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The Significance of the Pooled Trust Notification Law

Published March 12, 2018

 By Erica M. Fitzgerald, Esq., Littman Krooks LLP

On December 18, 2017, Governor Andrew Cuomo signed the “Pooled Trust Notification Bill” into law. This law, which is set to take effect on June 18, 2018, requires plain language notification to Medicaid applicants and recipients of the availability of pooled trusts as a means of maintaining Medicaid eligibility while retaining access to the surplus monthly income.  The notice must also include information regarding how to enroll in a supplemental needs trust, as well as information on how to request that the Department of Social Services re-budget medical assistance based upon participation in a pooled trust.  This is essential information for individuals with disabilities in New York State who rely upon Medicaid for access to items such as medical supplies and service coordination.

Many Medicaid recipients face the daunting task of maintaining continued Medicaid eligibility.  To do so, an individual’s monthly income may not exceed the limit set for continual eligibility, which is based upon the Federal Poverty Line.  Those with monthly incomes in excess of this limit must:

  1. Turn over the surplus income to the local Department of Social Services to assist with the cost of their care,
  2. Incur enough medical expenses to eliminate the surplus income, or
  3.    Participate in a pooled income trust, whereby the surplus income is deposited in said trust every month.  The first two options do not benefit the applicant/recipient, who loses access to the surplus income and is often left without sufficient monies to cover everyday living expenses.  Thus, a pooled income trust is an important tool in the elder law / special needs planning attorney’s toolbox as it provides a means by which an individual with a disability seeking Medicaid benefits can retain his or her surplus income as well as continue receiving benefits.  Indeed, by placing the surplus income into a pooled trust, an individual maximizes his or her resources by retaining access to the excess income, which can be used as a supplemental fund to pay bills and expenses, such as rent, utilities, mortgages, non-covered medical expenses, personal expenses and more.

Prior to the enactment of this law, however, the Notice of Decision sent to individuals when approved for benefits only advised of the first two, disadvantageous options.  Now, applicants/recipients must be notified of all three available options.  The importance of providing Medicaid eligible individuals with information regarding pooled trusts cannot be understated.  If you or someone you know is Medicaid eligible and could benefit from the use of a pooled trust, contact an elder law / special needs planning attorney as soon as possible.

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