Federal Court issues injunction against State of NJ in Medicaid case involving irrevocable annuity

Judge William Martini of the Federal District Court for the District of New Jersey has issued a preliminary injunction barring the New Jersey Division of Medical Assistance and Health Services (DMAHS) from treating a certain type of annuity contract as a countable resource in connection with a Medicaid application. The case is JANE CUSHING, by her attorney-in-fact, Evelyn Fornale vs. Jennifer Langer Jacobs, Ass’t Commissioner of DMAHS of NJ and Carole Johnson as Commissioner of the Dep’t of Human Services, and it was decided in U.S. District Court for the District of New Jersey under docket #  Civil Action 2:20-130, last week.      Cushing, Jane–Opinion Cushing, Jane–Order granting Summary Judgment

The case centered around Jane Cushing’s application for MLTSS/medicaid benefits to pay for her nursing home care. As part of the “spend-down” of the excess marital assets,  Mr. Cushing purchased a single premium, immediate, non-transferrable, level term, irrevocable, noncashable, nontransferrable annuity contract which would pay him equal monthly payments during the term of the contract. The State of New Jersey was named as the first beneficiary in case he died before the term of the contract was up. When the MLTSS application was reviewed by the County Board of Social Services, the annuity should have been treated as a fixed source of income for Mr. Cushing, rather than a resource that could be liquidated and spent. However, the County Board of Social Services denied eligibility on the basis that Mr. and Mrs. Cushing have excess available resources.

“Resources” and “Income” are two different things in the realm of Medicaid. A long line of cases has evaluated this sort of annuity contract and has held them to “income,” but not “resources” because they cannot be liquidated. In Cushing, the County Board was relying on an informal directive from DMAHS, and the Court found that DMAHS was wrong to consider the contract to be an available resource when its salient terms specified that it was irrevocable.

Call for advice regarding Medicaid spend-down and applications for New Jersey MLTSS/Medicaid ……..Ask for an FRE-L  At Home Telephone Consult   732-382-6070

COVID Emergency Highlights Importance of POLST

One of the most heartbreaking things about this emergency is the prohibition of in person visitation of loved ones who were already declining in facilities.  Communication with facilities is less than ideal.  Now, more than ever, healthcare workers need to know where legal decision-makers stand on treatments and possible interventions, because one never knows when COVID-19 will take hold.

The Practitioner Order for Life Sustaining Treatment (POLST) is a universal doctor’s order that lays out what treatments and interventions are permitted for a person in the last years of his or her life. It is signed by the individual or his or her legal representative, and the physician, nurse practitioner or physician’s assistant.  It can be filled out and signed over the phone.  It can be updated.  The most recent POLST always controls.  POLST is designed to follow the resident to any subsequent setting, such as a hospital, or hospice.

Of course, the first step of all of this is to determine the resident’s competence to sign a POLST, and subsequently, if the resident is not competent, to determine who the legal medical decision-maker is. The social service department should conduct a telephone conference with the decision-maker to make, reconfirm or update the POLST.

These issues are upsetting and difficult but we’re here to help. Call 732-382-6070 and ask for a “FREL at Home” telephone consult.



COVID-19 Emergency Means Making Tax and Insurance Decisions

As COVID-19 affects employment nationwide, more New Jerseyans will need to make strategic decisions about health insurance and tax filing this year.  Marketplace insurance and MAGI Medicaid are based on your 2020 Modified Adjusted Gross Income (MAGI).  There is special enrollment for a change in employment status. MAGI will include any unemployment you collect as well as any distributions from retirement plans (but not loans from those plans).  When you apply, you are essentially giving the government an “honest guess” of your income for the year, and if your guess is off, it will be reconciled on your 2020 return in the first quarter of 2021.

How you file your return is also a strategic decision.  If you’re under 26, it might not have mattered that your parent claimed you as a dependent, because you were on their insurance.  Now, there is the possibility of a cash payment under the CARES Act, and the parent may no longer have a health plan that can cover you.  So, filing your own return for 2020 and getting Marketplace or Medicaid insurance needs to be immediately considered.  Additionally, now that the filing deadline has been extended to July, you may want to review your dependent status on any 2019 return as well.

As if things weren’t complicated enough, you might be able to change your MAGI income with a strategic 401k distribution to put you in an income bracket outside of Medicaid eligibility but within income limits for Marketplace insurance subsidies.  This might be best if you’re over 55 because Medicaid would put a lien against assets at death for those amounts they laid out–private insurance doesn’t do this.

In short, it’s a lot to take in; and frankly, it might be time for a family meeting!  We’re here to help!  Call 732-382-6070 and ask for a “FREL at Home” telephone consult!

County Surrogates Modify Hours and Practices in Response to COVID-19

Much of our work in the area of guardianships, probate and estate administration involves our County Surrogates.  As we continue to adjust to working with COVID-19, be aware that each Surrogate Office is adjusting their hours and policies to deal with the pandemic. The overview of changed hours and policies in each county can be found here.  In Union County, the new hours are Mon. & Thurs. 8:30 a.m. – 12:30 p.m. to reach staff by phone and schedule emergent matters.

Court proceedings for uncontested Guardianships are being handled on the papers. The court-appointed counsel files his or her report, the Judgment (Order) is exchanged between the parties and then the Court handles the case on its regularly-scheduled date. In some cases, the Court may hold that hearing by telephone. Our office handled a guardianship case in Essex County last week which involved some unusual issues and the Court decided to conduct a hearing with all the parties present. The Judge was on the bench with his clerk, and six people as well as the Judge called in to the conference from various locations. Witnesses were sworn, oral argument was made, testimony was taken, the Judge issued the ruling. All by telephone and it worked out very well for everyone concerned.

We continue to keep in touch with Union, Middlesex and other Surrogate’s Offices to facilitate mail in and email qualifications for guardians, executors, and administrators, as well as all related necessary filings with this office.  Thank you County Surrogates!

We’re here to help!  Contact 732-382-6070 and mention “FREL at Home” for 25% off the consult fee!

NJ Supreme Court issues Notice concerning Courts and Cases

The latest release by the NJ Supreme Court outlines the latest rules concerning trials, scheduling, closings, and so on which will affect cases, lawyers  and litigants throughout New Jersey. Cases can still be filed but numerous adjustments are being made to the deadlines and procedures. Emergencies can be addressed, and all matters are going to be handled by telephone or videoconferencing. Here is the entire Release.Supreme Court release 3-27-2020

For updated information about hearings at the Office of Administrative Law (such as appeals of Medicaid/MLTSS  denials), click HERE.  

For updated information about Medicare Hearings and Appeals, click HERE

For information about Social Security offices and hearings click HERE.


Stay safe, stay healthy. Call us for help with all your elder care, estate planning and special needs concerns ….. 732-382-6070