Susan Thinks About Working Again

After she had been on Social Security Disability Insurance (SSDI) for 2 years, Susan became eligible for Medicare. Susan had been on AHCCCS due to her low income, but now that she was on Medicare, she couldn’t get income-based AHCCCS anymore and her $1,004 per month in SSDI was more than disability-based AHCCCS's income limits. (Griffin could stay on AHCCCS, since he didn’t qualify for Medicare.)

At first, Susan was worried about not getting AHCCCS anymore for herself, since it had worked so well for her. But it turned out that Medicare was also a pretty good deal for Susan. Her income and resources were low enough that she qualified for the Specified Low-Income Beneficiary (SLMB) Medicare Savings Program, which meant she didn’t have to pay the Medicare Part B premium. She also automatically qualified for Medicare Part D’s Low Income Subsidy (LIS), so she didn’t have to pay the Part D premium either. On top of that, she didn’t have to pay a deductible for prescription drug benefits and didn’t have to worry about the donut hole.

Susan needed 2 more years before she felt ready to go back to work. By then it had been more than 4 years since her accident; years that were a major adjustment, both physically and financially for her family. While her migraines had become much less frequent and she was no longer as forgetful as she was immediately after the accident, she would be using a wheelchair for the rest of her life. And both she and Griffin had had to get used to living very carefully with their money, which was really hard for a teenager who wished he could have nicer clothes and a new videogame system.

Susan and Griffin really needed more income so that they could live a little better; struggling on benefits just wasn’t right for their family. After all she’d been through mentally and physically, Susan wasn’t prepared to go back to work full-time. However, she did want to try giving work a shot. But first, she needed to clarify a couple of things related to the Social Security Disability Insurance (SSDI) and Child’s Benefits they got from the Social Security Administration (SSA) and her Medicare and his AHCCCS health coverage.

Both the benefits from Social Security and the health coverage had been a huge help and Susan didn’t want to lose them, so she decided to talk to a Work Incentive Consultant again. She remembered Tom at Benefits 2 Work Arizona and gave him a call.

“I remember you — the architect,” Tom said. “Glad to hear you’re doing better. What’s up?”

Susan explained the situation, “I want to go back to work, but my family still needs the benefits we’ve been getting, because I’m not ready to go back to work full-time, due to my disability.”

“I understand,” Tom paused. “The good thing is that all of the benefits you and Griffin are getting right now — SSDI, Medicare, and AHCCCS — are designed so that you can work, make some money, and keep getting benefits if you need them.”

“That’s a relief,” commented Susan. “How do the rules work? And what do I have to do to make sure everything goes smoothly when I find a job?”

Learning SSDI’s Work Rules

“It’s a little complicated, but I can explain it,” Tom said. According to Tom, the short version was this: she would continue to get the $1,004 per month in SSDI direct-deposited into her bank account for at least her first 9 months of working and making more than $880 in a month. Months where she made less than $880 would not count against this time limit, which was called the Trial Work Period. If she earned more than $880 for a total of 9 months, then, depending on how much she was working, she would keep getting SSDI for an additional 3-month grace period, but after that her benefits would stop. However, if her countable income dropped below $1,220 a month at any time during the following 3 years, she could give Social Security a call and start getting SSDI again. “That’s called the Extended Period of Eligibility (EPE),” Tom explained. “It’s there to help you just in case your income drops again.”

“So, it sounds like I’ll be able to test the waters for a while to see if I am able to balance my disability, a part-time job, and my parenting responsibilities for at least a year,” Susan said. “And then I’ll have 3 more years where I can easily restart my SSDI benefits if for some reason I am not able to keep up with work due to my disability. What about the $488 a month that we’re getting to help with Griffin’s expenses?”

Tom continued explaining, “His benefits are based on your SSDI benefits, so any month you get SSDI benefits, he’ll get Child’s Benefits. If you stop getting SSDI after the 9-month Trial Work Period and 3-month grace period are completed, he’ll stop getting Child’s Benefits. If at any point during the 3-year Extended Period of Eligibility you get SSDI benefits, he’ll also get Child’s Benefits.”

“This makes sense,” Susan said. “So, we’ll have 12 months where we’ll be getting both my work income and the benefits from Social Security. After that, if I keep working, it’ll just be the work income. Since I plan to make more money by working than we get from SSDI and Child’s Benefits, we’ll be in better shape overall. What about our health coverage? Will I lose my Medicare and Griffin his AHCCCS? Will that happen before or after the SSDI Trial Work Period ends?”

“Well, I’ve got good news there,” said Tom. “Right now, you have Medicare. Even if you stop getting SSDI benefits after your Trial Work Period ends, your Medicare will continue for at least 93 months (that’s 7 years and 9 months). So, there’s nothing for you to worry about there.”

“For Griffin, he’s been getting AHCCCS because your family income is below 138% of the Federal Poverty Guidelines (FPG). Your income is going to go up, and your total combined income from your SSDI benefits, his Child’s Benefits, and your new job will probably go over 138% of FPL. If that happens, Griffin will have to switch to a private plan using Healthcare.gov, which is pretty easy. You just need to make sure to update your family income on Healthcare.gov.”

Then Tom added. “The best news for you is that once you start working, you’ll qualify for AHCCCS Freedom to Work.”

Susan paused for a moment and then said, “But I thought Griffin and I couldn’t get AHCCCS because we'll have too much income after I start working? And why would I want AHCCCS Freedom to Work if I already have Medicare?”

Tom explained that AHCCCS Freedom to Work had a higher income limit than AHCCCS for people with disabilities usually had. “AHCCCS Freedom to Work helps people with disabilities who get jobs and have higher income. Griffin can't get it because he doesn't have a disability, but you can. You can make up to $61,720 per year and still get AHCCCS Freedom to Work coverage.”

Tom also told Susan that there were other good reasons to have AHCCCS Freedom to Work and Medicare at the same time. "You will no longer qualify for a Medicare Savings Program due to your increased income, but AHCCCS Freedom to Work makes you automatically eligible for the Part D Low Income Subsidy, which can help pay for out-of-pocket expenses for medications. As an added bonus, AHCCCS Freedom to Work might pay for some in-home services, if you need them.”

Tom continued, “You’ll have to pay a premium for AHCCCS Freedom to Work, which is based on your income, but the most your premium could be is $35 per month. That means that once you start working, it's almost surely worth it for you to sign up for AHCCCS Freedom to Work so that you'll pay less for Medicare.” Tom knew that this was pretty complicated, so he added, “Call me up after you get your job and I’ll help you out.”

Susan thanked Tom for the information and said she would get in touch with him.