Rule-making Standards and Procedures



STATEMENT OF BASIS AND PURPOSE

Summary of the basis and purpose for the rule or rule change. (State what the rule says or does, explain why the rule or rule change is necessary and what the program hopes to accomplish through this rule.)

On October 30, 2013, the Social Security Administration (SSA) announced a 1.5% Cost of Living Adjustment (COLA) increase for all Social Security and Supplemental Security Income recipients. This COLA increase was adopted by the State Board of Human Services on December 6, 2013, effective January 1, 2014. At that time, the Old Age Pension (OAP) grant standard increased from $737 to $748.

In February 2014, the Joint Budget Committee approved an additional 1.5% COLA to bring the total increase to three percent (3%). This increase was passed in H.B. 14-1238, the CDHS Supplemental for 2014. This rule will revise the Colorado Department of Human Services rules to increase the OAP grant standard from $748 to $759 in order to pass along the additional COLA increase, to be implemented retroactively to January 1, 2014. The components of the grant standard will be adjusted accordingly.

An emergency rule-making (which waives the initial Administrative Procedure Act noticing requirements) is necessary:

|X |to comply with state/federal law and/or |

|X |to preserve public health, safety and welfare |

Explain: 20 CFR 416, et. seq., requires a Maintenance of Effort (MOE) between the State of Colorado and the Social Security Administration (SSA). This MOE requires that Colorado spend at least the same amount in the current year as they did in the previous year for specific categories of assistance, which includes OAP recipients who receive SSI. Failure to pass along the COLA could impact the MOE agreement with the SSA. Failure to comply with terms of the MOE could jeopardize Medicaid Federal Financial Participation (FFP) funds as the SSA could impose a sanction of no less than one full quarter FFP match (approximately $300-350 million) for every month Colorado does not meet the MOE requirement.

This COLA increase will be completed in the Colorado Benefits Management System (CBMS). OAP recipients live at seventy seven percent (77%) of the Federal poverty level. Adoption of these rules will allow these individuals to improve income levels by granting an increase for their daily living expenses, positively impacting the health, safety, and welfare of recipients. Emergency adoption of these rules is necessary as the Supplemental legislation and MOE are tied to this Fiscal Year.

|Initial Review | 05/02/2014 |Final Adoption | 06/06/2014 |

|Proposed Effective Date |05/02/2014 |EMERGENCY Adoption |05/02/2014 |

DOCUMENT 4

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[Note: “Strikethrough” indicates deletion from existing rules and “all caps” indicates addition of new rules.]

STATEMENT OF BASIS AND PURPOSE (continued)

Authority for Rule:

State Board Authority: 24-4-103(6), C.R.S. (2013) provides for emergency adoption of rules; 26-1-107, C.R.S. (2013) - State Board to promulgate rules; 26-1-109, C.R.S. (2013) - state department rules to coordinate with federal programs; 26-1-111, C.R.S. (2013) - state department to promulgate rules for public assistance and welfare activities, thus instructing the State Board to consider changes made by the SSA, such as the COLA increase.

Program Authority: (give federal and/or state citations and a summary of the language authorizing the rule-making)

Colorado Constitution, Article XXIV, Section 6 - authority for adjustments to the OAP grant standard by the State Board;

26-2-111(2), C.R.S. (2013) - creates the OAP program and;

26-2-114, C.R.S. (2013) - eligibility for public assistance

20 CFR 416, et seq. - requires a maintenance of effort with SSA.

| |Yes |X |No |

| |Yes |X |No |

Does the rule incorporate material by reference?

Does this rule repeat language found in statute?

If yes, please explain.

The program has sent this proposed rule-making package to which stakeholders?

County Human Services Directors Association; Colorado Commission on Aging; Colorado Legal Services; The Legal Center; Colorado Senior Lobby; Single Entry Point agencies; Community Centered Boards; Economic Security Sub-PAC; Colorado Cross-Disability Coalition; All Families Deserve a Chance (AFDC) Coalition; Colorado Coalition for the Homeless

Attachments:

Regulatory Analysis

Overview of Proposed Rule

Stakeholder Comment Summary

REGULATORY ANALYSIS

(complete each question; answers may take more than the space provided)

1. List of groups impacted by this rule:

Which groups of persons will benefit, bear the burdens or be adversely impacted by this rule?

This rule change will impact all Old Age Pension (OAP) recipients. All OAP recipients will receive an $11 increase to their monthly OAP grant. ($748 + $11 = $759)

2. Describe the qualitative and quantitative impact:

How will this rule-making impact those groups listed above? How many people will be impacted? What are the short-term and long-term consequences of this rule?

The rule will result an increase of $11 to the OAP grant standard ($748 + $11 = $759) and will impact all OAP recipients, approximately 23,455. This increase will ensure that the OAP recipients will not fall below 77% of federal poverty level and will provide them with increased means to meet their basic living needs. This change may slightly change the food assistance benefit received by these clients.

Long-term, increasing the grant standard will assist the State in meeting the SSA MOE. If the State fails to meet the provisions of the MOE, Medicaid Federal Financial Participation (FFP) funds will be placed in jeopardy. The State was under limited performance improvement in FY2011 due to past failures to meet the MOE requirements. Under the limited performance improvement requirements, the State had to provide SSA with a monthly report showing the progress of the State towards meeting the MOE requirements. This requirement was lifted for FY2012 because the State did meet the MOE requirement in FY2011.

3. Fiscal Impact:

For each of the categories listed below explain the distribution of dollars; please identify the costs, revenues, matches or any changes in the distribution of funds even if such change has a total zero effect for any entity that falls within the category. If this rule-making requires one of the categories listed below to devote resources without receiving additional funding, please explain why the rule-making is required and what consultation has occurred with those who will need to devote resources.

State Fiscal Impact (Identify all state agencies with a fiscal impact, including any Colorado Benefits Management System (CBMS) change request costs required to implement this rule change)

The total estimated cost to the State through the OAP cash fund for SSI and non-SSI OAP recipients is estimated at $3,096,060 (plus caseload growth) for FY2014 and beyond.

County Fiscal Impact

None

REGULATORY ANALYSIS (continued)

Federal Fiscal Impact

None

Other Fiscal Impact (such as providers, local governments, etc.)

Maintenance hours will be utilized to make the required changes to CBMS.

4. Data Description:

List and explain any data, such as studies, federal announcements, or questionnaires, which were relied upon when developing this rule?

None.

5. Alternatives to this Rule-making:

Describe any alternatives that were seriously considered. Are there any less costly or less intrusive ways to accomplish the purpose(s) of this rule? Explain why the program chose this rule-making rather than taking no action or using another alternative.

Taking no action could adversely impact the health, safety, and welfare of OAP recipients. It could also cause the State to be unable to meet the MOE requirements.

The only viable alternative to passing the grant increase would be to shift limited funds in the Aid to the Needy Disabled (AND) appropriation. Currently, the AND appropriation provides funding for the AND-Colorado Supplement (AND-CS) program, which qualifies under the MOE requirements, and the AND-State Only (AND-SO) program. The AND-SO program does not qualify under the MOE requirements but provides critical interim cash benefits for persons with a disability while they await for a determination of disability by the SSA. The current AND-SO grant standard is $175 per month.

The AND-SO grant standard could potentially need to be reduced below the $175 per month standard to stay within available appropriations for the AND programs, allowing for an increased payment(s) to AND-CS recipients in order to meet the MOE. However, because there are only approximately 980 AND-CS recipients, the grant standard for AND-CS would be increased dramatically due to a need for a very high payment to meet the MOE, potentially causing the AND-CS clients to become ineligible for other assistance they receive.

This alternative is not recommended as it disproportionately benefits one category of recipient over all others.

OVERVIEW OF PROPOSED RULE

Compare and/or contrast the content of the current regulation and the proposed change.

|Section Numbers |Current Regulation |Proposed Change |Stakeholder Comment |

| | | | | | | |

|3.530, A |Standard of Assistance Table for OAP grant|Updates amounts of components to reflect |___ |Yes |X |No |

| |standard components |the increased grant standard effective | | | | |

| | |January 1, 2014 | | | | |

| | | | | | | |

| | | | | | | |

STAKEHOLDER COMMENT SUMMARY

DEVELOPMENT

The following individuals and/or entities were included in the development of these proposed rules (such as other Program Areas, Legislative Liaison, and Sub-PAC):

None.

THIS RULE-MAKING PACKAGE

The following individuals and/or entities were contacted and informed that this rule-making was proposed for consideration by the State Board of Human Services:

County Human Services Directors Association; Colorado Commission on Aging; Colorado Legal Services; The Legal Center; Colorado Senior Lobby; Single Entry Point agencies; Community Centered Boards; Economic Security Sub-PAC; Colorado Cross-Disability Coalition; All Families Deserve a Chance (AFDC) Coalition; Colorado Coalition for the Homeless

Are other State Agencies (such as Colorado Department of Health Care Policy and Financing) impacted by these rules? If so, have they been contacted and provided input on the proposed rules? Rules were sent to Marivel Guadarrama, Policy Manager. No comments were received.

|X |Yes | |No |

Have these rules been reviewed by the appropriate Sub-PAC Committee?

| |Yes |X |No |

Date presented _Will be emailed to them no later than April 18, 2014_. Were there any issues raised? ___ Yes _X_ No

If not, why. Have not received the rule package as of this date.

Comments were received from stakeholders on the proposed rules:

| |Yes |X |No |

| | | | |

| | | | |

If “yes” to any of the above questions, summarize and/or attach the feedback received by specifying the section and including the Department/Office/Division response. Provide proof of agreement or ongoing issues with a letter or public testimony by the stakeholder.

(9 CCR 2503-5)

3.530 Old Age Pension (OAP) Program [Eff. 3/2/14]

The Old Age Pension (OAP) program provides financial assistance and may provide health care benefits for low-income Colorado residents who are sixty (60) years of age or older who meet basic eligibility requirements.

A. The total monthly OAP grant standard, as set by the State Board of Human Services, is $748.00 $759.00, effective January 1, 2014.

B. Effective January 1, 2014, the maximum monthly In-Kind Support and Maintenance (ISM) deduction amount for shelter, including utilities, is $260.00.

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