6. Areas With Certain Levels of Unemployment

Section 1902(xx)(3)(ii)(II) of the Act also includes in the definition of a “short-term hardship” event the circumstance of an applicable individual residing in a county or equivalent unit of local government that has an unemployment rate that is at or above the lesser of 8 percent or 1.5 times the national unemployment rate. To implement a short-term hardship exception in this circumstance a State first must seek CMS approval. We implement this component of the short-term hardship event definition at § 435.555(d)(3).

Notably, Section 1902(xx)(3)(B)(ii)(II)(bb) of the Act does not specify a source that States or CMS must use to determine whether a county or equivalent unit of local government has an unemployment rate that has reached one of the thresholds described therein. The U.S. Bureau of Labor Statistics (BLS) is the Federal government's primary source for unemployment information [ 95 ] and maintains statistics for 7,500 different areas in the U.S., including, but not limited to, States, small labor market areas, and counties and county equivalents. [ 96 ] The “Local Area Unemployment Statistics” program (“LAUS” program) that is maintained by the BLS is a Federal-State cooperative effort, and both Federal programs and State and local governments use LAUS information for various purposes. [ 97 ] (References herein to “BLS information” include the LAUS information.)

Because the BLS information is well-known and utilized by both States and the Federal government, CMS considers it appropriate to make the BLS information the standard for evaluating whether a State's request to apply the short-term hardship exception in this circumstance is consistent with § 435.555(d)(3); for example, if a State requests the unemployment-related undue hardship exception on the basis that an unemployment rate in a particular county (or counties) is at or above 8 percent, we will consult the unemployment rate in the county or counties using the BLS statistics, presume the accuracy of such information, and use it to determine (subject to a State's rebuttal, as described below) whether the particular county's (or counties') unemployment rate is at or above 8 percent.

We understand, however, that a State might believe that the available BLS information does not reflect the actual circumstances in a particular county or other unit of local government For example, as available BLS data is commonly based on data from previous months, the BLS adjustment of a county's unemployment rate in a county that experiences widespread layoffs from a major employer may take multiple months. To account for such a situation, for any month for which the available BLS data is based on data from previous months, a State may submit preliminary data from a reliable source (such as a State labor department) reflecting the unemployment rate in a county pending the BLS adjustment (if an adjustment is necessary) of the county's figure. We will review the preliminary data and will approve a State's request to implement this exception if we determine its data persuasive. If we determine the State's preliminary data persuasive and the BLS data, when updated, conflicts with the State's data and indicates an unemployment rate below the thresholds in section 1902(xx)(3)(B)(ii)(II)(bb) of the Act, we will not require revision of short-term hardship exceptions that were applied based on our approval of the State's preliminary data but will take the updated data into consideration.

As noted in section 1902(xx)(3)(B)(ii)(II)(bb) of the Act, the unemployment-related short-term hardship exception is subject to a State submitting a request to the Secretary “made in such form, at such time, and containing such information as the Secretary may require.” We will consider it sufficient if a State submits a request to CMS, in either electronic or hard-copy form, to apply the unemployment-related short-term hardship exception and identifies the particular county or counties, or equivalent unit(s) of local government, in which the State alleges the unemployment rate to have reached the lesser of the two thresholds described in § 435.555(d)(3). The State must also provide information from BLS or another reliable source to demonstrate that the unemployment rate has reached the appropriate threshold. We note that while the unemployment-related short-term hardship exception is contingent on a State submitting a request to the Secretary, section 1902(xx)(3)(B) of the Act does not mandate that a State make the request even if it believes one of the relevant unemployment thresholds has been reached; that is, a State that has elected the short-term hardship exception is not required to implement the unemployment-related exception when conditions are present in the State that would support it. In effect, implementing the unemployment-related short-term hardship event is optional for States that elect the short-term hardship exception.

We further note that, distinct from the short-term hardship events relating to applicable individuals who receive services in certain medical institutions (or receiving services of similar acuity) or needing to travel outside of their community for an extended period of time to receive medical services (as described in section II.G.7. of this IFC), section 1902(xx)(3)(B) of the Act does not require an applicable individual (or individual acting on the applicable individual's behalf) to request a short-term hardship exception in the circumstances described in section 1902(xx)(3)(B)(ii)(II) of the Act. The events described in section 1902(xx)(3)(B)(ii)(II) of the Act are broadly impactful in their nature and, especially in the case of disasters and emergencies, can hamper the ability of both local governments and individuals to function in a routine manner. We consider it reasonable to require that, for applicable individuals in States that have elected the short-term hardship exception and who are residing in areas in which a disaster has been declared under the Stafford Act or an emergency under the NEA (and in which, in the latter circumstance, CMS has approved the designation of a short-term hardship, as described previously), or in areas that are experiencing comparatively high unemployment, a State agency must apply an automatic short-term hardship exception to such applicable individuals for the duration of the particular circumstances; that is, a State would deem all applicable individuals residing in the affected areas to have demonstrated community engagement for the relevant months, without requiring applicable individuals to make such a request, ( printed page 33387) requesting any verification relating to these events from such individuals, or conducting any evaluation of the extent to which any such applicable individuals are affected by the circumstances.