is necessary to verify the absence of earnings for all individuals. This is applicable to all individuals who do not report earnings, report non-wage income only, such as self-employment or unearned income, or fail to answer questions about their income. Earned income sources are also checked for children. Even though most children will not have earnings found, this income test is a necessary element of the Both Below Reasonable Compatibility test as outlined in 6122. System interfaces will be checked to verify that no earnings exist. The Reasonable Compatibility Test will be used in Tier 2 to verify that no earnings exist. If no earnings are found in both TALX and KDOL (BASI) the zero earnings are considered verified.

When data sources are not able to confirm the absence of earnings, it is necessary to evaluate if proof of the income is going to be required prior to proceeding. When an applicant’s IBU meets the Household RC test for Both Below and there is no other information, other than income, that is still pending, the applicant is eligible and should be approved for Medicaid without further verifying the IBU income. When Both Below is not applicable, continue to Tier 3 sources and use in the order presented:

a) The Work Number – When The Work Number returns wage information, staff will evaluate the check dates returned on the Reasonable Compatibility Detail page. If the latest check date is older than 30 days, this is indicative that there has been a change in income. The lack of reported earnings is accepted and considered verified. If the latest TALX check date is within the last 30 days, staff will obtain the TALX Monthly Income Amount from the Reasonable Compatibility Test Detail in KEES and use this for the determination. It is considered current and countable income. If the consumer later contests the use of this income, proof of the end of the income would be required and the eligibility will be redetermined if appropriate.

b) Case File – When KDOL (BASI) wages are returned for the quarter prior to the current quarter, staff shall research the case file for information that may indicate the recent loss of employment. If an explanation is found that substantiates the report of no income, then further research into the KDOL (BASI) wages are not required. The zero earnings are considered verified.

(5) Proof of End of Income
Self-attestation of the end or absence of income is acceptable, with the exception of the following:
a) Individual is a CHIP premium-payer and reports a reduction/elimination of income.
b) TransMed or Extended Medical recipient reports a reduction/elimination of income.
c) The consumer contests to the use of income found in a data source.

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