Operations Memorandum - Medical Assistance


SUBJECT: Medical Assistance for Workers with Disabilities (MAWD)
TO: Executive Directors
FROM: Linda A. Hicks, Official in Charge, Office of Income Maintenance


  1. To announce the implementation of the Medical Assistance for Workers with Disabilities (MAWD) Program effective January 1, 2002.
  2. To provide the County Assistance Offices (CAOs) with information on the eligibility requirements and procedures for implementation of this program.
  3. To advise CAOs that information regarding Client Information System (CIS) data entry will be provided separately in a Daily Status.


The Ticket To Work and Work Incentives Improvement Act (TWWIIA) of 1999 (P.L. 106-170) gave states the option of providing categorically needy Non-Money Payment (NMP) Medicaid benefits to workers with disabilities who have higher incomes and resources than the current Medicaid standards. Pennsylvania exercised this option by passing Act 2001-77 of June 26, 2001 (P.L. 755), also known as the Tobacco Settlement Act, which establishes MAWD.

MAWD is intended to provide individuals with disabilities the opportunity to enter and remain in the workforce while receiving Medicaid coverage.


MAWD consists of two new eligibility groups. These groups are: Workers with a Disability and Workers with a Medically Improved Disability. Individuals in these groups will receive categorically needy Medicaid coverage.

Workers with a Disability Group

To qualify for coverage in this group, an individual must: 

Workers with a Medically Improved Disability Group

To qualify for coverage in this group, an individual must:

Note: The Department does not anticipate a large number of Workers with a Medically Improved Disability in the first year of implementation. Additional information on this group will be provided in the future.

Determination of Eligibility

The CAO will determine eligibility for MAWD using standard Medicaid eligibility and verification requirements where applicable, and additional requirements and procedures listed in this Operations Memorandum. MAWD requirements and procedures are as follows:


A new application form, PA 600 WD, has been developed. This application includes information on premium payment and an authorization form to allow premium payment by payroll deduction. The Authorization for Information Form (PA 4) must be signed by the applicant. When an applicant has already completed a PA 600, but is only eligible for MAWD, the PA 600 application can be used to determine eligibility for MAWD. The Income Maintenance Caseworker (IMCW) must then obtain the additional necessary documentation for MAWD from the client before authorizing MAWD benefits.


Income (earned and unearned), after allowable deductions, must be below 250 percent of the FPIGs. Use SSI-related methodology in Medical Assistance Eligibility Handbook (MAEH) Chapters 350, 352, 360 and 368 to compute income. The CAO will count the income of the applicant. When one spouse applies for MAWD, the CAO will count the income of the non-applicant spouse when determining eligibility, and will use a two- person applicant/recipient group. When both the husband and wife apply for MAWD, count both incomes and use a two-person applicant/recipient group. The income of non-applicant children is not counted.

When determining the monthly countable gross income, follow these instructions: If the income is received weekly or bi-weekly, determine the average weekly amount and multiply by four (4) to arrive at a monthly figure. Multiply by four (4) even if three or five pays are received in the calendar month.


The resource limit is equal to or less than $10,000. Use SSI-related methodology in MAEH Chapter 340 to determine countable resources. The applicant's resources are always included, regardless of the applicant's age. The countable resources of the applicant's spouse are included. Do not exclude resources for families with children under 21 in the household. Funds deposited into and interest earned on Family Savings Accounts (FSA) are excluded when determining eligibility. Refer to Operations Memorandum 01-08-06. For former recipients of SSI, the Plan for Achieving Self-Support (PASS) account is excluded as a resource.

NOTE:  MAWD resource levels and requirements apply only to MAWD and do not change resource policies for other Medicaid groups.


To be eligible for this program, individuals must be working or engaged in self-employment. Employment verification includes, but is not limited to:

Self-employment may be verified by tax records.


The disability requirement is met if the individual:

NOTE: Use the normal provisions for the gathering of medical documentation for MRT reviews. Notate "MA for Workers with Disabilities" on the PA 749 under "Reason for Referral." This form is being modified to include this information.


An individual determined eligible for this program must pay a monthly premium. Premiums are 5 percent of net countable income of the applicant/recipient. Income of other household members, including a spouse, is not used to calculate the premium. If both spouses are MAWD applicants/recipients, calculate the monthly premium separately for each spouse, using only the income he/she receives.

The following process is used to establish the premium amount:

Premiums are adjusted when an individual reports a decrease in income that is expected to continue for the remainder of the six-month period. Premiums will not be adjusted when the decrease in wages is due to a temporary absence from work, e.g., missed days due to illness. Premiums may be suspended if good cause is established.

Example of a Premium Calculation:

Applicant/recipient has $700 Earned Income and $800 Unearned Income for the month. The total Gross Income is $1,500. Applicant/recipient also has an Impairment-Related Work Expense (IRWE) of $100.

Earned Income

Unearned Income



-   65.00

-   20.00


$780.00 Net Unearned Income

- 100.00 IRWE




- 267.50 (50%)


$267.50 Net Earned Income



Add net earned and net unearned to arrive at net countable income for the premium: $267.50 (net earned) + $780.00 (net unearned) = $1047.50

Multiply by 5% and round down to arrive at the premium amount: $1047.50 X 5% = $52.38, rounded down to $52.00.

Premium Payment Method

The applicant/recipient has the choice to pay monthly premiums directly or through payroll deduction if the employer participates in payroll deduction. The preferred method is by payroll deduction because it is easier for the applicant/recipient. The applicant/recipient is responsible for all premium payments until payroll deduction can begin. The applicant/recipient is required to sign a form authorizing payroll deduction. The Central Office establishes payroll deduction. Each CAO must designate a liaison to address CAO concerns and problems regarding premium collection. This liaison will be responsible for contacting the Central Office for assistance. The phone number to call at the Central Office is (717) 772-6746.

Certain employment situations necessitate that the applicant/recipient make the monthly premium payments. These include: self-employment, more than one employer, or the employer will not participate in payroll deduction. If the applicant/recipient decides to pay the monthly premiums, payment must be by check or money order and submitted with the monthly voucher. Cash will not be accepted. The CAO staff is not responsible for collecting premiums.

Initial/Retroactive Premium Voucher

The authorization must be entered into CIS no later than the last calendar day of the month for the Central Office to generate the premium voucher for the following month. For premium payments for retroactive eligibility periods, the IMCW will manually complete and send the form to the applicant/recipient with a self-addressed, stamped envelope. After this, the Central Office will generate the monthly premium vouchers. Premium payments are to be mailed to the following address:

PO BOX 8052 
HARRISBURG PA 17105-8052

A copy of the form has been attached to this memorandum as an addendum. IMCWs will eventually be able to print the form off an internet web site which is under development.

Premium Collection

Monthly premium payments are received and processed by Central Office and tracked using their computer system. Central Office establishes payroll deduction, when appropriate, and generates monthly vouchers to both employers and recipients. Vouchers will identify the amount of the monthly premium and status of previous monthly premiums. Batch files will be exchanged between CIS and the Central Office systems to advise of changes or other events requiring action. For the Central Office to generate the system premium statement, the CAO data entry deadline is the last calendar day of the month.

Premium Collection Timeline

10th of Month

Premium invoice generated by Central Office

11th of Month

Vouchers mailed

15th of Month

Estimated date all vouchers received by recipients/employers

End of Month

Premium due at Central Office

10th of Month

Vouchers generated by Central Office. If premium for previous month not received and processed by this date, invoice will reflect that current month premium is due and previous month premium is past due.

20th of Month

If premium for previous month not received, Central Office generates an alert to CIS advising IMCW of past due premium.

End of Month

Estimated date that IMCW has taken action on late premium. Actions may include granting good cause or issuing PA 162A to close budget.


Income/Premium Review

Review income every six months to determine if the monthly premium amount needs to be changed. Contact the recipient by letter and request verification of income. Unearned income that is adjusted annually does not require verification. Evaluate the premium amount and make appropriate changes based on the information.

Good Cause

If good cause criteria are met, good cause can be granted for a period of up to two calendar months. During periods of good cause, the premium payment will be suspended. Good cause can be granted for temporary health problems, or for loss of employment that is beyond the individual's control - such as a lay-off, involuntary termination of employment, or employment that the individual cannot perform. The MAWD recipient must intend to return to their former position or make a bona fide effort to find other employment if good cause was granted for factors that are beyond the individual's control. When good cause is granted, the IMCW will update appropriately on the CADISB screen.

When good cause has been determined, good cause periods will begin in the calendar month in which the MAWD recipient requests good cause, or the following month. Good cause will apply to the month or months in which the individual demonstrates they are not able to work. Good cause cannot be granted for previous months. For example, if a MAWD recipient reports good cause in April for the previous March, good cause will not be granted.

It is the recipient's responsibility to request good cause timely.

Budget Groups

Each MAWD applicant/recipient is placed in a separate budget group. For married couples who are both eligible, establish separate budget groups.

Medicaid Benefits

An individual who is eligible for MAWD will receive the PA ACCESS card and categorically needy NMP Medicaid benefits. 
Individuals will be assigned HealthCare Benefits Packages (HCBP) as follows: 

Individuals residing in HealthChoices counties will be enrolled in HealthChoices. 

NOTE: If health insurance is available through employment, HIPP enrollment will be evaluated according to MAEH 338.22.

Medicare Buy-In

An individual eligible for MAWD may be eligible for Medicare Buy-In if the income and resource requirements are met for one of the Buy-In groups. When an individual is determined eligible for MAWD and Medicare Buy-In, use the appropriate program status code to identify the Buy-In group and to stage an auto accrete in the Buy-In system.

Periods of Eligibility

Eligibility will begin on the first day of the application month or on the first day of the month following the application month. The applicant will mark their choice on the application. The application month is the month in which the application was received and date stamped in the CAO. Eligibility ends on the last day of the month that eligibility conditions are no longer met, following proper notification. The applicant must pay a full month's premium for the first month of coverage.

Retroactive Medicaid Coverage

Retroactive coverage is available if the applicant has allowable medical expenses, is determined eligible for MAWD, and pays premiums for the retroactive periods of coverage. The IMCW must determine eligibility as specified in MAEH Section 338.2. The premium amount for the retroactive period is determined by using the income for the months in which the retroactive coverage is requested. The applicant must be informed that retroactive coverage will not be authorized until the premiums due for the retroactive period are paid to the Department. Provide the applicant with a copy of the voucher that is attached to this Operations Memorandum and a self-addressed, stamped envelope. Manually complete the voucher including the information on the retroactive premium amount. Explain that the application will be held for 30 days. When the payment is received, the worker will be notified by a worker alert generated by Central Office. Use the PA 162 RM to notify individuals that retroactive benefits have been authorized.

NOTE: If an applicant applies for both retroactive and on-going benefits, do not hold authorization of on-going benefits. Authorize on-going benefits prior to receipt of the premium for the retroactive periods (provided that all proper verification is received).


A complete redetermination is required every 12 months. An application form (PA 600 WD) is required. In addition, the Authorization for Information Form (PA 4) must be mailed to the recipient. A face-to-face interview is not required. The redetermination can be completed by correspondence or by telephone. In addition to eligibility factors in MAEH Chapter 376, the IMCW will review employment and the premium amount. Use the guidelines in the Disability section of this memorandum to review disability.

Waiver Eligibility for MAWD Applicants/Recipients

Due to the differences in resource and income eligibility limits between waiver programs and MAWD, MAWD applicants/recipients are not automatically eligible for waivers. Eligibility determination for waivers will be made based on the specific eligibility factors for the waiver under consideration. When a MAWD recipient becomes eligible for a waiver program, the IMCW should close the recipient out of the MAWD budget and open the recipient in the waiver using the appropriate category and program status/facility codes.


Category/Program Status Codes (PSC)

Two new category codes are established to identify the MAWD groups: PW identifies Workers with a Disability. PI identifies a Worker with a Medically Improved Disability. The following chart list categories and program status codes associated with MAWD. Use the appropriate Medicare Buy-In PSC to stage auto accretes into the Medicare Buy-In program.






Workers with a Disability



Workers with a Disability/SLMB



Workers with a Disability/HH Medicare Buy-In (Part A&B)



Worker with a Medically Improved Disability



Worker with a Medically Improved Disability/SLMB



Worker with a Medically Improved Disability/HH Medicare   Buy-In (Part A& B).



CIS CADISB (Disability Screen) – The CIS CADISB is scheduled during case initiation and maintenance modes. New fields have been added to the CADISB screen to capture Premium and Good Cause information. These fields will only be displayed for PI and PW budgets.

CIS CAEMPL (Employment Screen) – The CIS CAEMPL is scheduled during case initiation and maintenance modes. The information is required for premium collection. The employment status field must be data-entered. The employer address must be completed so that the Central Office can establish payroll deduction. Complete this section for self-employment so that a record is maintained for the individual's employment activity.


The following alerts will be used to notify CAO IMCWs of changes that need reviewed:







Central Premium Collection   Informational Change to CAO

Case alert created by Central Office and passed by daily batch run to CIS to advise of case change information such as: loss of employment, premium check returned for insufficient funds, payment of retroactive period premium, change in address, or returned mail.  Information must be reviewed and the appropriate action taken to update the record.


Worker cleared after the worker has reviewed the information and taken appropriate action to update the case record as required.




Review Good Cause

Case alert created by Central Office and passed by monthly batch run to CIS to identify MAWD budgets in which the good cause period for suspension of premium payments is ending.  The good cause criteria must be reviewed and appropriate action taken.


Worker cleared when worker reviews good cause and establishes new good cause period or reinstates premium payment requirement.




Premium Recalculation Due

Case alert created by monthly batch file to identify PW and PI budgets due for a recalculation of the premium.  Using earnings information provided by the client, IMCW would calculate the premium amount and update records as required by procedures.


Worker cleared after the worker has reviewed client income and determined premium for next six-month eligibility period.




Premium Not Paid

Case alert created by Central Office and passed by monthly batch run to CIS on the 20th of every month to identify budgets on which the premium payment for the previous month has not been made. The Central Office Intranet Premium Payment web page must be accessed to determine if the past due payment has been made.  If the payment has not been made, close the MAWD budget and determine eligibility for other MA categories.  If the payment has been made, determine continuing eligibility and follow procedure. PRIOR TO SENDING THE PA 162A AND CLOSING THE BUDGET, THE IMCW SHOULD REVIEW THE INTRANET WEBSITE TO VERIFY NON-PAYMENT OF PREMIUM.  THIS STEP IS RECOMMENDED TO AVOID UNNECESSARY WORKLOAD IN PROCESSING CASE CLOSINGS AND REOPENINGS.

Worker cleared



CIS Client Notices

Automated Client Notices have been developed to include texts for changes to premiums and eligibility.

The Eligible Client Notice includes text to inform the individual of the premium amount, premium period and premium payment.

New reason codes provide text for the following:

Reason 340/Option 1  – Eligible
Reason 340/Option 2   –  Not Eligible
Reason 340/Option 3  – Advance Notice Discontinue to discontinue benefits for non-payment of premiums
Reason 340/Option 4  – Advance Notice Change to increase a premium
Reason 340/Option 5  – Confirming Notice Change for decrease in premium amount

Inter-County Transfers

Use instructions in Operations Memorandum 01-08-05 to process inter-county transfers. Use reason code 099, option 2 for the client notice.

Closure of Benefits

Before benefits for MAWD are terminated, the IMCW will determine eligibility for medical coverage under other Medicaid categories. If the individual is determined eligible for benefits in another Medicaid category, benefits are continued in the new category with no break in coverage. In order to provide appropriate notice for budget closings, the budget may remain in active status for additional calendar months. When this occurs, enter Good Cause - reason code 05 (Administrative Processing), and Good Cause begin/end dates to notify the Central Office that a premium is not required for that time period.

Overdue Premiums and Reinstatement

If the recipient pays the overdue premiums within 30 days after the closure date, benefits will be reinstated. An application will not be required and the eligibility begin date will be the day after the closure date. The Department will allow reinstatement of benefits once every six-month period. An additional reinstatement of benefits due to late payment of premiums will require a complete application.

If Medicaid is discontinued for failure to pay premiums and the recipient reapplies, the owed premiums must be paid prior to authorization of benefits.

Intranet web page for Premium Review

An Intranet web page has been designed to provide real-time information on premium payments. IMCWs can access this file by CIS Recipient ID Number, County/Record Number, or SSN. This page was created to help IMCWs evaluate the necessity of closing budgets due to non-payment of premiums. On this page, the IMCW can obtain current information on past due premiums. IMCWs will be notified by an alert that a client has an overdue premium. When the alert is received, the web page must be checked to see if the premium has been paid, before any notice is sent. 
The page can be accessed at this address:

Food Stamps

If an individual is eligible for food stamps, the MAWD premium payment may be used as a medical expense. Refer to food stamp procedures, in the Food Stamp Handbook, Chapter 560.4.

Next Steps

  1. Review this Operations Memorandum with appropriate staff.

  2. Review the attached application and voucher forms.

  3. Begin accepting applications on January 7, 2002.

  4. Information on CIS data entry will be provided in a Daily Status.

  5. Contact your Area Manager if you have any questions.

  6. This Operations Memorandum becomes obsolete upon receipt of Medicaid Eligibility Handbook changes.

Attachment - Initial Premium Voucher

Last modified: Tuesday, August 23, 2005