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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 16, 2012, the Social Security Administration (SSA) announced a 1.7% Cost of Living Adjustment (COLA) for all Social Security and Supplemental Security Income recipients effective December 31, 2012.  This increased the SSI maximum payment by twelve dollars ($12) ($698 x 1.7% = $12) to $710 per month.  This rule will revise the Colorado Department of Human Services rules to increase the Old Age Pension (OAP) grant standard to $737 in order to pass along the COLA increase.  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:  
OAP recipients live at 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.  This COLA increase will be completed in the Colorado Benefits Management System (CBMS). 
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. 

Initial Review		   11/09/2012	Final Adoption		  01/04/2013	
Proposed Effective Date	01/01/2013 	EMERGENCY Adoption	11/09/2012	

DOCUMENT 2 

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

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STATEMENT OF BASIS AND PURPOSE  (continued) 

Authority for Rule: 
State Board Authority:  24-4-103(6), C.R.S. (2012) provides for emergency adoption of rules; 26-1-107, C.R.S. (2012) authorizes the State Board to promulgate rules;  26-1-111, C.R.S. (2012) authorizes the State Board to promulgate rules for public assistance and welfare activities.

Program Authority: (give federal and/or state citations and a summary of the language authorizing the rule-making)
Collectively the Colorado Constitution, Article XXIV, Section 6 - ability to adjust OAP basic minimum award; 26-2-111, and 26-2-114, C.R.S. (2012) create the OAP program and grant the authority for adjustments to the OAP grant standard to the State Board. 

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.  

State Board Administration will send this rule-making package to Colorado Counties, Inc., Office of State Planning and Budgeting, and the Joint Budget Committee.  The program has sent this proposed rule-making package to which stakeholders?

Colorado Commission on Aging; Colorado Legal Services; The Legal Center; Colorado Senior Lobby; County Human Services Directors Association; Office of Information Technology; and Economic Security Sub-PAC 

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 OAP recipients.  All OAP recipients will receive a twelve dollar ($12) increase to their monthly OAP grant.  ($725 + $12 = $737)

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 $12 to the OAP Grant Standard ($725 + $12 = $737) and will impact approximately 23,390 OAP recipients.  This increase will ensure that the OAP recipients remain at seventy seven percent (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 FY 2012 because the State did meet the MOE requirement in FY 2011.

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 cost to the State for the increase for non-SSI recipients (approximately 12,640) will be $12 per recipient per month.  This cost will be paid using one hundred percent (100%) OAP cash funds.  These increased expenditures by the State to non-SSI OAP recipients are estimated at $1,820,160 (plus caseload growth) for FY 2013 and beyond.  

The cost to the State for the increase to OAP recipients that are also receiving SSI (approximately 10,750) is estimated at $1,548,000 (plus caseload growth) for FY 2013 and beyond.

The total estimated cost to the State through the OAP cash fund for SSI and non-SSI OAP recipients is estimated at $3,368,160 (plus caseload growth) for FY 2013 and beyond.

REGULATORY ANALYSIS (continued)

County Fiscal Impact  

		None.

		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, could 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 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 990 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	
							
3.360.44	Standard of Assistance Table for OAP grant standard components.	Updates amounts of components to reflect the increased grant standard.	__	Yes	X	No	

							

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, Sub-PAC, and the Child Welfare Action Committee):  

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:  

Colorado Commission on Aging; Colorado Legal Services; The Legal Center; Colorado Senior Lobby; County Human Services Directors Association; Office of Information Technology; Economic Security Sub-PAC 

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? 

	Yes	X	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 October 19, 2012.  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	

(9 CCR 2503-1) 

3.360.4  OLD AGE PENSION (OAP) STANDARD OF ASSISTANCE TABLE
3.360.41  OAP Grant Standard Components
The grant standard represents a combined monthly allowance for components identified in the OAP grant standard of assistance table.
3.360.42  Determining Deduction for Items Supplied Without Cost
The table provides a breakdown of the component amounts. The utilities, and shelter information shall be used to arrive at a deduction when an item is supplied in full, without cost, to the applicant or recipient. 
3.360.43  Patients in a Medical Institution
For every full calendar month that the applicant or recipient is a patient in a medical institution, such as a hospital or nursing home, only a personal needs allowance shall be provided.
3.360.44	Old Age Pension (OAP) Standard of Assistance Table (effective January 1, 2013) 
The total OAP Grant Standard, effective January 1, 2013, is $737.00

OAP GRANT COMPONENT STANDARD ALLOWANCE TABLE 

Utilities…………………………………………combined with shelter 
Shelter (33.33% of grant standard + $20 disregard)……$266.00
The remainder of the grant standard is applied toward the applicant’s or recipient’s food, personal needs, medical, household, and other expenses (grant standard - shelter allowance = remainder). 

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