The Department of Housing and Urban Development (HUD) has released important new guidance clarifying when Medicare Advantage (MA) “Flex Cards” (similar to pre-loaded debit cards) can be counted toward calculations of income for purposes of rental assistance. The agency explained that people in HUD rental-assistance programs who do not actually use their Flex Card benefits for rent or utilities should not have any portion of their Flex Card amounts counted toward their income. This will assist low-income individuals who have wrongfully seen their rents increase as a result of receiving MA Flex Cards with pre-loaded dollar amounts, regardless of whether or how they have used the benefits.
First, the Frequently Asked Questions document makes clear that “any benefits administered through a Flex Card other than rent and utility support payments, or unused benefits (e.g., any portion of the Flex Card amount that is unspent and the family loses at the end of the month or plan year) should not be counted in the family’s income calculation.” Thus, amounts used towards groceries or over-the-counter medical products, which is how the cards are commonly used, should have no effect on MA enrollees’ subsidized rent amounts.
Second, HUD emphasizes that it, “requires that benefits or supports received and used for the purpose of paying rent and utilities – such as the supports that may be provided through an MA Plan with [Flex Cards] – must be included in the calculation of income.” (emphasis in original). It goes on to state that Flex Card benefits that are not used for the purpose of paying rent and utilities must be excluded from the income calculations.
The guidance also states that because “the vast majority” of these benefits will be excluded from income determinations, they “do not need to be verified, including benefits on Flex Cards that are used for anything other than rent and utilities.” Furthermore, because only “benefits for rent and utilities are relevant for income determinations, housing providers should generally assume that benefits administered through Flex Cards have not been used to pay for rent and utilities unless the housing provider has information to suggest otherwise, or the beneficiary has indicated that they receive and have used (or will use) the supplemental benefit for rent and utilities.” This presumption means that beneficiaries should not be burdened with proving that they did not use the benefits for rent or utilities.
The Center for Medicare Advocacy appreciates this clear statement from HUD. After learning that some Connecticut low-income housing complexes are imposing rent increases on residents who are in MA plans with flex cards, the Center for Medicare Advocacy has been monitoring this situation. The Center will explore this issue in more depth in an upcoming issue brief.
- CMA’s January 9, 2025 Alert on this topic is available here
- CMA’s October 3, 2024 Alert on this topic is available here
- CMA October 22, 2024 Press Release is available here
January 16, 2025 – K. Kertesz