[Federal Register Volume 59, Number 221 (Thursday, November 17, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-28317] [[Page Unknown]] [Federal Register: November 17, 1994] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration 42 CFR Parts 435 and 436 Medicaid Administration for Children and Families 45 CFR Part 233 RIN 0970-AA07 Aid to Families With Dependent Children; Extension of Medicaid When Support Collection Results in Termination of Eligibility AGENCIES: Administration for Children and Families (ACF) and Health Care Financing Administration (HCFA), HHS. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: These final rules interpret section 20 of the Child Support Enforcement Amendments of 1984, as amended by section 303(e) of the Family Support Act of 1988, and section 8003 of the Omnibus Budget Reconciliation Act of 1989. The 1984 law extended Medicaid coverage for a period of four months to certain dependent children and adult relatives who become ineligible for Aid to Families with Dependent Children (AFDC) as a result, wholly or partly, of the collection or increased collection of child or spousal support under title IV-D of the Social Security Act (the Act). The regulations are applicable to the AFDC and Medicaid programs in all jurisdictions. EFFECTIVE DATE: November 17, 1994. FOR FURTHER INFORMATION CONTACT: AFDC: Mr. Mack Storrs, ACF/OFA 5th Floor, 370 L'Enfant Promenade S.W., Washington, DC 20447, telephone (202) 401-9289. Medicaid: Mr. Marinos T. Svolos, HCFA Room 323, East High Rise Building, 6325 Security Boulevard, Baltimore, Maryland 21207, telephone (410) 966-4451. SUPPLEMENTARY INFORMATION: Statutory Authority Section 20 of the Child Support Enforcement Amendments of 1984 (Public Law 98-378) amended both the AFDC and Medicaid titles of the Act. Title IV-A (AFDC) was amended by adding a new paragraph (h) to section 406 of the Act. This new paragraph provides that: ``[e]ach dependent child and each relative with whom such a child is living (including the spouse of such relative as described in subsection (b)), who becomes ineligible for aid to families with dependent children as a result (wholly or partly) of the collection or increased collection of child or spousal support under Part D, and who has received such aid in at least three of the six months immediately preceding the month in which such ineligibility begins, shall be deemed to be a recipient of aid to families with dependent children for purposes of title XIX for an additional four calendar months beginning with the month in which such ineligibility begins.'' Section 20 of Public Law 98-378 also amended section 1902(a)(10(A)(i)(I) to require Medicaid coverage of eligible individuals pursuant to section 406(h) of the Act. Both amendments apply only to those individuals who became ineligible for AFDC on or after August 16, 1984, the date of enactment of Public Law 98-378, and before October 1, 1988, and who received AFDC in at least three of the six months immediately preceding the month of ineligibility. Section 303(e) of the Family Support Act of 1988 (Public Law 100- 485) amended section 20 of the Child Support Enforcement Amendments of 1984 to extend for one year, through September 30, 1989, the authority of this provision. Section 8003 of the Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239) removed the sunset date for this section, thus making it a permanent provision of the Act. Notice of Proposed Rulemaking (NPRM) A NPRM was published in the Federal Register on November 27, 1992 (57 FR 56294), amending 45 CFR Part 233 and 42 CFR Parts 435 and 436 to set forth the circumstances under which individuals become eligible for the four-month period of extended Medicaid coverage because they have lost AFDC as a result (wholly or partly) of the collection or increased collection of child or spousal support. The proposed rules interpreted the statute to require either the new receipt of, or an increase in, the collection of child or spousal support which renders the family ineligible for AFDC. As required by statute, the proposed rules provide that individuals must have received AFDC in at least three of the six months immediately preceding the month in which AFDC ineligibility begins in order to qualify for the extended Medicaid coverage. As we pointed out in the preamble to the proposed rules, individuals who do not actually receive an AFDC payment for any month because of the rounding of the payment amount to zero, the recoupment of an overpayment, or the elimination of payments for those who are eligible for amounts less than $10 are deemed to be AFDC recipients for that month for purposes of determining eligibility for continued Medicaid coverage under this provision. Also under the proposed rules, continued Medicaid under this provision ends for any individual family member who moves to another State. In the preamble to the proposed rules, we stated that Medicaid ends effective with the month following the month the individual moves to the new State. Although benefits end when an individual moves to another State, eligibility can be reinstated in the State in which he or she was entitled to the extended coverage if the individual re- establishes residence there before the end of the four-month period. It was the Department's view that extended Medicaid benefits are available only in the State in which the family became ineligible for AFDC benefits. For example, if a family moved to another State in March, the first month of the extended period, and moved back in May, the third month of the extended period, they would be eligible for extended Medicaid benefits for the months of May and June. The preamble to the proposed rules recognized that States require collection of support made by absent parents and spouses to be paid directly to the IV-D agency. Nevertheless, AFDC recipients occasionally receive child or spousal support directly. Because current regulations require that these payments must be turned over to the IV-D agency, we consider direct payments which are properly turned over to the IV-D agency to be collections of support for the purposes of this provision. Thus, extended Medicaid coverage will be provided when collections of child or spousal support are received by the eligible assistance unit and are turned over to the IV-D agency if these payments result (wholly or partly) in the loss of AFDC. The proposed rules indicated that section 406(h) of the Act provides certain individuals with extended Medicaid if they lose AFDC eligibility ``as a result (wholly or partly) of the collection or increased collection of child or spousal support * * *'' (emphasis added). They separately specified the circumstances under which AFDC ineligibility would be considered to be due ``wholly'' to a collection and when they would be considered to be due ``partly'' to a support collection. They also discussed at length examples of cases in which the child or spousal support collection ``wholly'' or ``partly'' affected the family's AFDC eligibility and made a clear distinction between the ``wholly'' or ``partly'' cases. Our interpretation of Congressional intent as it relates to the term ``wholly'' or ``partly'' limits the Medicaid extension under this provision to cases where ineligibility can be attributed, at least partly, to the initiation of or an increase in the amount of a child or spousal support collection. The proposed and final regulations both reflect our position that the collection of support must actually cause or actively contribute to ineligibility for AFDC, even if there are other factors which also contribute to ineligibility or could simultaneously cause it. The proposed rules provided that extensions of Medicaid eligibility pursuant to expiration of the earnings disregards as set forth in 45 CFR 233.20(a)(14) or pursuant to section 303(a) of the Family Support Act of 1988 (P.L. 100-485) are not affected by this provision. Thus, if a family is entitled to extended Medicaid as a result of earned income under section 303(a) and is also simultaneously entitled to extended Medicaid as a result of the initiation of or a change in the amount of the child or spousal support collection, the assistance unit would be entitled to the full twelve-month extension of Medicaid available under the section 303(a) transitional provision if it meets the requirements of section 1925 of the Act. However, the periods run concurrently so that one extended period cannot be delayed until the end of the other extended period. Response to Specific Individual Comments We received five comments on the proposed rules. Three were from State government agencies, one was from an advocacy group and one was from a health services organization. A discussion of these comments and our responses follows. Comment: One advocacy group requested that the Department clarify the definition of support collections which would trigger entitlement to extended Medicaid coverage. It recommended that the change must be in the amount of support collected. The advocacy group was concerned that the language in the discussion of the proposed regulations referring to an increase in the ``ongoing support payment'' may be read as referring to an increase in the amount the absent parent has to pay, rather than an increase in the amount which is collected in a given month. Response: We have eliminated any reference to an increase in an ``ongoing support payment.'' We believe this will eliminate any confusion between support ordered and support collected. The amount of support ordered is not material when establishing eligibility for extended benefits. This eligibility is based on the amount of support which is collected. Comment: One State agency recommended a change in the definition of ``collection'' of child or spousal support to cover situations where collections of child or spousal support contribute to a loss of eligibility but no initiation of or increase in collections occurred. Another State agency believed that the proposed definition is more restrictive than the wording of the statute and that there was no legislative history presented to conclude that Congress intended to define the entitlement as narrowly as proposed. Response: As a condition of extended Medicaid coverage, the final regulations continue to require that ineligibility for AFDC must result from a change in support collection; that is, either the new receipt of, or an increase in, the amount of a child or spousal support collection. As we stated in the preamble to the proposed rules, we believe that the Conference Report, H.R. Rep. No. 925, 98th Cong., 2d Sess. (1984), contemplates a change in the amount of the child or spousal support collection. In describing the House bill, the Conference Report states that ``[i]f a family loses AFDC eligibility as the result (wholly or partly) of increased collection of support payments * * *, the State must continue to provide Medicaid benefits * * *.'' Id. at 55 (emphasis added). The Conference Agreement followed the House bill, but with an amendment limiting the application of the provision to families who become ineligible for AFDC before October 1, 1988. Similarly, the Report of the Committee on Ways and Means, H.R. Rep. No. 527, 98th Cong., 1st Sess. at pages 11, 23, 52, and 56 refers repeatedly to either an ``increase in child support payments'' or to ``a change in child support levels.'' Comment: Two State agencies believed that the definition of ``collection'' was convoluted, unnecessarily complex, and difficult to administer. One agency believed the definition would make automation more difficult and expensive. Response: We believe that any difficulty in the proposed definition stemmed from our attempt to interpret the law broadly. The interpretation requires States to compare the different possible causes for the loss of AFDC, but was designed to allow continued eligibility under a number of different circumstances. We could have interpreted section 406(h) to mean that continued eligibility is available only when changes in support collections alone lead to a loss of AFDC. Extended coverage would not have been available if any other factors contributed to or caused ineligibility. We instead chose to cover individuals who lose AFDC under any circumstances in which the change in support either causes or contributes to the loss of AFDC. This interpretation, by its nature, has increased the complexity of the rule. We have attempted in the final regulation to express these concepts more simply and concisely. We have done so by removing the emphasis in the proposed regulation on the distinction between the loss of AFDC which results ``wholly'' instead of ``partly'' from support collections. Instead, we have placed the emphasis on extended Medicaid whenever a support collection has either caused or actively contributed to the loss of AFDC. As in the proposed regulation, a family can qualify for extended Medicaid when the support collection alone causes ineligibility for AFDC or when the support collection, in conjunction with other changes in income or family circumstances, contributes to ineligibility. The following examples demonstrate these concepts, as we have revised them. They are keyed to the regulations at Secs. 435.115(h)(1), 436.114(h)(1) and 233.20(a)(15)(iii)(A). An example of how the final rule would apply in Secs. 435.115(h)(1)(i), 436.114(h)(1)(i) and 233.20(a)(15)(iii)(A)(1) is an assistance unit which receives $250 in countable child support collections monthly. The applicable standard of need is $375. In the next month the countable child support collection increases to $400. In this example, the resulting ineligibility is due to the collection of child support, and the Medicaid extension would apply. Another illustration includes a situation which conforms to Secs. 435.115(h)(1)(i), 436.114(h)(1)(i) and 233.20(a)(15)(iii)(A)(1) of the final regulations. An assistance unit receives $200 in countable child support collections and $100 in title II benefits monthly. The applicable standard of need is $325. In the next month both the child support collection and title II increase by $75, for a total increase of $150 a month. Here, the resulting ineligibility is due to the child support collection because the change in support by itself, when added to the unchanged title II benefit, would cause ineligibility. Thus, the Medicaid extension would apply. An example of how the definition of ``collection'' applies in combination with other changes in family circumstances, as indicated in Secs. 435.115(h)(1)(ii), 436.114(h)(1)(ii) and 233.20(a)(15)(iii)(A)(2), would be as follows. An assistance unit received $275 in countable child support collections and the applicable standard of assistance was $375. In the next month, the countable child support collection increased to $325 and at the same time one of the older children left home. As a result, the applicable standard of assistance was reduced to $300. The countable child support collection of $325 exceeded the new standard of $300 and resulted in the assistance unit's ineligibility. Under the clarified definition of ``collection'' in the final regulation, the family would be eligible for extended Medicaid, since the collection of child support increased and contributed to the ineligibility. In this instance, the reduction in the standard of assistance worked in combination with the increased collection of support to cause the ineligibility. It thus contributed to the family's ineligibility. Neither change would have caused ineligibility by itself. However, suppose that in this example the $275 received by the assistance unit was raised to $325 and the $375 standard of assistance was reduced to $250. In this case, the increase in child support would have no effect on eligibility for AFDC. That is because the change in the standard of assistance would have caused ineligibility even before the child support collection was raised from $275 to $325. Because the change in the support collection neither caused nor contributed to ineligibility for AFDC, the family would not be eligible for extended Medicaid. Thus, under the definition included in the final rule, other changes affecting eligibility and occurring in conjunction with a change in the amount of the support collection would not negate the family's entitlement to extended Medicaid, as long as the support collection contributes to ineligibility for AFDC. Comment: One State questioned the discussion of payments made by absent parents directly to the AFDC recipient. The State asserted that if these payments are turned in as required, the money flows through the child support mechanism as would money collected by the State directly from the absent parent. As such it represents a ``collection'' under title IV-D. If the money is not forwarded to the State agency, it is budgeted accordingly (as income to the family), and penalties (for non-cooperation) are imposed as appropriate. The regulations are silent on the issue of monies not forwarded so the State assumes there is no intent to provide the extension when the support causes ineligibility when budgeted, since to provide such an extension in this case would be contrary to the statute. Response: There is no intent to provide the extension in such situations. The State is correct that monies not forwarded to the State agency would not constitute a ``collection'' under title IV-D, as required by the statute. Such monies would be budgeted as income to the family in a IV-A income State, with sanctions for non-cooperation imposed as appropriate. In a IV-D recovery State, the IV-D agency must recover all such payments. The IV-D agency would enter into a repayment agreement with the custodial parent in accordance with 45 CFR 303.80. We have revised the regulation in several places in order to make it clear that support collections must be child or spousal support collected under title IV-D. Comment: One State agency commented that, given the erratic nature of child support payments, the proposed policy could result in disparate treatment for clients with equal amounts of child support. Another State agency expressed concern that the application of the proposed regulations may provide an incentive for an absent parent not to pay child support when a child is approaching the age of majority or some other income change is expected to occur. Response: Because of the sporadic nature of the receipt of support payments and other changes in family circumstances, it would be difficult to determine when such a situation might occur. Nevertheless, it is true that, in some cases, an increase in support collection would coincide with other circumstances affecting AFDC eligibility. The statute places no special requirements on the circumstances which resulted in the increased support collection which, in turn, triggered the four-month period. If a family receives a change in support payments which in some way causes that family to lose AFDC, regardless of the circumstances, then that family is entitled to four extra months of Medicaid coverage. The statute places no relevance on the regularity or timing of payments. Comment: Two commenters suggested that extended Medicaid should be continued when a family or individual moves out of the State and is no longer a resident of the State. One commenter suggested that the State where the individual was originally eligible for extended Medicaid should be responsible for providing any remaining months of extended Medicaid, particularly where the individual was enrolled in a managed care organization. The other commenter suggested that the new State should be automatically responsible for paying for the remaining months of the extended period. Response: In the preamble to the notice of proposed rulemaking, HCFA took the position that ``[c]ontinued Medicaid under this provision ends for any individual who moves to another State.'' The preamble further provided, however, that eligibility could be reinstated if the individual returns to the State and the individual would be entitled to any remaining months of extended benefits. We believe that it is reasonable to allow States to terminate families who become residents of other States during the extended Medicaid period. Nothing in section 406(h) explicitly requires a State to continue extended benefits for an individual who has moved to another State. In addition, our interpretation of this provision conforms with the longstanding policy that States are only required to provide Medicaid to their own residents. The Medicaid statute establishes a framework of cooperative federalism in which each state develops a plan for providing medical assistance for its residents. The statute establishes a general framework for the State's Medicaid program; however, States have some flexibility to tailor the program to meet the particular needs of their residents. As a result, each State plan is different. From the outset of the Medicaid program, State residency has been an important aspect of Medicaid eligibility. Section 1902(b)(2), 42 U.S.C. section 1396a(b)(2), prohibits the Secretary from approving a plan which imposes any residency requirement which excludes individuals who reside in the State, regardless of whether or not the residence is maintained permanently or at a fixed address. On the other hand, there has never been any general statutory requirement that a State cover individuals who are not its residents or continue to cover those who are no longer its residents. Indeed, section 1902(b)(2) implicitly recognizes that States may limit Medicaid coverage to their own residents. Moreover, the statute requires the State plan to include provisions for furnishing medical assistance under the plan ``to individuals who are residents of the State but are absent therefrom'' (section 1902(a)(16); 42 U.S.C. section 1396a(a)(16)). This provision recognizes a State's continued responsibility for its Medicaid eligible residents during temporary periods of absence in another jurisdiction, but only as long as they remain residents. In light of these rules, we have for many years taken the position that the Secretary is permitted to approve a plan which limits eligibility to all State residents and consequently denies medical assistance to individuals who do not reside in the State. It is our understanding that most States expressly require individuals to be residents of the State in order to receive medical assistance under the State plan, although they could choose to cover non-residents. The right to continued receipt of Medicaid normally ends when an individual establishes residency in a new State. If an individual seeks medical assistance in the new State, eligibility is determined based on the State plan of the new State. If Congress had intended in section 406(h) a major departure from this traditional role of States under the Medicaid statute, we believe this would have been clear from either the statute or legislative history. Our review of the statute and the legislative history for section 406(h) does not reflect that Congress intended this result. We also do not believe that section 406(h) requires an individual's new State of residence to provide continued Medicaid coverage. This provision simply deems an individual to be an AFDC recipient for Medicaid purposes for an additional four calendar months; that is, as an add-on to the period of coverage the individual has already received under the State plan of his or her original State. HCFA does not regard section 406(h) as creating a portable status that entitles the individual to different Medicaid coverage in a different State. The fact that an individual is an AFDC recipient in State A does not get that individual Medicaid benefits in State B. Similarly, the fact that an individual is deemed to be an AFDC recipient in State A would not necessarily get that individual Medicaid benefits in State B (unless State B chooses to cover the individual or has an interstate agreement which does so). If the individual is deemed to be an AFDC recipient for Medicaid purposes for an additional four months, the individual should therefore receive extended Medicaid only in the State in which he or she lost AFDC status and was granted the four months of extended coverage. One commenter also raised the question of whether our policy has constitutional implications because the commenter believes that it violates an individual's right to interstate travel. The commenter points out that other residents in the new State would be eligible for extended benefits while the newly arrived individuals with exactly the same circumstances would not be eligible. We believe that the commenter is incorrect in assuming that the individual who has moved is equally situated with other residents of the new State who are receiving the additional four months of Medicaid. The individual's former State may well have had a higher AFDC eligibility standard than the new State, which enabled the individual to get Medicaid in the old State before he or she lost AFDC because of a support payment. In the new State, the individual may never have been eligible for AFDC even without the increased collection. We do not believe the residency requirement for extended Medicaid has any significant effect on managed care. Ordinarily, an HMO will lose an enrollee when he or she has moved to another State, because HMOs have defined service areas and provider networks. In most cases, when a recipient enrolled in an HMO moves to another State, he or she would no longer be in the service area of the HMO. As such, the recipient would no longer be qualified to remain in the HMO, regardless of the residency requirement. In addition, the effect of the residency requirement on recipients of extended Medicaid is no different from the effect of the residency requirement on any Medicaid eligible HMO recipient who moves from the State. Regulatory Procedures Executive Impact Analysis These regulations have been reviewed pursuant to Executive Order 12866 to ensure their consistency with the priorities and principles set forth in that Executive Order. An assessment of the costs and benefits of available regulatory alternatives (including not regulating) demonstrated that the approach taken in the regulation is the most cost-effective and least burdensome while achieving the regulatory objectives. Paperwork Reduction Act There will be no reporting or record keeping requirements imposed on the public or States which would require clearance by the Office of Management and Budget. Regulatory Flexibility Act The Regulatory Flexibility Act (Pub. L. 96-354) requires the Federal government to anticipate and reduce the impact of regulations and paperwork requirements on small businesses. The primary impact of these final rules is on State governments and individuals. Therefore, we certify that these rules will not have a significant economic impact on a substantial number of small entities because they affect benefits to individuals and payments to States. Thus, a regulatory flexibility analysis as provided in Public Law 96-354, the Regulatory Flexibility Act (RFA), is not required. Section 1102(b) of the Social Security Act requires the Secretary to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. Such an analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital which is located outside of a Metropolitan Statistical Area and has fewer than 50 beds. We are not preparing a rural impact statement since we have determined, and the Secretary certifies, that this final rule will not have a significant economic impact on the operations of a substantial number of small rural hospitals. List of Subjects 42 CFR Part 435 Aid to Families with Dependent Children, Grant programs--health, Medicaid, reporting and record keeping, Supplemental Security Income (SSI), Wages. 42 CFR Part 436 Aid to Families with Dependent Children, Grant programs--health, Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin Islands. 45 CFR Part 233 Aliens, Grant programs--social programs, Public assistance programs, Reporting and record keeping requirements. (Catalog of Federal Domestic Assistance Program No. 13.714, Medical Assistance Program: 13.780, Assistance Payments Maintenance Assistance.) Dated: April 4, 1994. Mary Jo Bane, Assistant Secretary for Children and Families. Dated: April 24, 1994. Bruce C. Vladeck, Administrator, Health Care Financing Administration. Approved: November 4, 1994. Donna E. Shalala, Secretary of Health and Human Services. For the reasons set forth in the preamble, parts 435 and 436 of chapter IV, title 42 and part 233 of chapter II, title 45, Code of Federal Regulations, are amended as set forth below: Health Care Financing Administration 42 CFR Chapter IV PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA 1. The authority citation for Part 435 continues to read as follows: Authority: Section 1102 of the Social Security Act (42 U.S.C. 1302). 2. Section 435.115 is amended by adding new paragraphs (f), (g), and (h) to read as follows: Sec. 435.115 Individuals deemed to be receiving AFDC. * * * * * (f) The State must deem an individual to be receiving AFDC if a new collection or increased collection of child or spousal support under title IV-D of the Social Security Act results in the termination of AFDC eligibility in accordance with section 406(h) of the Social Security Act. States must continue to provide Medicaid for four consecutive calendar months, beginning with the first month of AFDC ineligibility, to each dependent child and each relative with whom such a child is living (including the eligible spouse of such relative as described in section 406(b) of the Social Security Act) who: (1) Becomes ineligible for AFDC on or after August 16, 1984; and (2) Has received AFDC for at least three of the six months immediately preceding the month in which the individual becomes ineligible for AFDC; and (3) Becomes ineligible for AFDC wholly or partly as a result of the initiation of or an increase in the amount of the child or spousal support collection under title IV-D. (g)(1) Except as provided in paragraph (g)(2) of this section, individuals who are eligible for extended Medicaid lose this coverage if they move to another State during the 4-month period. However, if they move back to and reestablish residence in the State in which they have extended coverage, they are eligible for any of the months remaining in the 4-month period in which they are residents of the State. (2) If a State has chosen in its State plan to provide Medicaid to non-residents, the State may continue to provide the 4-month extended benefits to individuals who have moved to another State. (h) For purposes of paragraph (f) of this section: (1) The new collection or increased collection of child or spousal support results in the termination of AFDC eligibility when it actively causes or contributes to the termination. This occurs when: (i) The change in support collection in and of itself is sufficient to cause ineligibility. This rule applies even if the support collection must be added to other, stable income. It also applies even if other independent factors, alone or in combination with each other, might simultaneously cause ineligibility; or (ii) The change in support contributes to ineligibility but does not by itself cause ineligibility. Ineligibility must result when the change in support is combined with other changes in income or changes in other circumstances and the other changes in income or circumstances cannot alone or in combination result in termination without the change in support. (2) In cases of increases in the amounts of both support collections and earned income, eligibility under this section does not preclude eligibility under 45 CFR 233.20(a)(14) or section 1925 of the Social Security Act (which was added by section 303(a) of the Family Support Act of 1988 (42 U.S.C. 1396r-6)). Extended periods resulting from both an increase in the amount of the support collection and from an increase in earned income must run concurrently. PART 436--ELIGIBILITY IN GUAM, PUERTO RICO, AND THE VIRGIN ISLANDS 1. The authority citation for Part 436 continues to read as follows: Authority: Section 1102 of the Social Security Act (42 U.S.C. 1302). 2. Section 436.114 is amended by adding new paragraphs (f), (g), and (h) to read as follows: Sec. 436.114 Individuals deemed to be receiving AFDC. * * * * * (f) The State must deem an individual to be receiving AFDC if a new collection or increased collection of child or spousal support under title IV-D of the Social Security Act results in the termination of AFDC eligibility in accordance with section 406(h) of the Social Security Act. States must continue to provide Medicaid for four consecutive calendar months, beginning with the first month of AFDC ineligibility, to each dependent child and each relative with whom such a child is living (including the eligible spouse of such relative as described in section 406(b) of the Social Security Act) who: (1) Becomes ineligible for AFDC on or after August 16, 1984; and (2) Has received AFDC for at least three of the six months immediately preceding the month in which the individual becomes ineligible for AFDC; and (3) Becomes ineligible for AFDC wholly or partly as a result of the initiation of or an increase in the amount of a child or spousal support collection under title IV-D. (g)(1) Except as provided in paragraph (g)(2) of this section, individuals who are eligible for extended Medicaid lose this coverage if they move to another State during the 4-month period. However, if they move back to and reestablish residence in the State in which they have extended coverage, they are eligible for any of the months remaining in the 4-month period in which they are residents of the State. (2) If a State has chosen in its State plan to provide Medicaid to non-residents, the State may continue to provide the 4-month extended benefits to individuals who have moved to another State. (h) For purposes of paragraph (f) of this section: (1) The new collection or increased collection of child or spousal support results in the termination of AFDC eligibility when it actively causes or contributes to the termination. This occurs when: (i) The change in support collection in and of itself is sufficient to cause ineligibility. This rule applies even if the support collection must be added to other, stable income. It also applies even if other independent factors, alone or in combination with each other, might simultaneously cause ineligibility; or (ii) The change in support contributes to ineligibility but does not by itself cause ineligibility. Ineligibility must result when the change in support is combined with other changes in income or changes in other circumstances and the other changes in income or circumstances cannot alone or in combination result in termination without the change in support. (2) In cases of increases in the amounts of both the support collections and earned income, eligibility under this section does not preclude eligibility under 45 CFR 233.20(a)(14) or section 1925 of the Social Security Act (which was added by section 303(a) of the Family Support Act of 1988 (42 U.S.C. 1396r-6)). Extended periods resulting from both an increase in the amount of the support collection and from an increase in earned income must run concurrently. Administration for Children and Families 45 CFR Chapter II PART 233--COVERAGE AND CONDITIONS OF ELIGIBILITY IN FINANCIAL ASSISTANCE PROGRAMS 1. The authority citation for Part 233 continues to read as follows: Authority: 42 U.S.C. 301, 602, 606, 606 note, 607, 1202, 1302, 1352 and 1382 note; sec. 6 of Pub. L. 94-114, 89 Stat. 579; Part XXIII of Pub. L. 97-35, 95 Stat. 843; Pub. L. 97-248, 96 Stat. 324; Pub. L. 99-603, 100 Stat. 3359; and sec. 1883 of Pub. L. 99-514, 100 Stat. 2916. 2. Section 233.20 is amended by adding a new paragraph (a)(15) to read as follows: Sec. 233.20 Need and amount of assistance. (a) * * * (15) For Medicaid eligibility only, pursuant to section 406(h) of the Act: (i) Each dependent child and each relative with whom such a child is living (including the eligible spouse of such relative pursuant to section 237.50(b) of this chapter) who becomes ineligible for AFDC wholly or partly because of the initiation of or an increase in the amount of a child or spousal support collection under title IV-D will be deemed to be receiving AFDC, but only for purposes of this paragraph (a)(15), for a period of four consecutive calendar months beginning with the first month of AFDC ineligibility. To be eligible for extended Medicaid coverage pursuant to this paragraph (a)(15), each dependent child and relative must meet the following conditions: (A) The individual must have become ineligible for AFDC on or after August 16, 1984; and (B) The individual must have received AFDC in at least three of the six months immediately preceding the month in which the individual becomes ineligible for AFDC; and (C) The individual must have become ineligible for AFDC wholly or partly as a result of the initiation of or an increase in the amount of a child or spousal support collection under title IV-D. (ii)(A) Except as provided in paragraph (a)(15)(ii)(B) of this section, individuals who are eligible for extended Medicaid lose this coverage if they move to another State during the 4-month period. However, if they move back to and reestablish residence in the State in which they have extended coverage, they are eligible for any of the months remaining in the 4-month period in which they are residents of the State. (B) If a State has chosen in its State plan to provide Medicaid to non-residents, the State may continue to provide the 4-month extended benefits to individuals who have moved to another State. (iii) For purposes of paragraph (i) of this section: (A) The new collection or increased collection of child or spousal support results in the termination of AFDC eligibility when it actively causes or contributes to the termination. This occurs when: (1) the change in support collection in and of itself is sufficient to cause ineligibility. This rule applies even if the support collection must be added to other, stable income. It also applies even if other independent factors, alone or in combination with each other, might simultaneously cause ineligibility; or (2) The change in support contributes to ineligibility but does not by itself cause ineligibility. Ineligibility must result when the change in support is combined with other changes in income or changes in other circumstances and the other changes in income or circumstances cannot alone or in combination result in termination without the change in support. (B) In cases of increases in the amounts of both the support collections and earned income, eligibility under this section does not preclude eligibility under paragraph (a)(14) of this section or section 1925 of the Social Security Act (which was added by section 303(a) of the Family Support Act of 1988 (42 U.S.C. 139r-6)). Extended periods result from both an increase in the amount of the support collection and from an increase in earned income must run concurrently. * * * * * [FR Doc. 94-28317 Filed 11-16-94; 8:45 am] BILLING CODE 4184-01-M