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 2019)(Spanish version) .  

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

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.

There are two main steps to enrolling a Pooled trust in order to reduce the surplus or spenddown. 

• STEP ONE is to enroll in the trust.  -- See WARNING below about using a POWER OF ATTORNEY to sign a Joinder Agreement to enroll in a trust. 

• STEP TWO is to submit the trust with other required documents to the Medicaid program, requesting that the Medicaid program change your budget to reduce your surplus or spenddown.  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 submit it to the Medicaid program.

Step One - Enroll in a Pooled Supplemental Needs Trust

8-2019 UPDATE ABOUT TIMING of APPLICATION AND JOINING TRUST:  We used to recommend applying for Medicaid first with a spend-down, and then enrolling in a pooled trust while the Medicaid application was pending.   The reason for this timing was that approval of the trust would cause extensive delays in processing the application.  In order to expedite the application, we recommended first applying  and accepting the high spend-down that would result, and then joining the trust and requesting rebudgeting. 

In March 2019, a federal court approved a settlement in a class action called Garcia v. Banks, which requires  NYC HRA to approve Medicaid applications in 90 days if the application involves making a finding that the applicant is "disabled."  Below, you will see that anyone age 65+ who wants to use a pooled trust to shelter income must request that the local Medicaid agency determine that they are "disabled."   While 90 days may still seem like a long time, HRA was taking much longer to approve pooled trusts.  The 90-day limit is based on federal regulations.  However, the court order only requires the 90-day limit if the trust is submitted with the Medicaid application, not if the trust is submitted separately.  Therefore we now recommend enrolling the pooled trust first, then submitting the trust with the Medicaid application and the other forms described below.  In the application, the applicant may still request HRA/DSS to approve the trust initially with a spend-down in order to expedite it, and to approve the pooled trust and re-budget the case later. 

 Generally, to enroll in a pooled trust involves submission of the following:

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

WARNING  ABOUT USE OF POWER OF ATTORNEY TO Sign the Joinder Agreement : 

 An agent appointed by a valid Power of Attorney may execute the joinder agreement on behalf of an applicant.  However, in February 2019 the State Dept. of Health issued a directive GIS 19 MA/04 - Clarification of Policy for Treatment of Income Placed in Medicaid Exception Trusts that says, "If a trust is established by an agent acting under a Power of Attorney (POA), the powers granted under the POA must include permission to gift assets."    This means that the POA must include a Statutory Gift Rider (SGR) and that the SGR must be carefully drafted to specify that the agent has authority to establish and fund a supplemental needs trust including a pooled trust.  

• Elder law attorneys believe this requirement violates the state law governing powers of attorneys.  See article by Daniel Fish in the New York Law Journal, "New Restrictive Rule Regarding Medicaid and Power of Attorney," Aug. 15, 2019 (if you open in Google should be able to view article without registration).  The NYSBA Elder Law Section has asked DOH to eliminate this requirement, which earlier was adopted by the NYC Medicaid program.  See July 2017 NYC MICSA directive. 

• Under state law, a POA must be executed at the same time as the SGR.  Therefore, if there is no SGR, and if the applicant has mental capacity, she may either:

  1. execute  a new  POA with a Statutory Gift Rider, and the agent would then execute a new joinder agreement.  One MAY NOT just add a Statutory Gift RIder to an existing POA!  They must be executed together under state law.  

OR

2.  the applicant  can sign a new joinder agreement directly, and then execute a new jonder agreement.    

• EIther way, the amended joinder agreement must be sent to the pooled trust to amend the existing trust to reflect   the re-executed joinder agreement.  Then you must send that re-approved trust  to HRA/DSS with the request for approval.   See June 2018 HRA MICSA directive.   HRA will approve it retroactively.

• If the consumer lacks capacity to sign a new POA or to sign the joinder agreement directly, and the POA lacks an SGR but is otherwise valid, the NYS Bar Association may be willing to try to help.  .  Contact eflrp@nylag.org for more information.  

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.  The amount varies by trust.  

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.

Once approved, the pooled trust organization will send you the documents you will have to send to Medicaid to get your spend-down rebudgeted.   One of these is a "Verification of Deposits" or VOD verifiying that you deposited your spend-down for at least one month.  You must deposit the spend-down every month.  

Step 2 - Apply for Medicaid Home Care - and Submit the Pooled Trust Documents and Proof of Disability

Next, apply for Medicaid  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 $1279/mo. countable income would get billed $400/mo [$1279 - $879 = $400])(2019).  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.

If you choose to submit the trust documents along with your Medicaid application, it may take 90 days for Medicaid to approve the application with the trust.  In your cover letter you can ask Medicaid to initially approve your application with a spend-down, and to process the trust separately after your application is approved.  This way you can enroll in a Managed Long Term Care plan right away, or if you've applied based on "Immediate Need," start receiving home care services right away.  Eventually, you will ask Medicaid to 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.

Here are the documents that you must submit to the Medicaid agency to ask Medicaid to reduce your surplus or spend-down because you are depositing income into 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:  1. that you are enrolled in an SNT (and making contributions), and 2.  that you are disabled:

1. Proof of SNT
   1. Master Trust Agreement 
   2. Joinder Agreement, signed by both you and the trustee  (See STEP ONE above for warning about using a Power of Attorney to sign a Joinder Agreement on behalf of the applicant)
   3. Verification of Deposits made to the pooled trust
   4. Acceptance Letter by Trust

2. Proof of Disability

   1. 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.

   2. 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.

   3. 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.

      1. Note the NYC HRA Medicaid Alert 4/26/18 cautioning how to complete this form 

      2. 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.

   4. 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.

   5. NEW IN APRIL 2019  Submissions to HRA in which a disability determination is sought require Form MAP 751E (Authorization to Release Medical Information)  See Medicaid Alert from April 9, 2019.

3. 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. If you want DSS to approve your case initially WITH a spend-down, and then approve the trust later, say so in your letter.  Otherwise the application may take 90 days to approve.  

   • 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 THREE  - Follow-Up and Ensuring Medicaid Re-Budgeting Done Correctly

If you  have submitted the SNT and disability documentation to your DSS along with the Medicaid application, it should ,take 90 days maximum to approve the application with the trust.  In NYC, the Garcia v. Banks settlement requires this.  If you submitted the SNT separately after submitting the Medicaid application,  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.