Senate File 599 - Introduced SENATE FILE 599 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO SF 363) A BILL FOR An Act relating to work requirements for the Iowa health and 1 wellness plan, public assistance programs, an information 2 technology fund, the public assistance modernization fund, 3 and the Medicaid for employed people with disabilities 4 program. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1296SV (3) 91 lh/ko

S.F. 599 DIVISION I 1 IOWA HEALTH AND WELLNESS PLAN —— WORK REQUIREMENTS 2 Section 1. NEW SECTION . 249N.4A Work requirements. 3 1. The department shall request any federal approval 4 necessary to include work requirements as a condition of a 5 member maintaining eligibility for the Iowa health and wellness 6 plan. 7 2. The goal of including work requirements is to reduce the 8 dependence of low-income Iowans on public assistance programs 9 through efforts that advance economic stability and mobility. 10 3. The department shall exempt an individual from the work 11 requirements for the Iowa health and wellness plan if the 12 individual meets any of the following criteria: 13 a. The individual is under nineteen years of age. 14 b. The individual is sixty-five years of age or older. 15 c. The individual is determined to be disabled by the United 16 States social security administration. 17 d. The individual is identified as medically frail or 18 medically exempt under the Medicaid program. 19 e. The individual is a caretaker of a dependent child under 20 six years of age. 21 f. The individual is pregnant and the pregnancy is high 22 risk. 23 g. The individual is receiving unemployment compensation as 24 determined by the department of workforce development. 25 h. The individual is participating in substance use disorder 26 treatment, not to exceed a consecutive six-month period. 27 i. The individual is otherwise exempt for good cause as 28 determined by the director. 29 4. To maximize fiscal stability and administrative 30 efficiency, any exemption applied under the Iowa health and 31 wellness plan shall be substantially similar to the exemptions 32 applied under other public assistance programs. 33 5. Upon the department’s receipt of federal approval, 34 and the department’s operationalizing of a real-time system 35 -1- LSB 1296SV (3) 91 lh/ko 1/ 6

S.F. 599 to facilitate evaluation efforts and recipient referrals and 1 reporting, the department shall implement work requirements as 2 a condition of maintaining eligibility for the Iowa health and 3 wellness plan. The department shall adopt rules pursuant to 4 chapter 17A as necessary to administer the work requirements 5 for the Iowa health and wellness plan. 6 6. The department may resubmit a request for federal 7 approval submitted under subsection 1 if the initial request is 8 denied or withdrawn for any reason. 9 7. If federal law or regulations affecting work 10 requirements for the Iowa health and wellness plan are modified 11 to exclude work requirements as a basis for maintaining 12 eligibility as provided in this section, the department shall 13 discontinue the Iowa health and wellness plan, subject to 14 federal approval. If, under federal law, the department is not 15 allowed to discontinue the Iowa health and wellness plan, the 16 department may implement an alternative plan as specified in 17 the medical assistance state plan or waiver for coverage of the 18 affected population, subject to prior statutory approval of 19 implementation of the alternative plan. 20 Sec. 2. EFFECTIVE DATE. This division of this Act, being 21 deemed of immediate importance, takes effect upon enactment. 22 DIVISION II 23 WORK RULES AND REQUIREMENTS FOR PUBLIC ASSISTANCE PROGRAMS 24 Sec. 3. PUBLIC ASSISTANCE PROGRAMS —— WORK RULES AND 25 REQUIREMENTS ALIGNMENT. The department of health and human 26 services shall work with the United State department of 27 health and human services and the United States department 28 of agriculture to align the requirements and rules for 29 participants of public assistance programs related to working, 30 including but not limited to rules and requirements related 31 to employment and training for the supplemental nutrition 32 assistance program. 33 DIVISION III 34 INFORMATION TECHNOLOGY 35 -2- LSB 1296SV (3) 91 lh/ko 2/ 6

S.F. 599 Sec. 4. NEW SECTION . 217.25 Information technology fund. 1 1. An information technology fund is created in the state 2 treasury under the control of the department of health and 3 human services. The fund shall consist of moneys appropriated 4 or transferred to, or deposited in, the fund as provided 5 by law. All moneys deposited or paid into the fund are 6 appropriated to the department of health and human services 7 to be used for information technology systems and related 8 modernization initiatives. 9 2. Notwithstanding section 8.33, moneys appropriated in 10 this section that remain unencumbered or unobligated at the 11 close of the fiscal year shall not revert but shall remain 12 available for expenditure for the purposes designated until the 13 close of the succeeding fiscal year. Notwithstanding section 14 12C.7, subsection 2, interest or earnings on moneys in the fund 15 shall be credited to the fund. 16 Sec. 5. TRANSFER OF MONEYS. Any unobligated or unencumbered 17 moneys remaining in the public assistance modernization 18 fund created in section 239.11, on June 30, 2025, shall be 19 transferred to the information technology fund created in 20 section 217.25, as enacted in this division of this Act. 21 Sec. 6. REPEAL. Section 239.11, Code 2025, is repealed. 22 DIVISION IV 23 MEDICAID FOR EMPLOYED PEOPLE WITH DISABILITIES PROGRAM 24 Sec. 7. Section 249A.3, subsection 2, paragraph a, 25 subparagraph (1), subparagraph division (a), Code 2025, is 26 amended to read as follows: 27 (a) As allowed under 42 U.S.C. §1396a(a)(10)(A)(ii)(XIII), 28 individuals with disabilities, who are less than sixty-five 29 years of age, who are members of families whose income is 30 less than two hundred fifty percent of the most recently 31 revised official poverty guidelines published by the United 32 States department of health and human services for the family, 33 who have earned income and who are eligible for mandatory 34 medical assistance or optional medical assistance under this 35 -3- LSB 1296SV (3) 91 lh/ko 3/ 6

S.F. 599 section if earnings are disregarded. As allowed by 42 U.S.C. 1 §1396a(r)(2), unearned income shall also be disregarded in 2 determining whether an individual is eligible for assistance 3 under this subparagraph. For the purposes of determining the 4 amount of an individual’s resources under this subparagraph and 5 as allowed by 42 U.S.C. §1396a(r)(2), a maximum of ten thousand 6 dollars of available resources for an individual and twenty-one 7 thousand dollars of available resources for a couple shall be 8 disregarded, and any additional resources held in a retirement 9 account, in a medical savings account, or in any other account 10 approved under rules adopted by the department shall also be 11 disregarded. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill relates to work requirements for the Iowa health 16 and wellness plan (IHAWP), public assistance programs, 17 an information technology fund, the public assistance 18 modernization fund, and the Medicaid for employed people with 19 disabilities program and program review and report. 20 DIVISION I. This division requires the department of health 21 and human services (HHS) to request any federal approval 22 necessary to include work requirements as a condition of 23 maintaining eligibility for IHAWP. 24 HHS shall exempt certain individuals from the work 25 requirement who are under 19 years of age, 65 years of age or 26 older, medically frail or medically exempt under Medicaid, 27 a caretaker of a child under 6 years of age, experiencing a 28 high-risk pregnancy, receiving unemployment compensation, 29 participating in substance use disorder treatment, or exempt 30 for good cause as determined by the director of HHS. The 31 division requires that any exemption applied under IHAWP shall 32 be substantially similar to the exemptions applied under other 33 public assistance programs. 34 The division requires that upon HHS’s receipt of federal 35 -4- LSB 1296SV (3) 91 lh/ko 4/ 6

S.F. 599 approval and HHS’s operationalizing of a system to facilitate 1 evaluation, and recipient referrals and reporting, HHS shall 2 implement and adopt rules to administer work requirements as a 3 condition of maintaining eligibility for IHAWP. 4 HHS may resubmit a request for federal approval under the 5 division if the initial request is denied or withdrawn for any 6 reason. 7 If federal law or regulations exclude work requirements for 8 IHAWP, HHS shall discontinue IHAWP or implement an alternative 9 plan as described in the bill. 10 The division takes effect upon enactment. 11 DIVISION II. This division requires HHS to work with the 12 United States department of health and human services and 13 the United States department of agriculture to align the 14 department’s work rules and requirements for participants of 15 public assistance programs, including but not limited to rules 16 and requirements related to employment and training for the 17 supplemental nutrition assistance program. 18 DIVISION III. This division creates a information 19 technology fund in the state treasury under the control of HHS. 20 All moneys in the fund shall be appropriated to HHS to be used 21 for information technology systems and related modernization 22 initiatives. 23 The division repeals the public assistance modernization 24 fund, and transfers any unobligated and unencumbered moneys in 25 the fund on June 30, 2025, to the information technology fund 26 created in the division. 27 DIVISION IV. Currently, for the purposes of determining the 28 resources of an individual to meet the eligibility requirements 29 for the Medicaid for employed people with disabilities program 30 (MEPD) program, a maximum of $10,000 of available resources is 31 disregarded, in addition to any additional resources held in 32 a retirement account, in a medical savings account, or in any 33 other account approved under rules adopted by HHS. The bill 34 maintains the maximum amount of $10,000 in available resources 35 -5- LSB 1296SV (3) 91 lh/ko 5/ 6