NJ Medicaid confirms that CARES payments won’t interrupt benefits

Previously we reported on concerns about whether the $1200 per person payments or the $600 unemployment enhancements that would be arriving via the CARES ACT would be counted as income or a resource which would affect the means-tested benefits being received under New Jersey’s Medicaid (NJ FamilyCare) programs. We’re happy to report that the Director of DMAHS has released a Medicaid Communication (Med-Com) concerning the COVID-19 crisis  that makes it clear that this will not happen.  MedCom 20-04_COVID-19_Guidance

The receipt of the payments will be treated as ‘excluded unearned income” in the month of receipt. This means that it will not change a person’s eligibility category if s/he is in a program that sets a ceiling or “income cap” for eligibility. This also means that if the person is receiving MLTSS benefits for skilled nursing home services, the payments do not have to be handled the way other income is handled, and they are not counted toward the resident’s monthly cost share to the facility.

The receipt of the payments also will not be counted as a “resource” (asset)  for up to 12 months after the month of receipt. This means that it will not change a person’s resources if s/he is in a program that has a resource limit (frequently this limit is $2,000 but certain programs have a higher limit). The “spend down” can be done gradually over the year, and might have to be reported at the time of the annual redetermination.

Call us with questions about NJ Medicaid eligibility, applications and appeals …. 732-382-6070


No, You don’t necessarily have to cash out life insurance when applying for Medicaid

How often have I heard clients tell me they were told to cash out a life insurance policy as part of a “Medicaid spend-down,” because it was “an asset.” The fact is, whether a given policy needs to be liquidated depends on who owns the policy, what its cash surrender value is, and who is applying for Medicaid benefits. There’s no “one rule for all cases.”  It’s a real pity when someone who owns a policy with a minimal cash surrender value but a sizeable death benefit is told to go liquidate it, ending up with nothing. Senior care planning requires attention to these nuances.

NJ Medicaid/MLTSS pays for long-term care services (nursing home etc.) and an applicant needs to be financially eligible. Among other things, the applicant’s non-excluded resources have to below $2,000, and there is an upper limit on the resources that their spouse in the community can have at the time the application is filed. The process of reducing or restructuring resources to get them below these limits is often referred to as the “spend-down.” Each applicant or spouse needs to make decisions about which assets (resources) to keep and which to liquidate. Each situation is unique. Here’s one example:  let’s say a certain community spouse could retain $126,000 in non-excluded resources. She  might want to retain one or more IRA accounts (or the 401K at her job), her higher-earning CD or commercial bonds, a term life insurance policy with a zero cash surrender value, or a vacant lot adjacent to their house that has a low value. As noted, each case is unique. It’s a question of the total countable value of each of the assets being retained. The total value has to below the limit for that case.

Careful planning can preserve assets in ways you may not realize. Call us for advice on Medicaid eligibility planning …… 732-382-6070

Continuing Uncertainty about NJ Medicaid’s Treatment of Irrevocable Funeral Trusts

Several months ago I reported on  problems that were cropping up for people with irrevocable funeral trusts who apply for NJ Medicaid/MLTSS to pay for their nursing care, home care or assisted living. The issue is that once the funds are paid and the contract is signed, the contract is irrevocable and the funds cannot be returned to the purchaser at that time. Based on this irrevocability, the Medicaid/MLTSS program has historically excluded those dollars from the determination of available resources. It’s logical — the purchaser can’t get the dollars back.

You might wonder what can be included in an excluded funeral trust contract. Take a look at N.J.A.C. 10:71-4.4(b)i(3). The State’s regulations do not specify a helpful, useful list. And what’s been happening is that applicants are being told that they have excess resources sitting in those funeral trusts. In some egregious cases, the alleged excess dollars (non-excluded dollars) put them over the resource limit, causing a denial of eligibility which they receive from the County Board of Social Services many months down the road after the application was filed.  The impact can be catastrophic — there could be tens of thousands of dollars of unpayable nursing home bills and horrific debt suddenly acquired by a community spouse.

Just recently, we were told of a partial change in this policy. We found out that “the State has gone back and forth in what it will allow” as excluded burial trust expenses, and that “now, prepayment for clergy and pallbearers is allowed, along with one limo for the family even though it’s for the living and we aren’t supposed to exclude anything that’s for the living, but the State like I said keeps changing what’s allowed and what’s not, but not Mass cards, register book and those little items.”  In this case, the non-excluded items were $100, and in that particular case, it wouldn’t cause the person’s resources to exceed the $2,000 limit. But there are some people whose resources are just barely under the limit. This late-discovered non-excludability could cause ineligibility.

A very recent decision may help the public understand what the “rules of the road” are on this issue. See attached — A.H. vs. Middlesex County Board of Social Services.E.H. v MIDDLESEX Initial decision     E.H. FAD on funeral expenses 2020      Med-Com 18-08 Funeral Trusts

When the public does its best to comply with the requirements of a means-tested program, it is impossible to comply when the standards are unwritten or vague, or  when established standards are changed in secret through internal meetings among administrative management personnel. The New Jersey Supreme Court addressed that type of governmental action thirty years ago in a case called Metromedia vs Division of Taxation. Among other things, if a new interpretation is intended to have impact on many similarly-situated members of the “regulated public,” it’s necessary to publish the proposed new rule so there can be adequate Notice and Comment, and so that people have the opportunity to find out what the law is and act accordingly.

Call us for advice about senior care planning, Medicaid eligibility planning, applications and appeals ………. 732-382-6070

New 2020 NJ Medicaid numbers just released

The NJ Division of Medical Assistance and Health Services (DMAHS) has just released Medicaid Communication #20-01 which provides the new numbers that are relevant to applications for Medicaid Long Term Services and Supports (MLTSS) benefits.   20-01_Medicaid_Only_Standards         MLTSS pays for nursing home care (skilled nursing facilities), Assisted Living Facilities and part-time home care for eligible individuals. Eligibility is based on income, resources, and clinical condition, and if eligibility is established, a determination is made about whether to delay the start of benefits due to transfers/gifts that were made during the 5-year look-back.

For a married couple, available non-excluded resources owned by the applicant cannot exceed $2,000. At the time of application, the available non-excluded resources owned by the community spouse cannot exceed $128,640 (the limit was $126,420 in 2019) or half the amount that the couple owned when the applicant became institutionalized, whichever is less. This is the CSRA or Community Spouse Resource Allowance. The CSRA need not be less than $25,728 ($25,284 in 2019).

After approval, the applicant can retain some of his/her monthly income as a Personal Needs Allowance (“PNA”). The new 2020 amounts for the PNA are as follows:  Skilled Nursing Facility – $50; Assisted Living – $116.35; Home Care $2,349.

Applicants whose income exceeds a certain limit (sometimes called the “income cap), are required to establish a Qualified Income Trust (QIT) for their excess income. There are no formal regulations and the program requirements are very tricky. The new income threshold that requires a QIT, ” in 2020 is $2,349.

In 2020, applicants in Assisted Living Facilities must have monthly income of at least $816.70, which is the room and board fee.

As readers of this blog are aware, the MLTSS program contains numerous legal traps for senior planning and and obtaining benefits for individuals with disabilities, but careful planning can preserve the assets and protect the applicant and their family while achieving eligibility and avoiding the tremendous risk of unpaid nursing home bills

Call for individualized legal advice and assistance with Medicaid applications and asset protection planning …………. 732-382-6070

Continuous residence in USA not prerequisite for Medicaid eligibility for previously-qualified alien

One of the threshold eligibility requirements for Medicaid has to do with legal status. N.J.S.A. 30:4D-3(q)(1)(a).  If a person is an alien (non-citizen) with the status of a Legal Permanent Resident (LPR) (“green card holder”) who was present in the United States prior to August 22, 1996, s/he is eligible to apply for Medicaid (and receive “full Medicaid benefits” if all other criteria are met).  NJAC 10:71-3.11(c)1. On the other hand, if an alien enters the United States on or after that date, s/he can apply for Medicaid “after having been present in the United States for five years,” N.J.A.C. 10:71-3.11(d), unless s/he is in one of the protected categories that are further detailed in that regulation. So a person who meets the criteria is an “eligible alien” who could receive full Medicaid benefits. An alien who is not an “eligible alien” can receive emergency medical treatment only.

A recent case arose involving an 88 year old who had held LPR status since 1991. He had worked the necessary length of time and was insured under the Social Security system (40 calendar quarters). In 2007 he left the United States and gave up his LPR card. Seven years later he returned and again received an LPR card. In 2015 he applied for institutional Medicaid benefits but the application was denied under the section (d) five-year rule cited above. he requested a Hearing and the case was tried.

The pivotal part of the evidence at the hearing seems to be as follows, quoted from the Appellate decision: ” The supervisor of Adult Medicaid for the SCBSS testified that when K.K. applied for Medicaid, both his new LPR card and the agency computer system noted an entry date of July 2014, with no indication that he had previously resided in the country. His application stating his 1991 entry was not considered. K.K. was thus rejected because the computer records reviewed reflected he had not been an LPR for five years, as required of someone who entered the United States after August 22, 1996. At the hearing, K.K. proved he had entered the United States in 1991 and received an LPR card in 1996, which he surrendered upon leaving the country in 2007. His LPR card was at that time set to expire in 2015, after he applied for Medicaid. The card he obtained upon reentry in 2014 is valid until 2024. Both cards have the same identification number.”

Although the denial was affirmed by the administrative law judge and Director of the Division of Medical Assistance and Health Services, the appellate court reversed in a precedential published opinion called  K.K. v. Div. of Med. Assistance & Health Servs.

The Court agreed with Mr. K that since he had previously met the criteria of section (c) — presence in the United States before August 22, 1996 — the lapse in his residency did not terminate his eligible alien status..The Court reversed the decision and authorized the application to proceed. The Court also cited an earlier case from 2009, which was  A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 338 (App. Divi. 2009) in which the Court declared and held that “once an immigrant obtains qualified alien status, he or she does not have to remain continuously present in the United States in order to avoid application of the five-year bar.”

  The Medicaid program operates within a complex web of intertwining and often unclear regulations and statutes. For advice and representation concerning Medicaid eligibility, call us at ….. 732-382-6070