State officials are expected to sign off on a one-year extension of the Healthy Indiana Plan started by Gov. Mitch Daniels.

Family and Social Services Administration spokeswoman Marni Lemons said the state received the needed paperwork from the federal government Thursday and enrollees will not see a lapse in coverage. The Centers for Medicare and Medicaid Services agreed to a waiver that would allow the state to continue the program unchanged for a year, she said.

FSSA has until Dec. 31 to formally accept the extension.

The Healthy Indiana program offers health savings accounts to the state's working poor in place of traditional Medicaid coverage and requires them to pay a monthly contribution to their savings account.

The program has covered roughly 100,000 residents since it began in 2008 and was offered by the state as an alternative to the Medicaid expansion in the federal health care overhaul. More than 40,000 residents are enrolled in the program now.

"The HIP program is the quintessential example of state innovation," FSSA Secretary Michael Gargano wrote in a July 25 letter to CMS. "Over the past four years, the program has demonstrated strong success."

The state originally sought a three-year extension of the program via the Centers for Medicare and Medicaid Services' waiver process, but the federal government replied in July with an offer of one year and a request that the state end mandatory contributions from enrollees.

Lemon said the new offer allows Indiana to continue collecting a monthly contribution, but did not say why CMS reversed its position.

A CMS spokeswoman was not immediately available for comment Friday.