Workers with Disabilities Medicaid Arkansas: TEFRA and the WwD Program

Two Programs, Two Purposes

Arkansas operates two Medicaid pathways specifically designed for individuals with disabilities who work or whose families earn above traditional Medicaid income limits. They serve different populations and have different eligibility rules, but both exist to solve the same core problem: the fear that earning income or having family income will cost someone their health coverage.

Workers with Disabilities (WwD) is for working adults (age 16 to 64) with disabilities whose earnings or unearned income would otherwise disqualify them from standard Medicaid.

TEFRA (Tax Equity and Fiscal Responsibility Act) is for children under 19 with disabilities whose parents' income exceeds regular Medicaid thresholds. It allows families to buy into Medicaid through a sliding-scale premium.

Workers with Disabilities Program

The WwD program allows adults with disabilities to maintain Medicaid coverage while working. To qualify, the individual must:

• Be age 16 to 64
• Have a medically verified disability
• Be engaged in competitive employment (earning wages)
• Have unearned income below the SSI individual threshold plus the $20 general income disregard (effectively under $1,014/month in 2026)

There is no cap on earned income from employment. The program is specifically designed to eliminate the earnings cliff — the point at which a person's wages would push them over the SSI/Medicaid income limit and cost them health coverage.

For individuals enrolled in the CES waiver or receiving PASSE-coordinated services, maintaining Medicaid through WwD is essential. Losing Medicaid means losing access to waiver services, care coordination, day treatment, personal care, and specialized therapies — regardless of how much the person earns.

TEFRA Medicaid for Children Under 19

TEFRA operates differently. It exists for families whose income is too high for their child to qualify for standard Medicaid but whose child has significant medical needs that require Medicaid-level coverage.

Eligibility requirements:

• The child must be under 19
• The child must have a qualifying disability (meeting SSI's disability criteria)
• The child must live at home (not in an institution)
• The child must meet the institutional level-of-care standard — their needs must be sufficient that they would qualify for care in a medical institution

Parental income is not counted for eligibility — the program evaluates only the child's own income and resources. However, families with incomes above 150% of the federal poverty level pay a monthly sliding-scale premium. The premium amount increases with household income.

TEFRA is particularly important for families who earn too much for their child to receive SSI (due to parental income deeming before age 18) but whose child needs Medicaid to cover therapies, medications, equipment, and day treatment programs that commercial insurance does not adequately cover.

How These Programs Interact with the Age-18 Transition

At age 18, parental income deeming ends for SSI purposes. Many individuals who were denied SSI as children — or who received reduced benefits due to parental income — qualify for full SSI at 18 based on their own zero income. SSI approval triggers automatic Medicaid under Section 1634.

For families who used TEFRA to cover their child before 18, the transition often looks like this:

1. Child receives Medicaid through TEFRA (parents pay premium)
2. Child turns 18, parental deeming ends
3. Child applies for and receives SSI
4. Automatic Medicaid activates under Section 1634
5. TEFRA coverage is no longer needed

If the individual later starts working and earning above the SSI threshold, the Workers with Disabilities program picks up where SSI-linked Medicaid leaves off — preserving coverage regardless of earned income.

The Arkansas SSI at 18 & Adult Disability Benefits Guide includes a benefit comparison worksheet for modeling how employment income interacts with SSI, Medicaid, and the Workers with Disabilities program, plus the monthly wage reporting log for tracking earnings across all benefit programs.

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