Background

On August 10, 2018, South Dakota submitted a five year Section 1115 waiver application to CMS to implement the South Dakota Career Connector program. The waiver application proposes work requirements for certain Medicaid beneficiaries. South Dakota is a non-expansion state, beneficiaries required to meet the work requirement are those who qualify under a traditional Medicaid pathway. The state proposes to operate the program on a voluntary basis beginning July 1, 2018. The eligibility criteria will take effect within 90 days of CMS approval of the proposed waiver. The federal comment period on the waiver application will be open through September 26, 2018.

The following provides an overview of the waiver application.

1115 Waiver Elements

Work Requirement and Eligibility

Through the 1115 waiver application, South Dakota is proposing to require certain Medicaid beneficiaries to meet work requirements. Those required to meet minimum training and/or work requirements must either work at least 80 hours per month or achieve monthly milestones in their individualized plan. Individualized employment and training that can meet the requirement include, but are not limited to, English as second language courses, financial literacy courses, volunteer work, job searching, and caregiving.

Adult Medicaid recipients age 19 to 59, enrolled in the parent and other “caretaker relatives” eligibility group and reside in Minnehaha or Pennington counties, will be required to meet these requirements unless a qualified exemption applies. It is estimated that 1,300 recipients in the two counties will be eligible.

Recipients exempt from participating will include: individuals who work 80 hours or more a month; full-time students; pregnant women; individuals who are eligible on the basis of disability or are determined disabled by the Social Security Administration; medically frail individuals (e.g. individuals suffering from cancer or a terminal illness); individuals already participating in SNAP, TANF, or unemployment insurance; nonparent caretaker relatives; parents of dependent children under one-year old living in the parent’s residence; and primary caregivers of elderly or disabled individuals living in the caretaker’s residence. (There are also “good cause” exemptions.)

Recipients will be reviewed for program participation during their initial application or at their next eligibility review. Newly enrolled recipients will be provided a three month period from their initial application month before they are required to work requirements. Eligible recipients who are exempt may voluntarily participate in the program, and will not be subject to noncompliance remedies.

Non-Compliance

Upon failure to comply with the monthly work requirements, the participant must contact Department of Labor and Regulation (DLR) employment within 30 days of notice to establish a corrective plan. After a second month of non-compliance, Department of Social Services (DSS) will be notified and the participant must again contact DLR. After a third month of non-compliance, the participant will receive a 10-day notice of Medicaid eligibility closure.

An individual determined ineligible for Medicaid due to non-compliance may work with DLR to take corrective action within 30 days of closure to seek coverage reinstatement. Failure to obtain reinstatement during the 30-day period will result in a 90-day Medicaid coverage ineligibility period.

Transitional Medical Benefits and Premium Assistance

South Dakota estimates that 15% of participants will lose their Medicaid eligibility as a result of increased earned income or by choosing not to participate. In order to address the “subsidy cliff” when a participant’s income exceeds Medicaid eligibility, participants can be eligible for Transitional Medical Benefits (TMB) for one year and an additional twelve months of premium assistance. TMB provides full Medicaid coverage, while the premium assistance will assist participants in purchasing employer-sponsored health insurance or coverage through a Qualified Health Plan (QHP).