Mississippi Administrative Code
Title 23 - Division of Medicaid
Part 104 - Income
Chapter 3 - What is Not Income
Rule 23-104-3.1 - Items Not Considered Income for Medicaid Purposes
Universal Citation: MS Code of Rules 23-104-3.1
Current through September 24, 2024
A. Some items received by an individual are not income because they do not meet the definition of income. Other items are income by definition, but are excluded from an individual's income by federal statute. Only those items specifically listed in the law and regulations can be excluded from income. The items in this section are not considered income for Medicaid purposes, as follows:
1. Medical and Social Services. These
services are not income for Medicaid purposes. Under the circumstances
specified in this section, cash and in-kind items received in conjunction with
medical and social services are also not income.
a) Medical services are those services which
are directed toward diagnostic, preventive, therapeutic or palliative treatment
of a medical condition and which are performed, directed or supervised by a
state licensed health professional.
1) The
term "medical services" includes any room and board (i.e., food or shelter)
provided during a medical confinement, as well as in-kind medical items such as
prescription drugs, eyeglasses, prosthetics and their maintenance, electric
wheelchairs, modified scooters and specially trained animals, such as seeing
eye dogs, and their maintenance. Transportation to and from medical treatment
is also considered a medical service.
b) A social service is any service (other
than medical) which is intended to assist a handicapped or socially
disadvantaged individual to function in society on a level comparable to that
of an individual who does not have such a handicap or disadvantage.
1) Some frequently encountered social
services programs are programs funded under Title IV-B of the Social Security
Act, Child Welfare Services; Title V of the Social Security Act, Maternal and
Child Health and Crippled Children's Services and the Rehabilitation Act of
1973.
2) Education is not generally
considered to be a social service, nor is vocational training that is not part
of a vocational rehabilitation program.
3) Government income maintenance programs
such as TANF or Bureau of Indian Affairs General Assistance and Child Welfare
Assistance are also not social services.
c) When cash is received in conjunction with
medical or social services, handle as follows:
1) Any cash provided by a governmental
medical or social services program is not income.
2) Any cash from a nongovernmental medical or
social services organization is not income when:
(a) The cash is for medical or social
services already received by the individual and approved by the organization;
however, if the individual receives an amount in excess of the expense of the
medical or social services, the excess cash is unearned income; or
(b) The cash is a payment restricted to the
future purchase of a medical or social service, or related excludable in-kind
items.
3) Cash from any
insurance policy which pays "loss of time" benefits to the recipient and
restricts payment to periods of hospital confinement is treated as a third
party resource, not income. However, cash payments considered to be an income
supplementation for lost income due to a disability are income. This includes
weekly disability policies without regard to hospital confinement.
d) When in-kind items are is
received in conjunction with medical or social services, handle as follows:
1) In-kind items which meet the definition of
medical services are not income regardless of their source.
2) Room and board (food and shelter) provided
during a medical confinement is not income. A medical confinement exists when
an individual receives treatment in a medical treatment facility.
3) Any in-kind items (including food and
shelter) provided by a governmental medical or social services program are not
income.
4) In-kind items (other
than food or shelter) provided by a nongovernmental medical or social services
organization for medical or social services purposes are not income.
e) Cash payments for medical or
social services that are not income are also not a resource for one calendar
month following the month of receipt.
2. Personal Services. A personal service
performed for an individual is not income.
a)
Examples of personal services for an individual which are not income are:
1) Mowing the lawn;
2) Doing housecleaning;
3) Going to the grocery store; and
4) Babysitting.
3. Conversion or Sale of a
Resource. Receipts from the sale, exchange or replacement of a resource are not
income, but are resources that have changed their form. This includes any cash
or in-kind item that is provided to replace or repair a resource that has been
lost, damaged or stolen.
a) Example: Jerry
sells his 1999 Buick for $1000. The money he receives is not income, but a
resource which has been converted from one form (a car) to another form
(cash).
4. Rebates and
Refunds. When an individual receives a rebate, refund or other return of money
he has already paid, the money returned is not income.
a) The key idea in applying this policy is
the return of an individual's own money.
1)
Some rebates do not fit that category. If the rebate is a return on an
investment, for example, the rebate would be treated as a dividend.
5. Income Tax Refunds.
Any amount of income tax refunded to an individual is not income. Amounts
withheld or paid as income tax during the course of a taxable year are included
in the definition of income; therefore, any later refund of income taxes by a
federal, state, or local taxing authority is not again treated as income, but
it is treated as a resource. This is so even if the income from which the tax
was withheld or paid was received in a period prior to the Medicaid
application.
a) The Tax Relief, Unemployment
Insurance Reauthorization and Job Creation Act of 2010 provides that federal
tax refunds received from January 1, 2010, through December 31, 2012, are not
counted income or as a resource to the recipient or any person to whom the
funds are given for a period of 12 months following receipt.
1) Through December 31, 2012, any of these
funds which are transferred are not subject to penalty.
2) If placed in a trust, the funds are not
subject to Medicaid trust provisions.
6. Credit Life and Credit Disability
Insurance Payments. These payments are issued to or on behalf of borrowers to
cover payments on loan, mortgages, etc., in the event of the borrower's death
or disability.
a) Both types of insurance may
be administered under group or individual policies.
b) The insurance payments are made directly
to loan or mortgage companies, and are not available to the individual, either
directly or by sale or conversion, for purposes of meeting his basic
needs.
c) These payments made on
behalf of an individual under credit life or credit disability policies are not
income.
7. Other
Insurance Payments. Each insurance policy must be examined to determine the
type of benefit it provides and the purposes for which is can be used. Cash
payments should be treated as follows:
a) Cash
payments from any insurance policy made directly to the provider are not income
since the beneficiary does not receive the payment. Any amounts paid to a
facility for purposes other than medical care may be considered income if the
facility actually pays the amount to the individual.
b) Cash payments from any insurance policy
which are restricted for purchase or reimbursement of medical services covered
under the policy are a third party resource, not income.
c) Cash payments from policies that restrict
payments to periods of hospital confinement are a third party resource, not
income.
d) Cash payments from
specialized policies, such as cancer or dismemberment polices, are
reimbursements, not a third party resource.
e) Cash payments from any insurance policy
intended for income supplementation for lost income due to a disability are
considered income. This includes weekly disability payments without regard to
hospital confinement.
f) Long term
care insurance policies may be paid directly to the individual or to the
nursing facility.
1) If payments are made
directly to the individual, consider them countable unearned income.
2) If paid directly to the nursing facility,
consider them a third party resource.
8. Bills Paid by a Third Party. When someone
other than the eligible individual or couple makes a payment directly to a
vendor, the payment is not income to the Medicaid recipient because the
individual does not receive the payment itself.
a) However, a third party vendor payment is a
means by which an individual may receive unearned in-kind income if food or
shelter is received.
9.
Replacement of Income already Received. If an individual's income is lost,
stolen or destroyed and the individual receives a replacement, the replacement
is not income. This is because once a payment has been issued and treated as
income in determining an individual's eligibility, the reissuance of that same
payment is not counted as income
10. Return of Erroneous Payments. A payment
is not income when the individual is aware the he is not due the money and
returns the check uncashed or otherwise refunds all of the erroneously received
money in the month of receipt or the following month.
a) When the return is timely, accept the
client's statement the money was returned and do not count it as
income.
b) However, if there is a
delay in return of the erroneous payment beyond the month following the month
of receipt, verify return of the full payment and document the reason for the
delay and any other relevant facts.
11. Weatherization Assistance. This type of
assistance (insulation, storm doors, windows, etc.) is not income.
12. Receipt of Certain Non-Cash Items. The
value of any noncash items (other than an item of food or shelter) is not
income if the item would become a partially or totally excluded nonliquid
resource if retained into the month after the month of receipt.
a) Such non-income items may include, but are
not limited to, specially equipped vehicles, automobiles, household goods, and
property essential to self-support.
b) Consider these non-income items solely
under resource rules.
13. Wage-Related Payments. The following
payments by an employer are not income unless the funds for them are deducted
from the employee's salary:
a) Funds the
employer uses to purchase qualified benefits under a cafeteria plan;
b) Employer contributions to a health
insurance or retirement fund;
c)
The employer's share of FICA taxes or unemployment compensation taxes, in all
cases;
d) The employee's share of
FICA taxes or unemployment taxes paid by the employer on wages for domestic
service in the private home of the employer or for agricultural labor only; to
the extent the employee does not reimburse the employer.
14. Proceeds of a Loan. Refer to Part 103,
Chapter 3, Rule 3.3, for a complete discussion of the definitions associated
with loans. For income purposes, the proceeds of a loan are treated as follows:
a) The proceeds of a bona fide loan are not
income to the borrower because of the borrower's obligation to repay. Money
received as repayment of the principal of a bona fide loan is not income to the
lender; however, the interest received on money loaned is income to the
lender.
b) If the loan is not bona
fide, the proceeds received in the transaction are unearned income to the
borrower in the month received. If the loan is not bona fide, payments toward
principal and interest are unearned income to the lender. As indicated above,
the interest received by the lender on money loaned is unearned income whether
the loan is bona fide or not.
15. Promissory Notes and Property Agreements.
Refer to Part 103, Chapter 3, Rule 3.3, for a complete discussion of the
definitions associated with promissory notes and property agreements. For
income purposes, they are treated as follows:
a) Treatment for the borrower is as follows:
1) Under both SSI and liberalized policy, for
the Medicaid client who is the borrower, cash paid by the lender to the
borrower is not income if a promissory note or property agreement is bona fide.
However, any reserve may be a resource the following month;
2) Under both policies, if the agreement is
non-bona fide or non-negotiable, cash paid by the lender to the borrower is
income in the month received by the borrower and any retained cash (or property
received) may be a resource the following month.
b) Under SSI policy, treatment for the lender
is as follows:
1) A bona fide, negotiable
promissory note or property agreement is a resource.
(a) The goods or money represented in the
agreement are not a resource because they are not accessible.
(b) The interest portion of the payment on a
bona fide, negotiable agreement received by the Medicaid client who is the
lender is unearned income.
2) If the agreement is non-bona fide or
non-negotiable, both principal and interest paid to the lender are
income.
c) For coverage
groups subject to liberalized resource policy, treatment for the lender is as
follows:
1) A bona fide, non-negotiable
promissory note or agreement can be excluded as a resource if it produces at
least a 6% net annual return of the principal balance.
(a) For this exclusion to apply to the
non-institutionalized client, the income must be received by the client/spouse
and counted as income.
(b) For all
institutionalized individuals in either SSI or liberalized programs, the
agreement may be excluded as a resource if it produces at least a 6% net annual
return of the principal balance and meets all of the following criteria:
(i) The repayment terms of the note or
agreement are actuarially sound;
(ii) The institutional client must reasonably
expect to receive full payoff of the note or agreement during his lifetime. The
average number of years of life expectancy remaining based on the Annuity Life
Expectancy charts, compiled by the Office of Actuary of the Social Security
Administration and applicable to the decision, must coincide with the payout of
the note or agreement;
(iii)
Principal and interest portions of payments are of uniform rate, with no
deferred or balloon payments and
(iv) The agreement prohibits cancellation of
the debt upon death of the lender.
16. Fund Raising Proceeds.
Benefits received through fund raising are a potential third party liability
source. The applicant/recipient must report all sources of income from fund
raising to the regional office. The regional office will inform the Third Party
Liability unit of the availability of any source of payment for medical
services.
a) Donated funds for the purpose of
payment of medical services are considered a third party source. In order for
donated funds to be excluded as income, the following criteria must be met:
1) Prior to accepting donations, the
applicant/recipient (or family of a child) must make arrangements to place
donations in a trust fund or special account;
2) The trust fund or special account must be
managed by an administrator (someone outside the family);
3) The funds must never be mixed with
personal or family money;
4) The
applicant/recipient should not have direct access to the trust funds or special
account; and
5) The
applicant/recipient or administrator must be able to produce documentation of
how the funds were spent.
Social Security Act §1902 (r)(2); 42 CFR §435.601(b) (Rev 1994); Miss. Code Ann. § 43-13-121.1 (Rev. 2005).
Disclaimer: These regulations may not be the most recent version. Mississippi may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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