House File 2716 - Reprinted HOUSE FILE 2716 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO HSB 696) (As Amended and Passed by the House March 10, 2026 ) A BILL FOR An Act relating to the supplemental nutrition assistance 1 program; the medical assistance program; the special 2 supplemental nutrition program for women, infants, and 3 children; and other public assistance programs under the 4 purview of the department of health and human services. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 HF 2716 (9) 91 ak/ko/md

H.F. 2716 DIVISION I 1 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 2 Section 1. NEW SECTION . 135.16E Supplemental nutrition 3 assistance program error rate —— report. 4 Beginning with the fiscal quarter that starts on October 5 1, 2026, and every fiscal quarter thereafter, within thirty 6 calendar days of transmission of data to the food and nutrition 7 services of the United States department of agriculture, the 8 department shall submit a report to the general assembly 9 detailing payment error rates associated with the supplemental 10 nutrition assistance program for the immediately preceding 11 fiscal quarter. For the purposes of this section, “supplemental 12 nutrition assistance program” has the same meaning as defined 13 in section 239.1. 14 Sec. 2. FEDERAL SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 15 —— WAIVER OF EARNED INCOME RULES. 16 1. The department of health and human services shall 17 request a waiver from the food and nutrition services of the 18 United States department of agriculture to provide that, for 19 purposes of state administration of the supplemental nutrition 20 assistance program, the earned income under 21 7 C.F.R. §273.9(c)(7) of household members that meet all of the 22 following criteria shall be excluded from household income: 23 a. Less than twenty-two years of age. 24 b. Enrolled in an elementary or secondary school. 25 c. Resides with a natural parent, adoptive parent, 26 stepparent, or other household member who exercises parental 27 control over the household member described in paragraphs “a” 28 and “b”. 29 2. The department of health and human services shall 30 implement the waiver upon receipt of approval of the waiver 31 from the United States department of agriculture. 32 Sec. 3. FEDERAL SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 33 —— WAIVER OF ELIGIBILITY VERIFICATION RULES. 34 1. The department of health and human services shall 35 -1- HF 2716 (9) 91 ak/ko/md 1/ 13

H.F. 2716 request a waiver from the food and nutrition services of the 1 United States department of agriculture to provide that, for 2 purposes of state administration of the supplemental nutrition 3 assistance program, information from the following automated 4 sources be considered verified upon receipt for purposes 5 of 7 C.F.R. §272.12(c): 6 a. The national directory of new hires maintained by the 7 office of child support services of the United States office 8 for the administration of children and families. 9 b. The unemployment insurance benefits data released by the 10 Iowa department of workforce development. 11 c. The United States social security administration 12 benefits, death, social security number, and citizenship 13 records. 14 d. The residency and identity data released by the United 15 States department of transportation. 16 e. The state incarceration data released by the Iowa 17 department of corrections. 18 f. The automated employment verification service known as 19 work number, or equivalent third-party income verification 20 platforms. 21 2. The department of health and human services shall 22 implement the waiver upon receipt of approval of the waiver 23 from the United States department of agriculture. 24 Sec. 4. FEDERAL SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 25 —— WAIVER OF EXPUNGEMENT RULES. 26 1. The department of health and human services shall 27 request a waiver from the food and nutrition services of the 28 United States department of agriculture to provide that, for 29 purposes of state administration of the supplemental nutrition 30 assistance program, expungement of benefits on a household’s 31 electronic benefit account under 7 C.F.R. §274.2(i) be 32 permitted after three months or ninety-one days of inactivity, 33 or of benefits remaining, on the electronic benefit account. 34 2. The department of health and human services shall 35 -2- HF 2716 (9) 91 ak/ko/md 2/ 13

H.F. 2716 implement the waiver upon receipt of approval of the waiver 1 from the United States department of agriculture. 2 Sec. 5. FEDERAL SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 3 —— WAIVER OF PAYMENT QUALITY CONTROL SAMPLING PROCEDURES. 4 1. The department of health and human services shall 5 request a waiver from the food and nutrition services of the 6 United States department of agriculture to provide that, for 7 purposes of state administration of the supplemental nutrition 8 assistance program, when reporting the state’s payment error 9 rate as outlined by 7 C.F.R. §275.14, and food and nutrition 10 services handbooks 310 and 311, the department of health and 11 human services be permitted to report the payment error rate 12 based only on errors directly attributable to the department. 13 2. The department of health and human services shall 14 implement the waiver upon receipt of approval of the waiver 15 from the United States department of agriculture. 16 DIVISION II 17 MEDICAL ASSISTANCE PROGRAM 18 Sec. 6. Section 249A.3, subsection 2, paragraph a, 19 subparagraph (1), Code 2026, is amended to read as follows: 20 (1) (a) As allowed under 42 U.S.C. 21 §1396a(a)(10)(A)(ii)(XIII), individuals with disabilities, 22 who are less than sixty-five years of age, who are members of 23 families whose income is less than two hundred fifty three 24 hundred percent of the most recently revised official poverty 25 guidelines published by the United States department of health 26 and human services for the family, who have earned income 27 and who are eligible for mandatory medical assistance or 28 optional medical assistance under this section if earnings are 29 disregarded. 30 (b) As allowed by 42 U.S.C. §1396a(r)(2), unearned income 31 shall also be disregarded in determining whether an individual 32 is eligible for assistance under this subparagraph. 33 (c) For the purposes of determining the amount of an 34 individual’s resources under this subparagraph and as allowed 35 -3- HF 2716 (9) 91 ak/ko/md 3/ 13

H.F. 2716 by 42 U.S.C. §1396a(r)(2), a maximum of ten thousand dollars of 1 available resources for an individual , and twenty-one thousand 2 dollars of available resources for a couple as defined in 20 3 C.F.R. §416.1101, shall be disregarded . The earned income of 4 an individual’s spouse as defined in 20 C.F.R. §416.1101, one 5 motor vehicle per household, and any additional resources held 6 in a retirement account, in a pension account, in a medical 7 savings account, or in any other account approved under rules 8 adopted by the department shall also be disregarded. 9 (b) (d) Individuals eligible for assistance under this 10 subparagraph, whose individual income exceeds one hundred 11 fifty percent of the official poverty guidelines published 12 by the United States department of health and human services 13 for an individual, shall pay a premium. The amount of the 14 premium shall be based on a sliding fee schedule adopted by 15 rule of the department and shall be based on a percentage of 16 the individual’s income. The maximum premium payable by an 17 individual whose income exceeds one hundred fifty percent of 18 the official poverty guidelines shall be commensurate with 19 the cost of state employees’ group health insurance in this 20 state. The payment to and acceptance by an automated case 21 management system or the department of the premium required 22 under this subparagraph shall not automatically confer initial 23 or continuing program eligibility on an individual. The 24 department shall maintain a page on the department’s internet 25 site where individuals can electronically pay any premium owed 26 by an individual to the department. A premium paid to and 27 accepted by the department’s premium payment process that is 28 subsequently determined to be untimely or to have been paid on 29 behalf of an individual ineligible for the program shall be 30 refunded to the remitter in accordance with rules adopted by 31 the department. Any unpaid premium shall be a debt owed to the 32 department. 33 Sec. 7. Section 249A.4, Code 2026, is amended by adding the 34 following new subsections: 35 -4- HF 2716 (9) 91 ak/ko/md 4/ 13

H.F. 2716 NEW SUBSECTION . 15. Submit a report to the general 1 assembly, including the official payment error rate and 2 a summary of the data submitted in the payment error rate 3 measurement report, within thirty calendar days of receipt by 4 the department of the annual official payment error rate from 5 the centers for Medicare and Medicaid services of the United 6 States department of health and human services. 7 NEW SUBSECTION . 16. Submit an annual report to the general 8 assembly on or before October 1 on petitions for a waiver, also 9 referred to by the department as exceptions to policy, of rules 10 governing the Medicaid program filed pursuant to the rules of 11 the department. The report must include all the following for 12 the immediately preceding fiscal year: 13 a. The total number of exceptions to policy granted. 14 b. The cumulative cost of the exceptions to policy that were 15 granted. 16 c. The types of exceptions to policy that were granted. 17 d. Identifiable trends noted by the department including any 18 of the following: 19 (1) The number of exceptions to policy granted in a 20 particular geographic location. 21 (2) The types of Medicaid services that were the basis for 22 exceptions to policy. 23 (3) The Medicaid program eligibility classification of 24 individuals granted Medicaid program exceptions to policy. 25 Sec. 8. NEW SECTION . 249A.32C Home and community-based 26 service waivers —— rural provider rate increase. 27 1. For the purposes of this section, unless context 28 otherwise requires: 29 a. “Consumer” means the same as defined in section 249A.29. 30 b. “Rural area” means a geographical area that is not part 31 of a metropolitan statistical area as designated by the United 32 States office of management and budget. 33 c. “Waiver” means the same as defined in section 249A.29. 34 2. The base reimbursement rate for a provider of services 35 -5- HF 2716 (9) 91 ak/ko/md 5/ 13

H.F. 2716 under a medical assistance program home and community-based 1 services waiver shall be increased to cover the travel time 2 and expenses incurred by the provider to provide services to a 3 consumer who resides in a rural area. 4 Sec. 9. NEW SECTION . 249A.32D Waivers —— cost neutrality. 5 1. As used in this section, “cost neutral” means federal 6 approval of a waiver related to the medical assistance program 7 submitted by the department to the federal government will not 8 result in a net increase in spending for state administration 9 of the medical assistance program. 10 2. Prior to submitting a request for a waiver to the United 11 States department of health and human services related to 12 the medical assistance program, the department shall conduct 13 an analysis to determine if the waiver is cost neutral. For 14 any waiver that is determined to be not cost neutral, the 15 department shall not submit the request for a waiver unless the 16 waiver has been presented to the general assembly and approved 17 by a majority vote of both houses of the general assembly. 18 Sec. 10. MEDICAID EXCEPTIONS TO POLICY REVIEW —— REPORT 19 TO GENERAL ASSEMBLY. The department of health and human 20 services shall conduct a review of petitions for a waiver, 21 also referred to by the department as exceptions to policy, of 22 rules governing the Medicaid program granted by the department 23 between January 1, 2020, and January 1, 2026, and shall submit 24 a report on or before December 15, 2026, of the findings of the 25 review. The report shall include all of the following: 26 1. The total number of exceptions to policy granted. 27 2. The cumulative cost of the exceptions to policy that were 28 granted. 29 3. The types of exceptions to policy that were granted. 30 4. Identifiable trends noted by the department including 31 any of the following: 32 a. The number of exceptions to policy granted in a 33 particular geographic location. 34 b. The types of Medicaid services that were the basis for 35 -6- HF 2716 (9) 91 ak/ko/md 6/ 13

H.F. 2716 the waiver. 1 c. The Medicaid program classification of individuals 2 granted exception to policy. 3 Sec. 11. CONTINGENT EFFECTIVE DATE. The following takes 4 effect contingent upon receipt of federal approval by the 5 department of health and human services from the centers for 6 Medicare and Medicaid services of the United States department 7 of health and human services: 8 The section of this division of this Act amending section 9 249A.3, subsection 2, paragraph “a”, subparagraph (1), Code 10 2026, relating to Medicaid eligibility for employed individuals 11 with disabilities. 12 DIVISION III 13 ELIGIBILITY FOR CERTAIN PROGRAMS 14 Sec. 12. NEW SECTION . 234.6A Program eligibility —— 15 residency. 16 1. As used in this section, “public assistance program” 17 means any of the following: 18 a. The state child care assistance program under section 19 237A.13. 20 b. The family investment program under chapter 239B. 21 c. The medical assistance program under chapter 249A. 22 d. The supplemental nutrition assistance program 23 administered by the state pursuant to 7 C.F.R. pts. 270 – 283, 24 as amended. 25 e. The special supplemental nutrition program for women, 26 infants, and children as provided in 42 U.S.C. §1786 et seq. 27 2. a. Unless prohibited under federal law, the department 28 may require from an applicant to a public assistance program 29 proof of at least twelve months of continuous residency within 30 the state including any of the following: 31 (1) A statement from the applicant attesting to the 32 applicant’s reasons for being in the state and length of 33 residency within the state. 34 (2) A statement from the applicant’s employer confirming 35 -7- HF 2716 (9) 91 ak/ko/md 7/ 13

H.F. 2716 the applicant’s employment in the state. 1 (3) Any other statement from other persons with knowledge 2 who can attest to the applicant’s reasons for being in the 3 state and length of residency within the state. 4 (4) A copy of the applicant’s most recently filed Iowa state 5 income tax return. 6 b. Paragraph “a” shall not apply to applicants who receive 7 benefits under the federal Social Security Act, 42 U.S.C. §423 8 et seq. 9 Sec. 13. Section 239.6, subsection 1, paragraph a, 10 subparagraph (4), Code 2026, is amended to read as follows: 11 (4) Information maintained by the United States citizenship 12 and immigration services of the United States department of 13 homeland security , including but not limited to information 14 accessible through the systematic alien verification for 15 entitlements online service . 16 Sec. 14. Section 239.6, subsection 2, Code 2026, is amended 17 by adding the following new paragraph: 18 NEW PARAGRAPH . g. The systematic alien verification for 19 entitlements online service maintained by the United States 20 citizenship and immigration services of the United States 21 department of homeland security or other accessible sources to 22 verify immigration and United States citizenship information. 23 DIVISION IV 24 MISCELLANEOUS PUBLIC ASSISTANCE PROGRAMS 25 Sec. 15. NEW SECTION . 135.16E Special supplemental 26 nutrition program for women, infants, and children —— citizens 27 and qualified aliens. 28 1. The department shall restrict participation in the 29 special supplemental nutrition program for women, infants, and 30 children to citizens and qualified aliens pursuant to section 31 742 of the federal Personal Responsibility and Work Opportunity 32 Reconciliation Act of 1996, Pub. L. No. 104-193. 33 2. An infant or child who is a citizen or qualified alien 34 and who is otherwise eligible for the special supplemental 35 -8- HF 2716 (9) 91 ak/ko/md 8/ 13

H.F. 2716 nutrition program for women, infants, and children shall be 1 eligible regardless of whether the infant’s or child’s parent 2 is a citizen or qualified alien. 3 Sec. 16. Section 249N.6, subsection 5, Code 2026, is amended 4 by adding the following new paragraph: 5 NEW PARAGRAPH . c. Notwithstanding any other provision of 6 law to the contrary, an Iowa health and wellness plan provider 7 may impose a fee of no more than five dollars on a member based 8 on the member’s failure to attend a scheduled appointment with 9 the provider. 10 Sec. 17. Section 249N.7, subsection 1, Code 2026, is amended 11 to read as follows: 12 1. Membership in the Iowa health and wellness plan shall 13 require payment of monthly contributions for members whose 14 household income is at or above fifty one hundred percent 15 of the federal poverty level. Members shall be subject 16 to an eight dollar copayment amounts applicable only to 17 for nonemergency use of a hospital emergency department. 18 Total member cost-sharing, annually, shall align with the 19 cost-sharing limitations requirements for the American health 20 benefits exchanges under the Affordable Care Act , as amended 21 by Pub. L. No. 119-21, commonly referred to as the One Big 22 Beautiful Bill Act . Contributions Monthly contributions and 23 copayment amounts for members shall be established by rule of 24 the department. 25 Sec. 18. Section 249N.7, Code 2026, is amended by adding the 26 following new subsections: 27 NEW SUBSECTION . 3. Notwithstanding subsection 1, a member 28 who fails to complete all required preventative care services 29 and wellness activities specified during the prior annual 30 membership period shall be subject to a monthly five dollar fee 31 during the subsequent year of membership. 32 NEW SUBSECTION . 4. Notwithstanding subsection 1, a member 33 whose household income is at or above one hundred percent of 34 the federal poverty level shall be subject to the following 35 -9- HF 2716 (9) 91 ak/ko/md 9/ 13

H.F. 2716 copay amounts: 1 a. A five dollar copay for a diagnostic dental procedure. 2 As used in this paragraph, “diagnostic dental procedure” means 3 a dental procedure that is not performed for preventative 4 purposes. 5 b. A one dollar copay for a prescription drug when a 6 suitable generic equivalent drug approved by the United States 7 food and drug administration is available to the member. 8 Sec. 19. 2023 Iowa Acts, chapter 104, section 12, subsection 9 3, is amended to read as follows: 10 3. Unless otherwise provided in this Act, the department 11 of health and human services shall implement the provisions of 12 this Act in an incremental fashion, beginning July 1, 2023, 13 with a goal of full implementation no later than July 1, 2025 14 completed by January 1, 2027 , to minimize duplication of 15 efforts and to maximize coordination with the implementation 16 time frames of other departmental resource enhancements. 17 Sec. 20. IOWA HEALTH AND WELLNESS PLAN —— MEMBER 18 REENROLLMENT FOLLOWING TERMINATION FOR NONPAYMENT OF MONTHLY 19 CONTRIBUTIONS. The department of human services shall seek 20 approval of an amendment to the section 1115 demonstration 21 waiver for the Iowa health and wellness plan from the centers 22 for Medicare and Medicaid services of the United States 23 department of health and human services to provide the 24 following: 25 1. An Iowa health and wellness plan member who is subject 26 to payment of a monthly contribution as the result of failure 27 to complete required preventative care services and wellness 28 activities, and whose eligibility for the program is terminated 29 due to nonpayment of monthly contributions, shall be allowed 30 to subsequently reenroll in the program without first paying 31 any outstanding monthly contributions, if the member has not 32 been terminated from the program previously for nonpayment of 33 monthly contributions. 34 2. If an Iowa health and wellness plan member has been 35 -10- HF 2716 (9) 91 ak/ko/md 10/ 13

H.F. 2716 terminated from the program previously for nonpayment of 1 monthly contributions, and is subsequently terminated from 2 the program for nonpayment of monthly contributions owed as 3 a result of failure to complete required preventative care 4 services and wellness activities, the member shall be subject 5 to payment of any outstanding monthly contributions prior to 6 reenrollment in the program. 7 DIVISION V 8 PUBLIC ASSISTANCE FRAUD —— REPORT 9 Sec. 21. NEW SECTION . 10A.404 Fraud in public assistance 10 —— report. 11 On or before October 1, 2026, and every fiscal year 12 thereafter, the department shall submit a report to the general 13 assembly concerning the department’s activities relative 14 to fraud in public assistance programs for the immediately 15 preceding fiscal year. The report shall include but is not 16 limited to a summary of the number of cases investigated, 17 case outcomes, overpayment dollars identified, amount of cost 18 avoidance, and actual dollars recovered. 19 Sec. 22. NEW SECTION . 10A.404A Fraud in special 20 supplemental nutrition program for women, infants, and children 21 —— report. 22 On or before November 1, 2026, and by November 1 every 23 fiscal year thereafter, the department shall submit a report 24 to the general assembly concerning the department’s activities 25 relative to fraud in the special supplemental nutrition 26 program for women, infants, and children. The report shall 27 include but is not limited to a summary of the number of cases 28 investigated, case outcomes, violation points issued, and 29 actual dollars recovered. 30 DIVISION VI 31 HIGH-ACUITY PEDIATRIC WORK GROUP —— REPORT 32 Sec. 23. HIGH-ACUITY PEDIATRIC WORK GROUP —— REPORT TO 33 GENERAL ASSEMBLY. 34 1. The department of health and human services shall convene 35 -11- HF 2716 (9) 91 ak/ko/md 11/ 13

H.F. 2716 a work group to examine the unique service needs of high-acuity 1 pediatric recipients of medical assistance under chapter 249A, 2 and high-acuity pediatric members of the healthy and well kids 3 in Iowa program under chapter 514I. The work group shall do 4 all of the following: 5 a. Identify the barriers that prevent the high-acuity 6 pediatric recipients and members from remaining in the least 7 restrictive environment possible. 8 b. Develop a proposal for a tiered reimbursement 9 methodology to provide high-acuity home health services 10 tailored to meet the allowable medical and nonmedical support 11 needs of high-acuity pediatric recipients and members. 12 2. The work group shall be comprised of at least one 13 representative of a provider of high-acuity home health 14 services, one representative of the Iowa chapter of the 15 American academy of pediatrics, one representative of the 16 Iowa association of community providers, one representative 17 of the Iowa health care association, and other individuals or 18 organizations deemed appropriate by the department. 19 3. On or before December 1, 2026, the department shall 20 submit a report to the general assembly that includes all of 21 the following: 22 a. The barriers identified by the work group that prevent 23 high-acuity pediatric recipients and members from remaining in 24 the least restrictive environment possible. 25 b. The working group’s proposed tiered reimbursement 26 methodology and the estimated fiscal impact on affected 27 providers and health care facilities. 28 4. The department of health and human services shall provide 29 administrative support, including scheduling meetings of the 30 work group as necessary to complete the work of the work group. 31 DIVISION VII 32 MEDICAID REIMBURSEMENT RATE —— SPECIAL POPULATION NURSING 33 FACILITIES 34 Sec. 24. Section 249A.2, Code 2026, is amended by adding the 35 -12- HF 2716 (9) 91 ak/ko/md 12/ 13

H.F. 2716 following new subsection: 1 NEW SUBSECTION . 15. “Special population nursing facility” 2 refers to a nursing facility that serves one of the following 3 populations and has been designated as a special population 4 nursing facility by the department: 5 a. One hundred percent of the residents served are aged 6 thirty and under and require a skilled level of care. 7 b. Seventy percent of the residents served require a skilled 8 level of care for neurological disorders. 9 c. One hundred percent of the residents require care from a 10 facility licensed by the department of inspections, appeals, 11 and licensing as an intermediate care facility for persons with 12 mental illness. 13 d. One hundred percent of the residents require care from a 14 facility licensed by the department of inspections, appeals, 15 and licensing as an intermediate care facility for persons with 16 medical complexity. 17 Sec. 25. NEW SECTION . 249A.38C Medicaid reimbursement rate 18 —— special population nursing facilities. 19 The provider reimbursement rate for each special population 20 nursing facility enrolled in Medicaid before July 1, 2025, must 21 be the special population nursing facility’s average allowable 22 per diem costs as adjusted for inflation. The inflation factor 23 is based on the most recent centers for Medicare and Medicaid 24 services total skilled nursing facility market basket index. 25 If a special population nursing facility subject to this 26 section increases the special population nursing facility’s 27 number of beds or expands to provide additional services on 28 or after July 1, 2025, the reimbursement rate in this section 29 shall apply to such additional beds or services. 30 -13- HF 2716 (9) 91 ak/ko/md 13/ 13