MEMORANDUM

DISCUSSION:

The purpose of the memorandum is to clarify household composition and eligibility for parents and caretakers for MO HealthNet for Families (MHF) under Modified Adjusted Gross Income (MAGI) Methodology.

For MHF eligibility determinations:

• Step one is determining the caretaker relative(s) relationship to the child.
• Step two is determining income eligibility based on MAGI income methodology.

A caretaker relative is a relative of a dependent child by blood, adoption, or marriage with whom the child is living, who assumes primary responsibility for the child's care, and who is one of the following:

• The child's father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, aunt, first cousin, nephew, or niece.
• The spouse of such parent or relative, even after the marriage is terminated by death or divorce.

  NOTE: This does not include non-related legal guardians.

Federal law requires that DSS must provide MO HealthNet for Families to eligible parents and non-parent caretaker relatives if the household income is at or below the MHF income standard. The MAGI household composition rules are only used for the income determination and are not used to determine who is a MHF caretaker relative. A MHF parent/ caretaker relative may or may not claim the child as a tax dependent.

Constructing a MAGI Household for each Applicant

MAGI Household Composition is generally dependent upon tax filing status with some exceptions. There may be numerous household composition and tax filing scenarios within one application case to determine eligibility for each member of the household.

1. The household for a tax filer consists of the following individuals:
   • The tax filer;
   • The tax filer’s spouse if living together; and
   • All of the tax filer’s dependents (this means tax dependent which can be a person of any age).

   The household of the tax dependent is the same as the household for the tax filer; unless the tax dependent meets one of the following exceptions:

   • The individual is a child under age 19 living with both parents, but will only be claimed as a tax dependent by one parent;
   • The individual is a child under age 19 who expects to be claimed by a non-custodial parent; or
   • The individual expects to be claimed as a tax dependent of someone other than a spouse or a biological, adopted or step parent.

   The household for tax dependents who meet an exception is the same as the household for non-tax filers. Refer to B.

2. The household for non-tax filers, and for tax dependents meeting an exception consists of the following individuals:
   • The participant;
   • The spouse of the participant if living with the participant;
   • Children of the participant if living with the participant; and
   • For participants who are children:
     • The participant’s parents(including stepparents) who live with the participant
     • Any siblings, who are also dependent children (children under the age of 19), who live with the participant.

   EXAMPLE ONE: Mom and Dad, not married, both over age 19, live together, and have a child (age 3). Mom and Dad each file taxes separately. Dad claims their child as his tax dependent. The MAGI households for each applicant would be as follows:

   • Dad is a tax filer. He is not married to Mom. Dad is claiming the child as his dependent.
     • Dad is a MAGI household of 2 (Dad and Child).
     • Dad would receive MHF if he and the child meet all eligibility factors.
   • Child is not expected to file a tax return. Child will be claimed as a tax dependent by Dad.
     • Child meets the exception: “The individual is a child under age 19 living with both parents, but will only be claimed as a tax dependent by one.”
     • Child is a MAGI household of three (Child, Dad and Mom).
     • Child would receive MHF if he/she meets all eligibility factors.
   • Mom is filing taxes, she is not claiming dependents nor does she expect to be claimed as a dependent herself. Mom is not married to Dad.
     • Mom is a MAGI household of one (Mom only).
     • Mom meets the definition of caretaker relative as she has care of the child.
     • Mom would receive MHF if she and her child meet all eligibility factors.

   EXAMPLE TWO: Mom and Dad, not married, both over age 19, live together, and have a child (age 3). Mom is a non-tax filer and Dad is a tax filer. Dad claims their child as his tax dependent. The MAGI households for each applicant would be as follows:

   • The MAGI households for Dad and Child are the same as in Example One. Dad is filing taxes. He is not married to Mom. Dad is claiming the child as his dependent.
     • Dad is a MAGI household of 2 (Dad and Child).
     • Dad would receive MHF if he and the child meet all eligibility factors.
   • Mom is not a tax filer and does not expect to be claimed as a tax dependent. Mom is not married to Dad.
     • Using non-tax filer rules, Mom is a MAGI household of 2 (Mom and Child).
     • Mom meets the definition of caretaker relative as she has care of the child
     • Mom would receive MHF if she and her child meet all eligibility factors.

   EXAMPLE THREE: Grandmother and two granddaughters (both under age 19 and sisters) live together. Grandmother is a non tax filer. Based on the above guidelines, the households for each applicant would be as follows:

   • The granddaughters are not tax filers and do not expect to be claimed as tax dependents by anyone else.
     • Using non-tax filer rules, the granddaughters are MAGI household of 2 (grandmother is not counted).
     • The granddaughters would have potential eligibility for MHK if they meet all other eligibility factors.
   • Grandmother is not a tax filer and does not expect to be claimed as a tax dependent.
     • Grandmother is a MAGI household of 1.
     • Grandmother is a non-parent caretaker who would receive MHF if she and at least one of the granddaughters meet all eligibility factors.

NECESSARY ACTION:

• Review this memorandum with appropriate staff.

ATTACHMENT:

• Revised Household Composition Flow Chart

AC/tb