WORKING

Newsletter of the New York Makes Work Pay Initiative – Issue 7 – June 2011

Inside this Issue

BOND Participants Can Work and Keep Some Social Security Benefits. 2

Traditional SSDI Rules: Beneficiaries Face a Loss of Cash.. 4

What is BOND? – The Basics. 6

Eligibility for BOND.. 7

The 10 BOND Sites. 7

Recruitment and Selection of BOND Participants. 8

Two Work Incentives Counseling Providers. 10

How the Benefit Offset Formula Will Work. 14

The Basic Offset Formula.. 14

How SSI is Affected by the SSDI Offset Formula.. 20

BOND Participants and the Medicaid Work Incentives:  Using the Medicaid Buy-In for Working People with Disabilities or Section 1619(b) to Retain Medicaid.. 21

Conclusion.. 24

Contact Us. 25

 BOND Participants Can Work and Keep Some Social Security Benefits

 

Demonstration to Offer Work Incentives Counseling, Alternative Formula for Counting Work and Wages

            The Social Security Administration (SSA) is implementing the Benefit Offset National Demonstration (BOND) project in 10 different sites around the country.   This research demonstration project will test whether Social Security Disability Insurance (SSDI) beneficiaries achieve better employment outcomes when offered a $1 for $2 benefit offset in conjunction with work incentives counseling.  

            Under current SSDI rules, beneficiaries who complete a nine-month trial work period and subsequently engage in substantial gainful activity (SGA), by earning more than $1,000 per month in 2011 ($1,640 if blind), have their benefits suspended after a three-month grace period. In addition, if he or she continues to work at above SGA beyond the 36-month extended period of eligibility (EPE), his or her benefits will be terminated.  Knowing they will face the total loss of SSDI benefits by earning as little as $1,000 gross per month (the “cash cliff”), many beneficiaries depress their earnings potential rather than risk the loss of benefits.  Beneficiaries in the BOND project, however, do not lose their benefits by earning above the SGA level.  Their benefits are reduced by $1 for every $2 earned above the BOND yearly amount, as opposed to being held to a monthly gross accounting.  In 2011, the yearly amount is $12,000 for an individual who is not blind ($1,000 monthly SGA level times 12) and $19,680 for an individual who is statutorily blind ($1,640 monthly SGA level times 12).

            For many years, individuals with disabilities and their advocates have suggested that the SGA rule or cash cliff should be replaced with an SSI-like formula for treatment of earnings.  In the Supplemental Security Income (SSI) program, the first $65 of gross earned income is excluded ($85 if there is no unearned income) and the SSI payment is then reduced by $1 for every additional $2 earned.  Congress has responded to these suggestions by asking SSA to run a demonstration project that determines whether the benefit offset formula results in better rates of employment and higher wages among the project’s participants.

The 31-county Western New York BOND site (26 New York counties, 5 Pennsylvania counties) is one of 10 sites that began serving beneficiaries during April 2011.  Based on recruitment activity described below, the Western New York site will offer the benefit offset and other services to more than 3,000 SSDI beneficiaries between 2011 and 2017.

            Our lead article will explain: what BOND is; who qualifies; the counties served by the Western NY site; the recruitment and selection process for participants; the services offered for the two participant groups; and the specifics on how the benefit offset formula will work.

Traditional SSDI Rules: Beneficiaries Face a Loss of Cash

Benefits If They Earn More than $1,000 per Month

            The SSDI program pays monthly cash benefits to adults who have paid into the Social Security trust fund through payroll deductions.  An SSDI applicant must have enough “credits” (typically, by working in five of the last 10 years) and meet a very strict definition of disability.  Some adult dependents, including disabled adult children (i.e., Childhood Disability Beneficiaries) and disabled widows/widowers, can also qualify for SSDI on the wage earner’s Social Security account. The average monthly SSDI payment is about $1,100 per month in 2011, with some beneficiaries receiving as little as $300 and some receiving more than $2,000 per month. 

SSDI beneficiaries who return to work are given a nine-month trial work period (TWP) during which they can earn any amount of money and still qualify for an SSDI payment.  After nine TWP months (in 2011, months with $720 or more in gross earnings), the individual who performs SGA by earning more than $1,000 gross per month ($1,640 if statutorily blind) in 2011 will receive three more benefit checks and then have his or her entire SSDI payment suspended.  If SGA level work continues beyond the 36-month extended period of eligibility (EPE), benefits are terminated. Several work incentives can potentially soften the blow of this “all or nothing” rule, including the ability to reduce “countable earnings” below the SGA level by deducting paid time off, impairment related work expenses (IRWEs), and/or subsidies. In addition, if earnings drop below SGA levels during the EPE, then benefits can be reinstated. However, sustained SGA-level earnings will mean loss of the entire SSDI payment along with any payments to dependents. (For more information on the traditional rules, see our Working newsletter, Social Security Disability Insurance and Work:  A Review of SSDI Rules Related to Work Activity: A Discussion of the SSDI Work Incentives Available to Maximize Independence through Work; and our policy-to-practice brief, Social Security Disability Insurance, Medicare and Work: A Review of the SSDI and Medicare Rules Related to Work Activity. Guidelines for Proactively Using the SSDI and Medicare Work Incentives to Help Individuals with Disabilities Maximize Independence through Work.  Both documents are available at ilr-edi-r1.ilr.cornell.edu/nymakesworkpay/ (follow links for “Resources,” then scroll down to “newsletter” or “policy-to-practice briefs”). 

The current SSDI work incentives work very well for some individuals. In fact, the seven SSA-funded Work Incentives Planning and Assistance (WIPA) Projects (see contact information at https://secure.ssa.gov/apps10/oesp/providers.nsf/bystate and scroll down to WIPA link for New York State) have provided no-cost benefits counseling for many individuals who then have successfully moved from benefit status to self-sustaining employment.  Unfortunately, many others, faced with the loss of all their SSDI benefits by working for as little as $1,000 per month, have shied away from work at the SGA level.  Consider this example:

Janice receives $1,300 in monthly SSDI payments and another $650 in Social Security dependent’s benefits for her two minor children, ages 10 and 13.  She is offered a job working 30 hours per week at $10 per hour and would not have any impairment related work expenses, subsidies, or paid time off that would reduce her countable wages.  She learns that after completing her nine-month trial work period and three-month grace period, the $1,290 of gross wages (30 x $10 x 4.3 weeks) would result in the loss of $1,950 in combined SSDI and dependents’ benefits.   After learning this, she decides to look for a job where she would earn less than $1,000 per month and not put her benefits in jeopardy.

What if Janice were invited to participate in the BOND project as a T-1, T-21 or T-22 participant as described below, with her earnings subject to the $1 for $2 benefit offset?  In that case, she would have every incentive to accept the job offer, knowing that rather than losing $1,950 per month she would lose only $145 per month (half the amount by which her countable wages exceed the $1,000 SGA level).   So long as the offset formula leaves Janice with at least $1 in SSDI benefits, the benefits for her children (or any other auxiliary benefits) would continue.

What is BOND? – The Basics

BOND is a new approach to SSDI and work being tested in 10 sites, covering roughly 20 percent of the country.  The policy and service changes offered to BOND participants will be field tested and evaluated.  The findings from this project will be reported to both SSA and Congress.

BOND will test innovations to SSDI designed to address the financial disincentives and other obstacles that stop many beneficiaries from reducing their dependence on benefits.  These innovations include: 

·         Removing the SGA test or cash cliff as currently applied;

·         Replacing the SGA test with a $1 for $2 SSDI reduction when earnings exceed the SGA level; and

·         Increased counseling services for beneficiaries.

Eligibility for BOND

To be eligible to participate in BOND, a beneficiary must be:

·         At least age 20 and under age 60;

·         Entitled to SSDI benefits;

·         Not have benefits in terminated status;

·         Residing in one of the 10 BOND sites;

·         Not currently or previously participating in another SSA demonstration (e.g., those who previously participated in either the New York Works or Transition Works demonstration projects cannot participate in BOND); and

·         Invited to participate in BOND through a letter from SSA.

The 10 BOND Sites

Ten SSA Area jurisdictions around the country randomly selected for this demonstration (some small areas of these states may be excluded) include:

·         Alabama

·         Arizona/Southeast California

·         Colorado/Wyoming

·         DC Metro

·         Greater Detroit

·         Greater Houston

·         Northern New England

·         South Florida

·         Western New York

·         Wisconsin

The Western New York site includes 26 Western and Central New York counties:  Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Cortland, Erie, Genesee, Livingston, Madison, Monroe, Niagara, Onondaga, Ontario, Orleans, Oswego, Schuyler, Seneca, Steuben, Tioga, Tompkins, Wayne, Wyoming, and Yates Counties.  This includes four major cities:  Buffalo, Rochester, Syracuse and Binghamton.  This site also includes five counties in Northern Pennsylvania:  McKean, Potter, Susquehanna, Tioga, and Warren Counties.  These are largely rural with a number of small cities and towns.  The lead agency, Neighborhood Legal Services and partners are all existing WIPA providers.

Recruitment and Selection of BOND Participants

Three Participant Groups and Two Control Groups

            The BOND project is a “by invitation only” demonstration project.  Individual beneficiaries will be invited to participate in BOND through two major mailings of a “good news letter” (all numbers and dates are approximations for the 31-county Western New York site):

·        Stage One:  Includes a series of mailings (between May 2011 and August 2011) to approximately 7,880 “randomly assigned” individuals who receive either SSDI only or concurrently receive both SSDI and Supplemental Security Income (SSI).  This group, known as the “T-1” participant group, is automatically entitled to the benefit offset and can receive free benefit counseling by contacting the BOND Work Incentives Counseling (WIC) provider (Neighborhood Legal Services of Buffalo and its partners).  SSA estimates that approximately 30 percent of this group (2364) will contact the WIC provider for services.  Additionally, a group of approximately 80,000 individuals will be randomly assigned into a “current law” control group, a group that is not invited to participate in BOND, is subject to the traditional SSDI rules, and can receive benefit counseling services as available through a WIPA project or other provider.  Those in the T-1 control group will not be made aware of that status.

 

·        Stage Two:  This includes a series of mailed invitations to participate (sent between June 2011 and September 2012) to approximately 30,000 SSDI only beneficiaries in the 31-county region.  To volunteer, a beneficiary must call the local BOND site office in Buffalo and go through an extensive enrollment process, consisting of a face-to-face meeting.  Immediately after completing enrollment, the volunteers will be assigned to one of three groups:  an offset-only treatment group, known as “T-21,” with WIC services (301 people); a treatment group, known as “T-22,” offered both the offset and Enhanced Work Incentives Counseling (EWIC) (313 people); and another current law control group (501 people).  The purpose of the two control groups is to collect data relating to individuals who receive no special treatment and compare it to those in the three BOND participant groups.

The Stage One letter sent to T-1 individuals will direct them to call the BOND Call Center for more information about BOND.  Upon calling, the beneficiary receives information about BOND and contact information for the WIC provider.  If the beneficiary does not phone, the Call Center will take no immediate steps to reach out to the beneficiary to encourage them to participate in BOND.  However, in late 2011, the BOND site office (operated by Abt Associates) plans to contact T-1 beneficiaries with significant earnings to encourage them to report their earnings to the site office.  By contrast, many of the beneficiaries who do not respond to the Stage Two letter will be contacted by the BOND site office, within a short time after receiving the letter, to encourage them to participate.

Two Work Incentives Counseling Providers

Work Incentives Counseling (WIC)

Those participants randomly assigned to either the T-1 or T-21 group will be entitled to have the benefit offset formula applied to their wages.  They will also be entitled to benefit counseling services through the WIC provider.  WIC services will be provided by Neighborhood Legal Services of Buffalo, New York and its five partners (the Advocacy Center, Rochester, NY; Southwestern Independent Living Center, Jamestown, NY; Resource Center for Independent Living, Utica, NY; AHEDD, Camp Hill, PA; and Goodwill Industries Keystone Area, Harrisburg, PA).

The six WIC partners also provide benefit counseling services (sometimes referred to as benefit planning services) to SSDI and SSI beneficiaries as Work Incentives Planning and Assistance (WIPA) providers.  The WIPA program, funded by SSA, delivers services through regional providers in every state of the country.

The WIC benefit counseling services will be the same as currently offered through the WIPA programs.  BOND participants will be offered two types of counseling services, depending on their need:  information and referral (I&R) only (brief service), or I&R plus counseling (full service).  Beneficiaries will get full service counseling if one or more of the following apply:

·         They are working,

·         They expect to work in the near future, and/or

·         They expect to use one or more of the work incentives available as they go through education, training, or other work preparation activities. 

All those who get full service counseling will have a comprehensive interview with a benefits counselor, typically lasting an hour or longer.   Whenever possible, this will be a face-to-face interview with some interviews taking place by phone call.

The interview will be followed by the preparation and delivery to the beneficiary of a Benefits Summary and Analysis (BSA), a three to five page written document that summarizes: 

·         Current benefits and health insurance status;

·         Current or planned work activity;

·         The impact of work on cash benefits and health insurance, and the availability of any SSDI, SSI, Medicare or Medicaid work incentives and how to access them;

·         Any other benefits the individual may receive, such as food stamps or subsidized housing, how work may affect those benefits and any special work incentives that may exist within the other benefit program; and

·         The employment supports they need and summarizes any referrals made for other services, such as referrals to one of New York’s two state vocational rehabilitation agencies, ACCES-VR (formerly the Office of Vocational and Educational Services to Individuals with Disabilities or ACCES-VR) or the Commission for the Blind and Visually Handicapped.

·         The benefits counselor will also address in the BSA specific concerns brought up by the beneficiary, such as the impact of work on “auxiliary benefits” (such as Social Security benefits for dependent children) or how to deal with an outstanding overpayment of SSDI.  Beneficiaries receiving full service counseling will be encouraged to contact the benefits counselor, periodically, whenever their circumstances change (e.g., a change in jobs or pay rate) or they have questions. 

            The benefits counselor will typically only provide brief service (I&R only) to beneficiaries who are not currently working, not expecting to work soon, or not seeking specific information about using work incentives while they pursue education, training, or other work preparation activities.  Brief service would typically involve one or two phone conversations, answering questions about benefits and work, and offering to send informational materials (including links to websites).  During these meetings, the counselor will strongly suggest the beneficiary call back when he or she gets closer to starting a job.  

Enhanced Work Incentives Counseling (EWIC)

            Those participants randomly assigned to the T-22 group will be entitled to have the benefit offset formula applied to their wages.  They will also be entitled to Enhanced Work Incentives Counseling through the EWIC provider.  EWIC services will be provided by Erie I BOCES of West Seneca, New York and its two partners (Rochester Rehabilitation, Rochester, New York and Onondaga Case Management, Syracuse, New York).

            The three EWIC partners will provide a similar range of work incentives counseling services (including the written benefits summary and analysis) and additional services related to employment.  Unlike the WIC providers, the EWIC providers will not wait for BOND participants to contact them but will initiate contact with each T-22 treatment group member who is eligible for their services.

            EWIC services will focus on ensuring that beneficiaries are able to take full advantage of their Ticket to Work and all other resources available in the community.  In addition, EWIC staff will provide employment support counseling on a continuing basis.  In some cases, the EWIC counseling relationship will be brief.  The objective, however, is to provide a longer, intensive, advising relationship, with a focus on the beneficiary’s employment goals.  An EWIC counselor will focus on helping the BOND participant decide:

·         Which employment path is best;

·         What steps to take to pursue his or her employment goals; and

·         How to take those steps.

An EWIC counselor also addresses additional financial components (including tax issues) and employment supports.

How the Benefit Offset Formula Will Work

Entitlement to the Offset

            An SSDI beneficiary becomes a BOND participant when he or she is assigned to the T-1 participant group as part of the Stage 1 mailing or volunteers to participate in response to a Stage 2 mailing and is randomly assigned to either the T-21 or T-22 participant group.  An individual assigned to one of these three participant groups becomes entitled to the offset upon completing the nine-month trial work period and, thereafter, experiencing a “benefit cessation month” and “three month grace period.”

            As noted in our other resources on SSDI and work (see links for newsletter and policy-to-practice brief, above), the nine TWP months do not have to be consecutive months so long as they all occur within a rolling 60-month period.  A benefit cessation month occurs the first time the beneficiary earns above the SGA level following the ninth TWP month.  The beneficiary is then entitled to receive an SSDI check for the benefit cessation month and two more months (the grace period).

The Basic Offset Formula

            The offset formula includes the current standard that yearly countable wages are exempt up to the SGA level.  After subtracting the yearly SGA amount ($12,000/$19,680 for the blind in 2011) from countable yearly income, what remains is divided by two and then divided by the number of months in the offset period for the current year.  The resulting dollar figure is the offset amount which is subtracted from the current SSDI payment to determine the reduced SSDI payment.

            As implemented, this formula is based on estimated earnings and deductions for a calendar year or partial calendar year.  The deductions include estimated paid time off (vacation, holiday, personal or sick time), impairment related work expenses (IRWEs), and subsidies. The estimates are obtained by the WIC or EWIC counselor and reported to the BOND site office along with a calculation sheet that determines what the counselor believes should be the revised SSDI payment based on the gathered information.  The examples in the next two sections show how this should work in real cases.  Each example assumes that the individual was invited to participate in BOND and was not placed into a control group.

Example:  Partial Year Offset

            Unless an individual is enrolled in BOND at the end of a calendar year and will first be eligible for the benefits offset starting in January, their initial eligibility will always be based on a partial year offset.  Consider this example: 

Randy is a beneficiary whose payment amount is $1,800 per month.  He started work for the first time as a beneficiary in January 2010 making $30,000 per year ($2,500 gross per month).  His ninth trial work month was September 2010.  Although he has $100 per month in IRWEs and had those same expenses in October 2010, his countable earnings were $2,400 per month in October 2010 making that his benefit cessation month.  His three-month grace period was October, November, and December 2010. 

In June 2011, Randy receives a Stage 2 letter inviting him to contact the BOND site office if he is interested in becoming a participant.  He goes through the enrollment process and is randomly assigned to the T-21 treatment group.  (Note:  Randy had a roughly one-in-three chance of assignment to the control group.)  At the time of enrollment, Randy is in month nine of his extended period of eligibility and has not been eligible for an SSDI payment since December 2010 because his monthly countable earnings ($2,400) are more than the SGA level ($1,000).  Randy will be eligible for the $1 for $2 benefits offset starting in July 2011.  How will his partial year offset be calculated?

Partial Year Offset Calculation for Randy:

Step 1

Annual Earnings Estimate

$30,000.00

Step 2

Total Non-Countable Income:  IRWE of $600 (6 months at $100) Estimated earnings prior to offset is $15,000 (January to June 2011)

$15,600.00

Step 3

Determine annual BOND countable estimate by subtracting the amount determined in Step 2 from amount determined in Step 1.

$14,400.00

Step 4

Determine prorated BOND threshold amount – number months in the offset period times monthly BOND threshold (6 x $1,000/month)

$ 6,000.00

Step 5

Subtract the amount determined in Step 4 from the amount determined in Step 3

$ 8,400.00

Step 6

Divide the amount determined in Step 5 by 2 (to factor in the $1 for $2 offset)

$ 4,200.00

Step 7

Divide the amount determined in Step 6 by the number of months in the offset period for the year to determine the monthly offset amount (rounding to nearest dime)

$    700.00

 

            Effective July 2011 (the first month of offset entitlement), Randy’s SSDI check will be determined by subtracting $700 (the monthly offset amount) from his SSDI payment rate ($1,800 – 700 = $1,100).  Keep in mind that his July SSDI payment will be paid during August 2011.  His new SSDI payment of $1,100 per month will continue for the remainder of calendar year 2011, with the December check paid in January 2012.  By enrolling in BOND, Randy has gone from no SSDI payment to a reduced SSDI check of $1,100 per month at a time when he is earning $2,500 per month.  Randy can continue to participate in BOND and use the benefit offset formula for a full 60 months or through June 2016.

            In all cases, the benefit offset amount is determined by “estimating” annual wages and reductions to countable wages.  In Randy’s case, this estimate could change if his wages go up or down or if the reductions to his countable wages go up or down.  For example, if Randy takes a paid vacation week during the partial year period, the paid time off (about $600) would become part of non-countable income at Step 2 of the calculation above.  This would be reported to his benefits counselor and a revised estimate for the remainder of the year could be prepared. 

Example:  Full Year Offset

            A full year offset will be calculated for those who enroll at the very end of a calendar year or for those completing a partial or full year in BOND using the $1 for $2 offset.  As in a partial year offset, this will be done based on estimated wages and estimated reductions to countable wages. 

Consider this example: 

Charlotte is an SSDI beneficiary whose payment amount is $1,200 per month, with no auxiliary/dependent beneficiaries.  She completed her trial work period in June 2009 at a time when she was earning less than the SGA level.  Effective July 2010, she started working at a higher rate of pay, $18,000 per year ($1,500 per month) with no IRWEs, subsidies or paid time off.  July 2010 was her benefit cessation month (the first month of SGA level work after her trial work period) and July, August, and September 2010 comprised her three month grace period.  Her last SSDI check, prior to her enrollment in BOND, was for the month of September 2010. 

In September 2011, Charlotte receives a Stage 2 letter inviting her to contact the BOND site office if she is interested in becoming a participant.  She goes through the enrollment process and is randomly assigned to the T-22 treatment group. Following her enrollment in BOND, a partial year offset was determined starting in October 2011 and using the formula above.  In November 2011, Charlotte’s benefits counselor assists her in calculating estimated wages and reductions to countable income for calendar year 2012.  How will her full year offset be calculated?

Full Year Offset Calculation for Charlotte (Calendar Year 2012):

Step 1

Annual Earnings Estimate

$18,000.00

Step 2

Total Non-Countable Income: Vacation pay of $346.15 (5 days at $69.23) Holiday pay of $346.15 (5 days at $69.23)

$     692.30

Step 3

Determine annual BOND countable estimate by subtracting the amount determined in step 2 from amount determined in Step 1.

$17,307.70

Step 4

Determine BOND yearly amount (12 x $1,000) (assumes SGA remains at $1,000)

$12,000.00

Step 5

Subtract the amount determined in Step 4 from the amount determined in Step 3

$ 5,307.70

Step 6

Divide the amount determined in Step 5 by 2 (to factor in the $1 for $2 offset)

$ 2,653.85

Step 7

Divide the amount determined in Step 6 by 12 (rounding up to nearest dime)

$    221.20

 

            Effective January 2012 (the first month of the new offset period), Charlotte’s SSDI check will be determined by subtracting $221.20 (the monthly offset amount) from her SSDI payment rate ($1,200 – 221.20 = $978.80).  Her new SSDI payment of $978.00 (Social Security does not pay cents) per month will continue for the remainder of calendar year 2012. (Her new benefit amount for October through December 2011 must be calculated using the partial year offset formula.)  By enrolling in BOND, Charlotte has gone from no SSDI payment to a reduced SSDI check of $978.00 per month (beginning January 2012) at a time when she is earning $1,500 per month.  Since she was first eligible for the offset in October 2011(at the partial year calculated rate for the remainder of 2011), she can use the benefit offset through September 2016.

            The benefit-offset amount is determined by “estimating” Charlotte’s annual wages and reductions to countable wages.  This estimate could change if her wages go up or down or if the reductions to her countable wages go up or down.  Also, although the new offset estimate and SSDI payment level will be effective for the January 2012 payment, that SSDI payment will be received in February 2012.

How SSI is Affected by the SSDI Offset Formula

            Some individuals who are assigned to the T-1 participant group will be dually eligible for SSDI and SSI.  For example, Monica, a BOND enrollee, resides in New York and lives alone.  She will receive SSI payments based on New York’s 2011 SSI living alone rate of $761 per month.  If she receives SSDI payments of $344 per month, the SSI program will disregard $20 and count $324, making her eligible for a $437 SSI payment ($761 – 324).  In both New York and Pennsylvania, an SSI beneficiary who is eligible for at least a $1 SSI payment automatically qualifies for Medicaid.

            If Monica goes to work for the first time as an SSDI beneficiary and earns $1,200 per month, her SSDI benefits will continue during a nine-month trial work period and three-month grace period.  With this combined earned and unearned income, she will no longer qualify for SSI based on countable income (for SSI purposes) of $891.50 per month:  $324 in SSDI and $567.50 in wages ($1,200 – 65 = 1,135 ÷ 2 = $567.50).  In this case, since she lost her SSI due to wages, she should be able to continue automatic Medicaid eligibility through a work incentive known as 1619(b).

If Monica exhausts the nine-month trial work period and grace period as a BOND participant and continues to have earnings above the SGA level, she will be eligible for the benefit offset.  For example, if she had countable earnings of $1,200 per month, the monthly offset amount would be $100 and the SSDI check would be reduced by $100 to $244 monthly.  For SSI purposes, the reduction in the SSDI check would result in $100 less in countable SSI income.  However, with $791.50 in countable income ($224 from SSDI, $567.50 from wages), she is still ineligible for an SSI payment.  In this example, her right to automatic Medicaid should continue under section 1619(b).

An important role for the WIC benefits counselor to play in a case like Monica’s (only T-1 participants may be dually eligible for SSDI and SSI) is to let her know about her continued eligibility for Medicaid under the 1619(b) provisions.  (See below, BOND Participants and the Medicaid Work Incentives:  Using the Medicaid Buy-In for Working People with Disabilities or Section 1619(b) to Retain Medicaid.)  Also, the WIC counselor can alert Monica to the fact that her SSI payment could be restored if she stopped work for any period of time (assuming she does not also collect unemployment benefits).

BOND Participants and the Medicaid Work Incentives:  Using the Medicaid Buy-In for Working People with Disabilities or Section 1619(b) to Retain Medicaid

The Medicaid Buy-in For Working People with Disabilities (MBI-WPD) is a program that allows individuals with disabilities to work and get or keep Medicaid. Many persons with significant disabilities are unable to obtain employer-funded private health insurance that provides coverage comparable to Medicaid. The fear of losing Medicaid and/or Medicare is one of the greatest barriers keeping individuals with disabilities from maximizing their employment, earnings potential, and independence. For many Social Security Disability Insurance (SSDI) beneficiaries, the risk of losing health care through work activity can be a greater work disincentive than the risk of losing cash benefits through work activity.

            Since 1987, when the section 1619(b) Medicaid provisions became permanent, SSI beneficiaries have been able to keep Medicaid when they lose cash benefits due to wages. Throughout the 1980s and 1990s, no parallel provisions existed for persons who do not receive SSI, including individuals who receive SSDI. Although SSDI beneficiaries who work were and continue to be eligible for extended Medicare coverage for eight years or more following a nine-month trial work period, Medicare typically does not provide the scope of coverage available through Medicaid. Medicare, for example, has very restrictive and limited coverage for home health care benefits, a service covered by Medicaid.

            The MBI-WPD program has been available to New Yorkers with disabilities since July 2003.  It encourages people with disabilities to work or increase their levels of work, thereby reducing or eliminating their dependency on cash SSDI benefits.  An individual with a disability, whose only income is from his or her employment can earn up to $55, 476 a year and still qualify for the MBI-WPD program. 

            This program will work beautifully with most individuals with disabilities in New York participating in the BOND project.  Here’s an example that illustrates the utility of the MBI-WPD program for BOND participants.

Example: Jim is profoundly deaf and receives $1289 per month in SSDI benefits.  He works and earns $1100.  As a result of his participating in the BOND project and thus, eligibility for the special work incentive, Jim’s SSDI will be reduced to $1189 per month when he earns $1200 a month. Can he really qualify for the MBI-WPD program if he earns above the $1,000 substantial gainful activity (SGA) amount? 

            Absolutely!  Since Jim is receiving SSDI benefits, he meets the disability requirement.  Additionally, let’s assume that Jim is well within the $13,800 resource limit.  Thus, all we need calculate is his income eligibility.  For MBI-WPD purposes, an individual with a disability’s total countable income can be as high as $2269 per month.  Now, let’s do the calculation itself!

·         Determine countable unearned income

·         1289 - $20 (unearned income disregard) = $1269

·         Subtract total countable unearned income from the MBI-WPD countable income limit

·         $2269 (250% FPL - total countable income limit) - $1269 (countable unearned income)= $1000

·         This $1000 figure is how much total countable earned income the individual could have.

·         Now, you use the SSI-related budgeting to determine how much of Jim’s earned income will be counted. 

·         $1100 - $65 (earned income exclusion) = $1035 and $1035 divided by 2 is $517.50.  That is the total countable earned income that will be applied to the calculation.

·         Since $517.50 is less than $1100, Jim will still be eligible for the MBI-WPD program despite earning above the SGA limit!

            So, what’s the moral of the story?  Make sure you ensure that BOND participants are advised of the MBI-WPD program and sent in to their local Medicaid office to apply for this wonderful benefit.

            For more information on the MBI-WPD program, see our Working newsletter, Medicaid Buy-In for Working People with Disabilities and our policy-to-practice brief, The Medicaid Buy-In For Working People With Disabilities: Individuals with Disabilities Can Earn Significant Wages and Qualify for This Important Health Care Benefit.  Both documents are available at ilr-edi-r1.ilr.cornell.edu/nymakesworkpay/ (follow links for “Resources,” then scroll down to “newsletter” or “policy-to-practice briefs”).

Conclusion

          The BOND project offers a tremendous opportunity to invited SSDI beneficiaries to pursue their employment goals without the fear of an immediate loss of all cash benefits.  As illustrated by the examples above, the benefit offset formula will allow BOND participants to increase their monthly income (earnings + benefits) without facing the all-or-nothing cash cliff as countable wages exceed the SGA level.

            We hope that many of our readers, from the BOND project’s 26 Western/Central New York counties or five Pennsylvania counties will either be beneficiaries who get a BOND “good news letter” or provider agencies that come into contact with those beneficiaries.  Based on the information in this article, we believe that many of the beneficiaries who get BOND letters will take advantage of this opportunity and sign up for BOND.  Our readers must keep in mind, however, that some of the beneficiaries who respond to a Stage 2 letter will be assigned to a control group and not benefit from the benefits offset formula or other BOND services.

New York Makes Work Pay Partnering Organizations

New York Makes Work Pay is a Comprehensive Employment System Medicaid Infrastructure Grant (Contract No. #1QACMS030318) from the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services to the Office of Mental Health on behalf of New York State.  It is a joint effort of the Burton Blatt Institute at Syracuse University and the K. Lisa Yang and Hock E. Tan Employment and Disability Institute at Cornell University with the collaborative support of the Employment Committee of the New York State Most Integrated Setting Coordinating Council to develop pathways and remove obstacles to employment for New Yorkers with disabilities.

 

Working is the newsletter of the New York Makes Work Pay Initiative.

Contact Us

Cornell University

Employment and Disability Institute

201 Dolgen Hall, Ithaca, NY 14853-3901

Voice: 607.255.7727

Fax:    607.255.2763

TDD:   607.255.2891

Web:   ilr-edi-r1.ilr.cornell.edu/nymakesworkpay/

Email:  NYMakesWorkPay@cornell.edu

Editors:

James R. Sheldon, Jr., J.D.

Neighborhood Legal Services, Inc.

 

Edwin J. Lopez-Soto, J.D.

Cornell University

Employment and Disability Institute