Medicare Open Season – Important Deadlines

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The Medicare Open Enrollment window for 2020 runs from October 15, 2019 until December 7, 2019. Individuals who prefer not to have responsibility for out of pocket costs might consider enrolling in a Medicare Part F plan, which covers most deductibles and out of pocket costs. It is critical to enroll in such a plan during the upcoming open season window, because Part F plans are being phased out and will no longer be available to Medicare enrollees who are not enrolled in such a plan, or have not elected to enroll, as of December 31, 2019.

Medicare Part C enrollment will also be phased out for individuals who have not enrolled in a Medicare Part C plan as of December 31, 2019. Medicare Supplemental Plans C are private plans that deliver Medicare Part A and B services through a private insurance company.

The bottom line is that seniors and disabled individuals who will be eligible for Medicare A prior to January 1, 2020 and who prefer Medicare Part C or F coverage will need to sign up for these plans during the upcoming open enrollment period.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

ABLE Savings Registry – The Gift that Keeps on Giving

ABLE Program in New JerseyABLE accounts are special, tax qualified disability savings vehicles for seriously disabled individuals, who had a qualifying disability incurred prior to age 26.  As long as the rules of the ABLE program are complied with, a seriously disabled individual can receive up to $15,000 (in 2019) in funds in an ABLE account without the funds being counted against him in determining the individual’s eligibility for public benefits, including Medicaid and Supplemental Security Income.

Favorable income tax provisions apply to protect the income earned on funds contributed to an ABLE account, as long as the contribution is not distributed out of the account, or if the contributions are distributed out of the ABLE account, any income is not subject to federal income tax to the extent that it is spent during the same calendar year for qualified disability related expenses.

Qualified disability expenses are expenses which relate to the account beneficiary’s blindness or disability and enhance his or her enjoyment of life as a result of the disability. Qualified disability expenses can encompass basic living expenses, transportation, education, assistive technology, legal expenses, medical care and education and training.

Here is a digital-age tip for parents, grandparents and gift-giving relatives of young adults who are eligible for an ABLE account and want to attend college. There is a new, web platform www.giftofcollege.com which can help make saving for college (while continuing to qualify for means-tested public benefits) easier than ever.  The new platform enables a disabled individual eligible to link their ABLE account to an online profile. Invitations to contribute funds can also be sent electronically.

For more disability savings strategies and resources, consult with an experienced special needs and disability lawyer.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Is My Memory Loss Normal Aging or Something More?

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Garden variety memory lapses, like misplacing car keys, are normal, but where do you draw the line? A good rule of thumb is that if you notice that your loved one has repeated episodes of memory loss, and/or troubling personality changes or difficulty performing everyday tasks, like driving or financial management, it could be time for a crisis elder care plan. Here are some red flags to watch for:

  • Asking the same questions over and over again;
  • Repeating the same stories;
  • Difficulty paying bills, balancing the check book or reading a bank or credit card statement;
  • Difficulty adding and subtracting;
  • Late notices and missed payments, unopened mail accumulating;
  • Paying the same bill multiple times in the same month;
  • Difficulty performing everyday tasks (getting lost and being unable to find your way home, forgetting how to operate a home appliance);
  • Decline in personal hygiene (not bathing or brushing teeth, wearing the same clothing day after day);
  • Inappropriate attire, behavior, statements and/or language;
  • Confusion or word-finding difficulty (ex. asking where the “bread-thingy” is instead of where the toaster is;
  • Inability to retain new information; and/or
  • Irritability or foul language, behavior consistent with depression, apathy, anxiety, agitation, delusions and hallucinations, wandering, aggression

If you notice one or more of these signs, it may be a good idea to contact an elder lawyer without delay. An elder lawyer can help you find the best care and a way to pay for that care with public benefits, while protecting your life savings and the family home.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Support for New Jersey’s Unpaid Caregivers

Support for New Jersey’s Unpaid Caregivers

Caregiving, done well, can be the ultimate act of service and potentially a game-changer, enabling an elderly or functionally disabled individual to remain at home surrounded by their family, friends and happy memories.

However noble and important, caregiving often imposes a heavy financial, physical and emotional toll on unpaid caregivers, who statistically face a higher incidence of missed time from work, loss of employment, and of developing adverse emotional conditions such as anxiety, depression, and burn out, adverse health conditions and even physical injury.

The value of self-care on the part of the caregiver is essential. At a minimum, caregivers should take regular breaks, get physical exercise, maintain good nutrition and get plenty of rest, which is often easier said than done. With the number of elderly and disabled individuals reliant on care from unpaid caregivers projected to double by 2020, unpaid caregivers will face unprecedented challenges.

The state of New Jersey has taken up the challenge of supporting caregivers with recently enacted Public Law 2018, c166. Passed by the New Jersey legislature and signed by Acting Governor Sheila Oliver on December 28, 2018, the new law establishes the New Jersey Caregiver Task Force. The purpose of the task force is to evaluate existing supports for New Jersey caregivers and to develop recommendations for the improvement and expansion of caregiver support services within our state. The task force will take testimony from caregivers regarding the care duties performed, the sufficiency of caregiver training programs, the costs which caregivers face and their own personal caregiving experiences.  The task force will prepare a report with recommendations for new laws and regulatory or program changes to improve, expand and supplement existing caregiver support programs and systems within the state.

New Jersey’s new focus on caregivers is not unprecedented. In 2017, the state of Hawaii passed the Kapuna Care Act, which established the Kapuna Caregivers Assistance program to provide family caregivers who work with resources to help pay for care services for elderly individuals over age sixty residing in the community and requiring assistance with at least two activities of daily living or having substantial cognitive impairment.  Under the Hawaiian model, cash payments are available to help working caregivers defray some care-related costs.

At the federal level, the RAISE Family Caregivers Act was signed into law on January 8, 2018, and directs the Department of Health and Human Services to develop, maintain and update a National Family Caregiving Strategy and to convene a Family Caregiving Advisory Council. The Act defines family caregivers as adult family members or other individual having a “… significant relationship with” and providing “a broad range of assistance to an individual with a chronic or other health condition, disability or functional limitation.” The bill is designed to specify recommended actions which can be undertaken by federal, state, and local governments, communities, health care providers, and long term services and supports to assist family caregivers.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Critical Update – New Veteran’s Improved Pension Rules: What It Means for U.S. Veterans & Their Families

Critical Update on New Veteran's Improved Pension Rules: What It Means for U.S. Veterans & Their Families

Many veterans and their spouses with cognitive impairment or who require assistance with their activities of daily living rely on the Veterans Improved Pension to pay for their care.  The benefit is a needs-based monthly payment as high as $1,176 per month for a surviving spouse and $2,169 monthly for a veteran in 2018. As such, the benefit is suitable to fund an assisted living co-pay, or care in the home.

Eligibility depends in part on the claimant’s net worth.  Up until October 17, 2018, prospective claimants can transfer assets to family or to a trust, without any penalty or a lookback period, unlike Medicaid.  But this will soon change.

On October 18, 2018, the old rules will sunset and new rules, which will make it more difficult for some veterans to qualify for the Improved Pension, will go into effect on the following day. As such, veterans now have a very narrow planning opportunity, but the planning window is closing fast. The new rules will bring about major changes to the eligibility rules for the Improved Pension, including:

  1. Denials to claimants with net worth exceeding the sum of $123,600. Net worth means the sum of a claimant’s or a beneficiary’s assets and annual income. If the claimant’s net worth falls below this threshold, eligibility will be feasible.
  1. Penalty periods. Penalties will now be imposed for gifts made after October 18, 2018.  A penalty period is a temporary disqualification for the Improved Pension or other applicable needs-based benefit. During the penalty period, the claimant does not receive the Improved Pension benefit. The length of the penalty period is derived from the total assets given away during the three year period running retroactively from the date of the filing of the claim, divided by the maximum annual pension rate (MAPR). The penalty may be as long as five years. Here is an example illustrating how the penalty period will be computed:

Example:

Assume that Sergeant O’Leary, an honorably discharged U.S. military veteran who served on active duty for at least 90 days during a period of wartime, owns countable assets in the sum of $130,000.

Sergeant O’Leary needs assisted living care and wants to qualify for the Improved Pension.

Sergeant O’Leary buys an irrevocable annuity on November 15, 2018, in the principal amount of $10,000.  Because the annuity is irrevocable, after the expiration of any “look see” period required by local law, Sergeant O’Leary cannot liquidate the annuity. Throughout the term of the annuity, the annuity payments made to Sergeant O’Leary will be treated as income to him in computing his net worth for the Improved Pension. See 38 C.F.R. § 3.276(a)(5)(ii).

If Sergeant O’Leary applies for the Improved Pension (or any other needs-based benefit) any time between November 15, 2018. Sergeant O’Leary’s three year lookback period for the annuity purchase begins on December 1, 2018. If Sergeant O’Leary files a claim during the three year lookback period, he will be subjected to a penalty due to the irrevocable annuity purchase.

How is the penalty computed? If, when Sergeant O’Leary purchased the annuity, the MAPR in effect was $24,000 annually, that computes to a $2,000/monthly penalty divisor.  Based on this MAPR factor, the penalty for  the irrevocable annuity is computed at 5 months ($10,000 divided by $2,000 month equals 5 months).

  1. Grandfathered transfers. Gifts made before October 18, 2018 will be grandfathered into the old rules and will not result in a penalty.
  1. Size based residential real property exemption. The primary home and up to two acres of surrounding land are disregarded from the claimant’s assets for the net worth test, regardless of value.
  1. New limitations on medical expenses deductible in computing net worth. As of October 18, 2018, only certain categories of medical expenses can be used to offset the claimant’s income for purposes of the net worth test. Expenses for unlicensed in-home care providers can no longer reduce net worth, unless the disabled individual is receiving health care or custodial care, and the payments are commensurate with the number of hours that the provider attends to the disabled person. In addition, the disabled individual must also have been awarded Aid and Attendance or is Housebound; or a physician, physician’s assistant, certified nurse practitioner, or clinical nurse specialist must have stated in writing that, due to a physical, mental, developmental, or cognitive disorder, the disabled individual requires the health care or custodial care that the in-home attendant provides.

Questions? Let Jane know.

Jane Fearn-Zimmer is an attorney at Flaster Greenberg PC that specializes in veteran affairs. She’s an accredited attorney with the U.S. Veterans Administration, the editor of the Elder Law Report, Including Special Needs Planning, a national trade journal for elder law and special needs attorneys, and is very educated on the new changes and what it means for veterans across the U.S.

Financial Support for an Adult Disabled Child

Financial Support for an Adult Disabled ChildEven with child support payments from the non-custodial parent, raising a special needs child on a single parent’s income can be very challenging. N.J.S.A. 2A:17-56.67, a relatively new New Jersey emancipation law, requires termination of child support at age 19 unless otherwise provided in a court order or a judgment. As a practical matter, this means that the parents of adult disabled children who have prior court orders mandating continued child support after age nineteen, must either submit a written request for the continuation of the child support obligation prior to the nineteenth birthday of the child in question, or, if the child’s nineteenth birthday has already passed, the custodial parent must petition the Probate Court, rather than the Family Court, for continued financial support of the adult disabled child, even though the support obligation is already provided for in the court order.

The new law, enacted in 2015, further provides that the obligation to pay child support must terminate by operation of law when the child (who may be a special needs child) reaches the age of twenty-three. The custodial parent of an adult special needs child then bears the burden of seeking a court order for financial maintenance or reimbursement, as authorized by law.

The custodial parent is frequently the economically disadvantaged parent and the new law and the proposed new court rule will likely disproportionately impact these families. Among other things, the custodial parent must learn to navigate an entirely different set of legal rules and will no longer have the enforcement mechanism of the Probation Department.

Recently, I worked together with other elder and family law attorneys to advocate for the disability community on these issues. The Elder and Disability Law Section of the New Jersey State Bar Association presented this letter to the New Jersey State Bar Association, with the goal of making the process of obtaining continued financial support for an adult disabled child after the age of 23 as easy and cost-effective a process as possible.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Involuntary Commitment Proceedings –Who Pays for That?

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An involuntary commitment, or civil commitment, proceeding, is a summary legal action filed in order to obtain a court order to require a mentally ill individual to receive necessary psychiatric treatment against his or her wishes, pursuant to N.J. Rule of Court §4:74-7 and N.J.S.A. §30:4-27.2.  Typically, the involuntary commitment process is initiated through a mental health screening, but the process can also be filed by a prosecutor or the Attorney General. Only individuals who are shown by clear and convincing evidence to present a danger to themselves may be involuntarily committed.

An order for involuntary commitment must be issued within 72 hours, and the hearing itself must be held in no more than 20 days.  The individual who is the subject of an involuntary commitment hearing has the right to an attorney to represent her in the commitment proceedings. The existence of involuntary commitment proceedings does not mean that an individual has been adjudicated incapacitated, nor does it mean that her rights, such as the right to bear arms, the right to drive, the right to have visitors, to receive medical treatment, and to fresh air and exercise, are removed or restricted.  The only mechanism to restrict these rights is to obtain a guardianship order from the Superior Court, which is an entirely different proceeding governed by different rules.

By law, the State of New Jersey is required to bear ninety percent of the cost of an involuntary commitment, leaving the remaining ten percent to be borne by the involuntarily committed individual. The financial evaluation process is undertaken by the county adjuster’s office. If it is determined that the individual can afford to pay for the cost of their psychiatric care, the county adjuster seeks a court order requiring the individual to pay for the cost of psychiatric care, which can impose a heavy financial burden on the former patient.

It is important to know that hospitals and the county adjuster’s office are required to follow strict regulations in collection matters arising from emergency hospital admissions and psychiatric emergency screening services.  Charity care regulations apply where a financially eligible patient becomes involuntarily committed as the result of a hospital emergency room admission. Newton Medical Center v. D.B., No. A-5101-15T4 (N.J. Super. App.Div., January 17, 2018.  The case involved an uninsured patient who was admitted to a hospital emergency room during a psychotic episode, and was involuntarily committed. After the patient’s release, the medical center billed the patient the sum of $65,000 bill for the eleven days of care, reduced the bill due to the patient’s lack of insurance, and attempted to collect on the reduced bill. At the trial level, the Court entered summary judgment in favor of the hospital.  The Appellate Division reversed the trial judge’s decision, ruling that the hospital could not recover from the former patient, because it did not contact the patient as required by the charity care regulations.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.