Frequently Asked Questions

Below are several options states may consider in implementing section 2101(f). Under each, the state may not find such children ineligible for a separate CHIP based on current or recent insurance coverage or other state-specific restrictions on eligibility. The only restrictions on CHIP eligibility that may be applied to the protected children are those described above in response to Question 5: "Do these children automatically meet the definition of a "targeted low-income child" regardless of other CHIP eligibility factors?"

Option #1: Demonstrate that all Medicaid children qualifying for section 2101(f) protection will qualify for the state's existing separate CHIP.

States with an existing separate CHIP may be able to demonstrate that the income standard for the state's separate CHIP (after conversion for MAGI) is sufficiently above the state's converted Medicaid standard for children that all, or virtually all, children losing Medicaid as a result of the loss of disregards under MAGI will be income-eligible for the state's separate CHIP. The state would need to demonstrate that most if not all affected children would be eligible for the state's separate CHIP without any modification of the program. Note that because state Medicaid programs may cover children in different age ranges (under 1, ages 1- 5, and ages 6-18) up to different income standards, this analysis would need to be done separately for each age range.

Under this option, States would also need to develop procedures to ensure that children being transferred from Medicaid to CHIP after a loss of Medicaid eligibility at their 2014 redetermination are not denied CHIP based on eligibility criteria which may not be applied to these children in accordance with section 2101(f) (see Question 5).

Option #2: Enroll all children in a separate CHIP who lose Medicaid due to income at their first renewal applying MAGI methods.

States can elect to enroll all children into CHIP who lose Medicaid eligibility because of excess income after applying MAGI-based income methodologies and the converted MAGIbased income standard under Medicaid. This option will capture more children than strictly defined under this provision (i.e. children losing Medicaid because of families' increased earned income will also be included) but may be the easiest option to implement administratively.

Option #3: Determine an income standard above the converted MAGI Medicaid FPL that will capture all or almost all the children who would have benefited from application of the former disregards.

Option #4: Identify protected children using 2013 data.

If, upon renewal, the state finds a child ineligible for Medicaid but that child's family income has not increased since the child's last determination of Medicaid eligibility in 2013 (i.e., prior to the application of MAGI-based methods in 2014), the state would automatically enroll the child in its separate CHIP. If the family income has increased since the last Medicaid determination in 2013, the state would identify children protected by section 2101(f) by subtracting the value of the allowed disregards the child received during the 2013 determination from the child's household income based on MAGI in 2014. If the adjusted household income (i.e., 2014 MAGI-based household income minus the value of former disregards in 2013) is at or below the income standard in effect in 2013 for the Medicaid eligibility group under which the child was enrolled, the state would enroll the child in the separate CHIP.

CMS will work with states to ensure the selected option is implemented correctly as we recognize that there must be significant collaboration between Medicaid and CHIP agencies to implement 2101 (f). We are also open to considering alternative proposals from states for how to implement this provision. States are strongly encouraged to talk with CMS in advance of submitting their state plan amendments to implement this provision.

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Yes. However, the benefit package and cost-sharing structure must be in compliance with separate CHIP rules.

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Yes, states will need to submit a CHIP SPA for approval to provide coverage to children under this group in accordance with section 457.60. CMS will make available a simplified SPA template on which the state may report how these protected children will be identified and enrolled and information on benefits and cost-sharing.

Because of the flexibility provided states in establishing eligibility for separate CHIP programs, states could establish a group within an existing separate CHIP or as a standalone separate CHIP with eligibility criteria specific to the chosen option. For example, a state could establish a CHIP group with eligibility limited to children losing Medicaid at their 2014 redetermination using MAGI methodology. Coverage provided under this group would sunset when the last child eligible for 2101(f) protection came up for their first annual renewal in CHIP.

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Yes. States will need to conduct a renewal at the end of the 12-month separate CHIP coverage period in accordance with section 457.343 to determine if the child remains eligible for CHIP and, if not, to determine potential eligibility for other insurance affordability programs and transfer the child's account, as appropriate, to the Medicaid agency or the Exchange.

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As noted above, the protection afforded under section 2101(f) extends until the child comes up for his or her first regular renewal for coverage under the separate CHIP program, which would be 12 months from the child's transfer from Medicaid to the separate CHIP. When the last child eligible for protection under section 2101(f) comes up for renewal in the separate CHIP, the state may discontinue this part of its program.

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No. Systems programmed to determine eligibility based on 2013 rules would not properly determine eligibility based on MAGI methodologies and therefore could not be used to identify these children. Children protected by section 2101(f) are children who lose Medicaid eligibility after MAGI rules (including household composition and family income) are applied but would have remained eligible if the former disregards had also been applied.

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No. Section 2101(f) does not apply to children made ineligible for a separate CHIP as a result of the elimination of income disregards. Children losing coverage under a separate CHIP must be screened for eligibility for other insurance affordability programs and their cases electronically transferred per section 457.348.

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Yes. States may claim the enhanced match available under title XXI for children enrolled in a separate CHIP in accordance with section 2101(f).

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Yes, 75 percent FFP is available for ongoing costs of operating approved eligibility determination systems, often referred to as "E&E" systems, that meet the Standards and Conditions for Medicaid IT and critical success factors. (See: State Medicaid Director Letter on APD Requirements dated June 27, 2016 (SMD# 16-009), to be found at https://www.medicaid.gov/federal-policy-guidance/federal-policy-guidance.html.

Section 1903(a)(3)(B) of the Social Security Act provides 75 percent FFP for costs associated with operating an approved Medicaid management information system (MMIS). The Medicaid manual further clarifies at Section 11276.3 A. MMIS Operations, "FFP at 75 percent is available for direct costs directly attributable to the Medicaid program for ongoing automated processing of claims, payments, and reports. Included are forms, use of system hardware and supplies, maintenance of software and documentation, and personnel costs of operations control clerks, suspense and/or exception claims processing clerks, data entry operators, microfilm operators, terminal operators, peripheral equipment operators, computer operators, and claims coding clerks if the coded data is used in the MMIS, and all direct costs specifically identified to these cost objectives. Report users, such as staff who perform follow-up investigations, are not considered part of the MMIS."

States may claim 75 percent FFP for the costs of certain personnel closely associated with operating claims processing and related systems under MMIS. As noted in our final rule, Medicaid Program; Federal Funding for Medicaid Eligibility Determination and Enrollment Activities (CMS-2346-F), in response to comments, "enhanced funding is available for staff time spent on mechanized eligibility determination systems in the same manner that they apply to all mechanized claims processing and information retrieval systems, since mechanized eligibility determination systems are now considered to be part of such systems, assuming the requirements of this section are met." (See: https://www.federalregister.gov/articles/2011/04/19/2011-9340/medicaid-program-federalfunding-for-medicaid-eligibility-determination-and-enrollment-activities ).H59 Additional information on FFP rates, including tables delineating specific covered costs, is available in the State Medicaid Director Letter on Enhanced Funding dated March 31, 2016 (SMD# 16-004), to be found at https://www.medicaid.gov/federal-policy-guidance/federal-policy-guidance.html.

States should work closely with CMS during the APD process to provide appropriate documentation concerning their cost allocation and claiming plans. In states where workers determine eligibility or provide customer service for multiple health and human service programs, costs should be allocated across programs, as discussed further in FAQ# 40811.

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Eligibility for the enhanced FFP will be based on state systems being compliant with the Standards and Conditions for Medicaid IT, including meeting minimum critical success factors for accepting the new single streamlined application, making MAGI-based determinations and coordinating with Marketplaces. The 75 percent FFP will generally be available when the approved system becomes operational. The 75 percent FFP will not expire.
The start date for the 75 percent FFP for maintenance and operations is the actual start of the operations of the approved eligibility determination system (also referred to as "E&E" system).

We recognize states may be phasing in system upgrades that implement modified adjusted gross income (MAGI)-based eligibility determinations first, with subsequent releases to include non-MAGI and/or other human services programs eligibility. We will allow the 75 percent FFP to begin with the start of the approved MAGI shared eligibility service, based upon an approved Operations APD, that meets the critical success factors. Further, states with challenges in meeting critical success factors at the expected service level must have approved mitigation strategies in order to qualify.

In order to begin claiming, states should submit an Operations APD to CMS that clearly identifies the functions, staff and costs to be charged at the 75 percent FFP level, and it must be approved by CMS before a state can begin claiming the enhanced match.

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