A Glimpse at Kentucky’s Newly Approved Medicaid Work Requirement Waiver

Last week, for the first time the Centers for Medicare & Medicaid Services (CMS) approved a Medicaid waiver application that includes work and community engagement requirements as a condition of Medicaid eligibility for certain enrollees. Approval of Kentucky HEALTH’s Medicaid waiver proposal, which will run through Sept. 30, 2023, came one day after CMS released guidance allowing states to implement these types of requirements.

The following outlines key components in the state Medicaid program’s work and community engagement requirements and other aspects in the approved Medicaid demonstration project:

Kentucky sign pixabay 1_16_18Work and Community Engagement Requirements:

  • Applicable population groups: Able-bodied adults aged 19-64
  • Exempt population groups: Former foster care youth; pregnant women; primary caregivers of a dependent (either minor child or disabled adult; limited to only one exemption per household); medically frail individuals; individuals diagnosed with acute medical conditions that would prevent them from compliance with requirements (validated by a medical professional); full time students
  • Amount of hours required: 80 hours/month to maintain eligibility
  • Qualifying activities: Subsidized or unsubsidized employment; self-employment; job skills training; job search activities; enrollment in educational program related to employment (e.g. management training); general education (e.g. high school, GED, college or graduate education, English as a second language); vocational education and training; community work experience; community service/public service; caregiving services for a non-dependent relative or other individual with chronic, disabling health conditions, or participation in substance use disorder treatment
  • Enrollees meeting these requirements: Some enrollees will be deemed as satisfying requirements by the following:
    • Individual meets requirements of the Supplemental Nutrition Assistance Program (SNAP) and/or Temporary Assistance for Needy Families (TANF) employment initiatives or is exempt from having to meet those requirements
    • Individual is enrolled state’s Medicaid employer premium assistance program (a spouse or dependent of beneficiary enrolled in premium assistance program is also exempt)
    • Individual is employed at least 120 hours per month
  • Reporting frequency:
    • Enrollees must document participation in any one or combination of qualifying activities on at least a monthly basis.
    • Individuals deemed as satisfying the requirements will not be required to actively document participation in qualifying activities, although they will need to timely report changes in eligibility.
  • Penalties for noncompliance:
    • After a one-month opportunity to come back into compliance, individuals who fail to meet requirements for a month will have their benefits suspended unless a good-cause exemption is met.
    • Individuals can reactivate eligibility on the first day of the month after the individual complies with the requirements in a 30-day period or completes a state-approved health literacy or financial literacy course.
    • Individuals who, during a suspension period, become pregnant, are determined to be medically frail, become a primary caregiver of a dependent (either minor child or disabled adult — limited to only one exemption per household), are diagnosed with an acute medical condition that would prevent them from compliance with requirements (validated by a medical professional), or become a full-time student, or become eligible for Medicaid under an eligibility group not subject to the work and community engagement requirements can reactivate benefits, with an effective date aligned with their new eligibility category or status.
    • Individuals with suspended benefits at the time of their redetermination date who do not qualify for an exemption will have their enrollment terminated and will have to submit a new application to regain coverage.
  • Implementation details:
    • Requirements will be implemented on a regional basis. The state will assess areas that experience high rates of unemployment, limited economies and/or educational opportunities, and those with a lack of public transportation to determine whether there should be further exemptions from the work and community engagement requirements and/or additional mitigation strategies.
    • Kentucky HEALTH beneficiaries who have not been subject to the requirements in the past five years will be provided a three-month period prior to being subject to the requirements. 

Other Notable Waiver Components Include:

  • Disenrollment and a six-month non-eligibility period for individuals who do not provide necessary documentation/information to complete annual eligibility redetermination or report a change in circumstance that would affect eligibility, with some exceptions;
  • Use of My Rewards Accounts, which allows enrollees to earn incentives to use for enhanced benefits;
  • Premiums charged as a condition of eligibility for enrollees earning more than 100 percent of the federal poverty level (FPL), with disenrollment and six-month non-eligibility period for nonpayment (exceptions include pregnant women, former foster care youth, and medically frail individuals). Individuals earning below 100 percent of FPL are also subject to premiums, but not as a condition of eligibility (nonpayment results in requirement to pay copayments for services and lack of access to My Rewards Account for six months);
  • Access to certain substance use disorder treatment services through an opioid/substance abuse program;
  • Waiver of non-emergency medical treatment for certain populations and services; and
  • Waiver of retroactive eligibility for certain populations.

Note: Kentucky initially implemented the Affordable Care Act’s (ACA) traditional Medicaid expansion under Democratic Gov. Steve Beshear. In 2016, newly-elected Republican Gov. Matt Bevin sought a waiver to modify the state’s Medicaid expansion model.