Step-by-step guide to enrolling in a pooled income trust for Medicaid spend-down

This article is intended as a condensed road-map for using a pooled income trust to eliminate the Medicaid spend-down.  This article contemplates that the individual is applying for Medicaid in order to obtain home care services.  The sequence of events will be different if that is not the case.

I am leaving out some of the details here, so if you are planning on trying this, I advise you to also review our longer memo on this topic (updated 2018)  You don't need to have a lawyer to enroll in a pooled income trust, but you should have a social worker or someone else familiar with Medicaid to help you.

Watch this taped seminar by David Silva, Asst. Director of the Evelyn Frank Legal Resources Program, explaining pooled trusts.  (July 16, 2013)

Step One - Apply for Medicaid Home Care with a Spend-Down

The first step is to apply for Medicaid home care with a spend-down.  In New York, certain categories of Medicaid applicants can get Medicaid health coverage even though their income is over the income limit.  Those who receive Medicaid home care services can "meet" their spend-down by getting billed for their home care.  They will get billed for the amount by which their income exceeds the applicable income limit (e.g., a single person with $1200/mo. countable income would get billed $433/mo [$1200 - $767 = $433]).  It is those clients who are unable to afford to pay this bill who are most appropriate for a Pooled SNT.  Read this memo for more information on eligibility for Medicaid home care.

Step Two - Enroll in the Supplemental Needs Trust

The second step, which can actually start at the same time as the Medicaid application, is to enroll in a pooled income trust.  A pooled income trust is a type of Supplemental Needs Trust operated by a non-profit organization for the benefit of many people with disabilities.  There are many Pooled SNTs in New York, with different minimum deposits, fees, and policies.  Thus, the process of enrolling in a pooled trust varies by organization.  Generally, it involves submission of the following:

1. Joinder Agreement, filled out and signed before a notary public

NOTE:  An agent appointed by a valid Power of Attorney may execute this agreement on behalf of applicant. However, HRA in July 2017 issued a policy saying that POA's executed after Sept. 1, 2009 must include a Substantial Gift Rider (SGR) along with the POA form.  HRA will reject the trust as invalid without this rider.  Under state law, a POA must be executed at the same time as the SGR.  Therefore, if there is no SGR, either the POA must be re-executed as new or the applicant, if s/he has capacity, can sign a new joinder agreement directly. At least one pooled trust -- CDR-- will amend an existing trust if provided with the re-executed documents.  Then that re-approved trust should be sent to HRA with the request for approval.   HRA has not yet said if such amended trusts will be approved.

2. Copy of beneficiary's Social Security Award Letter, showing the type of benefit received (e.g., Retirement, Disability, Survivor's) and the claim number (Social Security number).  If you request an Award Letter from the SSA website, you can specify which information you want it to include (e.g., Medicare eligibility dates, date of birth).  It is recommended to include all available information on the Award Letter.

3. Guaranteed funds (cashier's check, certified check, or money order) payable to pooled trust organization for the initial deposit

For help determining the appropriate amount to contribute each month to eliminate your spend-down and obtain the Medicare Savings Program, you can use this Excel worksheet.

Eventually, Medicaid will reduce your spend-down to zero retroactively to the month you began contributing to the trust.  For this to work, you must continue sending your contribution to the trust every month.  However, once you are approved for Medicaid homecare with a spend-down, you will be expected to pay your spend-down to your Managed Long-Term Care plan every month, which you will be unable to do because you're sending it to the trust.  You can explain to the plan that your spend-down will eventually be retroactively reduced to zero, and therefore the plan will be able to back-bill Medicaid for the spend-down.

Once approved, the pooled trust organization will send you the documents you will have to send to Medicaid to get your spend-down rebudgeted.

Step Three - Notify Medicaid About the Supplemental Needs Trust

The last step is to notify Medicaid that you have a pooled trust.  For all documents below, send copies and keep the originals for your files.  There are two things you have to show to the DSS: that you are enrolled in an SNT (and making contributions), and that you are disabled:

• Proof of SNT
  • Master Trust Agreement 
  • Joinder Agreement, signed by both you and the trustee
  • Verification of Deposits made to the pooled trust
  • Acceptance Letter

• Proof of Disability

  • If you have been approved for either SSDI or SSI benefits on the basis of a disability, then all you have to send to prove disability is a copy of your SSA Award Letter stating that you are disabled.  Otherwise, you need to send the documents below and ask the DSS for a disability determination.

  • DSS-486T - Medical Report for Determination of Disability (Rev. 6/2012))
    This form needs to be filled out by your doctor(s).  In January 2013, HRA published a Medicaid Alert stating that applicable medical records must be included with 486T form.  NOTE:  The 486T form revised in June 2012 shortens this form from a 25-page form to a one page form, which will be less intimidating to doctors.   The old form consisted of numerous attachments that elicited information about the different body systems, such as a musculoskeletal or cardiac impairments.  Those  attachments, while burdensome, were helpful to show the criteria for "meeting the listings"-- Step Three in the sequential evaluation process described  in this article.   While no longer required, you might find some of these attachments helpful as a guide for the physician to provide information about particular conditions.  Click here for the old 486T.

  • DSS-1151 - Disability Questionnaire (Rev. 6/2012 to replace Disability Interview Form)
    This form can be filled out and signed by a social worker or family member.

  • LDSS-1151.1 (6/2012) Disability Questionnaire Continuation Sheet - provide names, addresses of all medical providers and hospitals where care received in order for State to obtain medical records.

  • OCA Official Form 960 - NY State HIPAA

  • Submit four copies of this form total, signed and dated by the applicant.  One of these should be filled out authorizing HRA to discuss the case with the submitter of the trust paperwork.  The three remaining copies will be used by HRA if follow up with providers is necessary to complete its review.  See this Medicaid Alert for more information.  NOTE:  HRA may incorrectly request that you also submit MAP-751E, a different HIPPA form.  On April 8, 2014, HRA confirmed that this form is not required as long as the OCA Form 960 is submitted.   IF you run into this problem please e-mail eflrp@nylag.org and provide the detailed client and case information.

• Cover Letter

  • Enclose a cover letter with this great packet of information, to explain what you are asking the DSS to do (rebudget your Medicaid case with no spend-down) and why (because you have an SNT and are disabled).  You can use this sample cover letter as a starting point.  You should customize it to apply to your specific impairment(s) and the information in the 486 and 1151 forms. 

  • Use the NYS Medicaid Disability Manual as a guide, which explains the "sequential evaluation process" for determining disability, has the Listing of impairments, and other information.

  • You should also ask to be enrolled in the Medicare Savings Program (MSP), to have your Medicare Part B premium paid by the State.  Just as the SNT has brought your income under the limit for Medicaid, it has also brought it under the limit for the MSP.  Click here for more information about this program.

• Government Directives

  • It may help to enclose also copies of the Federal, State, and local directives instructing DSS workers how to process SNT cases.

STEP FOUR  - Follow-Up and Ensuring Medicaid Re-Budgeting Done Correctly

Once you have submitted the SNT and disability documentation to your DSS, they will typically take many months to process this information.  You should eventually get a written notice stating that your Medicaid case has been rebudgeted with no spend-down.  Make sure that the effective date of this notice is correct - it should be the month that you first began contributing your excess income to the trust.  If it is not correct, you may have to request a Fair Hearing to appeal the notice (click here to request a hearing).

As you can see, this is one of the most complicated things you can do involving Medicaid.  Many people find that it is worth hiring a private elder attorney  or geriatric care manager to help with this process.  Some free legal services may be available to help, also.  For more in-depth information on SNTs, including how an SNT affects eligibility for other public benefits, see our Training Outline for Advocates.

TROUBLESHOOTING - Each local Medicaid office may have contact people to troubleshoot problems.

In NYC - here are suggested contacts within HRA.  CAUTION:  Time limit to request a hearing can run out, even when you are trying to informally advocate.  Keep your eye onthe deadlines! 

HOME CARE CASES - where client seeking or has MLTC or CASA personal care or CDPAP, Medicaid app and trust documents filed at 785 Atlantic Avenue, 7th Floor, Brooklyn, NY 11238

• Yvette Poole-Brooks   poolebrooksy@hra.nyc.gov  TEL. (929) 221-2493   Fax (718) 636-7848

NON-HOME CARE CASES - Medicaid application and trust filed in "regular" Medicaid office or Spend-Down unit

• Pooled Trust Unit  -- 785 Atlantic Ave., 5th floor, Brooklyn NY 11238

Eileen Fraser-Smith  fraser-smithe@hra.nyc.gov     TEL  (929) 221-0868/69 

Fax  (718) 636-7720 (updated June 2016)

•  Pooled Trust unit is part of Centralized Surplus Division as of June 2016

This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.