1805.000.00 Eligibility and Verification

1805.030.25 Determining MAGI

IM-92 June 18, 2020; IM-97 November 9, 2015

In determining eligibility based on MAGI methodology, use the following calculations:

  Total adjusted gross income (earned and unearned income)
PLUS Foreign earned income, tax-exempt interest, or tax-exempt Social Security income
MINUS Allowable deductions
EQUALS Modified Adjusted Gross Income (MAGI)

NOTE: See sections on included income (1805.030.20 Income, Deductions, and the Five Percent (5%) Disregard), excluded income (1805.030.20.10 Income Excluded Under MAGI), and allowable deductions (1805.030.20.15 Allowable Deductions) for examples.

Once the MAGI is determined, compare the MAGI to income guidelines for the specific program. Refer to Appendix A – MAGI Income With 5% of FPL Included and CHIP Premium Amounts in the Family Healthcare Manual (MAGI) for the MAGI Income with 5% of FPL included chart.

Determine the amount of earned income the household will receive in present and future months. Discuss employment with them, including:

  • Length of employment and employment status such as full-time permanent, part-time permanent, full-time temporary, etc. with present employer
  • Hours worked (regular or irregular hours, overtime, etc.)
  • Wages received (steady rate, piecework, commission, etc.)
  • Recent raises or promotions
  • Anticipated raises or promotions
  • Recent layoffs, or anticipated layoffs, etc.

Obtain an accurate account of the participant’s employment. Start by using the past thirty (30) days to evaluate income stability. If a 30-day history is not adequate to determine future earnings, explore a longer period of income and document facts to support the decision.

Infrequent and unpredictable overtime, or conversely, infrequent and unpredictable absences do not alter the certainty of the employment situation.

If income varies from pay period to pay period, determine the likely pattern of future income to calculate a monthly average. Use past patterns of income if these patterns will continue.

In some situations, recent past earnings records serve only as a partial guide for determining monthly income. Instances in which the employee or employer indicates a change in hourly wage rates, hours of work, job responsibilities, etc., can require additional verification in order to calculate an accurate prediction of future earnings.

In other situations such as new employment, no recent past earnings records exist to use as a guide. In these situations, carefully evaluate the information available from the employee, in comparison with known past earnings records and work patterns, if any, to determine a monthly income amount. It may be necessary to set a priority to verify accuracy of monthly income.

When unearned income fluctuates, compute it on an annual or other representative period and convert it to a monthly amount. Combine countable unearned income with other countable income.

Once the household employment situation is determined, budget projected monthly income. Use the following guidelines to determine a monthly income amount. See 1805.030.25.10 Patterns of Income for more information.

If income is paid other than monthly, convert it to a monthly amount:

  • If paid weekly, multiply by 4.333 weeks
  • If paid every two weeks, multiply by 2.166
  • If paid semi-monthly, multiply by 2

NOTE: Utilize the income frequency selections within the eligibility system to convert income to monthly amounts. See the Create Ongoing Income on an Integrated Case guide for more about income frequencies and averaging income.