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Ticket to Work….
Great Opportunities and
Room for Improvement
By Marsha
Katz, The University of
Montana Rural Institute
The Ticket to Work and Work Incentive
Improvement Act of 1999 is now in full swing. By the end of 2004, every person
between the ages of 18 and 65 who receives Supplemental Security
Income (SSI) and/or Social Security Disability Insurance (SSDI)
benefits will receive a “Ticket” in the mail from the
Social Security Administration. They can then use that “Ticket” to
purchase employment services from any enrolled “Employment
Network ” (EN).
The Employment Network is paid only if the person is satisfied
with their service. And if the EN performs any service for the
person that results in the person earning over what Social Security
calls the Substantial Gainful Activity (SGA) level—$810/month
in 2004—the EN has an opportunity to receive extended monthly
payments for up to five years, depending on how long the person
continues to earn over SGA, or is not due any SSDI or SSI payments.
Upon enrollment, an EN elects to receive payment under one of
two payment options.
• The “Outcome” option promises greater payments to the EN
over a five year period, but requires that the worker not be due any SSI or SSDI
check at all in order for the EN to receive payment.
• The “Outcome Milestone” option provides up to four reduced
payments to an EN in a 15 month period, providing the worker earns at least SGA
for up to 12 out of the 15 months. Additionally, the EN can then continue to
receive the reduced payments for the remainder of five years if the person continues
to earn over SGA.
While there are clearly some opportunities presented by Ticket
to Work, it should be noted that they are actually accessible
to a very few people. According to the Ticket program manager,
Maximus, Ticket to Work was never intended to serve everyone,
and if the ENs are successful with only one half of one percent
of all “Ticket” holders, Ticket will have more than
paid for itself. Because Ticket is meant to serve so few people,
despite the broadly aimed exposure it has received, it contains
some features that are frankly inequitable, and others that exemplify
one of my cardinal rules when dealing with Social Security: “Don’t
Look for Logic.”
Opportunities…
Personal Opportunities
Choice
The greatest opportunity Ticket to Work provides is that some
SSI/SSDI recipients will now have real choice in who provides
their employment services. They can now choose to receive services
from any EN providing services to their geographic location,
as an alternative to the services provided by their state Vocational
Rehabilitation (VR) agency
Benefits Analysis and Protection of Rights
One of the most constructive opportunities Ticket to Work provides
is the creation of a national cadre of Benefits Planning Assistance
and Outreach (BPAO) workers. These BPAOs partner with SSI/SSDI
recipients to examine the impact of work on benefits before the
person actually makes a decision to go to or return to work.
They share accurate information about a range of benefits so
individuals can make informed choices that will not see them
risking the loss of more than they stand to gain by working.
Along with the BPAOs, Ticket to Work provided money to the nation’s
Protection and Advocacy (P&A) organizations to assure SSA
does not inadvertently target people who took advantage of Ticket with Continuing Disability Reviews (CDRs), contrary to protections
in the law. Many of the P&A organizations and their BPAO
counterparts are also assisting SSI/SSDI recipients to write
Social Security Plans for Achieving Self Support (PASS plans)
to help them achieve their vocational goal.
Extended Medicare Coverage
A third Ticket opportunity is that working SSDI recipients can
continue to receive free Medicare (Part A) hospital coverage
even when they are no longer eligible for an SSDI check because
they are earning over SGA. This free extension of Medicare Part
A can continue for 8 ½ years. When the free Medicare hospital
benefits run out, people can choose to buy-in to the Medicare
hospital benefit. In addition, when a working SSDI recipient
loses eligibility for SSDI because of earnings over the SGA level,
and that person later must stop working because of their disability,
they can immediately begin to receive their SSDI checks again
if they notify SSA.
Medicaid Buy-In Potential
A fourth opportunity under Ticket exists in those states that
have elected to provide a Medicaid buy-in to working SSDI recipients.
This means that SSDI recipients don’t have to fear losing
Medicaid if they go to work. When their earnings put them over
their state’s income eligibility limit, working SSDI recipients
can buy-in to Medicaid at very affordable levels.
Community and Government Opportunities
Increased Tax Base and Economic Growth
From a community’s perspective, Ticket to Work represents
an opportunity for the community to gain motivated, productive
workers and business owners who contribute to the tax base as
well as to the local economy. When working, SSDI recipients will
likely spend some or all of their increased income in their own
communities buying goods and services from local merchants.
Communities Gain
A second community opportunity exists when an SSI/SSDI recipient
uses Ticket to start a business that provides goods and/or services
that the community lacks and needs. Unfortunately, this opportunity
comes with a significant challenge explained later under “Room
for Improvement.”
Slowing of Growth in SSI/SSDI Programs
Finally, Ticket is an opportunity for the federal government
to reduce the amount of disability benefits paid out, thus saving
money and slowing the growth of the SSI and SSDI programs. The
beauty of this cost savings is that it is not accomplished by
selective, hurtful budget cuts that put vulnerable people at
risk. On the contrary, it is accomplished by providing choice,
supports, and assistance to people so they can go to/return to
work and not lack health care insurance. It’s a win-win
situation.
Room for Improvement…
The opportunities contained in Ticket to Work are minimized,
or unavailable altogether to many people, partly as a result
of uninformed changes and compromises that occurred between the
time the intended legislation was envisioned, and the time it
was signed into law. These changes and omissions have seriously
diluted the promise of Ticket, thus similarly diluting the intended
outcomes of its implementation.
No Access to Services from Employment Networks (EN)
for SSI Recipients with Significant Disabilities
SSI is a disability-based public assistance program that poor
people with disabilities who have little or no work record receive.
In most states SSI comes with Medicaid, which provides the funding
for general health care, and for medications, personal assistance
services, and developmental disability and mental health services.
Depending on their state, persons on SSI can gross up to $14,000-$41,000/year
before they risk the loss of their Medicaid. This potential for
high earnings would seemingly make SSI recipients very desirable
customers for ENs.
Under the Ticket to Work regulations, ENs can choose whether
or not to serve a consumer, in the same way the consumer can
choose from whom to buy employment services. ENs can receive
reduced payments for their services when a consumer they assist
grosses over the SGA level. Or, they can choose to receive full payments over a 5-year period, if the consumer they assist is
earning enough to not be due any benefit check. For an SSI recipient,
this typically means earnings of $1,213/month in 2004 (as opposed
to earnings of $810/month for SSDI recipients). Therefore, ENs
providing services under the “Outcome” payment option
will most often choose to serve only those SSI recipients who
are likely to earn at least $1,213/month.
Persons born with significant developmental disabilities typically
receive SSI for much of their lives. They also frequently have
work histories that are very limited from years in work activity
centers and sheltered workshops. Even those in Supported Employment
often work only part-time for minimum wage. At the minimum wage
of $5.25/hour, even a full time job would produce only $840-$900/month,
which is less than the $1,213/month the person would have to
earn in order for the EN to receive full payments for their services.
Therefore, ENs providing services under the “Outcome” payment
option are much less likely to choose to serve persons with significant
developmental disabilities, because there may be practically
no chance the EN will receive payment for those services.
Even when the EN has chosen to provide services under the “Outcome
Milestone” payment option, a person earning $5.25/hour
would have to work nearly full time in order to gross over SGA,
thus making the EN eligible for payment. Once again, ENs will
be far less likely to serve persons with significant disabilities
because they are not as likely to receive any payment for their
services.
In essence, SSI recipients—the persons with the best health
care safety net, who can afford to try earning more without losing
essential services—are also the people who have the least
chance of earning enough to make it worthwhile for an EN of their
choice to serve them. The result is that Ticket to Work does
not provide people with significant developmental and other disabilities
the same freedom of choice and opportunity for self-determination
that it provides to people with less significant disabilities.
Ticket, as it reads today, sets up a situation where ENs are
likely to consistently refuse services to persons with significant
disabilities. Outside the realm of Ticket to Work, consistent
denial of government or other services to one segment of the
population would likely be termed as discrimination.
One solution to this inequity would be for Ticket to authorize
payment to ENs that assist SSI recipients to have earnings that
(significantly) reduce their SSI check each month, even though
those earnings are less than $1,213 (in 2004).
Loss of Essential Health Care for SSDI Recipients
Conversely to the above situation, many SSDI recipients have
significant work histories. Often having worked before acquiring
their disabilities, they understand the world of work and typical
workplace behaviors and rhythms, and are thus retrained for a
new job more easily. This means they are often better candidates
for a return-to-work than are many SSI recipients, and are more
likely to have higher earnings, or the prospect of earning over
the SGA amount each month.
ENs can receive the reduced payments for serving SSDI recipients
when they earn $810 or more/month in 2004, if the EN chooses
the “Outcome Milestone” payment option. If the SSDI
recipients earn the Substantial Gainful Activity amount or more
for enough months, SSA will deem them not eligible to receive
their SSDI checks, and the EN can then receive full payment for
providing employment services, if the EN has elected to provide
services under the “Outcome” payment option.
While SSDI comes with Medicare, Medicare doesn’t yet cover
prescriptions, personal assistance services, and most developmental
disability and mental health services. (In late 2003, Congress
passed a Medicare prescription bill that will provide partial
assistance with prescription costs for SSDI and SS Retirement
recipients.) If SSDI recipients need Medicaid in addition to
their Medicare, in order to cover their expensive medications,
personal assistance services, or mental health and developmental
disability services, they must keep their income within specific
low limits to become or stay financially eligible for Medicaid
in their state, unless that state is one of the few with a Medicaid
buy-in program. Since working means having additional income,
many SSDI recipients are fearful of working because they can’t
afford to lose their essential Medicaid.
So, the people with the best chance of earning enough to make
them desirable candidates for ENs, and for whom the ENs are most
likely to receive payment for services, are the least likely
to seek out those services for fear of losing Medicaid. Many
have noted that there appears to be a lack of logic in many current
Ticket to Work regulations and policy that prevents accomplishing
the very things the law initially said it wanted to accomplish.
The only light at the end of the tunnel currently is in the
states that already had a Medicaid buy-in program before Ticket
to Work, or that created one pursuant to the provisions in the
Act. However, because the Medicaid buy-in provision was not mandatory
for all of the states in Ticket to Work legislation, even this
bit of potential light comes with pitfalls. First, faced with
the option, States may choose to not create a Medicaid buy-in
program, and secondly, again because the program is optional,
it can easily end up on the chopping block during state budget
negotiations since states cannot by law cut mandatory Medicaid
services.
Inequity for Self-Employment
Issues Around Earnings
As I described above, payment for EN services can be partial
or full, based on whether SSI/SSDI recipients simply earn SGA
($810/month) for a number of months, or whether they earn enough
money for a long enough time to not be due any SSI or SSDI check
at all.
When someone receiving SSI/SSDI benefits chooses self-employment
as their vocational goal, they look for financing that will help
them start their small business while not creating additional
debt. Thus, loans are infrequently used. Some of the more common
sources of financing used by persons with disabilities include
funds from Vocational Rehabilitation, Tribal Vocational Rehabilitation,
Workforce Investment Act One-Stops, and PASS plans through the
Social Security Administration.
Alone or blended, these funding sources allow persons with disabilities
a modest start for their business. Typically, during the first
year of a new business, and often on into the next few years,
the gross income generated by the business is used to pay ongoing
business expenses, and any money left is likely to go back into
the business in order to help the business grow. This typical
and necessary business practice puts persons with disabilities
in a position that is in direct conflict with the Ticket
to Work payment system for Employment Networks.
Currently an EN that assists someone with self-employment gets
paid on the basis of the person’s “net” income.
Net income is what is left after all business expenses are paid
out of the “gross” income. These business expenses
may include things like the rent, utilities, and the cost of
inventory and supplies that are necessary for day-to-day business.
And these business expenses may also include money spent on new
equipment to improve the business, or the cost of establishing
an additional product line.
When profits are reinvested this way in the business in order
to “grow” it, there is often little or no “net” income
that remains. Little or no net income means that the EN won’t
be eligible to be paid for the services they provided to the
new business owner, because the person isn’t showing “net” income
at the SGA level or above. If there is little or no prospect
of payment for ENs, few of them are likely to serve persons with
disabilities who want to engage in self-employment.
This inequity could be relieved by any of several changes to
the Ticket to Work. Perhaps the simplest would be to pay ENs
based on the business’ gross income per month, instead
of the net income. Another possible measure might include payment
to ENs as long as the business continues to have income and grow
over the first 2-3 years, and then shows a net profit of over
the SGA amount beyond that time.
Unless some change in the current policy occurs, persons with
disabilities interested in self-employment are likely to be excluded
from the opportunities and choice offered by the Ticket in much
the same way that persons with significant disabilities are excluded.
Continuing Disability Status
One other inequity for persons with disabilities choosing self-employment
over wage employment is the way Social Security evaluates their
earnings for purposes of a continuing disability status. If workers
in wage employment gross over $810/month, ENs electing the “Outcome
Milestone” payment option can receive payment for their
services. And yet, when SSA evaluates that work for evidence
of SGA, and thus, continuing eligibility for benefits, the workers
are also able to protect their SSDI benefits if they have Impairment
Related Work Expenses (IRWEs), or if they receive “Subsidy” that
brings their earnings below SGA.
People in self-employment can also use IRWEs and “Subsidy” to
reduce how Social Security views their net earnings. However,
if they do so, and the result is that Social Security views their
net earnings to be under SGA, the ENs serving them will not be
paid for their services under either payment option.
Marketing and Loss of Confidentiality
When an employment provider becomes an official EN under the
Ticket to Work, it receives a list of all the Ticket holders
in its service catchment area so it can market its services to
them. When Social Security provides this list, it shares confidential
information about Ticket holders that the Ticket holders have
not authorized. In some cases, Ticket holders may be strongly
opposed to having personal information shared with particular
providers, but they are not consulted or given a choice ahead
of time. While the opportunity to market its services to Ticket holders will allow newer and smaller employment providers to
become known, it must somehow be balanced with the right of SSI/SSDI
recipients to have their privacy respected, and to remain in
control of who has access to confidential information about them.
Why Participate in the Ticket?
Despite the preponderance of inequities and problems in the
Ticket to Work, there are definitely reasons for SSI/SSDI recipients
to assign their Ticket to an EN, and there are definitely reasons
for an employment provider to enroll as an EN. The trick is to
remember that the Ticket to Work only applies in very select
situations. Therefore it is best thought of as only one more
option, in an array of options available to SSI/SSDI recipients
and employment providers.
Employment providers have nothing to lose by enrolling as an
EN, and when the situation is carefully selected, they can gain
by providing services under the Ticket. Whether or not an SSI/SSDI
recipient uses their Ticket must be decided on a one-person-at-a-time
analysis of the particular costs and benefits in that particular
situation. Use of the Ticket is just one more piece to include
in the comprehensive Benefits Planning process.
For the right person, and the right employment provider, the
Ticket to Work has great potential to result in a win-win situation
where all parties reap the benefits.
Contact Information
Marsha Katz, Project Director
The Rural Institute
52 Corbin Hall
The University of Montana
Missoula, MT 59812
(406) 243-2821
(877) 243-2476 Toll Free
(406) 243-4730 Fax
adaptmt@aol.com
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