Identification Number:
HI 03035 TN 37
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Verification Process and Pre-Decisional Issues
Type:POMS Full Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM

Part HI – Health Insurance

Chapter 030 – Eligibility for Subsidized Medicare Prescription Drug Coverage

Subchapter 35 – Verification Process and Pre-Decisional Issues

Transmittal No. 37, 02/05/2024

Audience

PSC: BA, CA, CS, DS, IES, ILPDS, IPDS, ISRA, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BET, CR, CTE, EIE, ERE, FDE, PETL, RECONE, RECONR;
Subsidy Appeals Unit (SAU): SDR, SDS, SDT;
OCO-ODO: BET, BTE, CCE, CR, CST, CTE, CTE TE, DEC, DES, PAS, PETE, PETL;
FO/TSC: CS, CS TII, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

01/01/2024

Background

This transmittal provides new policy to support the legislative changes mandated in the Inflation Reduction Act of 2022 (IRA), Section 11404, which expands Medicare Part D Extra Help (Low Income Subsidy or LIS) full subsidy and ends Extra Help partial subsidy effective January 1, 2024.

Summary of Changes

HI 03035.010 Income Verification Process

Added Background section to clarify summary language explaining income limit requirements used to determine Extra Help eligibility.

Subsection B:

  • Changed title from "Policy on income tolerances for application and agency data comparison" to "Policy" to clarify section purpose.

  • Deleted language regarding Federal Poverty Level percentages (i.e., 135%, 140%, 145% and 150%).

Subsection D:

  • Made minor language updates to improve clarity.

  • Added language about IRA change.

Subsection E:

  • Changed title from "When MAPS require verification and when it is not" to "MAPS Verification" to clarify section purpose.

  • Added language about IRA change.

  • Added example case with an effective date after January 1, 2024 to help clarify change to verification process due to IRA change.

Subsection F: Made minor language updates to improve clarity.

Subsection K: Corrected outdated POMS references

Revised this section as a part of the Gender Inclusive Language Initiative.

HI 03035.010 Income Verification Process

A. Background

To be eligible for a Medicare Part D Extra Help subsidy, the applicant’s income must be within Extra Help income limits. To determine if the applicant’s countable income is within Extra Help income limits, we count both earned and unearned income.

For Extra Help eligibility requirements and current Federal Poverty Levels (FPL) by family size, see HI 03001.020.

For a detailed explanation of income limits, see HI 03020.055.

B. Policy

Extra Help income verification tolerances are based on Extra Help subsidy category income limits prescribed by law.

For more information about Extra Help categories, see HI 03035.010C in this section.

Extra Help Applications go through the Medicare Application Processing System (MAPS) verification process. This process is used when:

  • the comparison of Medicare Part D Extra Help application data; and

  • agency data collected from agency income data sources does not fall within Extra Help income verification tolerances.

For additional instructions for income verification, follow instructions in HI 03035.006.

C. Sources of agency data for income

We obtain agency data regarding income from the following sources:

  • Master Beneficiary Record (MBR)

  • Railroad Retirement Board (RRB)

  • Department of Veterans Affairs (VA)

  • Office of Personnel Management (OPM)

  • Office of Child Support and Enforcement (OCSE)

  • Internal Revenue Service (IRS)

D. Subsidy (Extra Help) Categories

  1. 1. 

    Starting January 1, 2024:

    The Inflation Reduction Act of 2022 (IRA) increases the income limit for full subsidy from income below 135% of the FPL to income less than 150% of the FPL. Applicants who do not meet Extra Help eligibility requirements in HI 03001.020B receive an SSA determination that indicates ineligibility for a subsidy.

    All applicants who meet Extra Help eligibility requirements receive full subsidy (highest level of subsidy under the Medicare Part D Extra Help Program).

    NOTE: 

    We limit low-income premium subsidies to the greater of the lowest plan premium of the CMS-set "benchmark" amount in the person's area. Therefore, a person with income below 150% of the FPL may still be responsible for paying a portion of the plan's premium if the individual enrolls in a plan whose premium exceeds the area benchmark. Refer all questions regarding premiums to the Prescription Drug Plan (PDP) or Medicare Advantage with Prescription Drug coverage (MA-PD) provider.

  2. 2. 

    Before January 1, 2024:

    SSA determines an applicant's Extra Help eligibility and whether the applicant is eligible for a full or partial subsidy category. The SSA eligibility determination indicates one of the following conditions:

    •Full premium subsidy of the service area’s benchmark base premium with no deductible and limited copayments;

    •Full premium subsidy of the service area’s benchmark base premium with reduced deductibles and copayments;

    •Partial premium subsidy of 75%, 50%, or 25% of the service area’s benchmark base premium with reduced deductibles and copayments; or

    •Not eligible for a subsidy.

NOTE: 

The following chart shows the percent of partial subsidy (i.e., 100%, 75%, 50%, 25%), depending on the level of income. For a detailed explanation of income limits, see HI 03020.055.

Countable Income Is:

Premium Subsidy

Up to 135% of FPL

100%

More than 135% of FPL, but not more than 140%

75%

More than 140% of FPL, but not more than 145%

50%

More than 145% of FPL, but less than 150%

25%

150% of FPL or more

None

E. MAPS Verification

We compare application data for income with data from other agencies. The application data on the MAPS verification screen is the applicant’s allegation of earned and unearned income from the Extra Help application. The agency data consists of the earned and unearned income from data matches with other agencies. The system applies the following rules to determine if we must verify the application.

1. MAPS requires verification

MAPS sends the application through verification if:

  • the application data indicates less income than the agency income data and,

  • the difference in the income amounts result in a change from one subsidy category to another.

EXAMPLE: On October 20, 2023, Alex files for Extra Help with a total countable income (application data) for the applicable period of $15,500 (more than 100% and less than 135% on the 2023 FPL table for a family size of one). The agency data from data matching indicates income of $20,000 (more than 135% and less than 140% on the 2023 FPL table for a family size of one).

MAPS will send the application to verification because:

  • the application data falls in the 100% premium full subsidy category and,

  • the agency data falls in the 75% premium subsidy category.

IMPORTANT: The Inflation Reduction Act of 2022 (IRA) allows for one Extra Help category. Extra Help eligibility determinations on or after January 1, 2024 will indicate the individual is either eligible or ineligible for Extra Help.

2. MAPS does not require verification

MAPS does not send the application to verification if:

  • the application data and agency data both indicate income within the same subsidy category, and the system determines full or partial subsidy;

    IMPORTANT: 

    Partial subsidy only applies to applications with effective dates before January 1, 2024.

  • the application data and agency data both indicate income above the income limit for Extra Help eligibility (the system automatically issues a pre-decisional notice);

  • the application data indicates higher income than the agency data;

  • the application data indicates lower unearned income than the agency data, but the applicant answered the question about a recent unearned income decrease affirmatively (Question 10 on the SSA-1020-OCR, Application for Help with Medicare Prescription Drug Costs); or

  • the application data indicates lower earned income than the agency data, but the applicant answered the question about a recent earned income decrease affirmatively (Question 14 on the SSA-1020-OCR).

EXAMPLE 1: On July 2, 2023, James files for Extra Help with a total countable income (application data) for the applicable period of $19,800 (more than 135% and less than 140% on the 2023 FPL table for a family size of one). The agency data from data matching indicates income of $20,400 (more than 135% and less than 140% on the 2023 FPL table for a family size of one).

MAPS will not send this application to verification because both the application data and the agency data fall within the 75% premium subsidy category.

EXAMPLE 2: On January 16, 2024, Jacqueline files for Extra Help with a total countable income (application data) for the applicable period of $20,800 (more than 135% and less than 140% on the 2024 FPL table for a family size of one). The agency data from data matching indicates income of $21,800 (more than 140% and less than 150% on the 2024 FPL table for a family size of one).

MAPS will not send this application to verification because both the application data and the agency data fall within the 100% premium full subsidy category.

IMPORTANT: Effective January 1, 2024, the (IRA) Act of 2022 increased the income limit for full subsidy from income below 135% of the FPL to income below 150% of the FPL.

F. Procedure for verifying income

Follow these procedures when verifying income:

NOTE: 

Under Public Law (P.L.) 110-275 The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), in-kind support and maintenance (ISM) is not countable as income for Extra Help applications filed January 1, 2010, or later. Although MAPS does not select ISM as a verification issue, the Claims Specialist (CS) may identify ISM as a development issue while processing another verification issue (e.g., the applicant reported income incorrectly on the application). When a CS needs to develop further, the CR counts ISM for Medicare Part D Extra Help applications effectively filed December 31, 2009 or earlier. If the applicant files an Extra Help application January 1, 2010 or later, do not count ISM. MAPS will not use ISM in the computation of countable income.

See Also:

  • HI 03035.006, for additional instructions on verifying income.

1. Query the Medicare database and contact the applicant

The Medicare System Query displays data from the Medicare database. The verification screen clearly identifies income from the RRB, VA, and OPM. The verification screen does not show the specific source of the agency data for the income fields “Other Pensions or Annuities” and “Other Unearned Income.” For information on verifying “Other Unearned Income” or “Other Pension or Annuities” income posted on MAPS verification screen (VRAI), see HI 03035.010D in this section and HI 03035.010G in this section.

For instructions on verifying pension and annuity income, see HI 03035.012.

To obtain detailed agency data, access the Detailed Agency Data (DADS) screen by clicking on the “Query” option on the verification screen.

Contact the applicant after you review the Medicare database. If you make contact with someone other than the applicant, use caution to avoid improper disclosure. When contacting the applicant:

  • Discuss the discrepancy between the application data and the agency data. For instructions on if the applicant dies before we process the Extra Help application, see HI 03010.010E.

  • Discuss each type of income with a dollar amount posted in either the “Application” or “Agency” data field of the VRAI.

  • Obtain the applicant’s explanation for discrepancies between the income amounts posted in the “Application” and “Agency” data fields.

  • Accept the explanation and determine that the application data is the correct amount for the application data income if the applicant provides a reasonable explanation for the application data.

NOTE: 

When verifying an IRS reported pension or annuity, see HI 03035.012.

  • Inform the applicant that we will use the agency data for the Extra Help determination if the applicant agrees with the agency data.

  • Inform the applicant that we will use the agency data for the Extra Help determination unless the individual provides evidence to the contrary if the applicant is not able to provide a reasonable explanation for the discrepancy. To offer assistance for evidence and closeout, see HI 03010.040.

  • Assist the applicant in determining the actual amount of the excludable work expenses and input the determined amount if the applicant indicates the actual work expenses are higher than the amount automatically posted by MAPS as impairment-related work expenses (IRWE) or blind work expenses (BWE), see HI 03020.030.

NOTE: 

The applicant must meet the requirements for IRWE or BWE for the system to post an excluded amount.

2. Verify the “Stop Work Date”

When the CS performs verification for earned income:

  • Verify with the applicant that the “Stop Work Date” alleged on the application is correct. If it is not correct, input the correct “Stop Work Date” on the appropriate MAPS screens. Based on the “Stop Work Date” MAPS determines the months for countable earnings. An incorrect date results in incorrectly counting the applicant’s earned income, which can result in an erroneous subsidy determination.

  • Input the correct “Stop Work Date” on the MAPS Work Stop Date and Work Expenses for Disability (ATWE) screen for initial applications, or the State Agency Work Sampling (SAWS) screen for redeterminations prior to submitting the case for a Medicare Part D Subsidy Determination. If the applicant has ongoing earned income from the filing date, delete the “Stop Work Date” in MAPS.

  • Document the determination to revise or delete the “Stop Work Date” when completing the MAPS Report of Contact (DWRC).

3. Document first-time homebuyer and deemed first-time homebuyer tax credit

On November 6, 2009, the President signed the Worker, Homeownership and Business Assistance Act of 2009 (WHBA), which extends the deadline for receiving a tax credit for purchasing a home under the American Recovery and Reinvestment Act of 2009 (ARRA). WHBA also established a smaller tax credit, up to $6,500, for homebuyers who lived in their principal residence five out of the last eight years and purchased a new principal residence. For purposes of eligibility for the tax credit, these applicants are “deemed” first-time homebuyers.

For Medicare Part D Extra Help purposes, consider the first-time homebuyer’s and deemed first-time homebuyer’s tax credit as countable unearned income. By law, we do not exclude the first-time homebuyer’s tax credit or the deemed first-time homebuyer’s tax credit when we determine eligibility for Medicare Part D Extra Help.

NOTE: 

For more information on counting the first-time homebuyer’s and deemed first-time homebuyer’s tax credit as a resource, see the Supplemental Security Income instructions in SI 01130.676D.3.

4. Verify the $250 economic recovery payment from the American Recovery and Reinvestment Act of 2009 (ARRA)

When verifying the $250 economic recovery payment:

  • Verify income for Medicare Part D Extra Help applications filed May 2009 through December 2010. If the applicant reports other income on the application, ask if the applicant received a $250 payment based on the ARRA of 2009.

  • Exclude one-time ARRA payments of $250 from income to determine Medicare Part D Extra Help eligibility.

  • Inform the applicant not to report ARRA payment as income on the application for Medicare Part D Extra Help. If the applicant reported funds as income, the field office (FO) must correct the applicant’s income on the verification screen accordingly.

5. Document the making work pay tax credit from the ARRA

  • The Making Work Pay Tax Credit provides working applicants a reduction in the amount of income tax withholding deducted from their pay checks. This tax credit increases the applicant’s take home pay but does not increase the applicant’s gross wages.

  • For purposes of determining eligibility for Medicare Part D Extra Help, the increase in take home pay is not countable as income. This includes situations where the applicant has an increase in take home pay from multiple employers.

  • Applicants with very low wages may not receive their full tax credit through an increase in take home pay. Self-employed applicants do not receive this tax credit in take home pay. These applicants can get the tax credit as part of a tax refund when the individuals file their income tax return. If the applicant receives a tax credit in their tax refund, exclude it from income for Medicare Part D Extra Help.

  • You do not need to take special action because the increase in take home pay does not affect the computation of countable earned income, based on the applicant’s gross wages.

NOTE: 

We do not exclude the $25 weekly ARRA unemployment compensation increase from income or resources in States that agree to participate in this program. You do not need additional documentation or development verification.

See Also:

  • HI 03020.050 for more information on the one-time $250 payment, the $25 per week unemployment compensation increase, and the Making Work Pay Tax Credit.

  • HI 03030.020 for information on the resource exclusions for the one-time $250 payment and the Making Work Pay Tax Credit.

  • HI 03035.020 for resource verification.

6. Verify the Filipino Veterans Equity Compensation Fund payment

ARRA establishes the Filipino Veterans Equity Compensation Fund (FVECF) that provides a one-time payment for veterans who served in the Philippine armed forces during World War II. Only a small number of applicants will receive this payment, however, some veterans who file for Medicare Part D Extra Help may require verification via MAPS.

Eligible veterans who are citizens of the United States (U.S.) may receive a one-time payment of $15,000. Eligible veterans who are non-U.S. citizens may receive a one-time payment of $9,000. A veteran’s surviving spouse may receive the one-time payment only if the veteran filed for but did not receive the payment prior to death.

When verifying receipt of FVECF:

  • Exclude the one-time FVECF payment from income to determine Medicare Part D Extra Help eligibility received by the veteran or the surviving spouse.

  • Accept the Medicare Part D Extra Help applicant’s allegation about the receipt of this special payment and the amount of the payment.

  • Inform the Medicare Part D Extra Help applicant not to report the FVECF payment as income on the application for Medicare Part D Extra Help. If the applicant incorrectly reported funds as income, the FO must correct the applicant’s income on the verification screen accordingly.

  • If the applicant incorrectly reported funds, correct the income amounts on the income verification screen as income and document the verification on the (DWRC) screen.

NOTE: 

Direct all public inquiries related to applying or obtaining eligibility requirements to the Department of Veterans Affairs Office at 1-800-827-1000 or under “Locations.” On their website: http://www.va.gov/.

For more information about income exclusions for Medicare Part D Extra Help, see HI 03020.050.

For more information about resource exclusions for Medicare Part D Extra Help, see HI 03030.020.

7. Verify payment from the Economic Stimulus Act of 2008

When verifying income for Medicare Part D Extra Help applications filed May 1, 2008 through December 31, 2009, and the applicant reports other income on the application:

  • Ask the applicant if a payment was received based on the Economic Stimulus Act of 2008. Explain to the applicant not to report the stimulus payment as income on the application for the Extra Help; and

  • If the applicant incorrectly reported funds as income, the FO must correct the applicant’s income on the verification screen accordingly.

NOTE: 

Although distribution of the stimulus payments was completed December 31, 2008, the applicant may not receive a payment issued December 2008, until January 2009. Possibly, an applicant filing for Extra Help during 2009 might report the stimulus payment as other income; adjudicators must ask about these payments while doing verifications for claims filed through December 31, 2009.

8. Document the verification determination

Document the verification determination following procedures in HI 03035.007.

Use the DWRC screen to document:

  • verified income amounts;

  • types of evidence reviewed;

  • FO determination (Resolved or Failure to Cooperate); and

  • dates and types of contacts made.

NOTE: 

Document the type of contacts made on the DWRC screen by inputting the name of the person you contacted, dates, and a brief summary of the discussion (e.g., Workers’ compensation stopped in 04/07; application data is correct).

REMINDER: Do not photocopy evidence for the file because you must record all documentation on the verification screens.

9. Input the verification determination

Input the verification determination as follows:

  1. 1. 

    Select “None,” “Application,” “Agency,” or “New Amount” on the VRAI screen to indicate the correct amount of income for each type of income under consideration.

  2. 2. 

    If the applicant reports income not already on the application, input that in the appropriate field.

  3. 3. 

    When all income issues are resolved and there are no items marked “Not Verified,” go to the “Issue Resolution” section, select the “Resolved” button, and click on “Submit to Subsidy Determination.”

  4. 4. 

    If you made two unsuccessful attempts to contact the applicant by phone and the applicant does not respond to the Evidence Request Notice within the 15-day closeout period, input “failure to cooperate” and click on “submit to subsidy determination.” For additional information on evidence and closeout, see HI 03010.040.

G. Procedure for garnished Title II benefits

If we show the applicant’s benefit amount as garnished, MAPS does not reflect the full countable Title II benefit amount; and MAPS does not allow correction of the Title II benefit amount. If you discover a situation during verification where the Title II amount is incorrect due to garnishment, add the difference (i.e., the amount garnished) to the income amount, if any, posted in the “Other Unearned Income” field and explain the situation on a DWRC screen. If you are speaking with the applicant or spouse at the time of the verification, explain the situation to them. Although the applicant's Income and Resource Summary is not completely accurate, base the determination on the correct income.

Use the full MBR (FACT) query to determine the amount of garnished Title II benefits. The dates and amounts of garnishment are in the GARNISH and the Deductions Additions History (DED/ADD) data lines of the FACT query.

For the GARNISH data line, see SM 00510.397.

For the DED/ADD data line, see SM 00510.584.

H. Procedure for “other unearned income” reported on MAPS verification screen

The DADS screen does not provide detailed agency data for unemployment benefits reported by OCSE. The OCSE agency data available in MAPS shows on the Current Agency Data Screen in MAPS as “Unemployment (OCSE).”

If the applicant reports “Other Unearned Income” and corresponding “Unemployment (OCSE),” and no detailed agency data is present, determine that the other unearned income is unemployment benefits and that the source of the unemployment is the applicant’s State of residence.

I. How to process the application for “Other Unearned Income”

1. Query MAPS current agency data screen

If you select an application for verification that has “Other Unearned Income” reported and the DADS screen has no corresponding detailed agency data, query the MAPS Current Agency Data screen to see if the undocumented unearned income lists as “Unemployment (OCSE).”

2. Develop and document unemployment income

If there is a report of “Unemployment (OCSE)” on the MAPS Current Agency Data screen, develop and document the unemployment income following the procedures in HI 03035.010E in this section.

3. Develop and document other unearned income

If the applicant’s other unearned income remains unexplained, develop and document the remaining unearned income following the procedures in HI 03035.010, in this section.

REMINDER: The unexplained “Other Unearned Income” could be the amount of garnished Title II benefits (see HI 03035.010F in this section). For instructions on verifying annuity income, see HI 03035.012.

J. OPM annuity income reported in MAPS

Prior to May 23, 2009, MAPS received OPM annuity data from OPM and IRS. Effective with the Medicare software release on May 23, 2009, we updated the MAPS database with the pension data received only from OPM to avoid possible double counting of an OPM pension. You may view previous entries of OPM and IRS data remaining on the database through the Medicare Query System (MEDQ) on the “Detailed Agency Data” screen. The annuity data that comes from OPM displays on the Current Agency Data screen as “OPM/Civil Service” and on the VRAI screen as “Other Pensions or Annuities.”

K. References

  • HI 03001.020 Eligibility for Extra Help (Prescription Drug Low-Income Subsidy)

  • HI 03010.010 Filing Applications

  • HI 03010.040 Information/Evidence and Closeout

  • HI 03020.030 Earned Income Exclusions

  • HI 03020.055 Income Limits for Subsidy Eligibility

  • HI 03035.005 Verification Policy within the Medicare Application Processing System (MAPS)

  • HI 03035.006 Verification and Documentation Process for Medicare Application Processing System (MAPS)

  • HI 03035.007 Verification and Documentation Instructions for Internal Revenue Service (IRS) data within the Medicare Application Processing System (MAPS)

  • HI 03035.008 Chart with IRS Transaction Types for the Medicare Application Processing System (MAPS During the Verification Process

  • GN 02410.200 Garnishment

  • MS 03301.008  Medicare Query Display (QDIS) – Part D (Prescription Drug Plan) Data View

  • MS 03301.009  Detailed Agency Data Screen (DADS)

  • MS 03206.006   MAPS Development Worksheet – Issue Verification (VRAI)

 


HI 03035 TN 37 - Verification Process and Pre-Decisional Issues - 1/01/2024