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Recent Successes And News

Medicare and Medicaid Will Cover Coronavirus Testing

With coronavirus dominating news coverage and creating alarm, it is important to know that Medicare and Medicaid will cover tests for the virus. 

The department of Health and Human Services has designated the test for the new strain of coronavirus (officially called “COVID-19”) an essential health benefit. This designation means that Medicare and Medicaid will cover testing of beneficiaries who are suspected of having the virus. In order to be covered, a doctor or other health care provider must order the test. All tests on or after February 4, 2020 are covered, although your provider will need to wait until after April 1, 2020, to be able to submit a claim to Medicare for the test.

Congress has also passed an $8.3 billion emergency funding bill to help federal agencies respond to the outbreak. The funding will provide federal agencies with money to develop tests and treatment options as well as help local governments deal with outbreaks. 

As always, to prevent the spread of this illness or other illnesses, including the flu, take the following precautions:
•    Wash your hands often with soap and water
•    Cover your mouth and nose when you cough or sneeze
•    Stay home when you're sick
•    See your doctor if you think you're ill

For Medicare’s notice about coverage for the coronavirus, click here.

For more information about Medicare, click here.

For more information about Medicaid, click here

Medicaid Protections for the Healthy Spouse

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

The so-called “spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple's assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total “countable” assets up to a maximum of $128,640 (in 2020). Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $25,728 (in 2020).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $128,640 (in 2020), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.

The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple's income is in the name of the institutionalized spouse and the community spouse's income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,113.75 to a high of $3,216 a month (in 2020). If the community spouse's own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse's income.

Example: Joe Smith and his wife Sally Brown have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith's name and $700 is in Ms. Brown's name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Brown's MMMNA is $2,200 (based on her housing costs). Since Ms. Brown's own income is only $700 a month, the Medicaid agency allocates $1,500 of Mr. Smith's income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $140 a month ($1,700 – $1,500 – $60 = $140).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.

Contact your attorney to find out what you can do to make sure your spouse has enough income to live on. 

 

 

Feds Release 2020 Guidelines Used to Protect the Spouses of Medicaid Applicants

The Centers for Medicare & Medicaid Services (CMS) has released the 2020 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep, as well as related Medicaid figures.

In 2020, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $128,640 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Known as the community spouse resource allowance or CSRA, this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2020 will be $25,728.

Meanwhile, the maximum monthly maintenance needs allowance (MMMNA) for 2020 will be $3,216. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse's income. The minimum monthly maintenance needs allowance for the lower 48 states remains $2,113.75 ($2,641.25 for Alaska and $2,432.50 for Hawaii) until July 1, 2020.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse. According to Medicaid law, the community spouse may keep all her own income, even if it exceeds the maximum monthly maintenance needs allowance.

The new spousal impoverishment numbers (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2020.

For a more complete explanation of the community spouse resource allowance and the monthly maintenance needs allowance, click here.

Home Equity Limits:

In 2020, a Medicaid applicant’s principal residence will not be counted as an asset by Medicaid if the applicant's equity interest in the home is less than $595,000, with the states having the option of raising this limit to $893,000.

For more on Medicaid’s home equity limit, click here.

 

If Your Estate Plan Includes IRAs, a New Law Means It Is Time to Reevaluate

Both workers and retirees may need to rethink some of their estate planning in light of the newest spending bill. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, part of the massive bill, makes major changes to retirement plan rules, including inherited plans. 

Passed in December 2019, the SECURE Act changes the law surrounding retirement plans in several ways, but the biggest change eliminates “stretch” IRAs. Under the previous law, if you named anyone other than a spouse as the beneficiary of your IRA (or other tax-favored retirement account, such as a 401(k)), that beneficiary could choose to take required minimum distributions (RMDs) over his or her lifetime and pass what was left on to future generations (called the “stretch” option). The required minimum distributions were calculated based on the beneficiary’s life expectancy. This allowed the money to grow tax-deferred over the course of the beneficiary’s life and to be passed on to his or her own beneficiaries. 

The SECURE Act requires that most non-spouse beneficiaries of an IRA withdraw all the money in the IRA within 10 years of the IRA holder’s death. In many cases, these withdrawals would take place during the beneficiary’s highest tax years, meaning that the elimination of the stretch IRA is effectively a tax increase on many Americans. This provision will apply to those who inherit IRAs starting on January 1, 2020.  

Spouses who inherit an IRA are still able to treat the IRA as their own (and take distributions over their lifetime), and the following non-spouse beneficiaries are also treated like spouses:
•    Disabled or chronically ill individuals
•    Individuals who are not more than 10 years younger than the account owner
•    Minor children. But once the child reaches the age of majority, he or she has 10 years to withdraw the money from the account.

Given these changes, those with retirement accounts need to immediately reevaluate their estate plans. 

Look at Disclaiming 
With regard to estates of certain people who died during 2019, there is a planning option for individuals who are inheriting a large IRA. Beneficiaries of large IRAs have the option of disclaiming them and allowing their beneficiaries to stretch their withdrawals. The disclaimer has to be done within nine months of the IRA owner’s death. Disclaimed property is treated as if the person inheriting it had actually died before the decedent. 

For example, assume that Robert died on September 1, 2019, leaving a $1 million IRA to his wife, Stacy. The contingent beneficiaries are their three children. Stacy could choose to disclaim the IRA (or a portion of it) so that it passes directly to her three children. They then could stretch the withdrawals over their life expectancies, postponing the bulk of their withdrawals until they are older and presumably retired and subject to lower tax brackets. Stacy has to execute her disclaimer by March 31st so that it's within nine months of Robert's death. The window for this option will continue to narrow until it closes completely on October 1, 2020.

Review Your Conduit Trust 
Your estate plan may have been designed to have your retirement plans pass into trust for the benefit of your spouse, your children, or others. If your spouse is the only beneficiary, your trust is fine because the SECURE Act did not change any of the rules for spouses inheriting IRAs. But the rules did change for just about everyone else in a way that could affect how the trust would work. 

Under the previous rules, so-called “conduit” trusts were set up to pay out RMDs to the beneficiaries. Under the new law, RMDs are not required but the IRA must be completely withdrawn by the end of the 10th year after the owner's death, and if it's held by a conduit trust, it must be completely distributed to the trust beneficiaries. If you created the trust to protect assets in the event of divorce or bankruptcy, or simply so they will be professionally managed, the new rules could undermine the purpose of the trust by distributing all of the assets out of the trust. If your IRA names a trust as a beneficiary, you should review the trust with your estate planning attorney.

Check Your Special Needs Trust
Special needs trusts, unlike most other trusts, are usually drafted as so-called “accumulation” trusts. Unlike conduit trusts, accumulation trusts do not require that the RMDs be distributed. Instead, they can be retained by the trust and distributed as the trustees deem appropriate. Automatically distributing RMDs could undermine eligibility for public benefits the disabled beneficiary may be receiving. 

Under the new law, disabled beneficiaries are deemed “eligible designated beneficiaries” and fall under an exception that permits them to continue to stretch withdrawals under the old inherited IRA age-based schedule. But the trust will only qualify for this treatment if the disabled individual is the only beneficiary of the trust during his or her life. If the trust also permits distributions to a spouse or children, it won't qualify and the IRA will have to be completely withdrawn under the 10-year rule. 

One of the problems with the 10-year rule for accumulation trusts, as opposed to conduit trusts, is that the withdrawn funds if held by the trust will pay taxes at trust tax rates, which are much higher than individual tax rates in most cases. As a result, if your estate plan includes a special needs trust that could be a beneficiary of your retirement plan assets, it's important to review the trust with your estate planning attorney.

To read the legislation, click here. For more on the new law, click here and here.

Let’s Have The Conversation About Medicare & Medicaid

Join Patty and Joann for a complementary coffee and chat! We have answers to your questions and will address your concerns:

  • What is the difference between Medicare and Medicaid?
  • How do I qualify for each?
  • What benefits do they cover?
  • Can I have both?

Family and friends welcome!

When: Wednesday, September 11th 6:30-7:30pm
Where: Mamaroneck Public Library 136 Prospect Avenue, Mamaroneck, NY 10543
Register today! Phone: (914) 633-7400 or email: jeisele@kboattorneys.com

For more information, visit: www.mamaronecklibrary.org

Download the flyer here.

Patricia A. Bave To Speak At Program in Mt. Kisco

Patricia A. Bave will participate in a panel discussion titled “Making a move? Where do I go from here?” at the Mount Kisco Public Library. The event takes place on September 12, 2019.

Patricia A. Bave To Be Presenter at September CLE

Patricia A. Bave will be a presenter at the September CLE “A Critical Review of Mental Hygiene Law Article 81: How Can the Legal Community Do Better?” Patty will take part in the discussion: Should Non-Lawyers Be Appointed from the Part 36 List as Court Evaluators and /or Property Management Guardians for (Alleged) Incapacitated Persons.

Coffee & Conversation About Your Future

Please join us for Coffee & Conversation About Your Future with Patricia Bave, Esq. and Joann D’Emilio, Esq. on Thursday, May 30, 2019 at St. Thomas Episcopal Church, Mamaroneck, NY. Call (914) 633-7400 for more information.

KBO Sponsors Gala

Kommer Bave & Ollman LLP sponsored the annual spring At Home on the Sound Gala at the Hampshire Country Club in Mamaroneck, NY

Rachel F. Ciccone, Esq. Named Partner

We are pleased to announce that Rachel F. Ciccone has been named a new partner at Kommer Bave & Ollman LLP. Rachel has been with the firm since 2006. Since that time, her years of service have made significant contributions to the firm and its clients. Her practice includes personal injury litigation, matrimonial and family law litigation, guardianship litigation and commercial litigation. She has represented clients in state and federal courts, and has litigated matters throughout the NY Metropolitan area.

We are excited to welcome Rachel as the firm’s newest partner, and look forward to her continued commitment to providing our clients with quality legal representation.

Call Us  (914) 633-7400