ACHI Health Policy Director Craig Wilson and President and CEO Dr. Joe Thompson provide a detailed look at the work requirement approved for Arkansas’s expanded Medicaid program in a blog post for Health Affairs.
Arkansas recently became the third state to receive approval from the U.S. Department of Health and Human Services (HHS) to implement a work requirement for Medicaid adults. The hand-delivered approval follows the department’s endorsement of work requirements submitted by Kentucky and Indiana and comes ahead of action on similar requests from a host of other states, including Arizona, Maine, New Hampshire, Utah, and Wisconsin. Arkansas’s request was among several proposed amendments to the state’s Section 1115 demonstration waiver for its Arkansas Works program, including a proposed income eligibility cap at 100 percent of the federal poverty level (FPL) for the expansion population, which HHS did not approve at this time.
The approval follows clear signals in early November from Seema Verma, Centers for Medicare and Medicaid Services (CMS) Administrator, that the administration would approve such requests. Following that, CMS issued a letter to Medicaid Directors formalizing their position. Arkansas’s waiver—which proposes to further the objectives of Medicaid by “promoting independence through employment”—had been under review by HHS since July 2017. Now, the state will begin notifying enrollees that continued health care coverage is contingent upon meeting or being exempt from a work requirement, unless implementation is halted through litigation. Notices are expected to be sent to enrollees in early April, with reporting requirements to begin in June.
A standout among Southern states, Arkansas was successful in reducing its uninsured rate by more than half. The state’s unique premium-assistance approach to Medicaid expansion—under which Arkansas uses Medicaid funding to purchase individual qualified health plans through the Health Insurance Marketplace for eligible individuals—has resulted in the enrollment of nearly 300,000 Arkansans. The Arkansas Marketplace has remained competitive and has experienced some of the lowest individual premium increases nationwide, in part due to the injection of Medicaid as a large purchaser of coverage.
Employment among low-wage workers fluctuates considerably. Previous assessments have shown that, among beneficiaries who report zero income at eligibility determination, 70 percent had reportable wages in at least one quarter during the year before or after the date of eligibility determination. Challenges facing operational aspects of the work requirement will include fluctuating employment of individuals and differential employment opportunities in the communities within which they reside.
Implementation Preparation And Challenges
Arkansas Medicaid and Marketplace insurers have anticipated challenges and set up a considerable administrative overlay to track, report, and facilitate communication with beneficiaries about the work requirement. Building upon existing work requirements for individuals in the Supplemental Nutritional Assistance Program (SNAP), they have developed a communications plan to engage enrollees and providers to educate them about the work requirement and necessary actions to meet the requirement to retain coverage. Communications include correspondence through direct mail, email, social media, and other print and collateral materials.
Arkansas Medicaid has also invested in the development of an online portal for enrollee reporting of exemptions and work certification that is linked from the eligibility website. The portal for reporting will be different than two other online portals that applicants use for plan enrollment and access to resources to meet the work requirement. Notably, Arkansas Medicaid will require applicants to either have or obtain an email address as part of the eligibility process. The email address will be used for access to the reporting portal and for communication, including receipt of required notices from Arkansas Medicaid or Marketplace insurers.
Arkansas Works enrollees aged 19 to 49 will be subject to the work requirement, while those 50 and older will not. The state plans to operationalize the work requirement in phases, beginning with 30- to 49-year-olds in 2018 and adding 19- to 29-year-olds in 2019. This means that approximately 100,000 enrollees at or below 100 percent of the FPL will be subject to the work requirement in 2018. If Medicaid officials decide to apply work requirements to individuals above 100 percent of the FPL—which the waiver terms and conditions allow—then another approximately 20,000 beneficiaries will be affected.
Work Requirement Exemptions
Not all will be required to report work activities. Roughly 60 percent of enrollees are expected to be exempt. These include beneficiaries who are exempt from the work requirement for the Supplemental Nutrition Assistance Program (SNAP) and those receiving Transitional Employment Assistance, both of which can be verified by the state every 30 days using its own data. The following also qualify as exemptions and are determined at application, renewal, or attestation through the portal:
- medical frailty;
- living in the home with a dependent minor;
pregnancy (valid exemption until the end of post-partum care);
- caring for an physically or mentally incapacitated person;
- short-term physical or mental incapacitation;
- participation in an alcohol or drug treatment program;
enrollment in full-time education; or
receipt of unemployment benefits.
Work Activities And Reporting
For Arkansas Works enrollees who do not meet an exemption, they must be employed, with a gross income that is greater than $736.78 per month (the Arkansas minimum wage of $8.50 per hour multiplied by 20 hours per week at 4.334 weeks per month), or have a combination of work activities, which may include employment hours, totaling 80 hours per month. The following are approved work activities that require demonstration of compliance:
- employment of at least 80 hours per month;
- less than full-time education;
- job or vocational training;
- volunteer work (must include agency name, address, and phone number);
- independent job search (up to 40 hours per month);
- job search training (up to 40 hours per month);
- participation in classes on health insurance, use of the healthcare system, or healthy living (maximum of 20 hours per year);
- fulfillment of SNAP or Transitional Employment Assistance work requirement; or
- job assistance activities or programs through the Arkansas Department of Workforce Services.
Enrollees who are required to report employment, exemptions, or other work activity must do so no later than the fifth day of each month for the previous month. Failure to report results in the loss of coverage at the end of the third month of non-compliance. Months of non-compliance need not be consecutive to trigger loss of coverage. Those losing coverage as a result of non-compliance will be locked out of coverage for the remainder of the plan year, even if they meet an exemption in the latter part of the year in which they lose coverage. However, they are not barred from reapplying for coverage for the subsequent calendar year. Enrollees demonstrating good cause (e.g., experiencing hospitalization or serious illness, birth or death of a family member, severe inclement weather) may be considered as exempt from work-activity reporting on a case-by-case basis.
For work-activity and exemption reporting based on enrollee attestation, the state will seek to verify the reporting of a sample of enrollees. If the state discovers falsifications, Arkansas Medicaid will refer the enrollee’s information to the appropriate investigative authorities.
Medicaid As A Test Environment
With federal approval to implement a work requirement, Arkansas will now test—as the waiver application states—“innovative approaches to promoting personal responsibility and work, encouraging movement up the economic ladder, and facilitating transitions between Arkansas Works, employer-sponsored insurance, and the Marketplace for Arkansas Works employees.” These objectives in isolation are certainly laudable, but there remains a question about whether social goals such as employment enhancement can be operationalized within what has traditionally been restricted to a health care financing system for the poor. As multiple states are approved to implement work requirements, opportunities exist to learn from those strategies that are successful and those that fall short of expectations. Regular compliance monitoring and more rigorous state and federal evaluations should carefully assess results against stated objectives.