(1) Changes in Circumstances for Beneficiaries Enrolled on Another Basis Who Become Eligible for a Group Subject to the Community Engagement Requirement

States will encounter instances when a beneficiary enrolled in an eligibility group that is not subject to the community engagement requirement experiences a change in circumstance and becomes potentially eligible for an eligibility group for which community engagement is a factor of eligibility, such as the adult group or an applicable section 1115 demonstration described at § 435.551. When redetermining eligibility based on the change and considering eligibility on other bases, a State must evaluate whether the beneficiary is potentially eligible in the adult group or in an applicable section 1115 demonstration. If so, the State must evaluate whether the beneficiary would be an applicable individual. If the beneficiary is determined to be an applicable individual, the State must then determine whether the beneficiary meets or is deemed to meet the community engagement requirement. Only after these steps may the State complete its determination of eligibility and, if appropriate, move the beneficiary into the new eligibility group or applicable section 1115 demonstration.

Section 1902(xx)(3)(A) of the Act provides that anyone described in section 1902(a)(10)(A)(i)(I) through (VII) of the Act for part or all of a month is deemed to have demonstrated community engagement for that month. At § 435.556(a)(2)(iii), we specify that in the case of a beneficiary who becomes an applicable individual during their eligibility period, the review period is the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the end of the month prior to the month in which the individual enrolls in coverage in a group or an applicable section 1115 demonstration subject to community engagement. The end date of this review period ensures that the beneficiary's compliance is not assessed for any month for which the beneficiary did not have the entire month to demonstrate community engagement. In assessing compliance within this review period, the State would need to determine whether the beneficiary demonstrated or is deemed to have demonstrated community engagement for the lesser of the number of months the State elects under § 435.556(a)(2) or, consistent with the requirement at § 435.556(b), the number of months in the review period. This means the State will assess compliance with community engagement during a change in circumstances for the same number of months it requires at renewal except in situations when the number of months the State assesses compliance at renewal exceeds the number of months in the review period.

We note that most beneficiaries enrolled on another basis who become applicable individuals when the State acts on a change in circumstances will be deemed to have demonstrated community engagement for all months in the relevant review period because they meet one or more mandatory exceptions (as described in section II.D. of this IFC). There may be limited circumstances in which such deeming is not applicable, depending on the optional groups a State elects to cover and/or the section 1115 demonstrations a State has implemented.