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

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Posted: 29 May, 2009
by David Silva (New York Legal Assistance Group)
Updated: 24 Aug, 2019
by Valerie Bogart (New York Legal Assistance Group)

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)  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 - 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 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. 

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

WARNING  ABOUT USE OF POWER OF ATTORNEY TO ENROLL IN A TRUST

 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."

  • 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, then 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.  

OR

  1.  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.  

 NOTE:  NYLAG Evelyn Frank Legal Resources Program and some elder law attorneys dispute HRA's position that an SGR is legally required to establish a pooled income trust.  Contact eflrp@nylag.org for more information.  

  1. 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.

  2. 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.

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 t

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 SNTRead this memo for more information on eligibility for Medicaid home care.

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.

Step Two -

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

  • 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

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

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.

NYLAG

Attached files
item MAP-751E Authorization to Release Medical Information.pdf (479 kb) Download
item 2019-04-09 Disability determination update.pdf (1.8 mb) Download
item LDSS-1151.1 Continuation Sheet 2012.pdf (17 kb) Download
item 2018-06-25 POA Deferring Medicaid Apps - POA not auth for SNT.pdf (63 kb) Download
item 2017-07-26 Power of Attorney and Statutory Gifts Rider.pdf (74 kb) Download
item 2016-6-7 Pooled Trust Unit Liaison and Contact information.pdf (131 kb) Download
item OCA_960_hipaa_fillable.pdf (62 kb) Download
item Medicaid Alert--Medical Evidence Disability 1-2013.pdf (428 kb) Download
item Pooled Income Trust Contribution Worksheet.xls (42 kb) Download
item Cover Letter to Medicaid with SNT.dotx (53 kb) Download
item MAP-751D HRA HIPAA Release.pdf (289 kb) Download
item DSS-486T (OLD) - Medical Report for Determination of Disability - best version.pdf (205 kb) Download
item NYLAG SNT Outline 1-13-19 FINAL.pdf (1.47 mb) Download
item SNTShort (May 2019).pdf (694 kb) Download
item Medicaid Basic - 2019.pdf (670 kb) Download
item 2018-04-26 Disability Form completion for Pooled Trust Submission.pdf (148 kb) Download
item NYLAG PooledTrust 2018 Spanish.pdf (247 kb) Download

Also read
item Overview - Supplemental Needs Trusts
item List of Pooled SNTs in New York State
item Advocate's Outline on Supplemental Needs Trusts and Rules for Impact of Lump Sums on Various Benefits
item How to use a pooled SNT to eliminate the Medicaid spend-down.
item Medicare Savings Programs (MSP) in New York
item Legal Authorities Relating to Supplemental Needs Trusts
item Medicaid Disability Determinations - NYS Forms & Procedures (with updated forms July 2012)

External links
http://www.wnylc.com/health/client/images/icons/article_out.svg http://www.health.state.ny.us/health_care/medicaid/program/update/savingsprogram/medicaresavingsprogram.htm
http://www.wnylc.com/health/client/images/icons/article_out.svg http://ssa.gov/beve

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