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M, DE PART ME NT of HUMAN SERVICES DE PART ME NT OF m, HUMAN SERVICES Minnesota Department of Human Services Acting Commissioner Chuck Johnson Post Office Box 64998 St. Paul, Minnesota 55164-0998 Representative Matt Dean, Chair Health and Human Services Finance Committee 401 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155 February 27, 2018 Dear Rep. Matt Dean, I am writing to express concerns with HF2725, a bill that would repeal MNsure and create a new county­ based eligibility determination system for Medical Assistance (MA) and MinnesotaCare. This system would replace the Minnesota Eligibility Technology System (METS) and MAXIS and require counties to administer MinnesotaCare. The bill also establishes an information technology steering committee to direct development of the new system. The goal and impact of the bill is unclear as it is currently written. We are still assessing the potential unintended effects and disruptions this bill will create for our stakeholders, partners and the individuals we serve. Below are some of our preliminary concerns. OHS is designated as the single state agency required to administer and oversee the Medicaid (Medical Assistance) program. OHS ensures compliance with federal eligibility rules and establishes processes and procedures to ensure Minnesotans are able to enroll. The bill is unclear about how Medical Assistance and MinnesotaCare eligibility will be assessed and determined and how authority would be .divided between OHS, counties and the commissioner of Revenue. It is unlikely the federal government would approve of such a structure. It is also unclear how we would transition from METS to the new proposed system, or how the resources currently devoted to METS would impact the county-developed system. METS is an integrated eligibility and enrollment system that provides functionality for Medical Assistance, MinnesotaCare and the individual market. The bill's attempt to reconfigure eligibility functionality does not change the underlying functions and resources required to operate a fully integrated system to meet federal and state requirements. A non-integrated eligibility and enrollment system will greatly impact the experiences of mixed-eligibility households, putting seamless service out of reach by shifting case management to multiple entities. We are also concerned that the bill does not address other important functions performed by MNsure, notably navigator support and community outreach grants. These resources have been vital to people in need of health care coverage, including public program enrollees. 1 We would be happy to meet with you to discuss our concerns and identify any technical assistance we could provide. Please feel free to contact Matt Burdick, Legislative Director for the Health Care Administration, at 651-431-4858 if you would like to meet and further discuss this bill. Acting Commissioner Memo Date: March 19, 2018 To: Senator Michelle Fischbach and Rep. Sarah Anderson CC: Senators Julie Rosen, Jeff Hayden and Tony Lourey Representatives Ron Kresha and Rena Moran From: Jennifer Sommerfeld, Legislative Director Children and Family Services, Department of Human Services Christopher Orr, Legislative Director Operations, Department of Human Services Re: SF 3228/HF 3454 – Relative Foster Care Licensing and Child Protection Pilot Projects The Child Safety and Permanency and Licensing divisions at the Department of Human Services have carefully reviewed this proposed legislation and have significant concerns. Our concerns include, but are not limited to the following: • While we know that relatives experience barriers to completing the foster care licensing process, and agree that we should work to eliminate barriers that unnecessarily delay the process, data has not been reviewed to identify the reasons for those barriers and how existing processes are or are not used to overcome them. • The proposal does not authorize the department and pilot counties to work together to amend the background study process or specify how the relative foster parents will be assisted in navigating the process. • The pilot will have statewide implications, unless it is limited to cases where pilot counties are responsible for both the foster care placement and licensing the relative caregiver. • The proposal narrowly defines how the pilot will be considered successful, and does so without considering the permanency or well-being outcomes for the child. The proposal also does not provide for any of the evaluation necessary to measure impact of the proposal that will require funding. • The counties that participate in the pilot must agree that a foster child will not be placed with a relative who has a permanent bar. The bill as drafted does not include this provision. • The State’s Title IV-E Plan includes the background study process. The state must consult with the U.S. Department of Health and Human Services to determine if a waiver is necessary to implement a pilot. • Northstar Care for Children includes a federal, state and local share in the cost, the proposal requires a fiscal note to consider the implications. Without a waiver to the State Plan’s Guardianship Assistance Program, it is likely the children in the pilot will not be eligible for federal reimbursement, and placement expenditures would need to be made up by the state and county. • The pilot will require an evaluative design and data analysis/case review and staff to conduct the evaluation and write a summary evaluative report to be provided to the Legislature. We have additional concerns with this legislation and are happy to discuss them with you in person. At the Senate hearing on Monday, March 19, we do not intend to testify on this bill. Instead, we would prefer to continue the dialogue we began with Hennepin County staff last week, and expand it to include the legislation’s authors. It is our hope that we can address our concerns and amend the bill to support careful consideration of this important issue. March 19, 2018 Representative Sarah Anderson Representative Sheldon Johnson Chair, State Government Finance Committee DFL Lead, State Government Finance Committee 583 State Office Building 259 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. 100 Rev. Dr. Martin Luther King Jr. Blvd. St Paul, MN 55155 St Paul, MN 55155 Dear Chair Anderson and Representative Johnson: Thank you for your letter requesting information about the impact on the Department of Revenue if the legislature were to not act in response to the 2017 Federal Tax Law. Below, you will find a description of the resources needed to assist taxpayers and update our systems under this scenario. 2017 Federal Tax Law effects on Minnesota The 2017 Federal Tax Law is the biggest revision of federal tax laws since 1986. The law – enacted December 22, 2017 – changes federal taxable income (FTI) in many ways for individuals, businesses, and nonprofit organizations. These changes affect tax filing in Minnesota because FTI is the starting point to calculate Minnesota taxable income. If Minnesota does not respond to the federal tax law changes, Minnesotans will be affected by a more complex filing system. Before the 2017 Federal Tax Law, Minnesota’s definition of net income largely matched the federal definition of taxable income, which simplifies filing for Minnesota taxpayers. The more closely we match federal taxable income, the fewer forms, schedules, special instructions, and calculations are needed to file a state return. The federal tax code often changes from one year to the next, and Minnesota has generally updated its tax code to match most or all of those changes. However, the 2017 Federal Tax Law changed far more provisions of the federal tax code – in more substantial ways and across more tax types – than we have seen in recent years. The 2017 Federal Tax Law did not substantially affect tax year 2017 for the current filing season.1 But, absent any changes in state tax law, returns filed next year will be drastically affected. Before making the “usual” adjustments to get their Minnesota taxable income, state taxpayers will need to make many new adjustments to account for the differences between the 2017 and 2016 definition of FTI. 1 On February 9, Congress passed the federal Bipartisan Budget Act of 2018. This legislation provided tax relief for disaster victims and renewed a number of individual and business tax benefits for tax year 2017. Minnesota would need to pass legislation to conform to these provisions. The extended provisions are similar to what Congress has passed in previous years; Minnesota has conformed to parts of the package in prior years. 600 N. Robert St., St. Paul, MN 55146 An equal opportunity employer www.revenue.state.mn.us This material is available in alternate formats. The department will work to ensure the most efficient and effective filing system for our customers. Our goal is to continue to provide excellent service to all of our customers, and to ensure we maintain our current service levels, including: Informing our customers through outreach and education Answering customer questions by phone, email, letter, and in-person Developing and maintaining technology systems to file and pay Processing tax returns and issuing refunds Auditing an appropriate number of returns to encourage compliance and collect taxes owed Responding to taxpayer appeals in a timely manner However, if there is no law to respond to the federal changes, there will be complexity for individuals, businesses, and nonprofit organizations that the department cannot mitigate, as outlined in the following sections. Individual Income Tax Impacts of Not Responding The Department of Revenue serves 2.9 million Individual Income Tax customers each year. Of these: 56% rely on professional tax preparers who use tax preparation software 31% file their own returns using tax software 11% file their own returns on paper 2% use professional tax preparers who file on paper The 2017 Federal Tax Law will affect virtually all of our customers – taxpayers, tax preparers, and tax software providers – and will have a significant impact on the department and the ways we serve them.
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