Medicaid and Estate Planning for Seniors An Update- Rev

Medicaid and Estate Planning for Seniors An Update- Rev. 11-13-2015

Estate & Trusts Committee CLE Lake County Bar Association

Agenda Handout 2015 ©

November, 2015

Anthony B. Ferraro BS, MS-Tax, CPA, JD

The Law Offices of Anthony B. Ferraro, LLC The Elder Law, Estate & Trust and Asset Protection Law Firm

Estate Planning/Protection for Boomers and seniors 5600 N. River Road, Suite 764

Rosemont, IL 60018 847-292-1220

www.abferrarolaw.com

2015 Trusts and Estate Annual Seminar November 13, 2015

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http://www.abferrarolaw.com/

AGENDA I. Some trapdoors for estate, and trust, and tax lawyers when engaging a client who

requires Medicaid planning

II. News from Department of Human Services (DHS), Health and Family Services (HFS), Office of the Inspector General (OIG), and Bureau of Hearings (BOH)

III. Ongoing dialogue with OIG and DHS

IV. Court Cases

V. Recent Legislation

VI. General Categorization of Medicaid eligibility strategies for long-term care

VII. Medicaid application and appeals – Proposed appeals rules changes

VIII. Hot topics and case studies raised by practitioners


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I. Short List of Trapdoors for Estate & Trust & Tax Lawyers

II. News

1. MMAI- Implementation Status – January 14, 2014. The Medicare-Medicaid Alignment Initiative (MMAI) is an attempt to reform healthcare delivery to clients eligible for both Medicare and Medicaid (“dual eligible”). Opt-in enrollments began effective March 1, 2014 and passive enrollments began on June 1, 2014.

2. On February 6, 2014, DHS announced in Manual Release #14.05 that there are

certain clarifications being made to the following areas of the Policy Manual and Workers’ Action Guide based on the Deficit Reduction Act (DRA) and Save Medicaid Access and Resources Together (SMART) Act:

-Verifying resources and transfers during the look back period; -Transfers to the community spouse; -Annuities; -Medical expenses; -Two-step eligibility; -Penalty periods

3. On February 6, 2014, DHS announced in Manual Release #14.05 that there are certain clarifications being made to the following areas of the Policy Manual and Workers’ Action Guide based on the DRA and SMART Act:


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-Medical backdating; -Homestead property; -Non-homestead property; -Income; -Resources for self-support; -Prepaid burial contracts; -Requests for hardship waiver; -Liens and estate claims; -Billing; -Redetermination.

4. A little more discussion of some of these areas:

HFS has made it clear that any failure to file Form HFS 3654 will result in a denial of eligibility for Long-Term Care (LTC) medical assistance. Eligibility for Aid to Aged, Blind, and Disabled (AABD) community medical assistance may be available, but not LTC. The Policy Manual now indicates that a spouse who lives in a supportive living facility or a nursing home is not considered a community spouse. DHS also mentioned that when all of the HFS forms are revised and developed, an Information Memorandum with a complete list will be published. DHS requests that everybody check this in the forms library to make sure they are using the current version of each form.

5. On March 21, 2014, DHS announced in Manual Release #14.09 that, effective

immediately, DHS must allow the client the opportunity to provide missing information within 60 days after the date of Notice of Denial of a medical application. Also, they must not require an appeal or new application to be filed.

6. Manual Release #14.09 further states that DHS must re-register a denied medical

case using the original application date without a new application when: -The application was denied for failure to provide required information or verification; and -The applicant provides all required information and verification within 60 days following the date of Notice of the Denial.

DHS indicates the local office must not require the applicant to file an appeal to reopen the case if the information was provided within the 60 day time frame. If eligible, authorized benefits will be based on the original application date, including any backdating.

7. June 9, 2014- Manual Release 14.15

Same Sex Marriage and Civil Unions


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Effective Immediately: Same Sex Marriages are considered the same as opposite sex marriages for purposes of determining eligibility for all cash, SNAP, and medical programs. Couples who are in a civil union are not recognized as married couples for AABD cash, SNAP, and community medical programs. Policy regarding civil unions and persons who receive long term care services will be issued in a separate release. Both same sex and opposite sex couples can enter into civil unions, which are treated as a separate legal status. Partners have the option to convert their civil union into a marriage.

8. Manual Release 14.17 June 24, 2014

Application for Benefits Eligibility (ABE), Integrated Eligibility System (IES), and ABE Customer Call Center. This release begins the process of replacing references to the Automated Intake System (AIS) with Integrated Eligibility System (IES) and incorporating IES terminology and processes in the manual with primary focus on PM/WAG 02, Initial Request for Benefits. Future Manual Releases from both DHS and HFS will continue the process to incorporate IES functions for program specific areas. Future Manual Releases will continue the process to incorporate IES functions for program specific areas. Applications completed through the ABE Customer Call Center require a telephonic signature to be filed. The ABE Customer Call Center is accessed by calling the DHS helpline at 1-800-843-6154. The Call Center only accepts medical and SNAP applications.

9. Manual Release 15.01 retains the CSRA amount that $109,560 and the CSMNA

amount at $2,739.

10. Reminder that effective 5-7-14 Policy Memo was issued describing the new Affordable Care Act (ACA) Adult Group. This indicated in that effective January 1, 2014 Illinois expanded medical coverage to adults, aged 19 to 64 years under the ACA adult program. All disability is not a factor of eligibility for the ACA adult group. Individuals enrolled in AABD spend down may choose ACA adult, if eligible. Resources must be verified when changing case from ACA adult to the aid to aged blind and disabled AABD. Long-term care supports and services LTSS including nursing home, supportive living, and community care program services. Individuals eligible under the ACA adult program may receive long-term services and supports (LTSS). Transfer of resource policy provisions apply to ACA adults in LTC. Also the HFS 3654 must be completed for persons requesting LTC.


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11. On July 16, 2014 there was a Policy Memo written introducing the integrated eligibility system (IES) which is designed to systematically perform case progression when determining eligibility for most cash and medical benefits. All temporary process for progressing a case to AABD medical in IES is described later in the memo.

12. On July 30, 2015 Policy Memo was issued describing the process for determining

eligibility for AABD medical when an individual is determined income in eligible for ACA adult due to income budgeting and has an adjudicated disability or claims to have a disability.

III. IL-NAELA’s occasion dialogue with Office of the Inspector General (OIG) for the Illinois Department of Health and Family Services (HFS) in 2013 and 2014. 2015 dialogue forthcoming at upcoming IL NAELA Un-program 5-1-2015

First, on June 14, 2013, Heidi Dodd, Illinois NAELA's Chapter Past President, arranged for Mason Budelier to present at the Illinois NAELA Un-program at John Marshall Law School. Mr. Budelier is an attorney with the Office of Counsel to the Inspector General's Office for the Illinois Department of Healthcare and Family Services. Mr. Budelier took a great deal of time to discuss the status of Medicaid reforms and he also answered quite a few audience questions, making the following points on procedural matters. (It should be noted that in 2015 Mr. Budelier moved to a different division and his position is now occupied by Matt Rogina, Esq.)

At the Illinois NAELA Un-program, held at the Hilton Lisle on November 30, 2013, John Marshall Law School in June of 2014, and The Hilton Lisle in November of 2014, Mr. Budelier graciously shared some additional insights.

On May 1, 2015, as the president of the Illinois Chapter of the National Academy of Elder Law Attorneys, I was privileged to welcome back for comments to the members of IL-NAELA in a general session, Matt Rogina and Kathy Butcher from the Office of the Inspector General, Illinois Department of Healthcare and Family Services. They were gracious enough to spend time speaking to our group about the Medicaid appeal process and the treatment of hardship waivers and this presentation was given at the O’Hare Campus of DePaul University.

IV. Recent Court Cases

Zahner: Slepicka: Bezzini:


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V. Recent Illinois Legislation – In the Midterm Legislative Report, the following are

notable: 1. Electronic monitoring bills

2. Healthcare power of attorney clarifications to become effective January 1, 2016

3. ABLE Act adoptive legislation in Illinois

4. Caregiver - presumptively void transfers legislation

5. Designation of family caregiver medical record and training of Family Caregivers

VI. General Categorization of Medicaid Eligibility Strategies for Long-Term Care

Remember that all Medicaid planning must be distinguished between: 1. Preplanning – some examples:

a. 5 year planning b. Outright gifts c. Gifts to trust d. Purchases and transfers (allowable or not) e. Personal care contracts- watch withholding requirements f. Purchase of home g. Purchase of child’s home h. Transfer home and retained a life estate i. Purchase a Medicaid compliant prepaid funeral services contract j. Purchase an exempt automobile k. Make renovations to home l. Payoff of existing mortgage

2. Crisis Planning – some examples:

a. Gifts with annuity b. Gift with promissory note c. Purchase of annuity for assets that exceed the CSRA d. Taking advantage of IRAs and IRA annuities e. Allowable transfers to the person’s spouse, or to another person for the sole

benefit of the person’s spouse, the person’s child, or to a trust established solely for the benefit of the person’s child, or to another person for the sole benefit of the institutionalized person’s child. Or to a trust described as a d4a trust for those who are disabled and under age 65, or to a D4c trust for those who are over age 65.

f. Transfer of home to a person’s spouse, a person’s child who is under age 21, an adult blind child, the person’s brother or sister who has an equity interest in the home and who was residing in the home for at least one year prior to institutionalization, the caretaker child who provided care for the person in who resided in the Homestead for the two years immediately prior to the date the person became institutionalized.


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g. Curing prior transfers h. Pleading hardship exceptions i. Divorce j. Spousal Refusal to Support (distinguishable from refusal to disclose- which

is not permitted)

VII. Medicaid application process/fair hearings and appeals – Proposed rule changes – Note: comment period is over and Bureau of Appeal Hearings (BAH) is now responding to comments presented in Springfield and Chicago by Illinois NAELA and other interested groups. Areas of proposed change by BAH are as follows:

1. Burden of proof 14.510 2. Burden of proof 14.25 3. Timing issue – reduction of benefits of the peel not filed in 10 days 4. Timing issue 10 day notice of hearing 5. Timing issue statement of facts two days before hearing 6. Attorney fees 7. Confidentiality 8. Impartial hearing officers 9. Venue 10. Postponement 11. Good cause for dismissal, continuance, postponement 12. Representative 13. Appealable issues

VIII. Hot Issues Discussed by Practitioners over the Last Year

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1

November 13, 2015

Medicaid and Estate Planning for Seniors: An Update

LAKE COUNTY BAR ASSOCIATION

ESTATE AND TRUSTS COMMITTEE CLE

2015©

Presented by:Anthony B. Ferraro

BS, MS‐Tax, CPA, JD

The Law Offices of Anthony B. Ferraro, LLC

Rosemont, Illinois

The Elder Law, Estate & Trust, and Asset

Protection Law Firm.

“The Laws of Aging for Boomers and Seniors”


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Today’s presentationI. Trapdoors for Estate & Trust Lawyers

II. Recent News

III. NAELA’s Conversations with the OIG for DHS

IV. Court Cases

V. Recent Legislation

VI. General Categorization of Medicaid Eligibility Strategies for Long‐Term Care

VII. Medicaid Application Process, Appeals & Proposed Rule Changes for Appeals

VIII.Hot Topics from Practitioners

I. Trapdoors for Estate and Trust Lawyers


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II. Recent News

III. NAELA’s Conversations with theOffice of the Inspector General (OIG) for the Illinois Department of Healthcare and Family Services (HFS)


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June 14, 2013: IL‐NAELA meeting with Mason BudelierMr. Budelier was an Attorney with the Office of Counsel to the Inspector General’s Office for the Illinois Department of Healthcare and Family Services

It should be noted that in 2015 Mr. Budelier moved to a different division and his position is now occupied by Matt Rogina, Esq.

November 30, 2013: Illinois NAELA UnprogramLastly, at the Illinois NAELA Unprogram, held at the Hilton Lisle on November 30, 2013, Mr. Budelier graciously shared some additional insights.


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May 1, 2015 – Illinois NAELA hears from Matt Rogina and Kathy Butcher from the Office of the Inspector General at the May 2015 Un‐programMr. Rogina reminded us that appeals can be filed for three reasons: 1) Spend down, if you have more than the eligibility amount,

2) Penalties, imposed for uncompensated transfers, meaning you transferred assets for less than the fair market value within the look back period, and

3) Failure of documentation, meaning you were unable to provide all the necessary documentation.

Allocation of responsibilities are as follows: 1)OIG/ LTC ‐ ADI unit handles transfer of assets for less than fair market value and issues relating to failure to provide documentation.

2) The local DHS offices handle matters regarding spend down, private pay rates, and the backdating of applications.

3) Bureau of Administrative Hearings (BAH) handles the hearings, grants continuances, and issues final administrative decisions.

Email Comments Finally, OIG has asked that mention be made of their universal mailbox that several people at OIG have access to in order to receive comments from practitioners. The effect of this universal mailbox address is to minimize the effect of any OIG staff turnover.

The universal mailbox address is: hfs.oig.ltc‐[email protected].


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IV. Recent Court Cases of NoteZAHNER

SLEPICKA

BEZZINI

V. Recent Legislation of Note


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In the 2015 Midterm Legislative Report, the following are notable:1. Electronic monitoring bills for Nursing Homes

2. Health Care Power of Attorney clarifications to become effective January 1, 2016

3. ABLE Act adoptive legislation in Illinois

4. Caregiver – presumptively void transfers legislation

5. Designation of family caregiver medical record and training of Family Caregivers

VI. General Categorization of Medicaid Eligibility Strategies for Long‐Term Care


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VII. Medicaid Appeals Process

Fair Hearing and Levels of AppealIf Medicaid Application is approved, confirm their income calculation regarding liability amount and spenddown amounts.

If Medicaid Application is denied, then: Applicant has 60 days to appeal.


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Pre‐Appeal Hearings The agency should hold a pre‐appeal hearing 10 days before the appeal.

The Administrative HearingThe hearing will be conducted in the county in which the applicant resides.


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Appealing to the Circuit CourtIn Illinois, the appeal of a final administrative decision must be filed within 35 days.

Appealing to the Federal CourtSection 1983 of the Civil Rights Act has traditionally been used to allow citizens appealing Medicaid denials to get into federal court.


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VII. Proposed Rule Changes for AppealsCOMMENT PERIOD IS OVER, BUREAU OF APPEAL HEARINGS (BAH) IS NOW RESPONDING TO COMMENTS PRESENTED IN SPRINGFIELD AND CHICAGO BY ILLINOIS NAELA AND OTHER INTERESTED GROUPS

Areas of Proposed Change by BAH1. Burden of Proof 14.5102. Burden of Proof 14.253. Timing Issue – Reduction of benefits if appeal not filed in 10 days4. Timing Issue – 10 day notice of hearing5. Timing issue – Statement of facts two days before hearing6. Attorney’s Fees7. Confidentiality 8. Impartial Hearing Officers9. Venue10. Postponement11. Good cause for dismissal, continuance, postponement 12. Representative13. Appealable Issues


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VIII. Hot TopicsHOT ISSUES DISCUSSED BY PRACTITIONERS OVER THE LAST YEAR

Thank you!


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Attorney Profile for 2015

Anthony B. Ferraro

BS– MSTax – CPA- JD

The Law Offices of Anthony B. Ferraro, LLC

Estate Planning/Protection for Boomers and Seniors

The Elder Law, Estate & Trust and Asset

Protection Law Firm

Columbia Centre I

5600 North River Road, #764

Rosemont, Illinois 60018

Phone (847) 292-1220

Fax (847) 291-1221

Email [email protected]

”Our passion, as Estate and Elder Law Attorneys, is to provide a law practice that creates

legal solutions to helps boomers and senior citizen-taxpayers avoid financial ruin due to

the devastating costs of death, taxes and long-term care”. - ABF

Mr. Ferraro has 37 years of experience as an Attorney and CPA with a MS in Taxation. He has managed his own private law practice for over 24 years. He is also a frequent guest lecturer for numerous bar associations, health care symposiums and organizations serving seniors and their loved ones. As an Estate and Trust attorney Mr. Ferraro plans and administers the estates of clients, giving particular attention to the impact of the client's dispositive wishes, asset protection planning, estate and income tax minimization, as well as the orderly and efficient administration of trusts and estates after death. As an Elder Law attorney, he and his staff focus on Elder Law, which combines ''senior” estate planning, disability planning, long term care planning, nursing home contracts and admissions, special needs planning, governmental benefits planning such as VA benefits, Medicaid asset protection planning and eligibility, Medicare eligibility, and estate and trust administration. He is the 2015 President of the Illinois Chapter of the National Academy of Elder Law Attorneys, and a member of the Elder Law Section Council of the Illinois State Bar Association, Elder Counsel, Wealth Counsel and the National Academy of Elder Law Attorneys. Mr. Ferraro is a past-President of the Justinian Society of Lawyers and a charter member of the panel of participating attorneys for the American Association of Retired Persons (AARP). He is also a past member of the commercial faculty of the American Arbitration Association. Having practiced now for years with in-depth experience, Mr. Ferraro is able to provide a diverse array of services to solve many of the problems concerning seniors, boomers and their families in matters of Estates and Trusts as well as Elder Law and Elder Care. Some of his other professional affiliations include the Illinois State Bar Association, the American Institute of Certified Public Accountants, and the American Association of Attorneys-CPAs, Inc. Areas of Practice: Elder Law . “Senior” Estate Planning

. Alzheimer’s Long Term Care Planning

. Long Term Care: Preplanning, Wait & See, and Crisis Planning

. Medicaid Asset Protection Planning & Medicaid Application Filing

. Nursing Home Application, Contract Negotiation and Admissions

. VA Benefits Planning

. Special Needs Planning


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mailto:[email protected]

Traditional Estate Planning, Wills & Trusts Guardianship Probate, Estate & Trust Administration Estate & Gift Tax Planning and Filing Matters

Certification/Specialties:

Certified Public Accountant (CPA), State of Illinois, 1978

Bar Admissions: Illinois, 1983 U.S. District Court Northern District of Illinois, 1983

Education: De Paul University College of Law, Chicago, Illinois, 1983 Juris Doctor

DePaul University Graduate School of Commerce, Chicago, Illinois, 1976 M.S. Taxation

DePaul University College of Commerce, Chicago, Illinois, 1973 B.S. Accountancy

Classes/Seminars Taught: Various- 2015 topics available on request Honors and Awards:

Past President, Justinian Society of Lawyers, 1996 – 1997

Professional Associations and Memberships:

National Academy of Elder Law Attorneys President for 2015 of the National Academy of Elder Law Attorneys – Illinois Chapter Wealth Counsel, Inc. Elder Counsel, Inc.

AARP Legal Services Network - Past Member, Panel of Participating Attorneys

AARP Legal Checkup Seminars Past Lecturer Illinois State Bar Association Past Elected Member of General Assembly

Illinois State Bar Association Current Member of Elder Law Section Council,

Past Member of Section Council on Business Advice & Financial Planning

Illinois State Bar Association Past Member of Standing Committee on Pensions and Profit Sharing

American Institute of Certified Public Accountants


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Illinois Society of CPA's Past Member, Estate and Gift Tax Section

DePaul College of Law Past Member, Alumni Association Board

American Association of Attorney-CPA's, Inc Past Member


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Documents

Medicaid and Estate Planning for Seniors An Update- Rev