Volume 17 Number 1 • 2004

Great Opportunities & Room for Improvement

By Marsha Katz, The University of Montana Rural Institute

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 & Government Opportunities
Demonstration Project Funded

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."

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.

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.

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 $14,500-$42,000/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).

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 all prescription costs, 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 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 policies 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.

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.

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.

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.

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.

Marsha Katz is the Project Director for the Rural Institute's Rural Entrepreneurship and Self-Employment Expansion Design (RESEED) Project. You may reach her at (406) 243-2821, (877) 243-2476 (toll free), or adaptmt@aol.com.