Understanding Medicare Advantage Flex Card Benefits in HUD Housing Income Determinations

In January 2025, the U.S. Department of Housing and Urban Development (HUD) clarified how Medicare Advantage (MA) supplemental benefits, particularly those administered through Flex Cards, should be treated when calculating income for HUD-assisted housing residents. This guidance helps housing providers accurately determine which benefits should be included or excluded from income calculations.

Key Points for Income Calculations

1. Rent and Utility Support

• When MA supplemental benefits are explicitly used for rent and utilities, these amounts must be included in income determinations.
• Only the amount spent on rent and utilities should be counted, not the total available benefit.
• Rent and utility expenditures may be documented through third-party verification or resident self-certification if third-party documentation is unavailable.

2. Other Flex Card Benefits

• Benefits used for purposes other than rent and utilities (such as groceries, medical expenses, or over-the-counter medications) should be excluded from income calculations.
• Unused benefits that expire at month-end or year-end are not counted as income.
• Housing providers should assume Flex Card benefits are not being used for rent and utilities unless they have specific information indicating otherwise.

Verification Requirements

Housing providers should note that:

• Most MA supplemental benefits are excluded from income and do not require verification.
• Providers should not require beneficiaries to track or document routine Flex Card purchases for excluded benefits.
• Only benefits used explicitly for rent and utilities need verification.
• As part of the application and intake procedures, owners and managers should inquire whether applicants or residents use MA benefits for rent or utilities.
• When residents report using MA benefits for rent and utilities, providers should first attempt to obtain third-party documentation.
• Self-certification is acceptable when third-party documentation cannot be obtained.

Example Scenario

If a resident receives a $100 monthly Flex Card benefit:

• If they spend $50 on medical expenses and $0 on rent/utilities, the entire $100 is excluded from income.
• If they spend $30 on rent/utilities and $70 on other eligible expenses, only the $30 used for rent/utilities is counted as income.
• Any unused portion that expires is not counted as income.

Practical Implementation

Housing providers should:

• Update their policies and procedures to reflect these requirements.
• Train staff on the proper treatment of MA supplemental benefits.
• Develop appropriate verification procedures for benefits used for rent and utilities.
• Maintain clear documentation of included benefits.

This guidance helps ensure consistent and appropriate treatment of Medicare Advantage supplemental benefits while minimizing the administrative burden on housing providers and residents.