Wisconsin Legislature: A1096

Health Care Eligibility Determinations

Section 93 [as it relates to eligibility determination] specifies that the W-2 agency shall make the eligibility determination within two working days and that DHFS or the provider shall issue the health plan membership care to an individual within three working days. I am exercising the partial veto in this section because these timelines are too prescriptive. It is certainly this administration's intent that a person's application and membership card be processed as quickly as possible. However, these rigid timelines do not allow flexibility to address unforeseen circumstance that could cause a delay. In addition, these issues can be addressed through contracting.

Asset Test for Pregnant Women and Children

A1094 Section 93 [ as it relates to the asset criteria] specifies the income and asset criteria that a Wisconsin Works group must meet in order to be eligible for the W-2 health care plan. AB591 applies a different asset test to pregnant women and children up to age 12 than to the rest of the W-2 health care plan participants. For this group of people, the W-2 agencies shall exclude all of the resources specified under 42 USC 1382b (a), which is the section of the federal code that enumerates the asset test for the federal Supplemental Security Income (SSI) program. However, the motion made by JCF was to model the asset test after the spousal impoverishment asset test, which is broader than SSI. Even if the spousal impoverishment asset test had been referenced, I believe that it would be confusing and administratively difficult to apply two different asset tests to, in some cases, the same family. I am exercising the partial veto to apply the same asset test to all W-2 health care plan participants.

Health Care Spenddown

Section 93 [as it relates to medically needy individuals] specifies that nonpregnant adults and children ages 12 to 18 years old, who meet the other requirements of the W-2 health care plan, but have income in excess of 165% of the federal poverty level can qualify for the W-2 health care plan if they spend down to 165% of poverty. This group would remain subject to the employer-offered health care rules in AB591. In addition, this section specifies that pregnant women and children under 6 years old with excess income may also spend down to 165% of poverty, but children ages 6 to 12 would have to spend down to 100% of poverty. Neither of these two groups would be subject to the employer-offered health care rules.

Under current law, nonpregnant adults are not eligible under the spenddown program. Children ages 6 to 18 have to spend down to 133.33% of the AFDC grant size, which for a family of three is roughly 65% of poverty. Under the W-2 bill, as it was originally submitted, spenddown was eliminated for all groups. While I understand the Legislature's desire to extend a health care safety net to as many people as possible, especially pregnant women and children, the provisions of AB591 will increase the costs of the W-2 program and go beyond current law eligibility. I am therefore exercising a partial veto of this section to limit spenddown to pregnant women and children up to 12.

Learnfare Sanction Amount

Section 143m specifies that a dependent child in a Wisconsin work group who fails to meet the school attendance requirement under the Learnfare program is subject to a monthly sanction of $50. The sanction amount for the current Learnfare program is determined by the department by rule. I am exercising the partial veto of this section in order to remove the $50 from the statutes because I believe that the department should have additional flexibility in the Learnfare program. I am directing the department to continue to determine the amount of the monthly sanction by rule.

Transportation

Section 275 (4m) (b) requires DILJD to identify significant local and regional employment opportunities and identify the residential locations of current and potential W-2 participants. In addition, no later than September 30, 1996, DILJD shall submit, with assistance from the Department of Transportation (DOT), a report to JCF that recommends options that the W-2 agencies could take to facilitate the transportation of W-2 participants to the employment opportunities. The report may not recommend options that would have an adverse impact on existing public transportation systems. I am exercising the partial veto in this section to remove the date that the report must be submitted and to remove the restriction on what options the report can present. First, submitting the report by September 30, 1996 will make the information less current than it might otherwise be for W-2. I am therefore directing the two departments to submit the report no later than the date by which the department must implement W-2 statewide. Second, I do not believe that the report's options should be limited. It is possible that DOT, DILJD and local communities may develop creative transportation solutions that work outside of the public transportation network.

Advanced Earned Income Tax Credit

Sections 21b, 21c, 219m, 225b, 225d, 225f, 225h, 225j, 225L, 225n and 278 (3g) and (3h) provide a mechanism for an advanced payment of the state earned income tax credit (EITC), if both an employee and employer choose to participate. Employers could reduce the amount owed for individual income tax withholding or, if that is insufficient, from unemployment compensation contributions that are due. DILJD would be required to promptly transfer an equal amount from the general fund to the unemployment trust fund, if unemployment compensation is used. Based on the experience of the federal advanced EITC, where only 1% of the eligible population elect to receive it, participation in the voluntary state advanced payment option is likely to be very low. On the other hand, the cost to the state is likely to be high, both in terms of administration and payments to persons eventually found to be ineligible for the EITC. I am vetoing these provisions because benefits are likely to go to only a few EITC recipients, while the cost to the state is relatively high. I am directing the department to require, as part of the W-2 contract, the financial and employment planners of the W-2 agencies to help W-2 participants sign up for the federal advanced earned income tax credit program. If participation in the federal program increases significantly, I believe it would be appropriate to revisit the idea of an advanced payment program for the state EITC.

Retroactive Benefits for Decisions Overturned

A1095 Section 92 allows an individual to petition a W-2 agency for a review of certain actions. In addition, the department is required to review a W-2 decision regarding the determination of initial eligibility, if requested to do so by either the W-2 agency or the individual. If the department reverses a decision on initial eligibility the individual will receive benefits retroactive to the date of the original decision to deny benefits. The benefits would be computed as if the person had complied with all the requirements of the W-2 employment position into which they most likely would have been placed. I am exercising the partial veto of this section to eliminate the requirement that a person receive retroactive benefits if the department reverses the W-2 agency decision. It would be very difficult to implement this provision. Assessment of where the person most likely would have been placed is likely to lead to additional disputes between the applicant and the W-2 agency. For example, a person may have been able to be placed in an unsubsidized job. In this situation, it is unclear what retroactive benefit amount the person should receive. At the same time, it may be appropriate for a person to receive some level of compensation if the denial is overturned. I am directing the department to determine the best way to accomplish this goal and to report back to me and Legislature.

Report on Homelessness

Section 84 [as it relates to homelessness] requires DILJD to maintain a record detailing statistics on the homelessness of W-2 participants. I am exercising the partial veto of this section to remove this reporting requirement. I do not believe that this requirement was carefully constructed. It is unclear when or for how long this information should be collected. It will not shed any light on the W-2 program if this information is collected as people come into the W-2 office. If the intent was to see if the W-2 program had an impact on homelessness, it is more helpful to look at information from homeless shelters and transitional housing programs. Data are already being collected and compiled on the people using these services by the Department of Administration's Division on Housing. This Division will be able to compile information on the W-2 population as it is implemented.

Emergency Assistance Program

Section 83e continues the current AFDC Emergency Assistance program after W-2 is implemented with one modification. In addition, DILJD would be required to submit a report to the Legislature within 12 months of the implementation of W-2 on the interaction of the this program with the W-2 program. I am exercising the partial veto in this section to remove the reporting requirement as it is administratively burdensome to the department. I am, however, maintaining the emergency assistance program beyond the start of the W-2 program in order to continue to provide assistance to needy families with dependent children in the cases of fire, flood, natural disaster, homelessness or energy crisis.

Kinship Care and Health Insurance

Sections 70d and 70g specify that DHFS, in consultation with DILJD, shall determine whether a kinship care child is eligible for Medical Assistance (MA) only if no other health care insurance is available to the child. DHFS's intent was to make kinship care children immediately eligible for MA as they do for children in foster care. Just as in foster care, the parents of the kinship care child will still be required to initiate or continue health care insurance coverage for the child as part of their child support obligation. I am exercising the partial veto in these sections to ensure that the kinship care provider does not have to bear any costs related to the child's medical care and to ensure that there is no gap in the child's health care coverage if the parent is not complying with the child support order.

Food Stamp Employment and Training Requirements

Section 79 specifies that the maximum number of hours that an individual may be required to participate in the Food Stamp Employment and Training (FSET) program may not exceed the amount of food stamp benefits divided by the federal minimum wage or 40 hours per week, whichever is less. I am exercising a partial veto of this section to remove the language related to the minimum wage calculation. This language will limit the department's ability to require participation in FSET activities. For example, the maximum food stamp benefit for a single adult is $119 per month. Using the minimum wage formula would result in this individual only being required to participate for seven hours per week. This minimal level of participation may not lead to self-sufficiency.

Criminal Background Checks

Sections 71d, 71m [as it relates to the petition process] and 75 require criminal background investigations of kinship care providers, certified day care providers, licensed day care providers and any employees or adult residents who live in the homes of the providers. Also specified is a list of the criminal convictions that an applicant cannot have on his or her record if applying for a kinship care payment or day care certification or license. An individual who is denied a kinship care payment, certification or licensure based on the criminal background investigation may petition DHSS for a review of that denial. I am exercising a partial veto of the provisions related to the petition process. The statutes are very clear and explicit regarding an applicant's conviction record. In addition, current statutes already provide due process rights to all licensure applicants under s. 48.715. Certification applicants may take a grievance to the county department under Chapter 62. In addition, I am directing the Secretary of DHFS to recommend the best method for individuals to make appeals for the entire kinship care program, not just for an appeal regarding the criminal background check. This is a larger issue that is not addressed in the W-2 legislation.

Section 71m [as it relates to employees of a day care center] also specifies that the department must complete a background investigation of each employee and prospective employee of a licensed day care center. This language is substantially different from what I proposed or what was in Senate Substitute Amendment 1 to SB24 which states that the applicant or licensee, with the assistance with the Department of Justice, shall conduct a background investigation of each employee or prospective employee of the applicant or licensee. I am partially vetoing this section in order to require the day care applicant or licensee to perform the background investigation of each employee or prospective employee, not the department. The language as written would impose a significant new workload on the department. This should instead be the responsibility of the licensed day care center as part of their licensure.

Nonstatutory Provision on Administrative Rules for W-2

Section 275 [as it relates to rules for the administration of W-2] directs DILJD to promulgate rules on the qualification criteria for the administration of the Wisconsin Works program without the finding of an emergency. I am partially vetoing the words "qualification criteria" in section 275 (3) (title) because the department needs emergency rulemaking authority for the administration of all of the W-2 program. This is primarily a technical correction.

State Supplemental Security Income (SSI) Supplement

A1096 Sections 175 and 209 create a separate supplemental payment under the state's SSI program for custodial parents who receive SSI and who have dependent children. The supplement was intended to replace the AFDC payment that the child is currently receiving, once W-2 is implemented. The child was to continue to receive Medical Assistance coverage. Unfortunately, these sections do not reflect the Administration's intent. A federal waiver is necessary before the department can make this supplemental SSI payment in lieu of an AFDC payment for the child. I am vetoing these sections because the provision in AB591 would require the department to make this payment beginning July 1, 1996 whether the waiver had been approved or not and whether the dependent child was receiving AFDC or not. I am directing the department to pursue the legislation needed to implement the provision as originally intended.

Medical Savings Accounts (MSAs)

Sections 250, 250m and 279 [as it relates to qualifying coverage definition] include provisions on high cost-share benefit plans that are linked to a tax-preferred savings plan for payment of medical expenses, which are often referred to as medical savings accounts. Under AB591, portability of coverage and guaranteed acceptance rights would be limited for MSAs under certain circumstances. If a person has had a MSA within 60 days of the effective date of his or her new job's health care coverage, and that new coverage includes a choice between a MSA and group health coverage, and the employee chooses to switch to a group health care plan, portability of coverage and guaranteed acceptance rights are not available. I am exercising the partial veto in these sections to remove any reference to high cost-share benefit plans that are linked to a tax-preferred savings plan for payment of medical expenses, including the portability and guaranteed acceptance restrictions for several reasons. First, tax-exempt MSAs have not yet been created at either the federal or state level. AB591 does not create MSAs either; it only provided for a limit on MSA portability and guaranteed acceptance in the event that other legislation is passed that creates the MSAs. I have been involved in discussions at the federal level on this issue and it is not clear to me that the federal legislation creating MSAs will pass in the near future. Furthermore, the state Legislature is currently debating a bill (AB545) that would create MSAs in Wisconsin. Any limits on the portability or guaranteed acceptance of MSAs should be included with the legislation that actually creates the MSAs. I do not believe it is appropriate to retain this language in the statutes in anticipation of the passage of a MSA bill.

I believe that these partial vetoes make a good piece of legislation even better. We can now move forward to implement this pathbreaking welfare reform measure.

Sincerely,

Tommy G. Thompson

Governor

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Communications

State of Wisconsin
Office of the Secretary of State
Madison

To Whom It May Concern:

Acts, Joint Resolutions and Resolutions deposited in this office have been numbered and published as follows:

Bill Number Act Number Publication Date

Assembly Bill 188214April 30, 1996

Assembly Bill 491217April 30, 1996

Assembly Bill 451218April 30, 1996