Title of Regulation: 12VAC30-141. Family Access to Medical Insurance Security Plan (amending 12VAC30-141-740, 12VAC30-141-760).

Statutory Authority: §§ 32.1-325 and 32.1-351 of the Code of Virginia; 42 USC § 1397aa et seq.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: July 28, 2017.

Agency Contact: Emily McClellan, Regulatory Supervisor, Policy Division, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-4300, FAX (804) 786-1680, or email emily.mcclellan@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance and directs that such Plan include a provision for the Family Access to Medical Insurance Security (FAMIS) program, and § 32.1-324 of the Code of Virginia authorizes the Director of the Department of Medical Assistance Services (DMAS) to administer and amend the Plan for Medical Assistance when the board is not in session, subject to such rules and regulations as may be prescribed by the board. Section 32.1-351 of the Code of Virginia authorizes DMAS, or the director, as the case may be, to develop and submit to the federal Secretary of Health and Human Services an amended Title XXI plan for the FAMIS Plan and revise such plan and promulgate regulations as may be necessary. Section 2105 of Title XXI of the Social Security Act (42 USC § 1397ee) provides governing authority for payments for services.

Section 1115 of the Social Security Act (42 USC § 1315) provides states with the opportunity to implement demonstration projects that extend benefits to additional population groups with the intent of promoting program objectives, including those of Title XXI. Virginia implements the FAMIS MOMS program through a § 1115 Health Insurance Flexibility and Accountability (HIFA) Demonstration called "FAMIS MOMS and FAMIS Select." The Centers for Medicare and Medicaid Services (CMS) has approved the HIFA waiver amendment to allow state employees and their dependents, who otherwise qualify, to enroll in FAMIS MOMS.

Purpose: Lower-income families face a barrier when accessing health care services. The barrier is high out-of-pocket costs, which for low-income pregnant women can add up to a substantial part of their income. The proposed amendments permit pregnant women in families who have access to state employee benefits, and who have incomes greater than 143% and less than or equal to 200% of the federal poverty level (FPL), to enroll in FAMIS MOMS.

Pregnant women in working families who cannot afford insurance due to high out-of-pocket costs suffer from lack of access to health care. While state employees may be covered through their subsidized employee health insurance, for many low-income families this is not an affordable option due to high out-of-pocket costs such as premium contributions, copayments, and deductibles that can add up to a substantial proportion of earned income. The FAMIS MOMS change permits pregnant women who have access to subsidized health insurance through state employment, and are otherwise eligible (e.g., by virtue of family income, residency) to be enrolled for health coverage under the FAMIS MOMS program. By removing the exclusion of such women from enrollment, the proposed amendments allow the Commonwealth's employees to be treated the same as other families with access to employer-sponsored health insurance.

As a result of the FAMIS MOMS change, more lower-income pregnant women are permitted to obtain insurance coverage for critically important prenatal care. This is essential to protect the health, safety, and welfare of these affected individuals by providing an opportunity to access high quality health care services that they might otherwise not be able to afford. It does not otherwise affect the health, safety, or welfare of other citizens of the Commonwealth.

Substance: DMAS submitted a HIFA § 1115 Waiver amendment, which was approved by CMS, that expands coverage for FAMIS MOMS to include pregnant women with access to state employee health benefit coverage in accordance with the hardship exception specified in § 2110(b)(6)(C) of the Social Security Act.

To meet the financial hardship test, the Commonwealth showed that the annual aggregate amount of premiums and cost-sharing imposed for coverage of the family of the pregnant woman exceeded five percent of such family's income for the year involved. An analysis of annual aggregate out-of-pocket expenses for employees of the Commonwealth of Virginia, University of Virginia, and Virginia Commonwealth University Health System Authority demonstrated that Virginia currently meets the federal financial hardship test.

Under the FAMIS MOMS change, applicable qualified state employees, and their otherwise-eligible dependents, are permitted to enroll in FAMIS MOMS. This change only affects state employees who are qualified for employer-sponsored health insurance; wage employees are not eligible to receive a state contribution toward the cost of their health coverage, but are eligible to enroll in FAMIS MOMS if they otherwise qualify.

In order to alert potentially eligible employees about this policy change, DMAS and the Department of Human Resources Management (DHRM) implemented communication strategies to include agency website postings of a fact sheet, electronic newsletters to state benefit administrators, the annual notice to all state employees about premium assistance, and the state employee open enrollment newsletter for 2015.

Issues: The primary advantage of the FAMIS MOMS change is that more low-income working families had access to the FAMIS MOMS program, with significantly reduced out-of-pocket expenses for pregnancy-related care, perhaps resulting in more disposable income for such families to cover their basic necessities or other expenses. Businesses that offer health insurance to their employees may see a reduction in health insurance costs if any of their employees have spouses employed by the state, and could enroll their eligible dependents in FAMIS MOMS. The primary disadvantage for the affected families is the administrative process of having to rejoin the state health benefit plan within the 60-day qualifying event period once the pregnancy ends.

One advantage to the Commonwealth is cost savings associated with the state employee health benefit plan. The Commonwealth agencies that currently cover a pregnant woman on the state health plan might have been able to reduce their benefit option to that of an employee only, or employee plus spouse (depending on their family size and situation), thus reducing the state's share of premium for family coverage. Since the state employee health plan is self-insured, a reduction in the costs of claims incurred for pregnant women covered under the state health plan would contribute additional savings if those women were enrolled in FAMIS MOMS instead. Another advantage to the Commonwealth is the sharing of the costs, with the DMAS Federal Financial Participation, of care of these women and their infants. The Federal Financial Participation rate for FAMIS MOMS is 88%.

Another advantage to the Commonwealth is reduction of the social and economic costs associated with reducing the number of births to uninsured women. To the extent that FAMIS MOMS participants deliver fewer preterm or low birth weight infants, the program contributes to reduced medical costs for women in the income range served. In 2013, 7.1% of babies born to FAMIS MOMS were of low birth weight, compared to 8.0% of all births in Virginia; 7.9% of babies born to FAMIS MOMS were delivered preterm, compared to 11% of all births in Virginia ("Calendar Year 2013 Improving Birth Outcomes through Adequate Prenatal Care: Delmarva Foundation 2014").

There is no identified disadvantage to the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. On behalf of the Board of Medical Assistance Services, the Director (Director) of the Department of Medical Assistance Services (DMAS) proposes to amend this regulation to allow low income state employees, their spouses, or their dependents to participate in the Family Access to Medical Insurance Security (FAMIS) MOMs program. In practice, DMAS has already implemented this change.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. The Children's Health Insurance Program (CHIP) is the federal program under Title XXI of the Social Security Act that provides funds to states to enable them to initiate and expand the provision of child health insurance to uninsured, low-income children. In Virginia CHIP is known as the Family Access to Medical Insurance Security (FAMIS) Plan and the CHIP waiver program for pregnant women is known as FAMIS MOMS. FAMIS MOMS is only available to uninsured pregnant women whose household meets the family size and income limits in the following table.

FAMIS MOMS INCOME LIMITS* (GROSS INCOME**) - EFFECTIVE JANUARY 31, 2017
Family Size***	Monthly	Yearly
2	$2,775	$33,292
3	$3,490	$41,861
4	$4,203	$50,430
5	$4,917	$58,999
6	$5,632	$67,568
7	$6,345	$76,137
8	$7,060	$84,706

*includes 5% standard disregard.

**gross income is household income before taxes and deductions

***counts the unborn children as additional family members

This regulation (12VAC30-141, Family Access to Medical Insurance Security Plan) sets out provisions regarding FAMIS and FAMIS MOMS. The current regulation excludes state employees who have access to employer subsidized health coverage from enrolling themselves or their dependents in the FAMIS MOMS program, even if they are otherwise eligible by income, residency, and family size. The Director proposes to remove this exclusion from the regulation. Removing the exclusion allows the Commonwealth's employees to be treated the same as other families with access to employer-sponsored health insurance.

While the Commonwealth of Virginia subsidizes health insurance for full-time state employees, some lower-earning employees may still believe they cannot afford to enroll in one of the state sponsored plans. There are no premiums, copayments, or other charges associated with FAMIS MOMS participation. Thus, the proposal to remove the exclusion for state employees and their dependents may result in some pregnant women enrolling in FAMIS MOMS and receiving prenatal care who otherwise would not have. For these women and their babies there would be reduced risk of adverse health outcomes.¹ For example, a study done for DMAS by the Delmarva Foundation found that in 2013, 7.1% of babies born to FAMIS MOMS were of low birth weight, compared to 8.0% of all births in Virginia; and 7.9% of babies born to FAMIS MOMS were delivered preterm, compared to 11% of all births in Virginia.

The federal government pays 88% of the cost of FAMIS MOMS. Each Virginia participant costs the Commonwealth approximately $5,000.

Additionally, some low-income state employee families who participate in one of the state sponsored plans may choose to drop coverage for a pregnant member of the family, and have her enroll in FAMIS MOMS during the pregnancy. This would enable the family to save on premiums and copayments, while still maintaining pregnancy-related care. Pursuing this strategy may result in gaps in health coverage though. Employees and their family members cannot rejoin the state health plan at any time of the year. There is a 60-day open enrollment period each year where the state employee can change the coverage. Thus there would likely not be many state employee families who would drop state coverage for FAMIS MOMS. To the extent that some do, there would be some cost savings for Virginia. The Commonwealth agencies that currently cover a pregnant woman on the state health plan might be able to reduce their benefit option to that of an employee only, or employee plus spouse (depending on their family size and situation), thus reducing the state's share of premium for family coverage.

In practice, DMAS has accepted and encouraged low-income pregnant state employees to enroll in FAMIS MOMS since the 2015 enrollment period. In order to alert potentially eligible employees about this policy change, DMAS and the Department of Human Resources Management implemented communication strategies to include: agency website postings of a Fact Sheet, electronic newsletters to state benefit administrators, inclusion in the annual notice to all state employees about premium assistance, and the state employee open enrollment newsletter for 2015. DMAS has not formally tracked the number of state employees who have enrolled, but specifically knows of only a couple who did so in 2015, and is not aware of how many have enrolled since.²

Businesses and Entities Affected. The proposed amendment potentially affects all state employees and their families with household income that qualifies for FAMIS MOMS (see previous table), and have a household member who could become pregnant.

Localities Particularly Affected. The proposed amendment does not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendment does not significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendment does not significantly affect the use and value of private property.

Real Estate Development Costs. The proposed amendment does not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendment does not affect costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendment does not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendment does not adversely affect businesses.

Localities. The proposed amendment does not adversely affect localities.

Other Entities. The proposed amendment does not adversely affect other entities.

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¹ U.S. Department of Health and Human Services, National Institutes of Health.

² DMAS tracks the number of FAMIS MOMS enrollees, but does not know how many are state employees.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis prepared by the Department of Planning and Budget. The agency raises no issues with this analysis.

Summary:

In Virginia the federal Children's Health Insurance Program (CHIP) is known as the Family Access to Medical Insurance Security (FAMIS) Plan, and the CHIP waiver program for pregnant women is known as FAMIS MOMS. FAMIS MOMS is only available to pregnant women, according to their income who are uninsured. Under the authority of the federal Centers for Medicare and Medicaid Services, pregnant, low-income state employees and their pregnant dependents who are otherwise eligible for FAMIS MOMS have been permitted to enroll in the FAMIS MOMS program. The proposed amendments reflect these changes.

12VAC30-141-740. Eligibility requirements.

A. This section shall be used to determine eligibility of pregnant women for FAMIS MOMS.

B. FAMIS MOMS shall be in effect statewide.

C. Eligible pregnant women must:

1. Be determined ineligible for Medicaid due to excess income by a local department of social services or by DMAS eligibility staff co-located at the FAMIS CPU;

2. Be a pregnant woman at the time of application;

3. Be a resident of the Commonwealth;

4. Be either a U.S. citizen, U.S. national or a qualified noncitizen;

5. Be uninsured, that is, not have comprehensive health insurance coverage; and

6. Not be a member of a family eligible for subsidized dependent coverage, as defined in 42 CFR 457.310(c)(1)(ii) under any Virginia state employee health insurance plan on the basis of the family member's employment with a state agency; and

7. 6. Not be an inpatient in an institution for mental diseases (IMD), or an inmate in a public institution that is not a medical facility.

D. Income.

1. Screening. All applications for FAMIS MOMS coverage received at the FAMIS central processing unit must be screened to identify applicants who are potentially eligible for Medicaid. Pregnant women screened and found potentially eligible for Medicaid cannot be enrolled in FAMIS MOMS until there has been a finding of ineligibility for Medicaid. Pregnant women who do not appear to be eligible for Medicaid due to excess income shall have their eligibility for FAMIS MOMS determined and, if eligible, will be enrolled in the FAMIS MOMS program. Applications for FAMIS MOMS received at a local department of social services shall have a full Medicaid eligibility determination completed. Pregnant women determined to be ineligible for Medicaid due to excess income will have their eligibility for FAMIS MOMS determined and, if eligible, the local department of social services will enroll the pregnant woman in the FAMIS MOMS program.

2. Standards. Income standards for FAMIS MOMS are based on a comparison of countable income to 200% of the federal poverty level for the family size. Countable income and family size are based on the methodology utilized by the Medicaid program as defined in 12VAC30-40-100 e. Pregnant women who have income at or below 200% of the federal poverty level, but are ineligible for Medicaid due to excess income, will be income eligible to participate in FAMIS MOMS.

3. Spenddown. Deduction of incurred medical expenses from countable income (spenddown) shall not apply in FAMIS MOMS. If the family income exceeds the income limits described in this section, the individual shall be ineligible for FAMIS MOMS regardless of the amount of any incurred medical expenses.

E. Residency. The requirements for residency, as set forth in 42 CFR 435.403, will be used when determining whether a pregnant woman is a resident of Virginia for purposes of eligibility for FAMIS MOMS. A child who is not emancipated and is temporarily living away from home is considered living with her parents, adult relative caretaker, legal guardian, or person having legal custody if the absence is temporary and the child intends to return to the home when the purpose of the absence (such as education, medical care, rehabilitation, vacation, visit) is completed.

F. U.S. citizenship or nationality. Upon signing the declaration of citizenship or nationality required by § 1137(d) of the Social Security Act, the applicant or recipient is required under § 2105(c)(9) to furnish satisfactory documentary evidence of U.S. citizenship or nationality and documentation of personal identify unless citizenship or nationality has been verified by the Commissioner of Social Security or unless otherwise exempt.

G. Qualified noncitizen. The requirements for qualified aliens set out in Public Law 104-193, as amended, and the requirements for noncitizens set out in subdivisions 3 b, c, and e of 12VAC30-40-10 will be used when determining whether a pregnant woman is a qualified noncitizen for purposes of FAMIS MOMS eligibility.

H. Coverage under other health plans.

1. Any pregnant woman covered under a group health plan or under health insurance coverage, as defined in § 2791 of the Public Health Services Act (42 USC § 300gg-91(a) and (b)(1)), shall not be eligible for FAMIS MOMS.

2. No substitution for private insurance.

a. Only uninsured pregnant women shall be eligible for FAMIS MOMS. A pregnant woman is not considered to be insured if the health insurance plan covering the pregnant woman does not have a network of providers in the area where the pregnant woman resides. Each application for FAMIS MOMS coverage shall include an inquiry about health insurance the pregnant woman has at the time of application.

b. Health insurance does not include Medicare, Medicaid, FAMIS or insurance for which DMAS paid premiums under Title XIX through the Health Insurance Premium Payment (HIPP) Program or under Title XXI through the SCHIP premium assistance program.

12VAC30-141-760. Pregnant women ineligible for FAMIS MOMS.

A. If a pregnant woman is:

1. Eligible for Medicaid, or would be eligible if she applied for Medicaid, she shall be ineligible for coverage under FAMIS MOMS. A pregnant woman found through the screening process to be potentially eligible for Medicaid but who fails to complete the Medicaid application process for any reason, cannot be enrolled in FAMIS MOMS;

2. A member of a family eligible for coverage under any Virginia state employee health insurance plan, she shall be ineligible for FAMIS MOMS;

3. 2. An inmate of a public institution as defined in 42 CFR 435.1009, she shall be ineligible for FAMIS MOMS; or

4. 3. An inpatient in an institution for mental disease (IMD) as defined in 42 CFR 435.1010, she shall be ineligible for FAMIS MOMS.

B. If a pregnant woman age 18 years or older or, if under younger than age 18 years, a parent or other authorized representative does not meet the requirements of assignment of rights to benefits or requirements of cooperation with the agency in identifying and providing information to assist the Commonwealth in pursuing any liable third party, the pregnant woman shall be ineligible for FAMIS MOMS.

C. If a pregnant woman age 18 years or older, or if under younger than age 18 years, a parent, adult relative caretaker, guardian, or legal custodian obtained benefits for a pregnant woman who would otherwise be ineligible by willfully misrepresenting material facts on the application or failing to report changes, the pregnant woman for whom the application is made shall be ineligible for FAMIS MOMS. The pregnant woman age 18 years or older, or if under younger than age 18 years, the parent, adult relative caretaker, guardian, or legal custodian who signed the application shall be liable for repayment of the cost of all benefits issued as the result of the misrepresentation.