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Summary of Final Rules


Section 2.46 of HB 2292, 78th Legislature, Regular Session, authorized the Texas Health and Human Services Commission (HHSC) to establish eligibility standards for the Children's Health Insurance Program (CHIP) regarding the type and dollar value of allowable assets for a family whose gross family income is above 150% of the Federal Poverty Level (FPL). Legislative appropriations assumed the implementation of an assets test.

The proposed assets test rules were published in the Texas Register in a detailed form on February 20, 2004. HHSC held public hearings on the rules in Austin on March 15 and 16. Approximately 100 comments were received during the public hearings and comment period, which ended March 21.

In response to public comment, the proposed rules were modified to exempt from the asset calculation:

  • Retirement accounts that have penalties for early withdrawal;
  • Life, burial or other insurance with a cash value;
  • Internal Revenue Code 529 qualified college savings program accounts, such as Texas Tomorrow Fund accounts;
  • Educational grants and scholarships; and
  • Vehicles modified to transport a household member with a disability.

Final rules will be published in the Texas Register on May 7, 2004, and will apply to any CHIP applications and renewals that have not been fully processed before August 24, 2004.

Assets Test Policy:

Families with incomes above 150% FPL who are newly applying for or renewing CHIP coverage and who have not been found eligible for a new term of coverage before August 24, 2004, may not have assets that exceed specified limits after certain allowances are made. Liquid assets, such as cash and bank accounts, and certain vehicle values will be considered. Real property, such as a home, will not count as an asset. The federal poverty income levels for 2004 are outlined below:

Family Size Monthly Federal Income Guidelines*   Annual Federal Income Guidelines*
150 % 200% 150% 200%
2 $1,561 $2,082 $18,735 $24,980
3 $1,959 $2,612 $23,505 $31,340
4 $2,356 $3,142 $28,275 $37,700
5 $2,754 $3,672 $33,045 $44,060

* Effective through March 31, 2005
Source: U.S. Department of Health and Human Services

Liquid Assets

Countable liquid assets include:

  • cash on hand;
  • cash value of checking and savings accounts;
  • money remaining from the sale of a homestead; and
  • cash value of stocks, bonds, and savings certificates.

Excluded liquid assets include:

  • Individual Development Accounts and other accounts, such as retirement accounts, with restricted use and penalties for early withdrawal;
  • cash value of life insurance, burial insurance, or other insurance with a cash value;
  • Internal Revenue Code 529 qualified college savings program accounts, such as Texas Tomorrow Fund accounts; or
  • funds received as educational grants or scholarships.

Vehicle Values

The family's vehicle values will be considered in applying the assets test, but some or all of the family's vehicle values may be exempt as outlined below.

Countable vehicles include any operable and licensed automobile, truck, motorcycle, SUV, van, boat, or motor home (including campers and RVs). The value of countable vehicles will be the lowest trade-in/wholesale value listed in the Hearst Corp./NAR Division Black Book.


  • If a family does not own any vehicles that are totally exempt, the family may exempt the first $15,000 of the highest valued vehicle and $4,650 of the value of each additional vehicle.
  • Exempted vehicles include:
    • vehicles owned by friends or family outside the CHIP household, but used by the CHIP family;
    • trailers, mobile homes, all-terrain vehicles, tractors, and farm equipment;
    • leased vehicles;
    • vehicles owned by a business;
    • vehicles modified to provide transportation for a household member with a disability (modifications may include lifts, ramps, hand controls, etc.); and
    • any vehicle worth less than $15,000 and one vehicle worth $15,000 or more if the vehicle is:
      • the family's only home;
      • used more than 50% of the time to produce income;
      • used more than 50% of the time by a self-employed person to transport equipment or employees to worksites; or
      • necessary to carry fuel or water.


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