26-10

Rule Impact Statement

To: Programs Administrator

Legal Services - Policy

From: Sondra Shelby, Adult and Family Services (AFS) Director

Adult and Family Services

Date: May 6, 2025

Re: Chapter 10. Temporary Assistance for Needy Families (TANF)

Subchapter 2. Temporary Assistance for Needy Families (TANF) Work Program

340:10-2-2 [AMENDED]

340:10-2-4 [AMENDED]

Subchapter 3. Conditions of Eligibility – Need

Part 3. Income

340:10-3-31.1 [AMENDED]

Part 5. Assistance Payments

340:10-3-57 [AMENDED]

340:10-3-59 [AMENDED]

Part 7. Transitional Benefits

340:10-3-75 [REVOKED]

Subchapter 10. Conditions of Eligibility - Deprivation

340:10-10-3 [AMENDED]

340:10-10-6 through 340:10-10-7 [AMENDED]

Subchapter 20. Diversion Assistance

340:10-20-1 [AMENDED]

Subchapter 22. Temporary Assistance for Needy Families (TANF) Supported Permanency Program

340:10-22-1 [AMENDED]

(Reference WF 26-10)

Contact: Caleb Turner, Programs Manager V, 405-982-3685

A. Brief description of the purpose of the proposed rule:

Purpose.

The proposed amendments to Chapter 10, Subchapters 2, 3, and 22 amend the rules to remove the Soonercare (Medicaid) eligibility determination for Temporary Assistance for Needy Families (TANF) participants from Oklahoma Human Services (OKDHS) rules.

The proposed amendments to Chapter 10, Subchapter 10 amend the rules to: (1) remove the Soonercare (Medicaid) eligibility determination for TANF participants from OKDHS rules and (2) permit OKDHS TANF program staff to reach a good cause determination even if documentary evidence is not available.

The proposed amendments to Chapter 10, Subchapter 20 amend the rules to update the processing time for a Diversion Assistance (DA) application from "7-business days" to "10-calendar days."

(I) Rule classification

The proposed amendments are classified as non-major rules as they will not exceed one million dollars over the initial five-year period following the promulgation of the proposed rule.

(II) A determination whether the proposed rule is mandated by federal law, or as a requirement for participation in or implementation of a federally subsidized or assisted program.

Federal law requires Oklahoma to adopt the modified adjusted gross income (MAGI) for eligibility populations not specifically excluded per Subsection 435.603(a) and (j) of Title 42 of the Code of Federal Regulations [42 C.F.R. § 435.603(a) and (j)]. The Oklahoma Health Care Authority (OHCA) has shared that it received a federal finding that indicates that Temporary Assistance for Needy Families (TANF) participants must have their Medicaid eligibility determined according to the MAGI criteria. Per 42 C.F.R. § 435.907(b), the application for the MAGI population must be a "single, streamlined application . . . developed by the Secretary" or "an alternative . . . approved by the Secretary." OHCA MAGI eligibility system has already been approved, so OKDHS has decided to transfer the eligibility determination of Medicaid for TANF participants to OHCA.

Federal law at Section 654(29) of Title 42 of the United States Code [42 U.S.C. § 654(29) and state law at Section 230.63 of Title 56 of the Oklahoma Statutes [56 O.S. § 230.63] requires OKDHS to allow "good cause" exceptions to the child support requirement for TANF applicants or recipients; however, it does not dictate the "good cause" procedures.

Federal law at 42 U.S.C. § 604 allows Oklahoma the latitude to use TANF funds in a way that is "reasonably calculated" to accomplish the TANF purposes in 42 U.S.C. § 601. Federal law permits the issuance of DA but does not establish a processing time for these benefits.

(III) A determination whether the proposed rule exceeds the requirements of the applicable federal law.

The proposed amendments are not fully required by federal law, but OKDHS has not exceeded its legal authority. OKDHS is complying with 42 U.S.C. § 654(29), 42 U.S.C §608(a)(2) and (3), 42 C.F.R. § 435.603(a) and (j), and 42 C.F.R. § 435.907(b). OKDHS is employing its existing rulemaking authority to modify the TANF program.

Federal law requires Oklahoma to adopt the MAGI process for eligibility populations not specifically excluded per 42 C.F.R. § 435.603(a) and (j). It also dictates the applications that may be used for MAGI households at 42 C.F.R. § 435.907(b), the application for the MAGI population must be a "single, streamlined application . . . developed by the Secretary" or "an alternative . . . approved by the Secretary."

Federal law does not require documentary evidence for TANF to reach a "good cause" determination. At 42 U.S.C. § 654(29)(A), federal law requires OKDHS to determine whether a TANF applicant or recipient "is cooperating in good faith with the State in establishing the paternity of, or in establishing, modifying, or enforcing a support order for, any child of the individual by providing the State agency with the name of, and such other information as the State agency may require with respect to, the noncustodial parent of the child, subject to good cause and other exceptions." Per 42 U.S.C. § 654(29)(A)(i), "good cause and other exceptions" "shall, at the option of the State, be defined, taking into account the best interests of the child, and applied in each case, by the State agency administering such program."

DA is a permissible use of TANF funds. Federal law at 42 U.S.C. § 604 allows Oklahoma the latitude to use TANF funds in a way that is "reasonably calculated" to accomplish the TANF purposes in 42 U.S.C. § 601. The four purposes in Section 601 are:

(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;

(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;

(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and

(4) encourage the formation and maintenance of two-parent families.

(IV) A summary and preliminary comparison of any existing or proposed federal regulations that are intended to address the activities to be regulated by the proposed rule.

(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;

(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;

(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and

(4) encourage the formation and maintenance of two-parent families.

Strategic Plan Impact.

The proposed amendments achieve OKDHS goals by: (1) communicating updated eligibility information to applicants, recipients, OKDHS staff, and contracted partners; (2) ensuring effective and efficient program administration; (3) complying with federal law; (4) ensuring TANF program staff may act in the best interest of TANF households; and (5) ensuring TANF eligibility staff have adequate time to request any necessary verification for DA.

Substantive changes.

Subchapter 2. Temporary Assistance for Needy Families (TANF) Work Program

Oklahoma Administrative Code (OAC) 340:10-2-2 is amended to: (1) replace "worker" terminology with "eligibility staff"; and (2) update "county director" to "field manager."

OAC 340:10-2-4 is amended to : (1) update a citation; (2) update language; (3) correct the name of Form 08TW023E, State Work Incentive Program (SWIP) Referral; (4) remove the references to the career development specialist; (5) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; (6) replace "worker" terminology with "eligibility staff"; and (7) remove the Work Opportunity Tax Credit information.

Subchapter 3. Conditions of Eligibility – Need

Part 3. Income

OAC 340:10-3-31.1 is amended to: (1) replace "worker" terminology with "eligibility staff"; (2) update language; (3) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; and (4) update the agency abbreviation from "DHS" to "OKDHS."

Part 5. Assistance Payments

OAC 340:10-3-57 is amended to: (1) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; and (2) clarify children who are school-age must attend school to qualify for TANF.

OAC 340:10-3-59 is amended to: (1) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; and (2) replace "worker" terminology with "eligibility staff."

Part 7. Transitional Benefits

OAC 340:10-3-75 is revoked to remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF.

Subchapter 10. Conditions of Eligibility Deprivation

OAC 340:10-10-3 is amended to: (1) update language; (2) replace "worker" terminology with "eligibility staff"; and (3) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF.

OAC 340:10-10-6 is amended to: (1) require the client or OKDHS to pursue the good cause verification in OAC 340:10-10-6(e) and permit OKDHS TANF staff to reach a good cause determination even if documentary evidence is not available; and (2) replace "worker" terminology with "eligibility staff."

OAC 340:10-10-7 is amended to: (1) update the agency name from "Oklahoma Human "Oklahoma Department of Human Services" to "Oklahoma Human Services"; (2) remove a reference to a "county" office; (3) replace "worker" terminology with "eligibility staff"; (4) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; and (5) update language.

Subchapter 20. Diversion Assistance

OAC 340:10-20-1 is amended to: (1) update language; (2) replace "worker" terminology with "eligibility staff"; (3) update the processing time for a DA application from "7-business days" to "10-calendar days."

Subchapter 22. Temporary Assistance for Needy Families (TANF) Supported Permanency Program

OAC 340:10-22-1 is amended to: (1) update the agency name and abbreviation from "Oklahoma Department of Human Services" and "DHS" to "Oklahoma Human Services" and "OKDHS"; (2) clarify how the referral to TANF Supported Permanency currently occurs; (3) remove the Soonercare (Medicaid) determination from OKDHS rules as it relates to TANF; (4) update language; and (5) replace "worker" terminology with "eligibility staff."

Reasons.

OKDHS TANF seeks to comply with federal law. Paragraphs 435.603(a) and (j) of Title 42 of the Code of Federal Regulations (CFR) [42 C.F.R. § 435.603(a) and (j)] require Oklahoma to use the Modified Adjusted Gross Income (MAGI) criteria for TANF recipients. Since the Oklahoma Healthcare Authority (OHCA) already handles the Medicaid eligibility for the MAGI populations, OKDHS is transferring the eligibility determination for the Soonercare (Medicaid) eligibility determination to OHCA and removing references to Soonercare (Medicaid) eligibility in its TANF rules.

OKDHS TANF also seeks to increase its ability to act in the best interest of TANF recipients. TANF requires a custodial parent to pursue child support income from a noncustodial parent unless there is a good cause reason not to cooperate. The current version of OAC 340:10-10-6 requires the household to provide OKDHS with documentary (written) evidence to establish good cause. OKDHS TANF believes this rule is overly burdensome, so it has proposed a permanent rule change. OKDHS TANF intends to pursue any available verification and evaluate good cause based on all the evidence and information it has available.

OKDHS TANF is updating the processing timeframe for DA applications. TANF eligibility staff needs additional time to request any necessary verification for these applications, so OKDHS TANF is changing the processing time to 10-calendar days of receiving all necessary verification.

Repercussions.

If the proposed amendments are not implemented: (1) the Soonercare (Medicaid) eligibility determination for TANF recipients will not follow the MAGI process and conflict with federal law; (2) TANF program will continue to require documentary evidence to establish a good cause reason not to pursue for child support; (3) TANF eligibility will have to obtain all necessary verification for DA within 7-business days; and (4) TANF rules will remain outdated and include the errors corrected in this draft.

Legal authority.

Director of Human Services; Section 162 of Title 56 of the Oklahoma Statutes [56 O.S. § 162]; 56 O.S. § 230.50; 42 U.S.C. §§ 601, 604, and 654; 42 C.F.R. §§ 435.603 and 435.907.

Permanent rulemaking approval is requested.

B. A comprehensive analysis of the rule's economic impact on the Agency, including but not limited to, full-time employee count and any costs or benefits. The analysis includes a detailed explanation of the methodology and assumptions used to determine the economic impact, including, whenever possible, the dollar amounts calculated. The proposed amendments are not expected to have an economic impact on OKDHS, so no comprehensive analysis of impact is needed at this time.

C. A comprehensive analysis of the rule's economic impact outside the Agency, including a detailed quantification of implementation and compliance costs on the affected businesses, business sectors, public utility ratepayers, individuals, state or local government units, and on the state economy. The analysis includes a detailed explanation of the methodology and assumptions used to determine the economic impact, including, whenever possible, the dollar amounts calculated, as well as a list of fee changes with a separate justification for each fee change: TANF recipients should continue to receive medical assistance through OHCA. OKDHS staff enter eligibility information into the OHCA eligibility system to help reduce the burden on TANF households, but there may be times when TANF households must apply for TANF and medical assistance separately.

D. A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities: The class of persons most likely to be affected by the proposed amendments are OKDHS staff, contracted provider staff, TANF applicants, and TANF recipients.

E. A description of the classes of persons who will benefit from the proposed rule: The classes of persons who will benefit are OKDHS staff, contracted provider staff, TANF applicants, and TANF recipients.

F. A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each fee change: There are no fees associated with this rulemaking. There is no impact on the state's economy because this rulemaking does not expand or reduce TANF eligibility.

G. A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule: The proposed amendments neither have an economic impact on any political subdivision nor require the cooperation of any political subdivisions in implementation or enforcement of the rules.

H. A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act: There are no anticipated adverse effects on small businesses as provided by the Oklahoma Small Business Regulatory Flexibility Act.

I. A description of any measure taken by the Agency to minimize the cost and impact of the proposed rule on business and economic development in this state, local government units of this state, and individuals: There are no alternatives to adopting a rule that will accomplish the purposes of the rulemaking.

J. A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk: OKDHS does not anticipate the rules to reduce significant risks to the public health, safety, and environment.

K. A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented: If the proposed amendments are not implemented, there are no expected detrimental effects on public health, safety, and environment.

L. An analysis of alternatives to adopting the rule: There are no alternatives to adopting a rule that will accomplish the purposes of the rulemaking.

M. Estimates of the amount of time that would be spent by state employees to develop the rule and of the amount of other resources that would be utilized to develop the rule: Following final adoption of the rule, OKDHS anticipates 18 hours will be spent to develop the rule.

N. The date the rule impact statement was prepared and, if modified, the date modified: Prepared May 6, 2025; modified August 19, 2025

Last Modified on Dec 30, 2025