Special Needs Community News
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VA Corner
The U. S. Congress last month passed legislation that would improve the health care of women veterans and provide support for caregivers of disabled veterans. Once the final legislative hurdles are cleared, the measure will go to President Obama for his signature.
Courtesy of Elder Law FAX, a free newsletter published by the Elder Law Practice of Timothy L. Takacs, December 14, 2009 issue.
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Wishing you a healthy and happy Holiday Season
from all of us at Elder Law Associates PA.
We provide The Elder Law Update to our clients and our colleagues who make up a wide range of service providers for seniors and people with disabilities to facilitate the dissemination of helpful and accurate information. We thank you for letting us share our knowledge with you. We continue to welcome your comments and questions. You may send them to Info@ElderLawAssociates.com. |
Bank Pays for Refusing to Honor Request Made Under a Power of Attorney
In a recent Florida case, Bank of America rebuffed the request of an agent under a durable power of attorney (POA) to withdraw funds from a jointly held account. The agent fought back in court and just won a $64,000 judgment against the bank.
Clarence Smith, Sr., named his son, Clarence Smith, Jr., as his agent under a POA. When his father no longer wanted to manage his own finances, he asked Clarence Jr. to step in as his agent. Clarence Jr. reviewed his father's account activity and became suspicious about some withdrawals from a bank account that Clarence Sr. owned jointly with a friend from his retirement community.
Acting as his father's agent under the POA, Clarence Jr., asked Bank of America to transfer $65,000 from the account into a new account that listed only his father as the owner. Before doing so, Bank of America contacted the other person named on the account. When she told the bank that she did not want the funds withdrawn and also accused Clarence Jr. of stealing his father's money, Bank of America refused to honor Clarence Jr.'s request. The other account owner then withdrew all of the funds from the account and placed them into her own account. Clarence Sr. died several weeks later.
Clarence Jr. sued Bank of America under a Florida law that imposes penalties on financial institutions that refuse to honor reasonable requests from agents named in properly executed POAs. In November 2009, after a week-long trial, a Florida jury returned a verdict against the bank and awarded $64,142 to Clarence Sr.'s estate. The jury found that Bank of America had not acted reasonably when it rejected Clarence Jr.'s request, even though the joint owner of the bank account had not agreed to the release of the funds.
Bank of America plans to appeal. "We believe that neither the facts nor the law support the verdict," said spokeswoman Shirley Norton. |
Medicare's Open Enrollment Season Has Begun
 It is that time of year again -- time to reassess whether your Medicare plan is working for you. Medicare's open enrollment period began November 15 and continues until midnight December 31. During this period, you may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. In addition, during this period you can return to traditional Medicare from a Medicare Advantage (managed care) plan, enroll in a Medicare Advantage plan, or change Medicare Advantage plans. Beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage.
If you take no action, you will remain in your current plan unless your Medicare Advantage or drug plan is terminating its Medicare contract. Also, if you receive the Low-Income Subsidy (LIS) to help pay for some or most of your Part D drug costs, you may be randomly reassigned to a different plan. (For more on the LIS program, also known as "Extra Help," click here.)
But even beneficiaries who were satisfied with their plan in 2009 need to review their options for 2010. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions and appeals. Medicare Advantage plans can change their entire benefit package as well as their provider network.
Average premiums for prescription drug plans will rise 11 percent from $35 in 2009 to nearly $39 per month in 2010, which is a 50 percent increase from $25.93 in 2006, the first year of the Medicare Part D drug benefit. Also, more drug plans will charge a deductible in 2010. Sixty percent of plans will charge a deductible, up 15 percent from 2009. The number of plans that offer enrollees some coverage in the doughnut hole -- the coverage gap when consumers pay the full price for their prescriptions -- continues to shrink as well.
At www.medicare.gov/MPDPF you can evaluate drug plans. The Web site allows you to enter the list of medications you currently take to determine the amount that each prescription drug plan available in your area charges for premiums, copayments, and deductibles. It also allows you to compare Medicare prescription drug plans based on customer service and other criteria. You can compare Medicare Advantage and Original Medicare plans at www.medicare.gov/MPPF/. If you are enrolled in a Medicare Advantage plan, chances are it offers its own prescription drug coverage.
Some factors to look at when evaluating your drug plan include:
- What is the monthly premium?
- Does the plan continue to cover necessary drugs?
- Does the plan provide coverage for drugs in the "doughnut hole" or coverage gap?
- What pharmacies are covered under the plan?
Some factors to look at when comparing Medicare Advantage plans include:
- What is the monthly premium?
- What is the cost sharing for doctor visits?
- Which doctors and hospitals are covered?
- Are any extra benefits included and will they be useful to you?
Additional Resources
The Center for Medicare Advocacy offers a detailed list of things to consider when evaluating Part D and Medicare Advantage plans. For the list, click here.
For a useful checklist, "10 Factors to Consider When Choosing a Medicare Drug Plan," which includes a link to a Drug Plan Comparison Worksheet to help you compare drug plans side by side, click here.
For the Medicare Rights Center's "What questions should I ask before joining a Medicare private health plan?" click here.
For the Center's "Enrolling in Part D and Changing Drug Plans," click here.
Medicare's Medicare and You handbook was mailed to all Medicare beneficiaries in October. The handbook is also available online. To download an copy, click here.
The Kaiser Family Foundation has published three "Data Spotlights" on "Medicare Advantage Availability and Premiums," "Part D Plan Availability in 2010 and Key Changes Since 2006," and "Medicare Part D 2010: The Coverage Gap."
For more information on Medicare, click here. |
| The Effects of Health Care Reform on Long-Term Care
 Most of the discussion about health reform has centered around issues like the "public option" and abortion restrictions. But buried in both the House and Senate reform bills are important provisions that would make long-term care more affordable, help the elderly and disabled remain at home rather than move to a nursing home, and make nursing homes safer for those who have no choice.
The CLASS Act
The Elder Law Update has discussed the CLASS Act in earlier articles. This initiative would establish a new national long-term care insurance program offering basic help for the elderly and disabled. After paying a modest monthly premium for five years, Americans would be covered under the program and eligible to receive benefits averaging around $50 a day to pay for a range of long-term care services that would help them stay in their home. Versions of the CLASS Act are contained in both the health reform bill passed by the House, the Affordable Health Care for America Act, and the bill now being debated in the Senate, the Patient Protection and Affordable Care Act. (For an opinion article calling the CLASS Act "A Flawed But Powerful Game-Changer for Long-Term Care," click here.)
Ending Medicaid's Institutional Bias
The Senate bill contains a number of provisions aimed at ending Medicaid's "institutional bias," which forces elderly and disabled individuals in many states to move to nursing homes because Medicaid will not pay for care that could be provided at home and in the community, often at much less cost.
For starters, the Senate bill includes the Community First Choice Option, which would give states more federal Medicaid money if they set up community services and supports for Medicaid recipients who otherwise would require nursing home care. (The House bill includes a statement of support for the Community First Choice Option.)
The Senate bill also would give increased Medicaid funding to states that can divert more Medicaid recipients from nursing homes and other institutions to home and community-based care. And the bill extends for another five years an important demonstration project in 31 states called Money Follows the Person. This program encourages states to transition Medicaid recipients from institutions to the community, where they will continue to receive Medicaid coverage through new community services.
The Senate proposal would give the spouses of Medicaid recipients who are receiving services at home or in their community the same financial protections that the spouses of nursing home residents currently enjoy. However, under the current measure spouses would not become eligible for these protections until 2014 and the protections would disappear in five years unless renewed by Congress.
Finally, a "Sense of the Senate" provision of the bill states that, "(1) during the 111th session of Congress, Congress should address long-term services and supports in a comprehensive way that guarantees elderly and disabled individuals the care they need; and (2) long term services and supports should be made available in the community in addition to in institutions."
Nursing Home Protections
Both the House and Senate bills would help protect nursing home residents and other long-term care recipients from abuses, and give families of nursing home residents more information about the facilities their loved ones already reside in or are considering as a future residence.
Both bills would set up a nationwide program for national and state background checks of long-term care employees who have direct contact with patients. Both bills would also require nursing homes to publicly disclose all individuals and entities that own, govern, operate, finance, provide services to, or control them. In addition, information about nursing home staffing levels -- including hours of care per resident day, turnover and retention rates, and facility expenditures for wages and benefits -- would be added to Medicare's Nursing Home Compare Web site.
To read the House-passed Affordable Health Care for America Act, click here.
To download a copy of the Senate's Patient Protection and Affordable Care Act in PDF format, click here.
(If you do not have the free PDF reader installed on your computer, download it here.) |
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Book Review: Because I Love You: Have It Your Way-Make Your Own Arrangements and Spare Your Loved Ones
 Judy Herzog-Chmielarz. Because I Love You. BecauseILoveYoutheBook.com. 2009. 84 pages. $11.95 (click on book to order)
Because I Love You presents a different approach to what is often very difficult to discuss, let alone accomplish: preplanning your own arrangements. Yet taking this approach can prevent sibling rivalry, estranged relations, disputes, and legal actions that can be associated with a loved one's passing. This book, in a loving and sometimes tastefully humorous way, constantly reminds you to expand your thinking, to understand that you are so much more than your physical body. The author offers simple meditation techniques that will make it easier for you to complete a brief, fill-in-the-blanks workbook to get you started on making those arrangements. Once you have made them, you will be rewarded by the feelings of relief and satisfaction that come from accomplishing a difficult task. And then, knowing your plans are in place and your loved ones are protected, you can get on with the joy of living your life.
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End-of-Year Tax Planning Considerations
 As the New Year approaches, taxpayers around the nation are thinking about making gifts or other financial moves before January 1 that will benefit them come April 15, 2010. Here are some year-end considerations of particular interest to seniors.
A Reprieve on RMDs
Last year, as the stock market plunged and the economy teetered on the brink, Congress suspended the penalty for seniors who fail to take the required minimum distribution (RMD) from their IRA and employer retirement accounts in 2009.
There is normally a penalty for failure to withdraw once the account owner reaches retirement age -- after age 70 1/2. Taxpayers generally must begin taking annual distributions from their retirement accounts by the April 1 occurring after they reach age 70 1/2 or pay a whopping 50 percent excise tax on the amount that should have been distributed but was not. To prevent seniors from being forced to sell stocks in a down market, Congress suspended the required minimum distribution rule for 2009.
If you turned age 70 1/2 before 2009, you would normally be required to take your 2009 distribution by December 31, 2009. If you turned or will turn age 70 1/2 in 2009, you would normally be required to take your required distribution no later than April 1, 2010. In either case, you will not need to take this distribution. The new law also waives 2009 distributions for beneficiaries of inherited IRAs and employer retirement accounts. However, taxpayers still must take their 2010 distributions no later than December 31, 2010.
Gift Threshold Now $13,000
The amount that may be gifted each year to any one person without the need to file a gift tax return rose from $12,000 to $13,000 on January 1, 2009. The increase to $13,000 means that more can be given away for estate tax planning purposes. For example, a married couple with four children will be able to give away up to $104,000 in 2009 with no gift tax implications.
Charitable Donations From an IRA Not Taxable
As part of the large financial rescue package, Congress retroactively extended the IRA charitable rollover provision from January 1, 2008, through December 31, 2009. This reinstates the rollover exemption that was part of the Pension Protection Act of 2006.
Previously, those wishing to make charitable donations using money in their IRA accounts were required to withdraw funds from their IRA and pay income tax on the withdrawal before they could take a charitable donation deduction on their annual tax returns. But under the new law, so long as the donation is transferred directly from a traditional or Roth IRA or rollover IRA account to an eligible public charity, the donor does not have to pay any income tax on the withdrawal at all. As far as the federal government is concerned, money donated to the charity simply is not income. (But note that the transfer is no longer eligible for the charitable tax deduction, either.) For details and restrictions, click here. For more from the IRS on this and other charitable donation rules, click here.
Rollover Retirement Distributions
Those 70 1/2 or older who took a distribution from a retirement plan or IRA earlier in the year may be able to avoid tax on the payout by rolling it over into an eligible retirement plan (including an IRA) before December 1, 2009.
Retirement Contributions
A great way to reduce taxable income is to contribute funds to an IRA or to your 401(k) through work. In addition, the income on assets in the IRA or qualified plan are deferred until the withdrawal is made. The contribution limits for traditional and Roth IRAs remain the same for 2009 as in 2008: $5,000 for a single person and $10,000 for a couple, or $6,000 for a single person if over 50 and $12,000 if both spouses are over 50 and married. If you are self-employed, the contribution limite for a SEP-IRA or a simple IRA is $49,000 per year. Keep in mind that there are limitations on the contributions that may be made based on income and other specific data.
Take Advantage of Losses
Even though the market has posted gains since the dark days of last March, many investors still have long-term capital losses on investments held longer than one year. You can deduct up to $3,000 of these losses a year against ordinary income, with the excess carried forward for use in future years.
New Roth Rollover Rules Take Effect Jan. 1
Before January 1, 2010, you can convert a traditional IRA to a Roth IRA only if your adjusted gross income is less than $100,000. The income limit is lifted on January 1, at which point anyone will be able to rollover a traditional IRA to a Roth. Roth IRAs grow tax-free, but you will have to pay taxes when you convert a regular IRA to a Roth. However, the tax bill can be spread over two years. For details on Roth rollover rules from Kiplinger.com, click here. For an article on the benefits of Roths for heirs, click here.
If you have questions about how to take advantage of tax-saving opportunities before year's end, send us an email to schedule a consultation with one of our Elder Law Attorneys or consult with your financial advisor. |
| No Change in Medicaid Spousal Impoverishment Standards for 2010
 For the first time since 1989, when a law was enacted protecting the spouses of institutionalized Medicaid recipients from impoverishment, the federal Centers for Medicare and Medicaid Services is not raising its guidelines for how much money the husbands or wives of institutionalized Medicaid recipients may keep. With no increase in the consumer price index on which these figures are based, the resource and income guidelines that prevailed in 2009 will apply in 2010 as well. This follows the announcement by Social Security Administration that there would be no cost of living increase in Social Security benefits.
In 2009 and 2010, the spouse of a Medicaid recipient living in a nursing home (called the "community spouse") can keep as much as $109,560 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. 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. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2009 and 2010 is $21,912.
Meanwhile, the maximum monthly maintenance needs allowance for 2009 and 2010 is $2,739. 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 of $1,821.25 took effect July 1, 2009, and will not change until July 1, 2010. 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.
For a more complete explanation of the community spouse resource allowance and the monthly maintenance needs allowance, click here. | |
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Elder Law Associates PA is a boutique elder law firm that practices exclusively in Medicaid and long term care planning including long term care insurance, Medicaid applications, home and community-based Medicaid waiver services, diversion program benefits, nursing home benefits, spousal refusal applications, and Medicaid fair hearings and appeals; nursing home and assisted living facility residents' rights litigation; asset preservation planning with a special focus on planning in light of the Deficit Reduction Act of 2005, including personal service agreements, the purchase of life estates, income producing real estate and spenddown planning; disability planning, including special needs trusts and guardianship; estate planning, including wills and trusts and advance directives; and probate, which encompasses estate and trust administration as well as litigation.
We assist clients in planning for the possibility of disability, incapacity, home health care, assisted living and/or nursing home placement. Our firm enables clients to avoid impoverishment caused by the escalating cost of long term care, to maintain their right to make health care decisions and to avoid unnecessary medical treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at Info@ElderLawAssociates.com.
Warm regards, happy holidays and a happy, healthy New Year,
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Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA, CAP
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
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