New Eligibility Requirements Reduce Barriers to Work for People with Disabilities

According to a 2004 National Organization on Disability/Harris Survey, only 35 percent of people with disabilities reported being employed full- or part-time, compared to 78 percent of those who do not have disabilities (www.at508.com/040624_national_press_club.cfm). However, 72 percent of the individuals with disabilities surveyed want to work (www.whitehouse.gov/news/freedominitiative/freedominitiative.html). Removing the barriers to employment that cause this glaring discrepancy is an important public policy goal of the disability community.

One significant barrier to employment experienced by individuals with disabilities is the loss of necessary health care coverage. Recognizing this, Congress has given states broad authority to create programs that would allow individuals with disabilities to work and keep or obtain Medicaid coverage.  To date, the majority of states have implemented these “Medicaid Buy-In” programs for workers with disabilities.

Illinois took advantage of this opportunity and created Health Benefits for Workers with Disabilities (HBWD). The Program began in January 2002. Since its inception, advocates for people with disabilities in Illinois have pushed for its expansion. In its original form, the HBWD program had some of the most restrictive eligibility requirements in the country. 

This legislative session, Health & Disability Advocates and AIDS Foundation of Chicago worked closely with Rep. Sara Feigenholtz (D-Chicago), Sen. Don Harmon (D-Oak Park), and Gov. Rod Blagojevich to secure passage of House Bill 1256. Signed into law on August 29, 2007, H.B. 1256 makes significant changes in the eligibility criteria for the HBWD program. These changes will allow individuals with disabilities to work more, earn more, save more, and still maintain necessary Medicaid eligibility.

In particular, the Illinois HBWD income and asset eligibility requirements will be expanded as follows:

•     Income eligibility level increases from 200 percent to 350 percent of the federal poverty level.
•     Initial asset eligibility limit remains at $10,000 but increases to $25,000 once enrolled in HBWD.
•     Retirement accounts that may not be accessed prior to the age of 59½ without penalty, as well as medical saving accounts, will no longer factor into asset eligibility.
•     Individuals enrolled in HBWD are allowed to return to regular Medicaid without having to spend down assets accumulated while enrolled in HBWD (up to $25,000).
•     Retirement accounts that may not be accessed before age 59½ and medical savings accounts are also exempt to those returning to Medicaid after having been enrolled in HBWD.

For more information about this expansion, contact John Coburn of Health & Disability Advocates at 312.218.0941 or jcoburn@hdadvocates.org. Click here to read a fact sheet on H.B. 1256.

John Coburn is senior policy attorney, Health & Disability Advocates