Ticket to Work/Work Incentives Improvement Act

Forums for California Grantmakers, State Agencies and Disability Community Representatives

The recently passed Ticket to Work and Work Incentives Improvement Act (hereafter referred to as the Work Incentives Act) creates unprecedented opportunities for individuals who historically have been barred from the workforce. With the support of a grant from The California Endowment, the Disability Funders Network and Grantmakers in Health cosponsored two workshops on June 8 and 9, 2000, for foundation representatives, state agency officials and disability experts to explore what foundations — small as well as large — can do to support economic development and health programs that will serve as the cornerstone for effective implementation of the Act.

This document summarizes the workshop presentations and lists potential foundation actions suggested by the participants in roundtable discussions and individual meetings following the formal presentations. A companion document provides an overview of the current status of California state and local responses to the Federal legislation. The intent of this second document is to provide a roadmap to help foundations in the state identify appropriate foundation roles. Subsequent project activities will focus on working with foundations and nonprofits to facilitate private sector activity and collaboration with state, county and local agencies involved in the Work Incentives Act implementation.

Dr. Jeanne Argoff, Executive Director of the Disability Funders Network, moderated the panel. Featured speakers and their topics were as follows:

• Dr. Susan Daniels, Deputy Commissioner of the Office of Disability and Income Security Programs at the Social Security Administration (SSA) — Work and Healthcare Coverage for People with Disabilities
• Bryon MacDonald, Coordinator of the California Work Group on Work Incentives and Health Care (CWG) — The Grassroots Advocacy Movement Behind the Work Incentives Act
• Brenda Premo, Director of the Center for Disability Issues and the Health Professions, Western University (Pomona, CA) — The State Policy Environment

Speaker Presentations

Deputy SSA Commissioner Susan Daniels provided an overview of the Federal legislation and the context within which it was developed. Whereas most people in our economic system obtain access to health insurance from their employers, people with disabilities are often excluded from private insurance and frequently have healthcare needs that only Medicaid or Medicare can support. A major goal of the Work Incentives Act is to enable people with severe disabilities to work while retaining the health insurance coverage they need to manage their conditions.

Until recently, outdated public policy has excluded people with severe disabilities from the general economic upswing even in times like the present, when unemployment is low and welfare reform is putting more and more people into the workplace. A major contributor to this situation is the series of “work disincentives” that result from the definition of disability utilized by SSA for people who qualify for Social Security Disability Insurance (SSDI) or Social Security Supplemental Income (SSI). To meet the definition of disability under both programs, applicants have had to declare themselves so disabled that they are unable to work.

The Work Incentives Act provides what amounts to a set of policy tools to remove those work disincentives. Among those tools are the following:

The Work Incentives Act Medicaid Provisions. The Work Incentives Act allows states that offer Medicaid as a state option to liberalize the amount of income and resources a person can have and still obtain Medicaid. This means that, for the first time, states can fashion programs that allow people to earn a reasonable income and utilize Medicaid at the same time by paying a small premium relative to their earnings. It also means that they can stay on Medicaid when their income increases. The most important thing to remember, however, is that the Medicaid buy-in is an option for states, and action must be taken before the state can implement it.

Medicare Provisions. The Work Incentives Act extends the period during which Medicare recipients can maintain premium-free healthcare benefits after they return to work from four to eight-and-a-half years, thus giving them a good chance to get started in the world of work without risking loss of their Medicare benefits.

Removal of Work Discentives and the “Ticket- to-Work” Program. The new legislation offers increased flexibility in such aspects as getting on and off the rolls and expanded choice in employment services for SSI and SSDI beneficiaries, who will receive a voucher, or “Ticket,” which they can use for employment-related services delivered by any provider authorized to be an “Employment Network” by SSA.

Whereas state vocational rehabilitation agencies were the starting point for consumers to begin receiving services in the past, under the new legislation any state agency, nonprofit organization, for-profit placement firm or private employer can provide services by becoming authorized as an Employment Network. The network agrees to be a “ticket taker” and provide services necessary for returning the individual to work. Once beneficiaries have entered the work force and are no longer eligible for cash benefits, the Employment Network responsible for successfully returning them to work can receive up to $16,000 per beneficiary from Social Security entitlement funds that would have been paid to the individuals had they remained on benefits. There is no limit to the number of beneficiaries an employment network can serve.

According to Dr. Daniels, the Ticket in combination with the other provisions of the Act creates a win-win situation for all stakeholders. People with disabilities who once had to choose between work and healthcare coverage win because they can now work and keep their healthcare benefits — and they can earn more than they would have received from benefits. Employers win by gaining access to a pool of employees who once would not have been able to consider working for fear of losing health benefits. The Ticket Program Employment Networks win by tapping into the cash flow generated over the five-year time-frame during which they receive a portion of their clients’ Social Security benefits. Finally, taxpayers win, since the amount paid to the Employment Networks represents a 60 percent savings over the amount paid to non-working beneficiaries.

Federal Grants to Assist in State Implementation. Dr. Daniels noted that the Federal government would assist states through a series of grant competitions, including the following:

• Infrastructure grants to help states establish or strengthen their capacity to deliver services and assistance under the new Act;
• Health care demonstration grants to see if Medicaid can be sold to working people whose disability is likely to become severe enough in the future to qualify them for public health insurance and to beneficiaries who medically improve but are still disabled; and
• Grants to train “benefits planners” who will provide outreach to disabled consumers and educate them about how to use the new work incentives provided by the Act.

Dr. Daniels concluded by reminding the audience that it is up to local communities to take the initiative to utilize the tools now available through the Act. She pointed out that Federal funding for activities like dissemination would not be sufficient to cover a state like California, so that real success in implementation must depend on a strategic mix of Federal, local, government and private funding.

Bryon MacDonald, Coordinator of the California Work Group on Work Incentives and Health Care (CWG), presented an overview of the Work Incentives Act implementation efforts in California from the perspective of the CWG, an advocacy group which is a statewide component of a project established under a three-year grant from The California Endowment to the World Institute on Disability and the Center for Independent Living of Berkeley/Oakland. The purpose of the grant is to develop public policy recommendations and community outreach, training, curricula and materials that consumers can use to understand and utilize the new program. Approximately one million people in California are on Social Security benefits. These people form the core of those affected by the new legislation.

Mr. MacDonald introduced his assessment of state efforts by noting that the Work Incentives Act is the first legislation focused on employment of people with disabilities that cuts across the major Federal agencies affecting disability policy. These entities include five bureaucracies (SSI program, SSDI program, Medicaid, Medicare, and Vocational Rehabilitation) overseen by six congressional committees. These linkages, said MacDonald, illustrate the crucial fact that an employment initiative for people with disabilities cannot happen in a vacuum. In order to maintain employment, people need healthcare and a number of other accessible supports working together.

California currently has a MediCal buy-in program established under the Balanced Budget Act of 1997, which is available to working people with disabilities who earn up to 250 percent of the federal poverty level. This program, however, has a number of limitations that the Work Incentives Act gives the states options to overcome. First, there is no provision in the current law for people with disabilities who “medically improve” but remain disabled. Second, the 250 percent earnings cap still puts a significant limitation on people with disabilities who need services only available under Medicaid. Finally, information about the Working Disabled program has not been well disseminated and the program is severely underutilized.

The Work Incentives Act enables states to remove the buy-in earnings cap and resource limits of the current program and to offer the buy-in to workers who have improved medically but continue to have a significant disability. In addition, the infrastructure grants available under the Work Incentives Act would assist the state with implementation costs. In many respects, California is well situated to implement new healthcare policies for people with disabilities. Draft legislation is under development by policymakers working with community advocates which would utilize Work Incentives Act options like the removal of the earnings cap and resource limits; the MediCal buy-in for disabled workers who medically improve; creation of a program to provide outreach, benefits planning and assistance to potentially eligible people; and coordination with and accessibility of the One-Stop Centers created under the Workforce Investment Act.

Mr. MacDonald concluded by highlighting some of the principles that guide the CWG in its policy work as a way of bringing home to the foundation audience the core concerns involved in the systems change the Work Incentives Act represents:

1. First, healthcare and other related public program reform must take place simultaneously so that valuable opportunities will not be lost because of lack of coordination between people with disabilities, employers, state agencies and service providers.
2. Second, people with disabilities must be empowered to make informed choices — this means that they must be given the tools to understand the programs and to navigate their use.
3. Finally, the opportunities the Work Incentives Act offers for creating seamless healthcare — such as complementary coordination of MediCal or Medicare with private, employer-provided health coverage — should be recognized as a priority and utilized.

Brenda Premo, Director of the Center for Disability Issues and the Health Professions at Western University in Pomona and past Director of the State Vocational Education Department, opened her presentation by conveying the impact on individuals of the systemic barriers to independence previously noted by Dr. Daniels and Mr. MacDonald. She described her own experience as a one-time Social Security beneficiary who chose to give up a lifetime of benefits and guaranteed healthcare at a time when the prevailing attitude toward people with disabilities was that they had to be cared for and protected — an attitude that the Work Incentives Act and other recent legislation is helping to change. She relayed her case worker’s resistance to her plan to forgo benefits to gain independence from a system that exerted an extraordinary amount of control over her life, saying that the case worker refused to allowed her to leave the rolls until she signed a statement stating that she understood that she was “actually, on purpose, getting off.”

The attitude her caseworker exhibited is an example of the messages society sends to people with disabilities: messages that “disability means inability or dependence.” The creators of Social Security policy wanted to ensure that people who become disabled and cannot work are able to survive. “That was good,” said Premo, “but they made a policy presumption that if you’re able-bodied you can work, and if you’re disabled, you cannot work.”

The regulations written to implement that policy established further limitations on people with disabilities in the workplace. The regulations, said Premo, are built on the premise that “if you’re able-bodied, then you won’t need all of the supports that you need when you’re disabled, and if you’re working, it automatically means that you’re no longer disabled and therefore do not need any supports in the workplace.”

The second premise is, “if you’re disabled, you are not able to make decisions and incorporate the outcomes of those decisions in your own life.” “We presume that the education of able-bodied children is an investment,” she said “and we presume that the education of disabled children is a cost — that we are throwing money into something that is consumed and that will go away.”

The worst thing about these premises, Premo said, is that people with disabilities internalize them. What makes the Ticket-to-Work so exciting is that it stands the old paradigm on its head and looks at the employment of people with disabilities as an investment that will reap benefits for society.

Ms. Premo identified four requirements for successful state implementation of the Work Incentives Act:

1. An effective form of communication must be created between state agencies to help bridge the knowledge gap that separates health and employment-focused agencies and to ensure smooth interagency linkages. In particular, a common vocabulary must be developed that includes the concepts of reasonable accommodations,(1) undue hardship(2) and the need to invest in people with disabilities.
2. State policy that recognizes the work potential of people with disabilities must be implemented to educate workers about the need for and the content of the Act.
3. The state should utilize the expertise of community-based disability organizations to teach the agencies that house the new One-Stop Employment Centers how to make their services, buildings and equipment accessible for people with all types of disabilities.
4. Finally, agencies need not only to hear from consumers but must also be prepared to listen and respond to their needs.

Ms. Premo concluded by suggesting that foundations can provide valuable assistance by supporting initiatives characterized by communication, education and empowerment.

Foundation and Corporate Giving Program Roles

The final segment of the meetings, the roundtable discussion among the participating foundations and disability experts on how foundations can play a role in supporting these new legislative changes, produced the following list of options for foundation funding:

• Infrastructure activities, including dissemination of education on the Work Incentives Act for people with disabilities, linking employers to people with disabilities, provision of information and links to healthcare services
• Model service delivery programs created with input from people with disabilities, state officials, providers and others.
• Service delivery for integrated assistance for people with disabilities to work and coordinate healthcare: models that recognize and make use of established institutions and programs — like Community Development Corporations (CDCs), community health clinics and One-Stop Centers
• Incubators for service delivery projects.
• Development and delivery of training for nonprofits and agencies.
  • Coordinate with state efforts to develop curricula and train benefits planners. Incorporate input from consumers, state agencies and nonprofits with expertise in benefits planning.
  • Train employment agency personnel in non-disability organizations about disability.
  • Fund groups to help integrate disability into agencies and organizations like One-Stop Centers.
• Development of a range of health insurance products responsive to the new legislation and taking into account the healthcare needs of working individuals with severe disabilities
  • Develop private healthcare models that wrap around MediCal coverage.
  • Create a clearinghouse of healthcare products for people with disabilities. The clearinghouse would contain information on the Work Incentives Act and other related legislation and house demonstration projects.
• Encourage partnerships between disability organizations and existing institutions and organizations that provide employment, economic development and health access functions
  • Between disability employment organizations and mainstream employment service agencies, including CDCs.
  • Between health research and provider organizations.
  • Between Community Development Financial Institutions (CDFIs) and disability funding organizations (government agencies and private funders).
• Fund data collection, analysis and evaluation
  • Data collection and analysis to feed into state planning, including a cost-benefit analysis and a demographic study
  • Outcome evaluations on the Work Incentives Act implementation
• Support education and outreach
  • Consumer education and outreach
  • Education of employers, health organizations and others directly affected by the Act
  • State and/or county-wide public relations campaigns to inform the general public
• Employment-related support
  • Provide seed funding for Employment Networks
  • Incorporate Small Business Administration loans
  • Convene bankers who control Community Reinvestment funds
  • Work with employers in Silicon Valley and elsewhere
  • Support loan funds