Demonstration to Maintain Independence and Employment

To prevent the loss of employment and reliance on cash assistance by individuals at risk for disability.

To provide benefits equivalent to those provided by Medicaid, to the categorically needy and to workers who have physical or mental impairments that, without medical assistance, will result
in a disability.
Related Programs

Examples of Funded Projects

Projects approved so far will cover the HIV/AIDS, multiple sclerosis, and bi Polar/schizophrenia populations.

People enrolled in these demonstration programs will receive Medicaid equivalent services and will participate in an evaluation to determine if the provision of medical services delay the onset of disability and extends the duration for which a person can work.

Agency - Department of Health and Human Services

The Department of Health and Human Services is the Federal government's principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.

Office - Contact the appropriate CMS Regional Administrator.

(See Appendix IV for Regional Offices).

Program Accomplishments

Under the section 204 grant program, seven States (Rhode Island, Texas, Mississippi, Louisiana, Kansas, Hawaii and Minnesota) and the District of Columbia have been awarded Demonstration to Maintain Independence and Employment grant funding since the program's inception. States implementing demonstration grant programs will provide Medicaid-equivalent services to targeted populations of working individuals with disabilities. The demonstration projects will be used to evaluate the impact of providing Medicaid benefits to a working person with a potentially severe disability. The State demonstration projects cover individuals with all types of disabilities including HIV/AIDS, and various mental illnesses. In FY 2006, a total of almost $73 million was obligated for the section 204 program.

Uses and Use Restrictions

These demonstration grants will enable States to assist working individuals by providing the necessary benefits and services required for people to manage the progression of their conditions and remain employed.

Federal funds paid to the States under this demonstration must be used to supplement, but not supplant, State funds expended for workers with potentially severe disabilities at the time the demonstration project is approved.

Eligibility Requirements

Applicant Eligibility

All States are eligible to apply.

Beneficiary Eligibility

Eligible beneficiaries are workers with potentially severe disabilities who are: (a) At least 16 but less than 65 years of age, (b) have specific physical or mental impairments identified by the State that are reasonably expected to lead to blindness or disability (as defined under Section 1614(a) of the Social security Act, and (c) are employed.


Federal funds must go to a designated State Medicaid Agency or its partner agencies. Individuals must meet State requirements. Administrative costs will be determined in Accordance with OMB Circular No. A-87, "Cost Principles for State and Local Government."

Aplication and Award Process

Preapplication Coordination

This program is excluded from coverage under E.O.


Demonstration proposals must be submitted by the Single State Medicaid Agency and funds will be distributed only to the Single State Medicaid Agency.

States are limited to one overall demonstration proposal.

Application Procedures

The standard application form SF-424 and related forms, as furnished by CMS, must be used for this program. Application forms are submitted to the Acquisition and Grants Group, CMS, C2-21-15 Central Building, 7500 Security Boulevard, Baltimore, MD 21244-1850. This program is subject to the provisions of OMB Circular No. A-102.

Award Procedures

Official notice of approved applications is made through issuance of a Grant Award.


Established when program announcements are published in the Federal Register or transmitted to States.


Ticket to Work and Work Incentives Improvement Act of 1999; Public Law 106-170.

Range of Approval/Disapproval Time

From 100 to 150 days.


There are formal appeals procedures. If an application is disapproved, the reasons for disapproval will be fully stated.


Extensions and continuations of projects are available if formally applied for and approved. If a grant application is recommended for approval for 2 or more years, the awardee must annually submit a formal request for continuation accompanied by a progress report that will be evaluated prior to a recommendation of continuation.

Assistance Considerations

Formula and Matching Requirements

Funding will be distributed to the demonstration States as quarterly payments equal to the Federal medical assistance percentage of the expenditures of the States on medical assistance provided to workers with potentially severe disabilities at the normal service match rate. Administrative expenses will be paid with 100 percent demonstration funding.

Length and Time Phasing of Assistance

While there are no restrictions precluding States from proposing demonstrations that operate for less than the total length of the demonstration, scoring preference will be given to States that propose to participate for the duration of the demonstration. Funding for the demonstration is available from fiscal year 2001 through fiscal year 2006. If any Federal funding remains available after 2006, payments may be made to the States until funding is depleted or through fiscal year 2009.

Post Assistance Requirements


Reports of progress and expenditures are required on all projects.


All fiscal transactions identifiable to Federal financial assistance are subject to audit by DHHS audit agency.


Proper accounting records, identifiable by project number and including all receipts and expenditures, must be maintained for 3 years. Subsequent to audit, they must be maintained until all questions are resolved.

Financial Information

Account Identification



(Grants) FY 07 $36,079,635; FY 08 $2,000,000; and FY 09 est $0.

Range and Average of Financial Assistance

$284,253 to $3,980,308; $2,132,280.

Regulations, Guidelines, and Literature

Grants Administration policies (45 CFR 74 and 92) application kits may be obtained from the Office of Acquisition and Grants Group, Centers for Medicare and Medicaid Services, Room C2-21-15, Central Building, 7500 Security Boulevard, Baltimore, MD 21244-1850. Grant application forms are also available on the CMS website at

Information Contacts

Regional or Local Office

Contact the appropriate CMS Regional Administrator. (See Appendix IV for Regional Offices).

Headquarters Office

Dennis Smith, Director, Center for Medicaid and State Operations, Centers for Medicare and Medicaid Services, Department of Health and Human Services, Room C5-21-17, Central Building, 7500 Security Boulevard, Baltimore, MD 21244-1850. Telephone: (410) 786-3870. FTS is not available.

Criteria for Selecting Proposals

The major elements in evaluating proposals include: the applicant's proposed strategy to achieve each of the outcomes identified by the applicant, including capability to identify a study population, conduct outreach and enroll individuals; whether the particular Medicaid equivalent benefits and services will be advantageous if provided to demonstration participants; the methodology for evaluation of its demonstration project that adequately measures its effectiveness; the adequacy of measures of the demonstration outcomes; and compliance with all reporting requirements.

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