The Supreme Court decision on the Affordable Care Act (ObamaCare) has tremendous implications for our practice, primarily negative, but is a huge boon to planning for persons with disabilities who have been shut out of the private insurance market in the past.  Our law firm’s loss is our clients’ gains, and we couldn’t be happier about it.

Depending on the November election, if Obama is re-elected, our clients with Special Needs Trusts will have the option to get off of public health programs, like Medicaid, and begin to pay for private health insurance from private health companies.  For the reasons mentioned in the attached "Commentary", we believe there are substantial resons why this will be appealing to many.  Whether, how and when to do it, however, will require a careful analysis of individual client’s needs.  Click the link below:

www.floridaspecialneedslaw.com/uploads/file/Lillesand – Commentary on the Impact of Affordable Care Act.pdf

The PCIP program is now cheaper – premiums have been reduced.  PCIP is "Pre-existing Condition Insurance Program,"  a part of the Affordable Care Act (ObamaCare) that is currently available to persons who have been denied health insurance by private health insurance companies because of even minor health conditions.  It also insures individuals with significant medical issues who have been without health insurance for six months or more.  Some of our clilents who have funds are purchasing the PCIP health insurance (the same non-profit company that insures Congresspersons and U.S. Senators).  The coverage is excellent.  And the doctors are first class private physicians and hospitals – after all, Congress wrote this insurance for themselves and their families – Obama is just letting disabled persons and others previously excluded from purchasing insurance, to buy this insurance.

The new rates are significantly lower than what our law firm’s group health insurance costs: for a person age 32, our office policy costs $525 per month; the PCIP plan cost is $176 per month; for an employee age 48, our plan costs us $755 per month, and the PCIP is only $270 for even better coverage.

CLICK HERE for more descriiptions on how to sign up online for PCIP and the coverage and rates.  A full description of the program – about 81 pages – is available here.

The South Dakota Supreme Court decision attached actually pre-dates the U.S. Circuit Court of Appeals decision yesterday by a couple of weeks, but comes to the same conclusion, and further adds language that no state may avoid application of the federal rule:

“[¶ 44.] In a CMS memorandum from Gale P. Arden, Director of Disabled and Elderly Health Programs Group at the Center for Medicaid and State Operations in Baltimore, the transfer penalty and pooled trust statutes at issue in this case were clarified. See Memorandum from Gale P. Arden to Jay Gavens, Acting Assoc. Regional Adm’r, Div. of Medicaid and Children’s Health (Apr. 14, 2008). In part, the memorandum stated:

Although a pooled trust may be established for beneficiaries of any age, funds placed in a pooled trust established for an individual age 65 or older may be subject to penalty as a transfer of assets for less than fair market value. When a person places funds in a trust, the person gives up ownership of the funds. Since the individual generally does not receive anything of comparable value in return, placing funds in a trust is usually a transfer for less than fair market value. The statute does provide an exception to imposing a transfer penalty for funds that are placed in a trust established for a disabled individual. However, only trusts established for a disabled individual 64 or younger are exempt from application of the transfer of assets penalty provisions ․

“Id. (emphasis added). CMS issued this memorandum because “it was brought to [its] attention that in many States individuals age 65 or older are establishing pooled trusts, but the States may not be applying the transfer of assets penalty provisions as required by statute.” Id. The memorandum explain[ed] that “[i]f States are allowing individuals age 65 or older to establish pooled trusts without applying the transfer of assets provisions, they are not in compliance with the statute. [F]ederal statute requires the application of the transfer rules in this situation; it [is] not a decision for each State to make.”8 Id.”

When a person on SSI and Medicaid concludes a lawsuit for personal injuries, the Florida Medicaid agency swoops in and takes a big bite of the settlement or jury verdict to reimburse itself for the doctor and hospital bills caused by the person or corporation that hurt the disabled SSI/Medicaid recipient.  This action is based on the Florida Medicaid Third Party Liability Act, Florida Statutes, Section 409.910.

A few years ago, the U. S. Supreme Court substantially and appropriately reduced what Medicaid can get.  Click here for the Alhborn case.  Florida Medicaid has resisted the Supreme Court’s decision, but its position is now substantially weakened by a new U. S. Circuit Court of Appeals decision.

Based on a March 22nd U. S. Circuit Court of Appeals decision, more net settlement money is going to go to diasbled plaintiffs.  The court’s decision completely eviscerates the Florida Medicaid agency’s defense to avoiding the reduction in the Medicaid lien based on the U.S. Supreme Court Ahlborn decision in 2006. This is going to allow substantially MORE money to go into plaintiff’s Special Needs Trusts funded from  Personal Injury/Medical Malpractice settlements or jury verdicts.

Continue Reading Prediction: Florida Medicaid Liens will be reduced

 The Chicago Regional Chief Counsel Precedent issued in May, 2010, restricts the use of “Retained Funds” after the member/beneficiary has died.

This decision represents “current policy, albeit unwritten” according to the head of the SSA office that drafts POMS in conversation on March 17, 2011. A similar decision was issued in New Jersey last summer. Another was applied by the San Francisco Regional Office against a pooled trust in Arizona. However, contemporaneously, there had been a proposed POMS on this subject last summer that was not issued – yet. Accordingly, SSA Regional Offices have been advised by the national office to consult the national office, and not apply this “precedent” below without consultation. However, in March, 2011, the San Francisco SSA Regional Office applied the policy to an Arizona trust. 

Thus, the safest route is to draft pooled trusts to comply with the standards on retained trusts delineated in the following opinion. Basically, the analysis indicates that the national office believes that the retained funds belong to the pooled trust (to be used for other members of the pooled trust), and do not belong to the sponsoring non-profit agency. 

Thus, the common practice of using retained funds to make “grants” to other agencies or the courts for the benefit of “disabled persons” in general, is not allowed under SSA’s view of the difference between d4A individual SNTs and d4C pooled SNTs].

Pooled Special Needs Trusts in three states – Minnesota, Arizona, and New Jersey – in three different regions of the country, have had their pooled trust disqualified based on the same analysis as in the Chicago Regional Office’s “Regional Chief Counsel Precedent” below. Note that in the body of the report, we find the language,

“However, we have recently received guidance from the Office of Income Security Programs (OISP) that funds retained by a pooled trust may be used only for the benefit of beneficiaries with accounts in the pooled trust. This means that the use of retained trust assets to add new trust beneficiaries (section 7.3B) and to aid disabled individuals generally (section 7.3C, D) are not acceptable under POMS SI 01120.203(B)(2)(g). Second, section 7.8 of the Trust appears to permit the Trust to avoid reimbursing Medicaid if the remainder beneficiaries agree to forego any distributions from the Trust. This provision is inconsistent with POMS SI 01120.203(B)(2)(g), which requires that, aside from certain allowable expenses, any amounts in the IBA not retained by the Trust must be used to reimburse the State for Medicaid.”

The language of the decision and the conversations with the national office in Baltimore are consistent. This is a problem to be aware of.

So what’s one to do? First, consider amending the language of the pooled trust so that it is consistent with the principles in this RCC Precedent, or at a minimum, is silent on what the pooled trust intends to do with any retained assets. There is nothing in the statute or existing POMS that requires that there be a statement that describes what happens to retained assets. There is nothing in the national POMS 8-step Action Checklist for SSA staff reviewing pooled SNTs that would lead the staff to question the retained asset provisions in a pooled trust.

Secondly, or perhaps, most importantly, do not let the time deadlines to appeal adverse decisions pass. The SSA procedure here is that some client member/beneficiary of the pooled trust will receive a Notice of Planned Action and then a Determination that the funds in their pooled trust account are “countable resources” and SSA is terminating the client’s SSI benefits effective “X” date, including retroactively back “X” number of years. The client has to act quickly and file a “Request for Reconsideration” checking the box in the middle of the form that indicates that they want a Formal Conference. The time limit is 65 days from the date of the SSA determination. If the client appeals within 10 days, SSA may continue their benefits pending the Reconsideration determination. If the Reconsideration is denied, the client can file a Request for Hearing before an SSA Administrative Law Judge – again, within the time limits stated above.

The “guidance” from national SSA is not based, in my opinion, on the d4C pooled trust statutory language. Congress did not limit how the retained funds could be spent, and did not clearly define whether the funds belonged to the sponsoring non-profit, or must stay in the trust for the benefit of other current members of the pooled trust. The argument that SSA is acting outside its authority is not a slam-dunk, however, because other parts of the Social Security Act give the Commissioner of Social Security extremely broad powers to carry out the purposes of the Act without specific or detailed direction from Congress.

If the ALJ hearing is lost, there is an appeal on the record to the Appeals Council in Falls Church, Virginia, and if denied there, to the U.S. District Court, Court of Appeals and the Supreme Court.

Our office would be interested in representing claimants on this issue anywhere in the country, or in assisting local counsel in other states who wish to challenge SSA’s new “guidance” on retained funds. Contact us at 727-330-7895 or David@LillesandLaw.com or Jessica@LillesandLaw.com.

David and Jessica Lillesand

There may be an answer for significantly disabled people who have been, up until now, unable to purchase private health insurance.  Due to recent health care legislation passed by Congress, as of August 1, 2010, the new high-risk pool of individuals who have pre-existing conditions can purchase health insurance.  


In 2014, the main program kicks in, entitled the Health Insurance Exchange – in which these people will participate with all healthy people. 


However, as a stopgap for persons with disabilities or other pre-existing conditions, the legislation provided that by April 30th, 2010 the state governors had to elect to either run a no-pre-existing condition health insurance program themselves, or elect to have the federal government do it via the U.S. Department of Health and Human Services.  Governor Charlie Crist advised that Florida would opt for the federal plan, and not administer this by the state-run Department of Children and Families. 

 

The program set to begin on August 1, 2010 is called the “Pre-existing Condition Insurance Program” (PCIP).  It requires that the person have pre-existing conditions that caused him or her to be rejected by at least one insurance company, and have been without health insurance for 6 months. 

 

To be eligible for this coverage:

  1. You must be a citizen or national of the United States or lawfully present in the United States. You must provide a copy of a document that confirms your citizenship, such as a copy of your U.S. Passport, a copy of your birth certificate, a copy of your certificate of citizenship, or a copy of your naturalization certificate. By August 15th, 2010, we will have a system in place to match your information with the records of another Federal agency and will no longer require you to document your citizenship. We thank you for your patience.
  2. You must have been uninsured for at least the last six months.
  3. You must have had a problem getting insurance due to a pre-existing condition. For more details, download the Application Form to the right.
  4. For children under age 19 or persons who live in Massachusetts only: You must have been quoted a premium of 200% or more of the Pre-Existing Condition Insurance Plan premium for your state. To find out if the premium you were offered is twice as much as the Pre-Existing Condition Insurance Plan premium go to “Find Your State”. Premium rates will not be available until July 15, so if you send an application before rates are available, that determination will be made for you.

 

 

The application form is available ONLINE, and after August 1st, a person can actually apply online and not have to download and submit the form by mail.

 

The cost in Florida for someone over age 55 would be $773 per month.  It may seem high, but when compared to private health insurance for healthy individuals of the same age, it is actually comparable or lower.    And, of course, uninsured people can use up most of their resources paying fee-for-service rates if their medical costs are high.  Medical debt is the number one reason for bankruptcy in the United States.

 

Here’s some more info from the PCIP website:

 

Pre-Existing Condition Insurance Plan (PCIP): Florida


PCIP will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available for you, beginning on your coverage effective date, even if it’s to treat a pre-existing condition – there are no waiting periods.

The monthly premiums for your state are:

Age

00-34

35-44

45-54

55+

 

$363

$435

$556

$773

In addition to your monthly premium, you will pay other costs. Covered in-network services are subject to a $2,500 annual deductible (except for preventive services) before the plan starts to pay benefits. Once you’ve met the deductible, you will pay a $25 copayment for doctor visits, $4 to $30 for most drugs at a retail pharmacy for the first two prescriptions and 50% of the cost of the prescriptions after that. If you use mail order, you will pay $10 for generic drugs or $75 for brand drugs on the plan formulary for a 90 day supply. You will pay 20% of the cost of any other covered benefits received from a network provider. Your out-of-pocket costs cannot be more than $5,950 per year. However, your out-of-pocket costs may be higher if you go outside the plan’s network. See below for a benefits summary.

If you apply for PCIP coverage, you will be billed for the premium once your application is approved. You will need to send in your payment in order for your coverage to be effective. Please do not send in the premium before you are billed.

 

 

Here’s some more from the website – Questions and Answers:

 

Questions and Answers

What is a pre-existing condition?

A pre-existing condition is a condition, disability or illness (either physical or mental) that you have before you enrolled in a health plan.

 

Will the Pre-Existing Condition Insurance Plan (PCIP) be available in every state?

Yes, every state will have a plan that offers comprehensive health coverage for uninsured Americans with pre-existing conditions. The program name, start date, and other plan details may vary depending on which state you live in and whether the program is run by the state or the Department of Health and Human Services. Check out the State Plans page to learn more about how the Pre-Existing Condition Insurance Plan works in your state.

 

When will my coverage be effective?

If you live in a state where the U.S. Department of Health and Human Services is running the program, you can apply and enroll starting July 1, 2010. Coverage will begin August 1 if you apply and are approved for enrollment by July 15th. Generally, a completed application received on or before the 15th of the month will go into effect on the first day of the next month. A completed application received after the 15th of the month will go into effect on the first day of the following month. 

In all other states, coverage should be available by the end of the summer but the exact start date will vary by state. Check out the State Plans page to learn more about when the Pre-Existing Condition Insurance Plan begins in your state.

 

May I apply for the Pre-Existing Condition Insurance Plan if I have existing health coverage?

You are not eligible unless you have been without health coverage for at least the last six months. For example, if you have Medicare or TRICARE, you shouldn’t apply. If you are uninsured and have been told that you may be eligible for other coverage programs like Medicaid and the Children’s Health Insurance Program, you should check out those programs first, as they may better meet your needs. If you have job-based coverage, or individual insurance coverage, you aren’t eligible to apply.

 

May I apply for the Pre-Existing Condition Insurance Plan if I have COBRA or other continuation of coverage?

No, even if your COBRA or other continuation of coverage is about to run out, you won’t be eligible until you have been uninsured for at least the last six months, and meet other eligibility criteria.

 

What health care providers are in the network?

The Pre-Existing Condition Insurance Plan will have provider networks that include a full range of services and specialists.

 

What do I do if I can’t afford these premiums?

If you have limited income and resources, you may be eligible for the Medicaid program in your state. If you are seeking insurance coverage for your child, go to www.insurekidsnow.gov to learn more about children’s health insurance in your state.

 

 

Finally, we noted that Florida rates are around 40% higher than comparable programs in other states.  This may benefit disabled persons considering a move to another state.

Congratulations and a  big thank you to our Florida Congressmen, Ander Crenshaw and Kendrick Meek, who have introduced legislation to allow families to plan for their loved ones with some significant tax saings.   Information on the bill follows.  To see the bill in its entirety, click on H.R. 1205.

Disability Savings Accounts

The bipartisan Achieving a Better Life Experience Act of 2009 (ABLE Act), H.R.1205/S. 493, was introduced in both the House and Senate on February 26.  The bills would allow individuals and families to establish special accounts for meeting the future needs of children and adults with disabilities.  Funds in the accounts and expenditures which meet the requirements of the bills would not affect the individuals’ eligibility for federal benefits.  Using these accounts, parents would be able to save funds for a child’s future in a manner similar to the special "529 accounts" currently used to save for a child’s future educational expenses.  The House bill was introduced by Rep. Ander Crenshaw (R-FL) along with Representatives Patrick Kennedy (D-RI), Cathy McMorris Rodgers (R-WA), and Kendrick Meek (D-FL).  The Senate bill was introduced by Senator Robert Casey, Jr. (D-PA) along with Senators Sam Brownback (R-KS), Richard Burr (R-NC), Christopher Dodd (D-CT), Orrin Hatch (R-UT), and Edward Kennedy (D-MA).  The bills were referred to the House Ways and Means and the Energy and Commerce Committees and to the Senate Finance Committee.  The Arc and UCP worked with the sponsors and with other supporting organizations on development of the bills.

We are pleased to announce that Lillesand and Wolasky, P.L., has opened a new office in Gainesville, Florida to provide legal services to North Florida.  The practice is limited to Special Needs Trust, SSI disability and Social Security Disability Insurance Benefit Claims, and related Medicaid and Medicare issues.

Contact us at (352) 376-6666.

We are located in the Haile Village Center, SunTrust Bank Building, Second Floor, 5303 S.W. 91st Drive, Gainesville, Florida 32608.

We look forward to assisting other attorneys and clients from our new North Florida location.

The organizers of the Florida State Guardianship Annual Convention asked me to prepare some comments on Social Security, Medicare and Medicaid – It Just Keeps Changing.  The ten page paper highlights changes in how  attorneys and guardians of disabled individuals will have to change the way they interact with SSA, video hearings, “paperless” medical and legal files at SSA, as well as the 2008 changes in Medicare, and changes we are expecting in the SSI POMS that relate to Special Needs Trust administration: new rules on employment by the trustee of parents to care for minor disabled children, support of dependent spouses and minor children using the disabled parent’s trust funds (see our previous post on July 11th), and structured settlement annuity problems, particularly with deeming of healthy parents’ annuities against the disabled child’s continued eligibility for SSI and Medicaid.

If you want more information on guardianship, or the Florida State Guardianship Association and an application for membership, click here.

 

Social Security Region 4   

Good news!  One of the tasks of our Florida Bar Elder Law Section’s Special Needs Committee which I co-chaired this year, was to petition the Social Security Administration to change the Atlanta Regional POMS on Trusts.  Specifically, we wanted recognition that the Doctrine of Worthier Title no longer applied in Florida.  The Atlanta Regional Office of the Social Security Administration publishes the instructions to Florida SSA staff on interpretations of Florida law.

Our petition was adopted, and a new Atlanta Regional POMS styled "SI ATL01120.201 – Trust Property," was published by SSA on the Internet on April 15, 2008.

The Doctrine of Worthier Title had previously made irrevocable trusts into revocable trusts, automatically by operation of law, whenever the trust document failed to name a specific residual beneficiary.  This caught many Florida drafters of Special Needs Trusts by surprise.  For a Special Needs Trust to be valid under federal SSI rules, and thus trigger SSI-related Medicaid in Florida, the trust must be irrevocable.  A previous attempt by our law firm, through litigation in the federal courts, was unsuccessful in persuading the courts that Florida had abandoned the Doctrine through case law. Thus we sought an administrative remedy by petition.

That problem has now been corrected.   Life is good!