Similar to the $600 per week Pandemic Unemployment Assistance, the additional $300 per week Lost Wages Assistance you may receive will not be counted as income for MAGI Medi-Cal, but it will be counted for Covered California subsidies.
On August 8, 2020, President Trump instructed Homeland Security, through the Federal Emergency Management Agency (FEMA), to make available funds for a Lost Wages Assistance (LWA) program. FEMA does distribute the money to individuals. California will distribute a payment of $300 per week through the Unemployment Insurance Benefits program administered by the Employment Development Department (EDD.)
The LWA is a supplement payment and not all individuals receiving unemployment benefits are eligible to receive the additional LWA money. California, according to the Department of Health Care Services All County Welfare Directors Letter No. 20-16, was approved for the LWA grant from FEMA on August 22, 2020. EDD began processing the LWA supplemental payments on September 7, 2020. Eligible recipients will receive the $300 per week supplement, in addition to their weekly unemployment insurance benefits for a minimum of three weeks.
Reporting Income To Medi-Cal & Covered California
California policy states that Disaster and Emergency assistance payments received from federal, state, or local government agencies is exempt from both Modified Adjusted Gross Income (MAGI) and non-MAGI Medi-Cal programs. Consequently, county Welfare Directors have been directed to disregard the LWA when making income eligibility determinations.
However, for Covered California, the LWA money is counted as taxable income for eligibility and calculation of the monthly Advance Premium Tax Credit subsidy (federal) and the California Premium subsidy.
All MAGI Medi-Cal: Everyone in the household is eligible
If you have MAGI Medi-Cal, there is no harm in reporting the LWA income. If you properly document the source of the income, it should be disregarded by your local county Medi-Cal cases worker.
Mixed MAGI Medi-Cal and Covered California: adults on Covered California with subsidies, children on Medi-Cal
If there are adults receiving a Covered California subsidy and dependent children are on MAGI Medi-Cal, the income should be reported to your local county Medi-Cal case worker. All changes to the household must go through Medi-Cal. Changes to your Covered California application, if not made by Medi-Cal, will either be ignored or reversed.
All Covered California: Everyone eligible for subsidies
If everyone in the household – adults and children – are eligible for the health insurance subsidies through Covered California, you may need to report the LWA income. What is important is that the income you receive from either the PUA or the LWA does not make your final annual income higher than you estimated on your Covered California application. If your income is higher than you estimated, then you may have to repay some or all of the federal and state subsidies back on your 2020 tax returns.
There is no harm in properly updating your income on your Covered California application. You may have lost employment, started getting unemployment insurance, the PUA, and the LWA income. If the new income is lower, you and your children may qualify for MAGI Medi-Cal. If the income is higher than initially estimated, your monthly subsidy, which reduces your health insurance premium, will be reduced.
If you do make changes to the income section of your Covered California application, carefully review that section during the renewal period for 2021. The income stated for 2020 can rollover for 2021. If your income has, or will, pop back up, a low-income estimate will mean you will receive too much subsidy in 2021. If the income is too high for 2021, you are artificially reducing the monthly subsidy you are entitled to lower your health insurance premium.