B. Applicable Individuals

Section 71119(a) of the WFTC legislation amended section 1902 of the Act to add subsection (xx). Section 1902(xx) of the Act requires that “applicable individuals” demonstrate, as a condition of their Medicaid eligibility, “community engagement” (generally, that they work, are enrolled in an educational program, complete community service, participate in a work program, or any combination thereof) for a minimum period of time preceding their Medicaid application and during their Medicaid enrollment. Section 1902(xx)(9)(A)(i) of the Act defines the term “applicable individual” to mean an individual who is not a “specified excluded individual” described in section 1902(xx)(9)(A)(ii) of the Act (as further discussed in section II.E. of this IFC) and who (1) “. . . is eligible to enroll (or is enrolled) under the State plan under” section 1902(a)(10)(A)(i)(VIII) of the Act; or (2) “. . . is otherwise eligible to enroll (or is enrolled) under a waiver of such plan” and meets the criteria of 1902(xx)(9)(A)(i)(II)(aa) and (bb). In this IFC, we establish a new § 435.551 to implement this statutory definition of applicable individual.

For individuals applying for, or enrolled in, coverage under the State plan, only individuals eligible for or enrolled in the adult group under section 1902(a)(10)(A)(i)(VIII) of the Act (implemented at § 435.119 of the regulations) could be applicable individuals. Individuals eligible for or enrolled in any other mandatory or optional State plan eligibility groups are not applicable individuals subject to the community engagement requirement. For example, individuals enrolled under the State plan in the following groups are not applicable individuals: the mandatory group for parents and other caretaker relatives (under section 1931 of the Act and implemented at § 435.110 of the regulations); and the optional group for individuals under age 65 with incomes exceeding 133 percent of the Federal poverty level (FPL) (under section 1902(a)(10)(A)(ii)(XX) of the Act and implemented at § 435.218 of the regulations). This includes individuals eligible for or enrolled in mandatory and optional State plan groups that are modified through a waiver authority under section 1115(a)(1) of the Act, as their underlying eligibility authority is through the State plan.

Regardless of whether a State covers the adult group under the State plan, a person could still be an applicable individual if that person is “otherwise” eligible for or enrolled in Medicaid under certain section 1115 demonstrations. Section 1902(xx)(9)(A)(i)(II) of the Act specifies that an applicable individual includes an individual “who is otherwise eligible to enroll (or is enrolled) under a waiver of such plan that provides coverage that is equivalent to minimum essential coverage [(MEC) [ 28 ] ]. . .and has attained the age of 19 and is under 65 years of age, is not pregnant, is not entitled to, or enrolled for, benefits under part A of title XVIII, or enrolled for benefits under part B of title XVIII, and is not otherwise eligible to enroll under such plan.” To be an applicable individual in this case, an individual must be (1) eligible for, or enrolled in, coverage that meets MEC requirements under demonstration expenditure authority under section 1115(a)(2) of the Act (and not under the State plan), and (2) at least 19 years of age and under 65 years of age, not pregnant, not entitled to or enrolled for benefits under Medicare part A or part B, and not otherwise eligible to enroll under the State plan. If a State does not cover the adult group under the State plan and does not otherwise provide coverage to a population described in section 1902(xx)(9)(A)(i)(II) of the Act under section 1115(a)(2) expenditure authority, the State will not have any applicable individuals who will be subject to the community engagement requirement. However, States that cover the State plan adult group might also have a section 1115 demonstration population that meets the criteria described above and, therefore, also have applicable individuals under the demonstration.

We do not consider section 1915(b) waivers or section 1915(c) waivers to be “a waiver of such plan” for purposes of section 1902(xx)(9)(A)(i)(II) of the Act. This is because sections 1902(xx)(9)(A)(i)(I) and (II) of the Act define groups of individuals who are “eligible to enroll” or are “enrolled” under either the State plan or a waiver of the plan, whereas section 1915(b) and (c) waivers give States the flexibility to waive certain requirements to utilize managed care and long-term care delivery systems for individuals enrolled under the State plan, rather than enabling enrollment in Medicaid coverage for individuals who would not otherwise be eligible to enroll in Medicaid under the State plan.

Similarly, we do not interpret section 1902(xx)(9)(A)(i)(II) of the Act to describe section 1115 demonstrations that provide only section 1115(a)(1) waiver authority or that include section 1115(a)(2) expenditure authority only for specific services (versus eligibility) for groups covered under the State plan. Individuals whose coverage is affected by these kinds of section 1115 demonstrations are eligible to enroll (or are enrolled) in Medicaid through the State plan, not through demonstration expenditure authority. Individuals who are eligible to enroll (or are enrolled) in Medicaid under the State plan would be applicable individuals only if they are eligible for or enrolled in the State plan under section 1902(a)(10)(A)(i)(VIII) of the Act (the adult group). ( printed page 33354)

Due to the complex and often unique nature of section 1115 demonstrations and to support our rulemaking efforts, we are engaged in a systematic review and analysis of approved section 1115(a)(2) expenditure authority in demonstrations that create an eligibility pathway for individuals who are not eligible under the State plan to determine which demonstrations cover individuals who could be subject to the community engagement requirement. Based on our review thus far, many section 1115(a)(2) expenditure authority demonstration populations do not meet the definition of an applicable individual. For example, a number of demonstrations provide coverage only of limited Medicaid benefits, such as only family planning benefits to a group eligible only under section 1115(a)(2) expenditure authority. This coverage does not meet MEC requirements, and thus the community engagement requirement would not apply to individuals applying for or enrolled in coverage under these demonstrations.

In other instances, a demonstration could cover a population under section 1115(a)(2) expenditure authority that is not eligible under the State plan and generally meets the criteria in section 1902(xx)(9)(A)(i)(II) of the Act, but the demonstration also includes an eligibility criterion under which anyone eligible for the demonstration coverage would always be a specified excluded individual, as discussed in section II.E. of this IFC. For example, some section 1115(a)(2) expenditure authority demonstrations create an eligibility pathway for coverage that is equivalent to MEC for a population of individuals between age 19 and 64, who are not pregnant, not entitled to or enrolled for Medicare, and who are not otherwise eligible to enroll in Medicaid under the State plan, but who meet an institutional level of care to receive home and community-based services (HCBS) through the expenditure authority. Any individual in this population would meet the definition of an applicable individual at section 1902(xx)(9)(A)(i)(II) of the Act, except that they would be a specified excluded individual because they would be medically frail or otherwise have special medical needs (under the definition established in this rule at § 435.554(c)(5)). Therefore, individuals in this demonstration population would not be subject to the community engagement requirement.

Additionally, our review identified several demonstrations providing Medicaid eligibility under section 1115(a)(2) expenditure authority to populations generally meeting the definition of an applicable individual in section 1902(xx)(9)(A)(i)(II) of the Act, but in which not all individuals would always meet the criteria of a specified excluded individual or a mandatory exception for certain populations. These demonstration populations could be subject to the community engagement requirement.

As part of our section 1115 demonstration review and approval process, we will evaluate proposals which seek to provide Medicaid eligibility under section 1115(a)(2) expenditure authority to a population not eligible under the State plan to determine if the community engagement requirement might apply to the demonstration population.