The ABLE Act - Read the details here...

Achieving a Better Life Experience (ABLE) Act

What is the Able Act?

Living with a disability can be costly with constant out-of-pocket expenses to pay for care. Recently, President Obama signed into law the Achieving Better Life Experience (ABLE) Act. The ABLE Act allows people with disabilities and their family the ability to create a tax-exempt savings account that can be used for improving one’s health, independence, and quality of living.

How does it work?

Individuals with disabilities depend on a variety of publically funded programs (Medicaid, SSI, SNAP, etc.) to provide financial assistance with everyday needs. Eligibility for these benefits varies from state to state, but generally the individual would need to have $2,000 or less in assets, or “countable funds”, in order to qualify. With the Achieving a Better Life Experience Act, eligible individuals are able to create an ABLE account without fear of damaging their eligibility for programs like SSI and Medicaid.

Who can open an account?

If you have a significant disability with an age of onset of 26 years old or younger and are currently receiving SSI/Medicaid benefits- you are automatically eligible to create an ABLE account. If you are not a recipient of SSI/Medicaid, but still meet the age of onset disability requirement, you may be eligible to open an ABLE account if you meet the SSI requirements regarding significant functional limitations. Individuals over the age of 26 are still eligible for an ABLE account, but must have the documentation of disability that indicates an age of onset before the age of 26.

What are the limitations?

There are limitations ton an ABLE account. For example, the total annual contribution by all participating individuals may not exceed $14,000. For individuals with disabilities who are recipients of SSI/Medicaid, the first $100,000 towards your ABLE account would be exempt from the resource limit of $2,000. If the ABLE account exceeds $100,000, you (the beneficiary) would then be suspended from SSI eligibility; however, you would still continue to be eligible for Medicaid. Only one account per individual is allowed.

What expenses are covered?

ABLE accounts cover "qualified disability expenses”, meaning any expense related to helping you manage daily life with a disability. These include: housing, education transportation, employment support, healthcare, support services, and other. Consult your financial planner or attorney to see a full list today.

The Partnership Program - Some Good News!!!

Life is filled with uncertainty, but one thing is certain, people need to know that they will be taken care of when they grow old. As of 2013, the number of persons aged 65 or older rose to 46 million in the United States with statistical promises of doubling by 2050. Seniors have several means at their disposable to help ensure whatever care needs they require in the future are met; unfortunately, the inadvertent consequences arising from an instable care plan may be worse than the idea of not having one at all. As a solution, many states have enacted The Long Term Care Partnership Program; a joint federal-state policy initiative that conjoins the perks of private pay insurance with the regulation of Medicaid. This is good news for taxpayers everywhere.

The latest report from The National Spending for Long-Term Services and Supports offered that Americans financed $219.9 billion dollars towards elderly and disabled care, 62% of which was devoted entirely to Medicaid. The eligibility for Medicaid covered Long-term care can be complicated, and the requirement to deplete assets, or “spend down” can put seniors in an incredibly vulnerable (and emotional) situation. State laws differ about how much income and assets you can keep and still be eligible for Medicaid. (Some assets, such as your home, may not keep you from being eligible for Medicaid.) However, federal law requires your state to recover from your estate the costs of the Medicaid benefits you receive.

Enter the Partnership Program.

Most states allow a dollar-for-dollar asset disregard for claims paid on qualified partnership policies and will not require that the policy holder exhaust the benefits offered under the partnership policy in order to qualify for Medicaid.  Under this program, if additional coverage is needed beyond what is provided by the qualified partnership policy, the policyholder can access Medicaid. Simply put, whatever the policy paid toward care, that amount of hard-earned money will be protected.

In order for a policy to qualify as a partnership policy in Missouri, it must have been issued after August 1, 2008, the policyholder must be a resident in Missouri at the time the coverage became effective, the policy must include inflation protection, and the policy has to meet the definition of a Long Term Care insurance policy as defined in as defined in 7702B(b) of the Internal Revenue Code of 1986. Kansas, also a partnership policy state, requires the policyholder to be a resident of Kansas at the time coverage became effective, the policy must be issued after April 1, 2007, it must include inflation protection, and the policy has to meet the definition of a Long Term Care insurance policy as defined in 7702B(b) of the Internal Revenue Code of 1986.

Prior to 2006, when the Deficit Reduction Act (DRA) was enacted, only four states (CA, CT, IN and NY) adopted a private-public partnership plan to protect the assets of people unable to afford private insurance, yet had too many assets for Medicaid.  In the years since the DRA eased its restrictions, almost every state in the country now has a partnership program.

States like Indiana and New York offer a total asset approach which allows an individual to keep all their assets, not just an amount equivalent to the Partnership policy benefits received. However, for someone to fully qualify for total asset protection their policy must provide a certain amount of benefits.

Some of the benefits of a Partnership Program are:

·      Tax-qualified.

·      The policy must provide inflation protection.

·      Care eligibility does not require depleting or transferring assets.

·      Once private insurance benefits are used, special Medicaid eligibility rules are applied if additional coverage is necessary.

·      Regulated premium rates.

·      States with Partnership Policies tend to have reciprocity.

To locate the state insurance website to determine the rules for each state, go to www.naic.org/state_web_map.htm       

Elder Law Video Series

In this video, we have the chance to hear about one family's story as they navigate the roads with an aging loved one.  As an Elder Law practice, these are the types of scenarios in which our firm can be of service. Please take a look.

https://www.youtube.com/watch?v=e4trmZeYBVE

A Social Security Disability Primer

The Social Security Act provides financial benefits to qualified individuals who have suffered a physical or mental disability. "Disability" is defined as the "inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment ... which has lasted or can be expected to last for a continuous period of not less than 12 months" [42 U.S.C. Sec. 423(d)(1)(A)]. This comment briefly outlines the process of obtaining Social Security disability benefits. Always consult an experienced legal professional in Social Security disability cases.

Successfully proving a disability is the key barrier that claimants face. The U.S. Code states:

"An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work" [42 U.S.C. Sec. 423(d)(2)(A)].

There is a five step process for determining if an individual is "disabled" as defined above: 

1. The claimant must prove that she is not currently engaged in substantial gainful activity.

2. The claimant must prove that she has a severe mental or physical impairment(s) that significantly limits her ability to perform basic work activities.

3. The claimant must meet the definition of "disabled." Disability is presumed if one has certain listed impairments. Otherwise, a residual functional capacity assessment is conducted to determine the claimant's work environment limitations. This concludes with a job exertion category classification.

4. The claimant must prove that her impairment(s) prevent her from performing the physical and mental demands of her previous work.

5. If the claimant has satisfied all previous four steps, then to challenge the disability classification the Social Security Commissioner must prove that the claimant is capable of performing some other substantially gainful work that exists in significant job numbers in the national economy. The claimant may rebut the Commissioner's proof.

Procedurally, a Social Security disability claim process begins with a filing either with an authorized state agency or the Social Security Administration. A claimant may request a reconsideration of a denial of benefits. Denial of benefits may be subsequently appealed to an administrative law judge and beyond that step to the Appeals Council of the Social Security Administration. After these steps, the unsuccessful claimant may appeal to a federal District Court.

This court's review determines if the Commissioner applied the proper legal standard and the Commissioner's decision was supported by substantial evidence. Substantial evidence has been defined to be relevant evidence that a reasonable mind might accept to support a conclusion. The administrative law judge has broad discretion in determining the merits of medical and other testimony. A treating physician's testimony is not necessarily superior to that of a non-examining consultant.

In a January 9 decision, the federal District Court for the Northern District of Illinois, Eastern Division, in a sharply critical opinion, reversed and remanded an Administrative Law Judge's denial of benefits for several reasons including using "boilerplate" language that failed to link conclusions with evidence in the record [Wilcox v. Colvin]. Additionally, the Court criticized the Administrative Law Judge's determination of the claimant's credibility based solely upon medical evidence, the Judge's failure to address limited concentration in the context of an unskilled job, and a failure to adequately address the impact of the claimant's obesity.

The precise amount of benefits that a successful disability claimant receives is calculated with a somewhat complex formula. While private long-term disability insurance benefits typically do not reduce Social Security disability benefits, government disability benefits such as workers' compensation may reduce benefits in some circumstances.

Commentators have noted inconsistencies between Social Security decision makers in our national legal environment. This may be unavoidable, but further emphasizes the disability claimant's frequent need for professional representation throughout the claim process. This brief comment can only provide a brief educational outline of a difficult topic. Consult the Social Security Administration and experienced professionals in specific situations.

Great News - Congress Passes ABLE Act

Congress Passes ABLE Act Yesterday, Congress passed the Achieving a Better Life Experience Act of 2014 (ABLE Act). The ABLE Act will create tax-favored accounts for children and adults whose disability occurred before the age of 26; a step in the right direction to helping families take care of their disabled children. The purposes of this Act is to: (1) encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life; and (2) provide secure funding for disability-related expenses of beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, title XVI (Supplemental Security Income) and title XIX (Medicaid) of the Social Security Act, the beneficiary's employment, and other sources. The ABLE Act will allow anyone to contribute to this tax-favored account however, beneficiaries are limited to one account. These accounts are able to receive up to the annual gift tax exemption (currently $14,000 per year). The ABLE Act will start to apply to taxable years beginning 2015. The Act requires amounts in ABLE accounts to be disregarded in determining eligibility for means-tested federal programs, except distributions for housing expenses under the supplemental security income program and for amounts in an ABLE account exceeding $100,000. The payment of supplemental security income benefits to an individual are suspended during any period in which such individual has excess resources in an ABLE account, but does not suspend or affect the Medicaid eligibility of such individual. The Act will allow qualifying parents to create tax-free savings account for their disabled or special needs child to be used for approved expenses such as education, housing, and health care. In addition to this, another big  for many families is that the savings account will not take the place of other benefits that the child may be eligible for including SSI and Medicaid. This is very important for families who have been faced with making a decision between providing for their child's future and getting their child the help that they needed through available programs now. Over 19 organizations signed a letter of support for the ABLE Act urging congressional leaders to the pass the bill including the Autistic Self-Advocacy Network, AutismSpeaks, Muscular Dystrophy Association, and the National Federation of the Blind.  Congress for a change worked together on this legislation which went through many twists and turns. The ABLE Act has been a labor of love for a lot of advocates, but it started as an idea by a fellow father, Steve Beck. Beck has a daughter with Down syndrome. Under existing law, individuals who qualify for SSI disability and Medicaid cannot hold more than $2,000 in assets in their own name. This creates forced poverty. Adults with Down syndrome, and other disabilities, must choose to work less, or be paid less, or not work at all so that they maintain the social support services they depend on for providing the basics. It's a system that enforces disability on the disabled. Beck wanted to try to fix this in some measure. Kids with just 46 chromosomes can receive tax advantages through college savings accounts to help them live independently. Beck thought something similar for individuals with disabilities should be acceptable to most policy-makers. While it took some time, it turns out he was right. The ABLE Act allows a savings account for specific purposes-education, transportation, housing, and other services-to be established to benefit individuals with disabilities, like Beck's daughter.

Learn About the Importance of the ABLE Act

The Achieving a Better Life Experience Act (ABLE Act)

What is the ABLE Act?

Individuals with disabilities face enormous and unimaginable financial struggles, yet do not enjoy the same financial planning tools as other Americans who are planning for college and retirement.

The ABLE Act (H.R. 647/S. 313), introduced in the 113th Congress by Congressman Crenshaw and Senator Bob Casey (D-PA), is federal legislation that aims to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses such as education, housing, and transportation. The ground-breaking bill has earned more bipartisan, bicameral support than any other bill in Congress. (380 House co-sponsors, 74 Senate co-sponsors)

ABLE would supplement, but not supplant, benefits provided through private insurances, the Medicaid program, the supplemental security income program, the beneficiary’s employment, and other sources.

With ABLE in place, individuals with disabilities would no longer have to stand by and watch others use Internal Revenue Service-sanctioned tools to lay the groundwork for a brighter future. The ABLE Act would open the door to a brighter future for millions of Americans.

To learn more about this important act, please click on the link below to join the January 8, 2015 webinar.

https://global.gotowebinar.com/join/7794500964558873089/170029027

Thanks to the Missouri Bar For the Opportunity

http://www.mobar.org/esq/cle/shepherd.htm