1. Scope of the Election and Certain Notice Requirements

While the short-term hardship exception in section 1902(xx)(3)(B) of the Act is optional for States, the statute does not offer States an option to select one or only some of the circumstances described in section 1902(xx)(3)(B)(ii) of the Act to be the exclusive basis for granting a short-term hardship exception. For example, a State may not limit the short-term hardship exception only to individuals who reside in a county (or equivalent unit of local government) in which there exists an emergency or disaster declared by the President under the NEA or the Stafford Act. We therefore specify at § 435.555(a) that States electing the short-term hardship exception must deem an applicable individual to have demonstrated community engagement when the individual experiences any one of the short-term hardship events described in section 1902(xx)(3)(B)(ii) of the Act and implemented at new § 435.555(d). (We note, however, that certain short-term hardship events include in their criteria a State request to effectuate them, as described below.)

States that elect the short-term hardship option must confirm that they are doing so in their State plans. We expect that States will be able to make the election in the initial material, currently under development, that they will be required to submit to CMS confirming their compliance with section 1902(xx) of the Act. If a State does not initially elect the short-term hardship option, it may do so through a State plan amendment at a later time. A State that elects the short-term hardship option will be permitted to deselect the option through a State plan amendment.

New § 435.561(b)(3)(ii) and (iii) require the State to conduct outreach as implemented at new § 435.561 whenever a State: (a) elects the short-term hardship exception in its State plan under § 435.555(a); and (b) on each occasion in which a short-term hardship exception relating to an event described in § 435.555(d)(2) (for NEA-declared or Stafford Act-declared emergencies or disaster) becomes available to applicable individuals, or the State effectuates the short-term hardship event described in § 435.555(d)(3) (relating to a county or equivalent unit of local government having an unemployment rate at or above a certain level). It is possible that a State, upon electing the short-term hardship exception through a State plan amendment, will simultaneously submit a request to CMS to effectuate the short-term hardship circumstance relating to a county or other locality experiencing a certain level of unemployment (the procedure for this request is described below and would be separate from the State plan amendment). The State's request to CMS to effectuate the unemployment-related short-term hardship circumstance would not be a component of the State plan amendment, and it would necessarily be approved by CMS after approval of the State plan amendment proposing to elect the short-term hardship exception, although the approval of the former may closely follow in time the approval of the letter. The State would still be required to conduct outreach upon both occasions, consistent with § 435.561(b)(3)(ii) and (iii).

We consider both deselection of the short-term hardship exception option from a State plan and the expiration of a short-term hardship event to be an “action” under § 431.201, because the former reduces eligibility by removing the availability of an exception from the State plan while the latter ends the availability of an exception currently in use. Therefore, whenever a State deselects the short-term hardship option from the State plan or upon an anticipated expiration of a short-term hardship event, the State must provide all impacted beneficiaries with a minimum of 10 days advance notice with fair hearing rights consistent with §§ 435.917 through 435.918 and 42 CFR part 431 subpart E . Consistent with new § 435.561(b)(3)(iv)(A) and (B), the advance notice in these circumstances must include the outreach content in new § 435.561(c).