Current through Register Vol. 35, No. 18, September 24, 2024
Verification of income, both earned and unearned, is
mandatory for all MAP categories of ACA related eligibility. Verification
methods can be found at 8.291.410 NMAC.
A. All income will be calculated as defined
by Section 36B of the Federal Tax Code to produce a MAGI. This amount is
compared to the FPL for the appropriate MAP category of eligibility and
household size.
B. MAGI is
calculated using the methodologies defined in Section 36B(d)(2)(B) of the
Federal Tax Code, with the following exceptions:
(1) an amount received as a lump sum is
counted as income only in the month received except for qualified lottery and
gambling winnings per Subsection D of
8.291.430.15 NMAC;
(2) scholarships, awards, or fellowship
grants used for education purposes and not for living expenses are excluded
from income;
(3) the following
American Indian or Alaska native exceptions are excluded from income:
(a) distributions from Alaska native
corporations and settlement trusts;
(b) 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;
(c) distributions and payments from rents,
leases, rights of way, royalties, usage rights, or natural resource extraction
and harvest from;
(i) rights of ownership or
possession in any lands described in Subsection B of
8.291.430.15 NMAC; or
(ii) federally protected rights regarding
off-reservation hunting, fishing, gathering, or usage of natural
resources;
(d)
distributions resulting from real property ownership interests related to
natural resources and improvements;
(i)
located on or near a reservation or within the most recent boundaries of a
prior federal reservation; or
(ii)
resulting from the exercise of federally-protected rights relating to such real
property ownership interests.
(e) 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;
and
(f) student financial
assistance provided under the bureau of Indian affairs education
programs.
C.
Certain income of children and tax dependents: The following are not included
in household income:
(1) The MAGI-based income
of an applicant or recipient who is included in the household of their natural,
adopted, or step parent and who is not expected to be required to file a tax
return under Section 6012(a)(1) of the Internal
Revenue Code for the taxable year in which a MAP category of eligibility is
being determined, is not included in household income whether or not the
applicant or recipient files a tax return.
(2) The MAGI-based income of an applicant's
or recipient's dependent who is not expected to be required to file a tax
return under Section 6012(a)(1) of the Internal
Revenue Code for the taxable year in which a MAP category of eligibility is
being determined is not included in the household income of the taxpayer
whether or not such dependent files a tax return.
D. Qualified lottery and gambling winnings
are included in MAGI-based income based on the following:
(1) Qualified lottery winnings are defined as
winnings from sweepstakes, lottery, or pool described in section
4402 of the internal revenue code (which
generally requires that these particular activities be conducted by a state
agency or under the authority of state law), or winnings from a lottery
operated by a multistate or multijurisdictional lottery association or tribe.
Multijurisdictional lotteries include those that include multiple entities of
government. Qualified lottery winnings apply to the single payout option.
Lottery winnings paid out in installments are not considered qualified lottery
winnings and are treated as recurring income that can be prorated over a
twelve-month period to determine an average current monthly income for
medicaid.
(2) Income that is
received as a lump sum from monetary winnings from gambling is included in
MAGI-based income. Gambling winnings include betting pools, wagers placed
through bookmakers, slot machines, roulette wheels, dice tables, lotteries,
bolita or number games, or the selling of chances therein including tribal
winnings.
(3) Non-cash prizes, like
a car or boat, are not counted as qualified lottery winnings or monetary
winnings from gambling and are counted as lump sum income in the month
received.
(4) Formula for counting
qualified lottery or gambling winnings: For qualified winnings from lotteries
or gambling occurring on or after January 1, 2018, the following formula
applies for counting income:
(a) winnings
less than $80,000 are counted in the month received;
(b) winnings of $80,000 but less than $90,000
are counted as income over two months with an equal amount counted in each
month;
(c) 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;
(d) the maximum period of time over which
winnings may be counted is 120 months, which would apply for winnings of
$1,260,000 and above. HCA in the notice of case action (NOCA) notifies
individuals of the date on which the lottery or gambling winnings no longer
will be counted for the purposes of medicaid eligibility; and
(e) the formula for counting winnings is
applied separately to each instance of winnings.
(5) Lottery or gambling winnings count as
MAGI-based income over multiple months only for the individual receiving the
winnings in the household. For other individuals in the household, the winnings
count only in the month received in determining their MAGI-based income
eligibility.
(6) Verification of
lottery winnings: HCA requires verification of lottery winnings, but will first
access electronic data sources, if available, before requesting
documentation.
(7) Hardship
exemption: HCA allows for an exemption of the counting of lottery winnings if
the applicant or recipient with the lottery winnings can demonstrate an undue
medical hardship such that the applicant or recipient's health or life would be
endangered. An applicant or recipient must submit a written request along with
supporting documentation. A decision regarding a medical hardship exemption
will be made within 30 calendar days of receipt of the written request. Notice
of the exemption decision will be mailed to the applicant or recipient. If an
exemption is approved, then an eligibility determination will be made without
counting lottery winnings. If an exemption is denied, then the applicant or
recipient can request an HCA administrative hearing pursuant to 8.352.2 NMAC.
Hardship exemption request information is contained in the NOCA.
E. Parent mentor compensation: A
parent mentor is a parent or guardian of a medicaid 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 excludes certain parent mentor
compensation from the MAGI calculation. The disregard of parent mentor income
applies only in the case of parent mentors working with a grantee organization
under section 2113 of the Social Security Act. Nominal amounts paid as a
stipend, wages, or other compensation for participation as a parent mentor in a
grant-funded program under section 2113 of the Act are excluded from income. A
nominal amount is defined as $1,600 per month. Parent mentor income above
$1,600 per month is counted in the MAGI calculation.
F. Discharged student loan debt: Student loan
debt that is discharged, forgiven or cancelled is taxable income to the
borrower, and the amount of discharged debt is included in the MAGI-based
income. Discharged student loan debt is not included in 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 these circumstances is not
counted as income in determining household income for other members of the
borrower's household.
G. Alimony
received: Alimony payments 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
unless 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 for alimony.
H. Alimony paid: 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 for alimony.
I. Moving expenses, including expenses
incurred by the individual as well as reimbursements from an employer, are not
deductible in calculating MAGI for tax years 2018 through 2025. Moving expenses
are deductible for active duty members of the military who are ordered to move
or change duty station.
J. Tuition
and fees deduction: Effective January 1, 2018 the payment of tuition and fees
for qualified education expenses for postsecondary education is not an
allowable deduction in calculating MAGI.
