Purpose

• The bill directs state agencies to study whether a demonstration project could keep certain program benefits in place for people who lose eligibility after their income rises. The goal is to reduce benefit cliffs (sudden loss of help when earnings go up) and encourage folks to pursue job advancement opportunities. The study focuses on health care, income assistance, and social services programs run by the Department of Human Services (DHS) and the Department of Children Youth and Families (DCYF).

What the bill would do (Main Provisions)

• Require a report by January 15, 2026 to the chairs and ranking minority members of relevant legislative committees about the feasibility of a transitional benefit demonstration project.
• The report would examine whether it is feasible to continue some benefits for individuals who become ineligible due to increased employment income, during a transition period.
• The report must designate which programs could be included, and outline how the transition benefits would work if the project were implemented.
• The project design must consider how much income or time would determine continued benefits, and whether a single standard income limit should apply across all programs.

Key requirements for the Demonstration Project

• For feasibility, the agencies must evaluate and provide recommendations on:
  • Which programs would be part of the demonstration.
  • The income and time limits beyond which former enrollees would stop receiving transition benefits (including whether a uniform limit would apply).
  • How many and which counties would participate.
  • What changes to benefits, premiums, and cost-sharing would be needed to keep the project budget neutral.
  • Any federal waivers, legal changes, or approvals required to include each program.
  • The evaluation criteria and process to judge the project’s success.

Programs considered for inclusion

• At minimum, the agencies must evaluate these programs for possible inclusion:
  • Medical Assistance (MA)
  • MinnesotaCare
  • Minnesota Family Investment Program (MFIP)
  • Diversionary Work Program
  • General Assistance
  • Housing Support
  • Child Care Assistance Program
  • Programs funded through the Behavioral Health Fund

Implementation details and context

• The bill emphasizes the demonstration would be designed to be budget neutral, meaning it should not increase overall spending for the state.
• It requires consideration of necessary federal waivers and legal changes to implement the demonstration if chosen.
• The feasibility study would look at how benefits could continue during a transition period to support individuals while they pursue opportunities for career advancement.

Impact and changes to law (significant changes)

• The bill does not immediately expand benefits; it initiates a research process to determine whether a transition-benefit demonstration is feasible and how it could be implemented.
• If feasible, suggested changes could include modified benefit structures, new income limits, county participation plans, and required waivers or policy updates to state and federal rules.
• Any extension of benefits would be contingent on the is-specified feasibility study and subsequent legislative action.

Implementation considerations

• Coordination between DHS and DCYF is required.
• A clear framework for evaluation criteria and data collection would be established.
• Decisions on which programs to include would balance program goals with budget neutrality and administrative practicality.
• Counties’ involvement would affect how the demonstration could be rolled out.

Next steps (as envisioned by the bill)

• The agencies must prepare and submit the feasibility report by January 15, 2026.
• The report would be directed to members of the legislature who oversee health and human services policy and finance, and children, youth, and families policy and finance.

Summary of intended policy intent

• Provide a pathway to maintain some level of support for individuals who increase earnings, reducing abrupt benefit loss, while exploring how to keep programs affordable and compliant with funding rules.

Relevant Terms - transition period - demonstration project - benefit cliffs - career advancement opportunities - health care - income assistance - social services programs - Department of Human Services (DHS) - Department of Children Youth and Families (DCYF) - Medical Assistance (MA) - MinnesotaCare - Minnesota Family Investment Program (MFIP) - Diversionary Work Program - General Assistance - Housing Support - Child Care Assistance Program - Behavioral Health Fund - budget neutrality - income limit - time limit - counties - federal waivers - evaluation criteria - evaluation process