Congress Passes the Work Incentives Improvement Act

The Work Incentives Improvement Act (WIIA) passed the House of Representatives by voice vote on November 18 and the Senate by a vote of 95 to 1 on November 19. This legislation will help persons with disabilities return to the workforce by maintaining their Medicare and Medicaid health benefits. The bill would also allow cash benefits, typically Supplemental Security Income (SSI) or Social Security Disability Income (SSDI), to be reduced gradually as income increases, rather than having a sudden elimination of benefits, as often happens today. WIIA is now headed to the White House, where President Clinton has already agreed to sign it.

WIIA was introduced in the Senate by Senators James Jeffords (R-VT), Edward Kennedy (D-MA), William Roth (R-DE) and Daniel Patrick Moynihan (D-NY), and in the House of Representatives by Representative Rick Lazio (R-NY). WIIA attempts to address the disincentives to work in the existing federal system. Under current federal law, people with disabilities who return to work risk losing their cash and health benefits. These disincentives may help explain why the unemployment rate among persons with disabilities is so much higher than for the rest of the population.

Some estimate that more than 70 percent of Americans with disabilities want to work and are able to do so, yet less than one half of one percent of SSDI recipients ever leaves the program and returns to work. Many people with disabilities qualify for Medicare or Medicaid coverage; however, once they return to work, they are often unable to keep their medical coverage or get private insurance. WIIA will help eliminate barriers so that those with disabilities who can work are able to do so.

1. Medicaid expansion. Buy-ins allow people whose salaries make them ineligible for Medicaid remain eligible if they pay all or part of their premium. WIIA creates two new options for states to offer a Medicaid buy-in for workers with disabilities, and provides $150 million in grants to encourage states to provide this option. While current law establishes an income limit of 250 percent of poverty level (about $21,000 per year for a single adult) for Medicaid coverage, WIIA allows states to let individuals who earn between 250 and 450 percent of the poverty level to buy into Medicaid, even if some may have to pay 100 percent of the Medicaid premium. States may also allow those people whose conditions have improved to keep their Medicaid coverage.
2. Medicare extension. WIIA allows persons with disabilities to retain their Medicare coverage for up to eight-and-a-half years after returning to work, more than double the current limit. This applies even if they earn more than the substantial gainful activity (SGA) rate.
3. Vouchers for rehabilitation services. The "Ticket to Work and Self Sufficiency" program, which would enable people with disabilities to use vouchers to select their own employment or psychosocial rehabilitation provider, is included in this bill. The Social Security Administration will create this program and issue "tickets" for vocational rehabilitation services.
4. Prevention demonstration project. WIIA creates a new $250 million State Medicaid Demonstration Program to enable persons whose degenerative conditions have not yet become disabling to buy into Medicaid for early medical intervention. This would help people with such disabilities as muscular dystrophy, Parkinson's Disease, AIDS, or diabetes, stay healthier and keep working. This 5-year demonstration project will be effective October 1, 2000.
5. Correlating benefits and income. WIIA would create a demonstration project to reduce cash benefits as income increases, rather than the current policy of stopping all cash benefits when earnings exceed $500 per month.
6. Improving infrastructure. WIIA establishes an Infrastructure Grant Program to make funds available to states to design, establish, and operate an infrastructure to support working individuals with disabilities. This program will be effective October 1, 2000.

To view the final congressional report on WIIA, please go to the Web site for the House of Representatives Committee on Ways and Means. Go to the "What's New This Week" at the bottom of the page. Two key documents are: "Statement of Managers - Ticket to Work" and "Bill Language -Ticket to Work and Tax Expiring Provisions."

For further information, contact Daniel Dodgen, Ph.D. at APA.

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