Fiscal Note
Fiscal Services Division
SF 389 – Medicaid, Supplemental Nutrition Assistance Program (SNAP), Eligibility Verification
(LSB2201SV)
Staff Contact: Jess Benson (515.281.4611) jess.benson@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 389 requires the Department of Human Services (DHS) to implement an eligibility
verification system for public assistance programs to verify the eligibility of an individual who is
an applicant for any such program. The Bill creates new Iowa Code chapter 239 relating to
various eligibility verification and authentication measures for public assistance programs,
including:
• Providing definitions used in the new Iowa Code chapter, including the definition of “public
assistance,” which includes the Medicaid Program, the Family Investment Program (FIP),
SNAP, and the Children’s Health Insurance Program (CHIP).
• Requiring the DHS to conduct an asset test on all members of the household of an applicant
for SNAP benefits. The Bill specifies the minimum information from federal, State, and other
data sources and public records that the DHS must access prior to determining an
applicant’s eligibility for SNAP benefits. The Bill requires the DHS to enter into a
memorandum of understanding with any department or subunit of a department to obtain
the information specified.
• Requiring that an applicant for SNAP benefits cooperate with the DHS Child Support
Recovery Unit (CSRU) as a condition of eligibility for SNAP benefits.
• Requiring that by July 1, 2022, the DHS provide for identity verification, identity
authentication, asset verification, and dual enrollment prevention in each public assistance
program administered by the DHS. The DHS may contract with a third-party vendor to
develop a system or redesign an existing system to verify income, assets, and identity
eligibility of applicants and recipients.
• Requiring that prior to being awarded public assistance benefits, an applicant complete a
computerized identity authentication process to confirm the applicant’s identity through the
use of a knowledge-based questionnaire consisting of financial and personal questions,
including questions tailored to assist persons without a bank account or those who have
poor access to financial and banking services or who do not have an established credit
history.
• Providing that if information obtained from a review of an applicant’s or recipient’s
information does not result in the DHS finding a discrepancy or change in an individual’s
circumstances affecting eligibility, the DHS is to take no further action. If the information
obtained from a review of the applicant’s or recipient’s information results in finding a
discrepancy or a change in the individual’s circumstances affecting eligibility, the DHS is to
provide written notice to the individual and the opportunity to explain any issues identified.
• Specifying the processes and results depending upon whether an applicant or recipient
responds by disagreeing or agreeing with the findings of a review by the DHS. If the
applicant or recipient fails to respond to the notice in a timely manner, the DHS is required to
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 provide notice to terminate the applicant’s application or to discontinue the recipient’s
enrollment for failure to cooperate, and is required to terminate the applicant’s application or
discontinue the recipient’s enrollment.
• Allowing the DHS to refer cases of suspected fraud along with any supportive information to
the Department of Inspections and Appeals (DIA) for review. In cases of substantiated
fraud, upon conviction, the State is required to review all appropriate legal options including
but not limited to removal of a recipient from other public assistance programs and
garnishment of wages or State income tax refunds until the DHS recovers an equal amount
of benefits fraudulently claimed. The DHS may refer suspected cases of fraud,
misrepresentation, or inadequate documentation relating to initial or continued eligibility to
appropriate State agencies, divisions, or departments for review of eligibility issues in other
public assistance programs.
• Requiring the DHS to adopt administrative rules to administer the Iowa Code chapter and to
submit a report to the Governor and the General Assembly by January 15, 2023, and by
January 15 annually thereafter through January 15, 2028, detailing the impact of the
verification and authentication measures taken under the Bill.
• Requiring the DHS to request federal approval or waivers necessary to administer the Bill,
and requiring that the of the provisions the Bill requiring federal approval be implemented
upon receipt of such federal approval. The provisions of the Bill that do not require federal
approval are to be implemented as specified in the Bill or, if not specified in the Bill, no later
than July 1, 2022.
Assumptions
All increases in staffing are assumed for four months in FY 2022 and for a full year in FY 2023.
In addition, the federal match rate varies by program and activity from 0.0% to 100.0% federal
match. Total cost and State share are depicted in the table below.
Section 2 — Asset Test for SNAP — Requires 2,000 hours of contract computer work at $105
per hour to allow the DHS eligibility system to interface with the National Accuracy
Clearinghouse and an additional 2,000 hours to contract with a third-party vendor to check
against all other data sources at $105 per hour.
Section 3 — Cooperation with Child Support Enforcement for SNAP Eligibility — Requires
the following systems changes and staff increases:
• The changes will require 4,645 hours of contract computer work at $105 per hour to make
various changes to the Iowa Collections and Reporting (ICAR) system, the Automated
Benefit Calculation (ABC) system, and the Iowa Child Support Case (ICSC) number screen
to allow referrals and the systems to communicate.
• DHS field staff will have 12,417 additional referrals to the CSRU, requiring 1.0 full-time
equivalent (FTE) position for an Income Maintenance Worker 2 (IMW2).
• Of the cases referred by DHS field staff, 8,626 cases will be new and require the CSRU to
establish child support orders and begin enforcement procedures. At current staffing ratios,
this will require 16.0 Support Recovery Officer FTE positions, 5.0 Clerk Specialist FTE
positions, and 1.0 Support Recovery Supervisor FTE position.
• Each additional FTE position will require $2,097 for computers and other technology to
complete the work, with an ongoing software cost in the second year and beyond of $818
per FTE position.
• Approximately 77.0% (6,642) of the new cases will require court action to establish a child
support order. The CSRU must serve each nonrequesting parent in an establishment action
with a notice, which will cost an average of $5.96 per notice for certified mail. Approximately
45.0% of parents will not accept or pick up the certified mail, requiring the use of a process
server or sheriff at an average cost of $73.37 per case.
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Section 4 — Verification and Authentication Systems — Public Assistance Programs —
Updating the Eligibility Integrated Application Solution (ELIAS) to interface with a new vendor
and provide batch changes, form updates, and rules updates is estimated to cost $2.0 million in
FY 2022. In addition, the DHS will require 1.0 Executive Officer 2 FTE position to implement
and monitor the new requirements. The additional FTE position will require $2,097 for a
computer and other technology to complete the work, with an ongoing software cost in the
second year and beyond of $818.
Section 5 — Public Assistance Programs — Applicant and Recipient Eligibility
Verification — Approximately 1.0% of individuals receiving benefits will have their benefits
canceled due to discrepancies. This includes 5,999 Medicaid recipients, 793 CHIP recipients,
68 FIP recipients, and 1,466 SNAP recipients. Due to both enrollment and costs being skewed
by the COVID-19 pandemic, January 2020 data is being used for this estimate.
The DHS will contract with a third-party vendor to complete the verifications required by this Bill.
Although actual pricing is unknown, the DHS estimates a $500,000 annual base contract
amount plus a 10.0% contingency payment based on total savings.
Section 8 — Notice and Right to Be Heard — As of January 2020, there were 146,566
households receiving SNAP benefits. Sending Requests for Information (RFI) to benefits
members and addressing data discrepancies will have the following impact on DHS field staff:
• Due to the additional verifications and data matches, it is assumed that two changes will be
reported per year per household, requiring approximately five minutes of staff time per
change. This will require an additional 15.0 IMW2 FTE positions.
• There will be 1.0 IMW2 FTE position needed to address data discrepancies for SNAP
recipients.
• It is assumed that 1.0% of Medicaid, CHIP, and SNAP cases will be closed due to
discrepancies. This will require 4.0 fewer IMW2 FTE positions at current staffing levels.
• At current staffing ratios, the 15.0 additional IMW2 FTE positions listed above will require an
additional 1.0 IM Supervisor FTE position and 2.0 Typist Advanced FTE positions.
• Each additional FTE position will require $2,097 for computers and other technology to
complete the work, with an ongoing software cost in the second year and beyond of $818
per FTE position.
• An additional 7,328 RFIs will be sent at $0.60 per mailing.
Section 9 — Referrals for Fraud, Misrepresentation, or Inadequate Documentation — The
DIA anticipates that referrals for investigation will increase from 2.9% of the current SNAP
caseload to 3.9%, resulting in an additional 1,432 referrals annually. At current caseloads, this
will require 5.0 Investigator III FTE positions. Investigator III positions are home-based and
travel throughout the State to do investigative work, which requires that the employees are
assigned State vehicles.
Section 10 — Administration, Rules, and Reporting — New reporting requirements will
require 990 hours of contract computer work at $105 per hour to update the Data Warehouse to
collect data not currently collected. In addition, there will be an additional 140 hours of contract
computer work at $105 per hour to update the Local Area Network.
Fiscal Impact
Senate File 389 is estimated to increase State costs by $1.5 million in FY 2022 and save the
State $11.8 million in FY 2023 and subsequent fiscal years. Details of the estimated increase in
costs, increases in FTE positions, and savings are listed in the table below for FY 2022 and
FY 2023.
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 Fiscal Impact Estimate for SF 389
FY 2022 FY 2023
Total
DHS Staff Costs Total Cost State Share Cost/Savings State Share
DHS Staff Increase $ 766,872 $ 293,070 $ 2,300,616 $ 879,211
Other IT Costs (New Computers) 81,789 39,253 31,918 15,318
Total DHS Staff Costs $ 848,661 $ 332,324 $ 2,332,533 $ 894,529
DIA Staff Costs Total Cost State Share Total Cost State Share
DIA Staff Increase $ 117,998 $ 117,998 $ 364,615 $ 364,615
Other IT Costs (computer and licenses) 17,500 17,500 $ 7,500 $ 7,500
Investigator Vehicles 115,335 115,335 0 0
Total DIA Staff Costs $ 250,833 $ 250,833 $ 372,115 $ 372,115
DHS Information Technology Total Cost State Share Total Cost State Share
IT Systems Costs $ 3,026,233 $ 959,159 $ 0 $ 0
DHS Miscellaneous Costs
Third-Party Verification Contract $ 0 $ 0 $ 6,184,146 $ 2,978,783
Child Support Notices 0 0 258,889 88,022
Food Assistance Postage 0 0 4,397 2,220
Total DHS Miscellaneous Costs $ 0 $ 0 $ 6,447,431 $ 3,069,026
DHS Program Savings
Medicaid $ 0 $ 0 $ -49,953,560 $ -15,397,327
Children's Health Insurance Program 0 0 -1,578,908 -418,411
Family Investment Program 0 0 -270,139 -270,139
Food Assistance 0 0 -5,038,849 0
DHS Total Program Savings $ 0 $ 0 $ -56,841,457 $ -16,085,877
SF 389 Total Increased Cost/Savings $ 4,125,727 $ 1,542,316 $ -47,689,377 $ -11,750,207
Sources
Department of Human Services
Department of Inspections and Appeals
/s/ Holly M. Lyons
February 22, 2021
Doc ID 1213345
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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