Restrictions related to Covid-19 particularly impact elders and people with disabilities

Everything is happening so fast it’s making our heads spin. The frail, dependent aged and disabled people in our communities are having a tough time of it. Starting today, Social Security Offices are only accepting telephone contacts and online contacts. COVID – 19 SSA press release     Health care providers are overwhelmed. County welfare offices are urging people to do their business on-line and avoid coming into the offices. Based on the CDC guidelines – click HERE — nursing facilities are barring the door except for end-of-life situations, and preventing concerned family members from entering the facility to oversee the care being provided. There are inadequate quantities of protective gear for the staff members who are caring for nursing home residents or patients who need home health care. Staffing levels are being affected. Under proposed regulations by the federal government, nursing homes will be able to cut their infectious disease staffs in  the interest of “less regulation.” What will this mean for the safety of the residents, in terms of infection control, potential bedsores, fall prevention and more?

Meanwhile, applications for crucial government benefits must be processed and new applications continue to flow in. County offices that are processing MLTSS/medicaid applications still expect people to produce missing documents in ten days under threat of a denial of eligibilityThe paperwork requirements for certain programs is staggering. The Centers for Medicare and Medicaid Services issued CMS FAQs that enable States to to address some current issues raised by this crisis. CMS covd-19-faqs-20200312 Clearly there’s a need for the Division of Medical Assistance and Health Services (DMAHS) to exercise its muscle and  ease certain requirements as an accommodation to the present emergency. I’m not talking about the core standards for eligibility, but rather, the reams of paper documentation that are required to prove eligibility for MLTSS/medicaid. The State could direct the counties to ease up on the short deadlines they give to the applicants to submit requested verifications. The State could direct the counties to accept reasonable explanations that show the impossibility of complying with a request. For example. if the applicant is mentally incapacitated and house-bound, and the Agent under Power of Attorney has contracted the corona virus or is quarantined, it may be utterly impossible to obtain some requested bank records or to produce proof about some transaction happened several years ago.

So many issues need to be urgently addressed so that people in need of benefits will not be denied due to inability to meet administrative requirements. And there needs to be a way to assure those who watch over their loved ones in nursing facilities to still be able to perform that crucial role.

We are here to help with your family’s elder law crises …… call for consultation 732-382-6070 

 

New 401(k) Rules May Impact Medicaid Determinations for Couples

On January 1, 2020, new federal rules went into effect relating to hardship distributions from 401(k)s and other ERISA plans.

The new rule —  26 CFR 1.401(k)-1(d)(3)(ii)(B) —  broadens and changes the circumstances under which a 401(k) plan must be made available to employees.       Previously, a company with a 401K plan had the discretion to limit the ability of an active employee under a certain age to obtain release of vested funds from the Plan. These withdrawals are referred to as “in-service distributions.” For example, a Plan could prohibit such distributions altogether, or might require that funds be accessed only by means of a loan with a definite short-term payback, or might restrict access until age 59-1/2, or might prohibit in-service distributions altogether.  Previously, for MLTSS/Medicaid purposes, such Plans may have been inaccessible (unavailable) and would not be treated as countable resources. This was critically important because to be eligible to apply for for such programs, the available resources of both spouses could not exceed a certain limit.

Under the rule changes, the funds will be accessible under the broad language of “need,” and it is expected that they will now be treated as available resources on Medicaid/MLTSS applications in New Jersey.

The new rule says that a hardship distribution:

• may not exceed the amount of an employee’s need (including any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution),

• requires that the employee must have obtained other available, non-hardship distributions under the employer’s plans,

• requires that the employee must provide a representation he or she has insufficient cash or other liquid assets available to satisfy the financial need. A hardship distribution is impermissible if the plan administrator’s actual knowledge is contrary to that representation.

Also and most importantly, a hardship exception can be requested even if the employee takes no available loan under the plan first.  This is a very big change from the old rules of 401k’s.

It may seem counter-intuitive that 401k hardship rules which make it easier to obtain funds from a 401k  could be a bad thing, since people need to access funds for a variety of emergencies. For many state Medicaid programs, like New York, retirement accounts of a community spouse are not counted as an available resource, and therefore, hardship provisions in ERISA plans are irrelevant.

However, for States — such as New Jersey –that do consider retirement accounts as assets when processing Medicaid applications for long-term care like nursing home care,  there has typically been a secondary analysis of the Plan’s availability if the community spouse is still an active employee and the retirement account is his or her employer’s ERISA plan. Often, Plans under the older rules did not allow hardship distributions without the employee first borrowing under the plan. Plans requiring an employee to first borrow before allowing a distribution have not been considered available resources under the New Jersey appellate division case of Avery v. Union County Division of Social Services, A-2408-01T2 (May 15 2003), which was argued by Eugene Rosner. Borrowing was seen as a barrier to the spouse’s “right, authority and power” to convert the 401k or ERISA plan to cash.Fred Avery v UCBOSS

Now, companies will no longer be allowed to impose such impediments, including the borrowing requirements, in ERISA plans.

From a Medicaid perspective, these new rules will have punitive effects on working spouses of disabled people who need long-term care Medicaid benefits in states which don’t exclude the ERISA plans of employed community spouses. The employee spouse will be able to access just enough to pay for their ill spouse’s nursing home expenses — which could preclude eligibility for Medicaid — but will not be able to protect the retirement account for his or her own future economic security by accessing it for personal planning (such as annuity planning to achieve Medicaid eligibility).  In cases of catastrophic disability of a younger married person in his 40’s or 50’s whose spouse is employed — I think of all the clients I’ve had over the last 15 years who have had a sudden stroke or a degenerative disability or early-onset dementia —   this could result in the younger, employed spouse’s future financial security being wiped out.

There will always be options and remedies to help clients mitigate the financial liability and losses that could occur in these tragic situations. Each case will be unique. Call us for advice on what options would work best for your case  Everyone needs to be aware of this new rule and how it interacts with a potential applicant’s state’s Medicaid regulations.

This post is derived from Lauren Marinaro’s similar piece in this quarter’s NAELA News.

Call for advice on long-term care planning including crisis Medicaid eligibility planning  …. 732-382-6070

True or False? try this New Jersey Medicaid Quiz

Test your knowledge about nursing homes and the Medicaid-MLTSS program that pays for nursing home care, assisted living and part-time home care.

  1. Does a person’s monthly income have to be less than $2,313 (2,349 in 2020) to apply for Medicaid-MLTSS?
  2. Will the State take one-half the house if a married person moves into a nursing home?
  3. Does a married person have to sign over or pay one-half  of the couple’s assets when the ill spouse moves into the nursing home, before applying for Medicaid-MLTSS?
  4. Does a nursing home resident have to allow a nursing home to auto-debit his bank account every month?
  5. Does a nursing home resident have to hire the Medicaid application compiler who is recommended by the nursing home business office?
  6. Is $15,000 per year an excluded gift under the Medicaid-MLTSS transfer penalty rules?
  7. Is it illegal for a nursing home resident to use his money to make gifts to family members or set up trusts for family members, if he is paying for his care?
  8. If a Medicaid-MLTSS applicant transfers his house to his disabled child, will he be denied Medicaid benefits?
  9. Does the State put a lien on the house while a NJ Medicaid-MLTSS recipient is alive if all benefits are properly received?
  10.  Is there an upper limit on the income that the community spouse of a NJ Medicaid -MLTSS recipient can have in New Jersey?

The answer to all these questions is No!  However, myths abound, and people may be surprised to learn how they can actually protect assets in these situations.

For more information about the requirements of the MLTSS program and how to work with them for your benefit, about how you or your loved one can become eligible for Medicaid or protect your assets if nursing home care is needed, call us at ……. 732-382-6070

New guide available for appeals of Medicaid Managed Care Decisions

Medicaid services are now provided through managed care organizations (MCO’s), which are required by federal law to provide a grievance and appeal process for the enrollees. An enrollee may be dissatisfied with the number of hours of service, or the services being provided, or a host of other issues. Three major nonprofits have collaborated on a new guide for advocates to help them in efforts to advocate for good regulations or to pursue these cases.

Justice in Aging , the Disability Rights Education and Defense Fund (DREDF), and National Health Law Program (NHeLP) have produced their ” Advocates Guide to Accessibility in Medicaid Managed Care Grievances, Appeals, and State Fair Hearing.” States are in the process of developing regulations and procedures on this issue, and the Guide is designed for those who are involved at any part of the process. You can download it through the website for Justice in Aging HERE.

The Guide provides useful general guidance on the typical procedures for these appeals. Of course, individual state laws will vary, and the guide doesn’t constitute legal advice that would apply to any particular case. If an adverse decision is received from an MCO, the individual must swiftly pursue the administrative remedies, as the appeal period is short, and it can be difficult to obtain waivers of that time limitation.

Contact us for representation on Medicaid eligibility or denials of services ……. 732-382-6070

There’s no “income cap” anymore for Medicaid long term benefits

When I first started filing Medicaid applications for my clients back in 1995, a person who needed long-term care services in the home or assisted living but had run out of money could not even apply for Medicaid if their gross monthly income was higher than the “income cap.” Of course, the income cap was well below the amount that was needed to pay for care, which meant that a lot of people couldn’t receive necessary services. Basically it meant that many people who would have done well in a community environment with a home health aide and other support ended up moving into a nursing home, because that was the only setting where Medicaid would pay for them. Or they had to do without care or cobble together a plan in which family members took care of them.

Finally, in 2014 when the State’s Comprehensive Medicaid Waiver went into effect, the income cap was eliminated as a bar to receipt of community & assisted living services. There is a special procedure that the applicant has to use, because the income has to be funneled through a structure called a Qualified Income Trust (QIT), but at least the person can now apply for Medicaid benefits. You can read more about QIT’s in our earlier blogs.

We continue to meet people who haven’t heard this good news. If your family is struggling with how to arrange and pay for long term care, call us for legal advice regarding Medicaid eligibility that fits your specific situation.

For personalized advice about a Medicaid plan call … 732-382-6070