C Share of Cost (SOC) Deductions

Policy

Certain deductions are subtracted from the customer’s total counted income when determining the Share of Cost (SOC). The table below lists the deductions that apply. 

1)    Personal Needs Allowance (PNA)

The amount of the Personal Needs Allowance (PNA) is determined on a month-by-month basis. The PNA amount depends on the customer’s living arrangement during the calendar month. For more information about living arrangements, see MA521.

The amount of the PNA is calculated as follows:

The Table below lists the FBR Standards used to determine the PNA:

2)    Spousal Allowance (Non-Community Spouse)

When eligibility was determined using non-community spouse rules, a customer with a spouse but no dependent children living at home gets a deduction for the maintenance needs of the spouse. The customer may be living either in a medical facility or in the community.

The spousal allowance is calculated by subtracting the spouse’s counted income from the amount of the individual FBR.

3)    Family Allowance (Non-Community Spouse)

When eligibility was determined using non-community spouse rules, a customer with dependent children living at home gets a deduction for the maintenance needs of the family. The customer may be living either in a medical facility or in the community.

The customer’s family includes any of the following living in the home:

·        The customer’s spouse; and

·        The customer’s dependent children, including stepchildren.

The Family Allowance is determined by subtracting the combined counted income of the spouse and children from the AFDC A-1 Need Standard shown in the table below for the number of family members (not counting the customer).

NOTE          For families larger than 13, add $198 to the Need Standard for each additional person.

See Family Allowance (Non-CS) SOC Examples

4)    Home Maintenance Needs Allowance (Non-Community Spouse)

When eligibility was determined using non-community spouse rules, the customer may qualify for a Home Maintenance Needs Allowance for up to six months when the customer:

·        Lives in a medical institution for the entire calendar month;

·        Does not have a spouse or child living at home;

·        Is responsible for paying shelter expenses to maintain his or her home; and

·        Is likely to return to the home within six months of the date the customer entered the medical institution.

The Home Maintenance Needs Allowance is based on a federal standard and changes infrequently:

The Home Maintenance Needs Allowance is deducted beginning the first month following the month the customer entered the medical institution.

In the case of institutionalized couples, only one Home Maintenance Needs Allowance is allowed. If both spouses are expected to return home within the six-month period, the Home Maintenance Needs Allowance is deducted from the SOC of the spouse for whom it would be most beneficial.

The home maintenance allowance can be applied to separate periods of institutionalization for the same customer. However, a temporary absence from an institution is not a basis for beginning a new six-month period for the deduction. The customer must be discharged from the institution before another six-month period is allowed.

See Home Maintenance Needs Allowance SOC Examples

5)    Community Spouse Monthly Income Allowance (CSMIA)

When eligibility is determined using community spouse policy, a customer may qualify for a Community Spouse Monthly Income Allowance (CSMIA) deduction when the customer actually gives the monthly CSMIA amount to the community spouse.

If a court has ordered the customer to pay monthly financial support for the community spouse, the CSMIA is the higher of:

·        The amount of the monthly support ordered by the court; or

·        The calculated CSMIA.

NOTE          An Administrative Law Judge may increase the amount of the MMMNA when the customer or spouse appeals the amount and there is proof that the community spouse has a greater need due to circumstances resulting in significant financial hardship.

Steps used to calculate the CSMIA

The following steps are used to calculate the CSMIA. Detailed information about the amounts used in the steps is included below the table:

Standards used to calculate the CSMIA

The following standards are used in calculating the Community Spouse Monthly Income Allowance (CSMIA) for a community spouse. These are federal standards that change annually:

Standard Utility Allowance (SUA)

Utility Allowance

When calculating the CSMIA, the customer qualifies for a Utility Allowance when:

·        The customer or community spouse pays for heating or cooling the home where the community spouse resides; and

·        The costs are billed separately from their rent or mortgage on a regular basis.

The household does not need to be billed by a utility company to get this allowance. If the utility bill is in another person's name but the customer or spouse pays the bill, the customer gets the Utility Allowance.

The customer can get the Utility Allowance even when the household has heating or cooling costs for only part of the year. This includes those who have heating but not cooling costs, or cooling costs but not heating costs.

A Utility Allowance is allowed when household receives Low Income Home Energy Assistance (LIHEA) payments directly or through a vendor.

When the household qualifies for a Utility Allowance, the amount allowed is either:

·        The Standard Utility Allowance (SUA); or

·        A portion of the SUA.

When the household shares utility expenses with another household, or does not have a separate utility meter:

·        The SUA is divided equally by the number of households which share the expense, if each pays an equal share; or

·        The SUA is prorated among the households based on the portion paid by each.

When the household pays a required condominium or cooperative maintenance charge that includes a utility expense, that utility expense amount is subtracted from the SUA to get the Utility Allowance.

The following expenses do not qualify the household for the Utility Allowance:

·        Costs of operating fans for cooling, portable space heaters, electric blankets, and heat lamps;

·        Costs for cooking stoves, unless the stove is the primary heating source;

·        The costs of cutting wood for heating;

·        Costs for water for evaporative coolers; and

·        Costs only for excess heating or cooling expenses. For example, when a customer’s utilities are included in the rent up to a certain usage level or dollar amount, the excess amount does not qualify.

When both spouses live in the community, each spouse gets the full Utility Allowance calculated.

Excess Shelter Allowance

A customer may get an Excess Shelter Allowance only for verified shelter expenses.

Shelter expenses that are paid annually, semi-annually, or quarterly, such as taxes, and homeowner's insurance, are divided by the number of months they cover to determine a monthly amount.

When both spouses are receiving or intending to receive HCBS, share the same residence, and are eligible for ALTCS benefits, each is entitled to half of the verified shelter expenses for the Excess Shelter Allowance.

See Community Spouse SOC Examples

6)    Community Spouse Family Allowance

When eligibility is determined using community spouse policy, a customer may qualify for a Community Spouse Family Allowance when the customer has a dependent family member living at home with the community spouse.

A family member must meet all of the following to be considered a dependent:

·        Income low enough to be claimed as a tax dependent;

·        At least 50% of the cost of the family member’s support was paid by the customer and the community spouse; and

·        Citizenship or residency requirements.

When both spouses are eligible for ALTCS benefits and living in the community, each spouse gets one-half of the Family Allowance.

Income low enough to be claimed as a tax dependent

The family member must not receive enough income during the year to have to file a tax return.  For current information about who must file a tax return, go to the IRS webpage listed below and select Publication (Publ.) 501.

http://apps.irs.gov/app/picklist/list/formsPublications.html

EXCEPTION:

A child whose income is high enough to have to pay taxes can still be considered a dependent when he or she meets any of the following criteria:

·        Was under 19 years of age at the end of the calendar year; or

·        Was under 24 years of age at the end of the calendar year and was enrolled as a full-time student at a school during any 5 months of the calendar year.

NOTE      The school must have a regular teaching staff, course of study, and enrolled body of students in attendance. On-the-job training courses or correspondence schools do not qualify.

A married family member who is required to file a tax return and files a joint return cannot be a dependent. When the married family member is not required to file and only filed to get a refund, the person can be a dependent.

Support Requirement

To be considered a dependent, the institutionalized or community spouse must have paid over half of the family member’s support in the calendar year, including such items as:

·        Basic needs like food, clothing and housing;

·        Medical and dental care;

·        Recreation; and

·        Education.

In general, when both parents together paid more than half of the child’s support, the child is considered the dependent of the custodial parent if the parents are divorced or separated.

The child is only the dependent of a non-custodial parent when:

·        The custodial parent signs IRS Form 8332, or similar written statement, agreeing not to claim the child as a dependent, or

·        A divorce decree or other court order states that the non-custodial parent can take an income tax exemption for the child, and the non-custodial parent provided at least $600 for the child's support in the calendar year.

Citizenship or Residency Requirements

To be considered a dependent, the family member must meet one of the following:

·        A citizen or national of the U.S.;

·        A noncitizen who is a resident of the U.S., Canada, or Mexico; or

·        A noncitizen child adopted by and living the entire calendar year with a U.S. citizen parent in a foreign country.

Calculation

The Family Allowance is calculated for each dependent as follows:

See Community Spouse SOC Examples  

7)    Health Insurance Premiums

A SOC deduction is allowed for health insurance premiums the customer pays for his or her own coverage. A deduction is not allowed for premiums paid by anyone else or for any part of the premium that covers anyone else. When the premium covers people in addition to the customer, only the customer’s share of the premium is allowed as a SOC deduction. Health insurance includes any of the following:

·        Medicare;

·        Group health insurance;

·        Dental insurance;

·        Hearing aid insurance;

·        Vision care insurance; and

·        Prescription drug plans.

EXCEPTION:

Premiums for insurance policies that pay a flat rate benefit or a set amount to the person regardless of the actual charges or expenses are not allowed as SOC deductions.

Prorating Health Insurance Premiums

When the premium is billed less often than monthly (for example, quarterly or annually), the customer can choose to have the health insurance premium payment either:

·        Deducted from the SOC for the month in which the payment is due; or

·        Divided by the number of months it is meant to cover to get a monthly SOC deduction.

See Example Prorating Health Insurance Premiums

Pension Supplements for Health Insurance Premiums

When the customer’s pension benefit includes an amount to pay for all or part of the cost of health insurance premiums, a SOC deduction is only allowed for the amount of the health insurance premium that exceeds the amount reimbursed. When the customer also pays health insurance premiums for a spouse, the customer’s share of the insurance premium is compared to the total reimbursement received. A SOC deduction is allowed only for the amount of the customer’s share of the insurance premium that exceeds the total reimbursement.

See Example Pension Supplement for Health Insurance Premiums

Extra Help for Medicare Part D Coverage

When a customer’s Medicare Part D premium is all or partly paid by the Extra Help program, a SOC deduction is only allowed for the amount of the Medicare Part D premium the customer actually pays.

See Example Extra Help for Medicare Part D Coverage

8)    Non-Covered Medical Expenses

A SOC deduction is allowed for medical expenses that are not covered by the program contractor or any other health insurance.

NOTE          When the customer is not eligible for the ALTCS full benefit package due to a transfer penalty period, non-covered medical expenses during that period will not be allowed as a SOC deduction. 

To qualify for the SOC deduction, the expense must:

·        Be medically necessary;

·        Be ordered by a licensed healthcare professional (i.e., doctor, dentist, or other provider);

·        Not be covered by a third-party (including percentages of unpaid expenses);

·        Be the customer’s responsibility to pay;

·        Be either:

o       A type of care not normally covered by AHCCCS benefits, or

o       A type of care normally covered by AHCCCS, but that AHCCCS cannot pay because the customer was not eligible during the time of service; and

·        Has been provided within a specific time period, as described in the table below.

Paid Expenses

The amount of the deduction is the actual amount paid for the non-covered medical expense.

When the actual amount paid is more than the SOC for that month, the SOC is zero. Any remaining amount is not deducted in a future month.

See Example Current Payments for Services 

Unpaid Expenses

The unpaid balance is the total charge for the medical expense minus the amount covered by a third-party payor minus any payments made.

When an unpaid balance is more than the SOC for the month, the remaining unpaid balance is deducted in the next month. The deduction continues until the full balance is applied.

NOTE          A non-covered medical expense paid by a friend, relative, or other party is treated as the customer's unpaid expense when the customer has an agreement to repay that person.

See Example Unpaid Expenses

The allowable amount of the deduction is determined as follows:

See Example Calculating the SOC Deduction for Non-Covered Medical Expenses

9)    Special Deduction for Some Residents of an Arizona State Veteran Home

A customer who is a resident of an Arizona State Veteran Home gets a special SOC deduction when:

·        The customer is a veteran or the surviving spouse of a veteran; and

·        The customer has no spouse or dependent children.

Up to $90.00 of the VA pension benefits, including increases for aid and attendance and unusual medical expenses, is allowed as a deduction from the SOC.

The deduction may not exceed the total VA payment. When the customer receives less than $90.00 in VA benefits, the deduction is equal to the VA payment.

Definitions

Proof

The proof needed varies depending on the SOC deduction as described below:

1)    Proof for the Home Maintenance Needs Allowance

Proof of Shelter Expenses

The customer must provide proof that he or she has shelter expenses that need to be paid to maintain the home. Items that may be used as proof include:

·        Mortgage statements;

·        Tax statements or bills;

·        Utility bills;

·        Homeowner’s insurance or association fee bills; and

·        Telephone call to any of the above companies confirming the customer’s responsibility for and the amount of the expense.

Likely to Return Home

Proof is limited to a written statement from a physician that states the customer is likely to return to the home within six months from the date the customer entered the institution. The physician’s statement must be provided before the date the customer is expected to return home and must show the potential discharge date.

2)    Proof for the CSMIA

Excess Shelter Allowance

Items that may be used as proof include:

·        Mortgage statements;

·        Tax statements or bills;

·        Utility bills;

·        Homeowner’s insurance or association fee bills; and

·        Telephone call to any of the above companies confirming the customer’s responsibility for and the amount of the expense.

3)    Proof of Health Insurance Premiums

Proof of the amount of the premium and who is responsible to pay the premium must be provided before the premium amount can be deducted from the SOC. When proof of a future premium amount is received, the premium amount is deducted from the future SOC.

NOTE          If someone other than the customer is paying the premium, it is not necessary to prove the amount of the premium since it is not an allowable deduction from the SOC.

4)    Proof of Non-Covered Medical Expenses

To allow a SOC deduction for a non-covered medical expense, the following must be verified:

·        The expense is medically necessary;

·        The services were provided by a licensed health care professional;

·        The expense is not covered by the customer’s insurance or a third-party liability;

·        The expense will not be covered by the AHCCCS Medical Benefits package;

·        The customer is responsible for payment; and

·        The amount and date the expense was incurred or paid.

Proof that Services Were Medically Necessary

Proof that the service was medically necessary includes:

·        A written statement by a licensed health care professional; or

·        Billing statements  for preventive services

5)    Proof of Garnished Court-Ordered Child Support or Spousal Support

To allow an increase in the Personal Needs Allowance (PNA) for garnished court-ordered child support or spousal support, the following proof must be provided:

·        Court documents; and

·        Proof the income is garnished. Proof includes:

o       Letter from payor;

o       Pay stubs; or

o       Collateral contact with the source of the payment.

Legal Authority