Tuesday, May 28, 2013

The Disabled Military Child Protection Act - Allowing Funds to Be Directed to a Trust for Special Needs Children


 See below for details on this new bill........

Sponsor
  • Congressman Jim Moran (D-VA) (H.R. 4329 of the 112th Congress)
  • Senator Kay Hagan (D-NC) (S. 1076)

Quick Summary of the Bill:
  • Enables veterans who invest in a Survivor Benefit Plan (SBP) to transfer their benefits to a Supplemental Needs Trust for their special needs children (instead of leaving the benefit directly to the disabled child).
    • Ensures that a dependent, disabled child continues to qualify for certain government benefits.

What’s the Current Problem?
  • Health care for a disabled child can exceed $100,000 a year.
  • Current law does not allow military families to plan adequately for their special needs children’s future.
  • SBP
    • A benefit that military members can choose at the time of retirement.  
    • Under a SBP, a military retiree can have a portion of his or her monthly retirement pay withheld in order to provide, after his or her death, a monthly survivor benefit to a surviving spouse, child, or other eligible recipient.
    • Service members often want to leave these benefits to their disabled child.
  • Current law only permits that these SBP benefits go directly to the recipient, not into a trust. 
    • If a military member selected his or her disabled child to be the recipient of the benefit then the benefit will go directly to the disabled child.
    • However, this payment directly to a disabled child after the military retiree’s death is counted as income for Medicaid and Supplemental Security Income (SSI).
      • As a result, the military veteran’s disabled child likely becomes ineligible for federal benefits.  

What are Supplemental Needs Trusts?
·       Congress officially recognized the use of SNTs in the Omnibus Budget Reconciliation Act of 1993.
·       SNTs allow assets to be held in a trust for an individual with disabilities without having these assets considered countable assets for purposes of Medicaid or SSI
·       The benefit of the SNT is that it allows this individual with disabilities to have supplemental funds to pay for basic living needs and extra care above that provided by the government without disqualifying the individual for government benefits.
o   Protects against the risk of complete impoverishment and allows the individual to meet basic living needs.

About the Bill:
  • This bill would allow the SBP payment to be placed in a SNT for the disabled child of a deceased military veteran (disabled child remains eligible for federal assistance).
    • The bill requires use of a first party SNT, meaning there is a Medicaid pay-back provision for when the beneficiary of the SNT dies.
  • Equity and fairness issue.
    • Non-military (civilian) parents can create SNTs for their disabled children and can often assign their retirement benefits to a SNT for the disabled child rather than have the survivor benefit go directly to the disabled child.
  • The bill would allow more than 1,000 severely disabled military dependents to receive survivor benefits without losing access to Medicaid and SSI.
    • Helps disabled military children receive long-term care.
  • This bill will NOT lead to abuse of the system.
    • SNTs have significant oversight.
    • SNTs are administered under both state and federal law.
    • Appointed fiduciaries are subject to auditing.
Source: NAELA (National Academy of Elder Law Attorneys)




Thursday, May 23, 2013

SSA Revises POMS, Permits First-Party Trusts to Pay for Non-Beneficiary Travel in Some Cases


The Social Security Administration (SSA) has revised its Program Operations Manual System (POMS) to allow first-party trusts to pay for travel expenses incurred by non-beneficiaries in limited cases.  In addition, the revised POMS clarifies the rule that payment of some administrative expenses upon early termination of the trust or otherwise, including trustee fees, will not violate the sole benefit rule.
A controversy surrounding trusts and travel expenses began last spring, when the SSA added two examples to POMS Section 1120.201.  The new wording stated that trusts that permit a trustee to reimburse a beneficiary's family for expenses incurred in visiting the beneficiary would violate the "sole benefit rule" and would therefore not qualify as exempt resources. 
The SSA removed the offending examples after attorneys and other advocates objected, but the agency warned that it would revisit the issue.  The latest revisions, announced in a Policy Transmittal and effective May 15, 2013, represent a compromise position.
According to the updated POMS Section 1120.201.F.2, the general rule is that a trust is established for the sole benefit of an individual "if the trust benefits no one but that individual, whether at the time the trust is established or at any time for the remainder of the individual's life." However, the revised POMS establishes two exceptions, one for third-party payments and one for administrative expenses.
The new rule states that payments do not violate the sole benefit rule if they are to third parties for goods or services received by the beneficiary, payments of third-party travel expenses "which are necessary in order for the trust beneficiary to obtain medical treatment," or payments that allow a third party to "visit a trust beneficiary who resides in an institution, nursing home, or other long-term care facility (e.g., group homes and assisted living facilities) or other supported living arrangement in which a non-family member or entity is being paid to provide or oversee the individual’s living arrangement."  However, “[t]he travel must be for the purpose of ensuring the safety and/or medical well-being of the individual." 
The new POMS section also provides a 90-day safe harbor period for revision of a trust that was previously judged to be an exempt resource but has run afoul of the new travel provisions.  The 90-day period does not start running until the beneficiary or his representative payee is informed that the trust violates the new rules.
Revised POMS Section 1120.201.F.2.c, which is incorporated into several additional sections, including 1120.199 (the early termination rules) and 1120.203, makes it clear that payments for "reasonable compensation for a trustee(s) to manage the trust, as well as reasonable costs associated with investment, legal or other services rendered on behalf of the individual with regard to the trust" do not violate the sole benefit rule. 

Source: ElderLawAnswers.com

Monday, May 13, 2013

Medicare Proposes to Change Hospital Admission Rules


Medicare officials have proposed changes in hospital admission rules that they say will curb the rising number of beneficiaries who are placed in observation care but are not admitted, making them ineligible for nursing home coverage.
“This trend concerns us because of the potential financial impact on Medicare beneficiaries,” officials wrote in an announcement last week. Patients must spend three consecutive inpatient days in the hospital before Medicare will cover nursing home care ordered by a doctor.

Observation patients don’t qualify, even if they have been in the hospital for three days, because they are outpatients and have not been admitted. They also have higher out-of-pocket costs than admitted patients while in the hospital, including higher
 co-payments and sometimes paying exorbitant charges for non-covered drugs.

Under the proposed changes, with some exceptions, if a doctor expects a senior will stay in the hospital for less than two days (or through two midnights), the patient would be considered an outpatient receiving observation care. If the doctor thinks the patient will stay longer, the patient would be admitted.

Setting deadlines for observation stays would also limit the growing length of time of observation visits, another trend officials said were troubling.
Reaction from patient advocates, doctors and hospitals has been swift and unanimous: It’s a bad idea.

The number of observation patients has jumped 69 percent in the past five years, to 1.6 million in 2011, according to federal records. They also are staying in the hospital longer, even though Medicare suggests that hospitals admit or discharge them within 24 to 48 hours. Observation visits exceeding 24 hours have nearly doubled, to 744,748.

Officials said extended observation stays occur because hospitals are not sure Medicare will pay if patients are admitted. The proposed changes are intended to address these questions.

The proposed admission changes are part of a 1,400-page annual hospital payment update released last Friday. If adopted, the new admission rules would apply to more than 3,400 acute-care hospitals, and Medicare estimates that the change would result in 40,000 more inpatient hospital stays.

To offset the expected additional cost of $220 million, Medicare would cut hospital payments by 0.2 percent.

Joanna Kim, vice president for payment policy at the American Hospital Association, called the time factor “somewhat arbitrary.” The association also objects to the pay cut, asserting that the projected inpatient increase is not certain.
“I can’t imagine anyone is going to like this proposed rule because it makes time the determining factor in whether the services are provided on an inpatient or observation basis,” said Toby Edelman, senior policy attorney at the Center for Medicare Advocacy. “It is not about what the hospital is actually doing for you, what kinds of care you need and are receiving.”

Edelman said the proposal does nothing to help observation patients because it maintains 
the three-inpatient-days requirement, doesn’t require hospitals to tell patients when they are held for observation and doesn’t give patients a right to appeal their observation status. The center is representing 14 seniors who have filed a lawsuit against the government to eliminate the observation care designation.
A federal judge is holding the lawsuit’s first hearing Friday in Hartford, Conn., to consider the government’s request to throw out the case because the seniors should have followed Medicare’s lengthy appeals process before going to court. On Tuesday, government lawyers submitted the proposed rules change to the judge to bolster the argument for dismissal, claiming that it clarifies “when we believe hospital inpatient admissions are reasonable and necessary, based on how long beneficiaries have spent or are reasonably expected to spend, in the hospital.”

The American Medical Association is still reviewing the proposed changes, which don’t include steps it asked Medicare to take last year: either drop the three-day policy or count observation days toward the requirement.

“This policy is of great concern to the physician community because it has created significant confusion and tremendous, unanticipated financial burden for Medicare patients,” James Madara, the AMA’s executive vice president, wrote to Medicare. He also criticized a hospital’s ability to overrule the doctor’s decision to admit a patient, which creates more confusion when the doctor bills Medicare for inpatient services and the hospital bills for observation services.

Source: WashingtonPost.com

Thursday, May 9, 2013

Google Helps Users Secure Their Virtual Legacy


Google announced on April 11, 2013 that they would be offering a new feature specifically for users of Gmail, Google+, Google Drive, Picasa albums and YouTube.  This opportunity allows you to decide what happens to your accounts after you pass away.  You can appoint a "Google heir "or choose to have your data deleted after a certain time of inactivity.  To learn more about this plan for your "Digital Afterlife" see the full article here

In addition, there are websites and products that exist to help store your growing number of passwords such as myDucks.org and LastPass.com. If you are looking for an option like Google's "Inactive Account Manager" you may consider LegacyLocker.com.

Another resource for managing your "digital ducks" is a Virtual Asset Instruction Letter (VAIL). This valuable tool exists to identify and protect your virtual assets.  To learn more about the topic of virtual assets and to download a free VAIL template click here.