A Primer on Work Incentives
by Leye Jeannette Chrzanowski
Copyright ©1999 The Disability News Service,
Inc.
On November 19, 1999, by a vote of 95-1, the
Senate finally passed S. 1180, the Ticket to Work
and Work Incentives Improvement Act of 1999. The
bill establishes a program of work incentives
that improve vocational opportunities for people
with disabilities who receive Social Security
Disability Insurance (SSDI) or Supplemental
Security Income (SSI), and expands the
availability of health care coverage for workers
with disabilities. Here is a brief primer on
existing law and the new law.
Ticket to Work
Under existing law, Social Security refers SSDI and
SSI beneficiaries to state vocational rehabilitation (VR)
agencies for services. State VR agencies are then
reimbursed by Social Security for any services they
provide, after the individual has been gainfully employed
(had earnings in excess of $700 per month) for a period
of nine months.
The new law creates a Ticket to Work program. The
Social Security Administration (SSA) issues SSDI and
disabled SSI beneficiaries a “ticket” which
they can use to purchase employment services, VR services
and other services, such as assistive technology from a
provider of their choice. (State VR programs can elect to
participate in the new program or remain in the existing
program.) The program must be phased in at sites selected
by SSA's commissioner no later than one year after
enactment, and the provisions of the law must be fully
implemented within three years.
SSA contracts with program managers, who are
prohibited by law from providing services, but, who among
other things, will...
- recruit and recommend public or private
employment networks to coordinate services;
- ensure employment networks comply with their
contractual agreements;
- terminate those that fail to comply with their
contracts; and
- ensure adequate services were available to
beneficiaries.
Essentially, the employment networks would receive up
to 40 percent of the average disability benefit for each
month (up to 60 months) each SSDI or disabled SSI
recipient does not receive benefits because he or she is
employed. Also, SSA must conduct independent evaluations
to determine the program's effectiveness.
In addition, a 12-member Ticket to Work and Work
Incentives Advisory Panel will be established within 90
days of enactment of the law and remain in existence for
eight years. Panel members, who will be appointed by the
president and key members of Congress from majority and
minority parties, must have experience or expert
knowledge as a recipient, provider, employer or employee.
At least 50 percent of the panel will be comprised of
people with disabilities, but who should be appointed as
panel members whenever possible. The panel will...
- advise the president, Congress and SSA on work
incentive programs, planning and assistance for
people with disabilities; and
- submit interim reports; and
- submit a final report which includes findings,
conclusions and recommendations for legislative
and administrative action.
Work Activity and Reinstatement of Benefits
Currently, SSA periodically conducts continuing
disability reviews (CDRs) on SSDI and SSI beneficiaries
to determine if they are still disabled and eligible for
benefits. CDRs can be triggered by evidence of recovery
or if an individual returns to work. Effective January 1,
2002, periodic CDRs would continue, however, returning to
work would no longer trigger them.
Under existing law, an individual's eligibility
continues for 36 months after returning to work. If,
during that period, the individual becomes unable to work
because of his or her disability, benefits are
immediately reinstated. Otherwise, SSA must make a new
determination of disability before benefits are restored.
Under the provisions of the new law, if SSDI or SSI
benefits are terminated because of successful work
activity, benefits may be restored if the individual...
- can no longer work because of his or her
disability; and
- files for reinstatement within a 60-month period
following termination.
In addition, provisional benefits (cash and Medicare
or Medicaid) will be issued for a period of six months
while SSA determines if the individual is eligible for
reinstatement. If Social Security determines that the
individual is not eligible for benefits, he or she would
not have to repay any provisional benefits.
These provisions are effective 13 months after
enactment.
Outreach and Assistance
In addition to existing outreach, the new law mandates
SSA establish a corps of work incentives specialists
within the federal agency. SSA also must establish a
competitive grant program to operate and fund outreach
programs, benefits planning and assistance to include
protection and advocacy services for people with
disabilities who may be eligible for the work incentives
program. Although SSA field offices and state Medicaid
agencies are ineligible, centers for independent living,
protection and advocacy organizations, client assistance
programs, state developmental disability councils and
welfare agencies are eligible to apply for grants and
contracts to manage these programs. For this provision
which is effective upon enactment of the law, Congress
earmarked $23 million each year for a four-year period.
Another $7 million per year for four years was
allocated for grants to existing protection and advocacy
programs for people to obtain information and advice
about vocational rehabilitation, employment services,
advocacy and other services SSDI or SSI beneficiaries may
need to become employed or to apply and receive for work
incentives.
Expanding Medicaid
Currently, a number of varied requirements based on
such criteria as income, disability, individual state
laws and so on exist for continuing Medicaid eligibility.
The new law authorizes states to establish one or two
new optional Medicaid eligibility categories,
including...
- coverage for people with disabilities (aged
16-64) who except for their earnings would be
eligible for SSI, however, individual states
could establish limits on assets, resources,
earned and unearned income credit that may be
different from federal requirements; and
- coverage for employed people with disabilities
whose medical condition has improved but continue
to have a severe medical impairment.
People eligible for these options could choose to buy
in to Medicaid and pay premiums and other charges for a
sliding scale fee that is based on income. States can
require people with incomes above 250 percent of the
federal poverty level to pay the full Medicaid premium
cost. People with incomes between 250 percent and 450
percent of the poverty level, premiums may not exceed 7.5
percent of their income. Those with incomes above $75,000
per year must pay the entire premium, however, states can
choose to subsidize the premiums but cannot use federal
funds for this purpose.
The provisions for expansion of Medicaid are effective
October 1, 2000.
Extending Medicare
Currently SSDI beneficiaries who return to work lose
cash benefits after their monthly earnings are at or
above the substantial gainful activity (SGA) level of
$700 for nine months, however Medicare benefits continue
for another 39 months for a total of 48 months.
Effective October 1, 2000, the new law will allow
Medicare Part A coverage to continue at no cost to the
beneficiary for 52 months beyond the current level.
Within five years, the General Accounting Office (GAO)
must submit a report Congress that among other items,
examines the effectiveness and cost of extending Medicare
Part A coverage to working disabled people, and the need
to provide this coverage to people with incomes above the
Social Security taxable wage base of $72,600.
Medigap
Disabled Medicare Part A beneficiaries who also are
Medigap policyholders can elect to suspend their Medigap
coverage if they are covered under an employer group
plan. Medigap coverage can be reinstated if the
individual loses group coverage, as long as he or she
provides notice of the loss of coverage within 90 days.
Develop Infrastructure Grants
Currently there is no provision for states to design,
establish or operate infrastructures to provide products
and services that support working people with
disabilities.
The new law requires the Secretary of Health and Human
Services to award grants to states for such products and
services, as well as for outreach campaigns. Services
include personal assistance services that would enable
disabled people to remain employed and earn at least the
federal minimum wage and work at least 40 hours per
month. The bill also provides a Medicaid buy-in option to
encourage people with disabilities to return to work
without fear of losing health benefits. Although states
are not required to offer the Medicaid buy-in, the
Secretary is urged to give preference in awarding these
grants to states that exercise the buy-in option. The
minimum infrastructure grant a state can receive is
$500,000.
This provision is effective October 1, 2000 and
Congress authorized funding through 2011 for the grants.
Demonstration Projects/Reports
The law also establishes several demonstration
projects, including one that examines reducing benefits
by $1 for every $2 earned.
The GAO must conduct several studies, including
conducting studies of...
- existing tax and other incentives for employers
to hire people with disabilities;
- coordination between SSDI and SSI programs;
- SGA levels applicable to disabled beneficiaries
to include whether they are a disincentive;
- the merits of increasing SGA levels;
- and the rationale for not indexing the levels to
inflation.
In addition, SSA must report to Congress within 90
days on all income disregards applicable to SSDI and SSI
beneficiaries. Funding for these projects and studies
will be made from the federal Disability Insurance Trust
Fund and the Old-Age and Survivor's Insurance Trust Fund
(OASDI).
Technical Amendments
The new law authorizes SSA to determine whether a
representative payee would be in the best interest of a
disabled beneficiary who is incapacitated and who also
has a substance abuse problem, and also whether that
individual should be referred to a state agency for
substance abuse services.
The law extends incentive payments now in effect for
SSI prisoners to OASDI prisoners which reimburses any
agency, including correctional facilities, for reporting
information to SSA that assists in determining program
eligibility. Benefits would be suspended for any month a
prisoner is incarcerated because of a crime or a finding
of not guilty be reason of insanity. Benefits would not
be suspended if a prisoner's confinement lasts less than
30 days. Institutions would not get two incentives if the
prisoner is eligible for both OASDI and SSI. Prohibits
monthly payments to a beneficiary who completes a prison
term but remains in an institution because the individual
is sexually dangerous or a sexual predator. The law
also...
- allows SSA to charge an assessment fee which
cannot exceed 6.3 percent for certifying
attorneys and eliminates the existing requirement
that attorneys may not be certified before the
end of the 15-day waiting period;
- provides a two-year window to allow members of
the clergy who previously applied for and
received an exemption from Social Security
coverage to revoke the exemption;
- authorizes states to permit employers to submit
annual wage reports for domestic workers; and
- extends the authority of state Medicaid fraud
units to investigate and prosecute fraud in other
federal health care programs.
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