Sunday, July 20, 2014
The growing significance and scope of "elder law" is demonstrated by the program for the upcoming 2014 Elder Law Institute in Philadelphia, Pennsylvania, to be held on July 24-25. In addition to key updates on Medicare, Medicaid, Veterans and Social Security law, plus updates on the very recent changes to Pennsylvania law affecting powers of attorney, here are a few highlights from the multi-track sessions (48 in number!):
- Nationally recognized elder law practitioner, Nell Graham Sale (from one of my other "home" states, New Mexico!) will present on planning and tax implications of trusts, including special needs trusts;
- North Carolina elder law expert Bob Mason will offer limited enrollment sessions on drafting irrevocable trusts;
- We'll hear the latest on representing same-sex couples following Pennsylvania's recent court decision that struck down the state's ban on same-sex marriages;
- Julian Gray, Pittsburgh attorney and outgoing chair of the Pennsylvania Bar's Elder Law Section will present on "firearm laws and gun trusts." By coincidence, I've had two people this week ask me about what happens when you "inherit" guns.
Be there or be square! (Who said that first, anyway?)
July 20, 2014 in Advance Directives/End-of-Life, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Medicaid, Medicare, Programs/CLEs, Property Management, Retirement, Social Security, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Wednesday, June 18, 2014
Last week's news of a Chapter 11 Bankruptcy proceeding in the Texas-based senior living company Sears Methodist Retirement Systems, Inc. (SMRS) has once again generated questions about "entrance fees" paid by residents at the outset of their move to a Continuing Care Retirement Community (CCRC). CCRCs typically involve a tiered system of payments, often including a substantial (very substantial) upfront fee, plus monthly "service" fees. The upfront fee will carry a label, such as "admission fee" or "entrance fee" or even entrance "deposit," depending on whether and how state regulations require or permit certain labels to be used.
As a suggestion of the significance of the dollars, a resident's key upfront fee at a CCRC operated by SMRS reportedly ranged from $115,000 to $208,000. And it can be much higher with other companies. So, let's move away from the SMRS case for this "blog" outline of potential issues with upfront resident fees.
Even without talking about bankruptcy court, for residents of CCRCs there can be a basic level of confusion about upfront fees. In some instances, the CCRC marketing materials will indicate the upfront fee is "refundable," in whole or in part, in the event the resident moves out of the community or passes away. Thus, residents may assume the fees are somehow placed in a protected account or escrow account. In fact, even if the upfront fee is not "refundable," when there is a promise of "life time care," residents may assume upfront fees are somehow set aside to pay for such care. How the facility is marketed may increase the opportunity for resident confusion. Residents are looking for reassurances about the costs of future care and how upfront fees could impact their bottom line. That is often why they are looking at CCRCs to begin with. "Refundable fees" or "life care plans" can be important marketing tools for CCRCs. But discussions in the sales office of a CCRC may not mirror the "contract" terms.
One of the most important aspects of CCRCs is the "contract" between the CCRC and the resident. First, smaller "pre move-in" deposits may be paid to "hold" a unit, and this deposit may be expressly subject to an "escrow" obligation. But, larger upfront fees -- paid as part of the residency right -- are typically not escrowed. It is important not to confuse the "escrow" treatment of these fees. Of course, the "hold" fee is not usually the problem. It is the larger upfront fees --such as the $100k+ fees at SMRS -- that can become the focus of questions, especially if a bankruptcy proceeding is initiated.
The resident's contract requires very careful reading, and it will usually explain whether and how a CCRC company will make any refund of large upfront admission fees. In my experience of reading CCRC contracts, CCRCs rarely "guarantee" or "secure" (as opposed to promise) a refund, nor do they promise to escrow such upfront fees for the entire time the payer resides at the CCRC. In some states there is a "reserve" requirement (by contract or state law) for large upfront fees whereby the CCRC has a phased right to release or use the fees for its operation costs. Thus, the contract terms are the starting place for what will happen with upfront fees.
Why doesn't state regulation mandate escrow of large upfront fees? States have been reluctant to give-in to pressure from some resident groups seeking greater mandatory "protection" of their upfront fees. There's often a "free enterprise, let the market control" element to one side of regulatory debates. On the other side, there is the question of whether life savings of the older adult are proper targets for free enterprise theories. Professor Michael Floyd, for example, has asked, "Should Government Regulate the Financial Management of Continuing Care Retirement Communities?"
My research has helped me realize how upfront fees are a key financial "pool" for the CCRC, especially in the early years of operation where the developer is looking to pay off construction costs and loans. CCRCs want -- and often need -- to use those funds for current operations. and debt service. Thus, they don't want to have those fees encumbered by guarantees to residents. They take the position they cannot "afford" to have that pool of money sitting idle in a bank account, earning minimal interest. This is not to say the large entrance fees will be "misspent," but rather, the CCRC owners may wish to preserve flexibility about how and when to spend the upfront fees.
The treatment of "upfront fees" paid by residents of CCRCs also implicates questions about application of accounting and actuarial rules and principles. That important topic is worthy of a whole "law review article" -- and frankly it is a topic I've been working on for months.
In additional to looking for actuarial soundness, analysts who examine CCRCs as a matter of academic interest or practical concern have looked at whether CCRC companies and lenders may have a "fiduciary duty" to older adults/residents, a duty that is independent of any contract law obligations. Analysts further question whether a particular CCRC's marketing or financial practices violate consumer protection or elder protection laws.
There can also be confusion about what happens during a Chapter 11 process. First, during the Chapter 11 Bankruptcy process, a facility may be able to honor pre-bankruptcy petition "refund" requests or requests for refund of fees for a resident who does not move into the facility. Second, to permit continued operation as part of the reorganization plan, a facility will typically be permitted by the Court to accept new residents during the Chapter 11 proceeding and those specific new residents will have their upfront fees placed into a special escrow account, an account that cannot be used to pay the pre-petition debts of the company.
But what about the upfront fees already paid pre-petition by residents who also moved in before the bankruptcy petition? Usually those upfront fees are not escrowed during the bankruptcy process. Indeed, other "secured" creditors could object to refunds of "unsecured" fees. The Bankruptcy Court will usually issue an order -- as it did in SRMS's bankruptcy court case in Texas last week -- specifying how current residents' upfront fees will be treated now and in the future. A bit complicated, right? (And if I'm missing something please feel free to comment. I'm always interested in additional viewpoints on CCRCs. Again, the specific contract and any state laws or regulations governing for handling of fees will be important.)
Of course, this history is one reason some of us have been suggesting for years that prospective residents should have an experienced lawyer or financial consultant help them understand their contracts and evaluate risks before signing and again in the event of any bankruptcy court proceeding. "Get thee to a competent advisor." See also University of New Mexico Law Professor Nathalie Martin's articles on life-care planning risks and bankruptcy law.
As I mentioned briefly in writing last week about the SMRS Chapter 11 proceeding, CCRC operators have learned -- especially after the post-2008 financial crisis -- that the ability of a CCRC to have a viable "second chance" at success in attracting future residents will often depend on the treatment of existing residents. Thus, one key question in any insolvency will be whether the company either (a) finds a new "owner" during the Chapter 11 process or (2) is able to reorganize the other debts, thereby making it possible for the CCRC company to "honor" the resident refund obligations after emerging from the Chapter 11 process.
During the last five years we have seen one "big" default on residents' upfront. refundable entrance fees during the bankruptcy of Covenant at South Hills, a CCRC near Pittsburgh. A new, strong operator eventually did take over the CCRC, and operations continued. However, the new operator did not "assume" an obligation to refund approximately $26 million in upfront fees paid pre-petition by residents to the old owner. In contrast, Chapter 11 proceedings for some other CCRCs have had "gentler" results for residents, with new partners or new financial terms emerging from the proceedings, thereby making refunds possible as new residents take over the departed residents' units.
For more on how CCRC companies view "use" of upfront fees, here's a link to a short and clear discussion prepared by DLA Piper law firm, which, by the way, is the law firm representing the Debtor SMRS in the Texas Chapter 11 proceeding.
June 18, 2014 in Consumer Information, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Retirement, State Cases, State Statutes/Regulations | Permalink | Comments (1) | TrackBack (0)
Monday, June 16, 2014
Recently Artis Senior Living CEO Don Feltman joined CEOs from 10 other high profile corporate employers, such as Coca-Cola, Tyson Foods, and Loews Hotels & Resorts, to urge Congress to fix the "broken" immigration system, to permit expanded lawful avenues for foreign-born workers in the U.S. In their June 10 letter, they write in part:
All our companies rely on legal immigrants working alongside Americans to keep our businesses growing and contributing to the economy. This is a reality driven by demographics. In 1950, more than half of America’s workers were high school dropouts willing to do physically demanding, low-skilled work. Today, the figure is less than 5 percent. But our businesses still need less-skilled workers – and the need will only grow in years ahead. Baby boomers are retiring: 10,000 older workers are leaving the workforce every day. And after a long downturn, most of our operations are expanding and looking to hire workers.
The problem: there is virtually no legal way for less-skilled foreigners without family in the U.S. to enter the country and work in year-round jobs – effectively no temporary or permanent visas available for non-seasonal workers. Congress has an obligation to fill this gap – we need a visa program for less-skilled foreign workers seeking year-round jobs. Employers should have to try to hire Americans first. But if they can’t find enough U.S. workers, they should be able to hire foreign workers quickly, easily and legally.
Monday, June 9, 2014
Last week, the Second Circuit Court of Appeals ruled that a district court's rejection of a proposed Securities and Exchange Commission (SEC) settlement for $285 million -- because of the absence of any admissions by defendant Citigroup -- was improper. In SEC v. Citigroup Global Markets, a case that arose from investigations into fraud following the financial industries meltdown, the Second Circuit observed that while the court has an obligation to review consent degrees to determine generally the "legality" of the terms and may consider whether the settlement is "fair and reasonable, to demand admissions as a condition of settlement goes too far.
The Second Circuit said, "It is an abuse of discretion to require, as the district court did here, that the S.E.C. establish the 'truth' of the allegations against a settling party as a condition for approving the consent decrees.... Trials are primarily about the truth. Consent decrees are primarily about pragmatism.... Consent decrees provide parties with a means to manage risk."
In cases where injunctive relief is part of the settlement, the Second Circuit said the trial court is permitted to analyze the enforceability of the terms, as a matter of "public interest."
The Wall Street Journal, in reporting on the June 4 decision, observed that the decision "eases pressure" on prosecutors and regulators "to exact admissions of wrongdoing in settlements with companies."
After reading the SEC-related decision, it would seem the same reasoning would govern settlements of federal Medicare and Medicaid fraud suits, including whistleblower cases, such as the multi-million dollar settlements in recent months involving nursing home care, pharmaceutical sales, and hospice, thus explaining how millions in de facto fines often involve no admissions of wrongdoing.
Or as I sometimes describe such agreements to settle, defendants must decide whether they can live with the financial effect of the monetary terms, and must promise merely to never do again what they say they never did before.
But I worry, will customers -- which in Medicare and Medicaid cases, usually means seniors and disabled persons -- be the ones who pay the downstream price of the settlement, especially without clear admissions of wrongdoing in the past?
Friday, June 6, 2014
The Center for Medicare Advocacy’s 'Rubber Stamp' suit highlights the fact that 98% of Medicare appeals are denied at the first two levels of review
June 5, 2014 – The Center for Medicare Advocacy filed a complaint in United States District Court in Connecticut yesterday against Kathleen Sebelius, Secretary of Health and Human Services, on behalf of plaintiffs who have been denied a meaningful review of their Medicare claims at the first two levels of appeal. The case was brought as a class action, and the four named plaintiffs represent thousands of Medicare beneficiaries in Connecticut who cannot get a meaningful review of their case, and instead, receive an initial denial of coverage that is essentially “rubber stamped” at both the Redetermination and Reconsideration levels. The problem persists throughout the country.
Available information indicates that the combined denial rate for home health care coverage (that the plaintiffs in this case were denied) at the first two levels of review is about 98%. However, beneficiaries must complete those levels before they can get a hearing with an Administrative Law Judge (ALJ), which provides the first real opportunity for a meaningful evaluation of a claim.
"Older people and people with disabilities are going without necessary care because they’re being wrongly denied coverage and either drop out of the years-long appeals process, waiting for a hearing, or impoverish themselves to pay for care,” said Gill Deford, Litigation Director at the Center for Medicare Advocacy. “The sheer number of beneficiaries who are forced to deal with this time-consuming, meaningless appeals structure compelled us to take action to seek meaningful reviews earlier in the appeals process."
The denial rate at Redetermination and Reconsideration has been increasing in recent years, coinciding with the implementation of a new administrative review process for "traditional" Medicare (Parts A and B). While the new system was intended to make the process more efficient and user-friendly, the actual effect has been to deny beneficiaries an efficient and meaningful review of their claims, requiring them to take claims to the third level of review, an ALJ hearing.
"Most beneficiaries don’t have the resources, time or support to take their claims all the way to an Administrative Law Judge, making the first two levels of review vitally important,” said Judith Stein, Executive Director of the Center for Medicare Advocacy. "'Rubber-stamping' appeals deprives a huge number of people a legitimate review process and harms those who depend on Medicare coverage for critical health care and to maintain their quality of life."
To speak with a representative of the Center for Medicare Advocacy about this case, please contact Lauren Weybrew at email@example.com
Sunday, June 1, 2014
The Minensota DHS says that it is actively working to implement the plan and other mandates of the federal court, including departmentwide training on the agreement and plan.
The Jensen Settlement Agreement, approved Dec. 5, 2011, allowed the department and the plaintifs to resolve the claims in a mutually agreeable manner.
More information is on the Jensen Settlement page on DHS' website.
Saturday, May 31, 2014
Friday, May 30, 2014
Tuesday, May 20, 2014
The Justice Department filed a joint motion today for entry of a landmark consent decree to resolve allegations that the Law School Admission Council (LSAC) engaged in widespread and systemic discrimination in violation of the Americans with Disabilities Act (ADA). Under the proposed consent decree, LSAC will pay $7.73 million in penalties and damages to compensate well over 6,000 individuals nationwide who applied for testing accommodations on the Law School Admission Test (LSAT) over the past five years. The decree also requires comprehensive reforms to LSAC’s policies and ends its practice of “flagging,” or annotating, LSAT score reports for test takers with disabilities who receive extended time as an accommodation. These reforms will impact tens of thousands of test takers with disabilities for years to come.
Friday, May 16, 2014
U.S. Equal Employment Opportunity Commission Seeks Public Input on Regulations Requiring Federal Agencies to Be ‘Model Employers’ of Individuals with Disabilities
The U.S. Equal Employment Opportunity Commission announced today that it is inviting public input on potential revisions to the regulations implementing Section 501 of the Rehabilitation Act of 1973, a law that governs employment of individuals with disabilities by the federal government.
Responses to this Advance Notice of Proposed Rulemaking must be submitted by 5:00 pm EDT on Monday, July 14, 2014.
Wednesday, May 14, 2014
It occurs to me that what I'm about to write here is a mini-review of a mini-book. Slightly complicating this little task is the fact that I count both authors as friends and mentors.
The latest edition of Elder Law in a Nutshell by Professors Lawrence Frolik (University of Pittsburgh) and Richard Kaplan (University of Illinois) arrived on my desk earlier this month. (As Becky might remind us, both are definitely Elder Law's "rock stars.") And as with fine wine, this book, now its 6th edition, becomes more valuable with age. This is true even though achieving the right balance of simplicity and detail cannot be an easy task for authors in the intentionally brief "Nutshell" series. Presented in the book are introductions to the following core topics:
- Ethical Considerations in Dealing with Older Clients
- Health Care Decision Making
- Medicare and Medigap
- Long-Term Care Insurance
- Nursing Homes, Board and Care Homes, and Assisted Living Facilities
- Housing Alternatives & Options (including Reverse Mortgages)
- Alternatives to Guardianship (including Powers of Attorneys, Joint Accounts and Revocable Trusts)
- Social Security Benefits
- Supplemental Security Income
- Veterans' Benefits
- Pension Plans
- Age Discrimination in Employment
- Elder Abuse and Neglect
The authors describe their anticipated audience, including "lawyers and law students needing an overview of some particular subject, social workers, certain medical personnel, gerontologists, retirement planners and the like." Curiously, they don't mention potential clients, including family members of older persons. I suspect the book can and does assist prospective clients in thinking about when and why an "elder law specialist" would be an appropriate choice for consultation. This book is a very good starting place.
What's missing from the overview? Not a lot, although I find it interesting that despite solid coverage of the basics of Medicaid, and even though it is unrealistic to expect exhaustive coverage in a mini-book, the authors do not hint at the bread and butter of many elder law specialists, i.e., Medicaid Planning. Thus, there's little mention of some of the more cutting edge (and therefore potentially controversial) planning techniques used to create Medicaid eligibility for an individual's long-term care while also preserving assets that otherwise would have to be spent down.
Modern approaches, depending on the state, may range from the simple, such as permitted use of assets to purchase a better replacement auto, to more complex planning, as in states that permit purchase of spousal annuities or use of promissory notes, allow modest half-a-loaf gifting, or recognize spousal refusal. Even though the federal Deficit Reduction Act of 2005 succeeded in restricting assets transfers to non-spouse family members, families, especially if there is a community spouse, may still have viable options. Without appropriate planning the community spouse, particularly a younger spouse, may be in a tough spot if forced to spend down to the "maximum" permitted to be retained, currently less than $120,000 (in, for example, Pennsylvania). See, for example, a thoughtful discussion of planning options, written by Elder Law practitioners Julian Gray and Frank Petrich.
Perhaps the Nutshell omission is a reflection of the unease some who teach Elder Law may feel about the public impact of private Medicaid planning?
May 14, 2014 in Advance Directives/End-of-Life, Books, Cognitive Impairment, Dementia/Alzheimer’s, Discrimination, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare, Property Management, Social Security | Permalink | Comments (0) | TrackBack (0)
Friday, May 9, 2014
The April 2014 issue of the American Bar Association's Bifocal publication is now available. Current articles include:
- Will Your Health Care Advance Directive Be There When You Need It?
- A Guardian's Health Care Decision-Making Authority: Statutory Restrictions
- Palm Beach Guardianship Monitoring Program Offers Innovative Model
- Attorneys Representing Veterans: Opportunities and Challenges
- Don't Let Congress Go Another Year Without Funding the Elder Justice Act
By the way, while most Bifocal articles are written by practicing attorneys, American Univesity Washington College of Law student, Karna Sandler, is the author of the article on how state laws may affect a guardian's health care authority. Karna's an intern at the Commission on Law and Aging. Way to go, Karna!
In addtion, the issue provides details about AARP Foundation Scholarships to assist individuals in attending the 2014 National Aging and Law Conference to be held in Washington D.C. on October 16-17. Deadline for the scholarship applications is June 15, 2014.
Thursday, May 8, 2014
Via the Alzheimer's Association:
Congress unanimously passed the bipartisan National Alzheimer’s Project Act (P.L. 111-375) in 2010. The law instructs the Department of Health and Human Services (HHS) to develop a strategic plan to address the rapidly escalating Alzheimer’s disease crisis. The annually updated National Alzheimer’s Plan must be transmitted to Congress each year and is to include outcome-driven objectives, recommendations for priority actions and coordination of all federally funded programs in Alzheimer’s disease research, care and services. The plan also includes the goal of effectively treating and preventing Alzheimer’s by 2025.
The one missing piece in this plan is a projection of the level of funding necessary to reach the critical goal of effectively treating and preventing Alzheimer’s by 2025. The Alzheimer’s Accountability Act represents a bipartisan effort to ensure that Congress is equipped with the best possible information to set funding priorities and reach the goal of the National Plan to Address Alzheimer’s Disease - effectively preventing and treating Alzheimer’s by 2025.
Friday, May 2, 2014
Congressmen Earl Blumenauer (OR-03) and Chris Smith (NJ-04) introduced HR 4543, the PACE Pilot Act, a bipartisan and budget neutral bill that would allow The Program of All-Inclusive Care for the Elderly (PACE) programs greater flexibilities to expand their successful model to care for people under age 55 who have special health risks.
PACE integrates Medicare and Medicaid benefits for members of our society who have some of the most serious and costly health care problems. The program seeks to keep people living in the community rather than in long-term care institutions. Currently, PACE is only available to individuals age 55 or older and who are certified by their state as being eligible for a nursing home level of care. Expansion of these programs will offer younger individuals with disabilities this same integrated, community-based option that supports their independence and quality of life.
“PACE has been a huge success,” said Blumenauer. “What we have realized is that there is a group of people out there who currently don’t qualify for PACE because of the age requirement, but would otherwise greatly benefit from the program due to serious medical conditions. This bill allows us to see how we can bring them into the fold efficiently and affordably.”
“PACE continues to provide patient centric care to many of the frailest members in our society, while enabling them to live in their homes and stay in their communities,” said Smith. “We know that all PACE participants are eligible for nursing home care, yet 90 percent continue to live at home. By removing the nursing home level of care requirement, we can help ensure that people have greater access to preventative services and treatments, thereby helping them maintain their quality of life.”
Currently, a total of 103 PACE sites in 31 states serve about 56,000 enrollees nationwide. A number of research studies show that beneficiaries enrolled in PACE had fewer hospitalizations and nursing home admissions, and lower mortality than similar beneficiaries who were not enrolled in PACE.
Monday, April 28, 2014
National Senior Citizens Law Center's Executive Director Kevin Prindiville analyzes Paul Ryan's Congressional budget numbers for the Huffington Post, highlighting the effect of proposed deep cuts on federal aid programs, cuts that would dramatically impact the nation's poorest seniors. Kevin writes:
"The U.S. House of Representatives' recent approval of the Ryan budget resolution threatens programs that help poor seniors. In a disappointing vote, 219 House members gave their blessing to a budget that leaves country's older adults to struggle with less food, income, housing and care. The Ryan budget's path to poverty must not be allowed to happen. . . . By cutting essential programs that often make life manageable for those with limited means or resources, the Ryan budget will lead to poverty numbers among seniors the nation hasn't seen since the Depression."
Kevin then outlines specific terms of the House plan to cut $5 billion from SSI, $732 billion from Medicaid, as well as additional cuts to Meals on Wheels and food benefit programs.
The NSCLC, a nonprofit law firm with offices on both sides of the country, is a watchdog for the nation's low income elderly, succeeding with tough-to-win cases where the nation's most at-risk seniors are adversely affected by often-hidden changes or procedural traps in Social Security, Medicare and Medicaid programs. Additional information on NCSLC's advocacy is available on their website, along with a calendar of events including the April 29 free webinar on "Understanding and Impacting Implementation of New Medicaid Home and Community-Based Services Rules."
Friday, April 18, 2014
Three legal advocacy organizations, Disability Rights Oregon, the Oregon Law Center and the National Senior Citizens Law Center, worked as a team to initiate a class action suit in Oregon on behalf of 700 individuals with disabilities to protect their rights to continue to receive Social Security benefits needed for basic living requirements. The individuals' access to monthly Social Security benefits was jeopardized when a non-profit organization, "Safety Net of Oregon," serving as their representative payee was disqualified following an investigation for alleged mismanagement of clients' funds. The advocates explained:
"This suit is asking that SSA follow its own regulations to make sure that benefits continue to flow to recipients in a safe and responsible manner. In early March, SSA sent a notice to approximately 1,000 SSA recipients who have Safety Net as a representative payee, advising them that their benefits would be suspended beginning April 1, 2014, and that the amount they would receive would be $0.00. While some recipients have been able to find a new payee, or to become their own payee, many clients never received the notice and have no idea that their benefits are about to be suspended. Almost 700 individuals still lack new payees as of March 21, 2014. Many are homeless, have severe and persistent mental illness, developmental disabilities, and/or alcohol or drug addictions. Many of the clients are profoundly social isolated and alienated, and totally unable to navigate the system on their own."
In response to the suit, the federal court issued a restraining order on March 26 requiring SSA to assign new payees to former Safety Net Clients, rather than delay, require new applications or other in-person requests by the disabled SSI and SSD recipients. More background here.
Tuesday, April 15, 2014
The Social Security Administration announced on Monday that it is halting its practice of "Treasury Offsets" to recover debts reported to be 10 years or older. This decision comes just three days after the Washington Post's front page account of intercepts that targeted IRS income tax refunds going to children of alleged debtors. As reported in today's Washington Post:
“"I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,' the acting Social Security commissioner, Carolyn Colvin, said in a statement.
Colvin said anyone who has received Social Security or Supplemental Security Income benefits and 'believes they have been incorrectly assessed with an overpayment' should contact the agency and 'seek options to resolve the overpayment.'”
The Washington Post reported that after its first article, "many hundreds of taxpayers whose refunds had been intercepted came forward and complained to members of Congress that they had been given no notice of the debts and that the government had not explained why they were being held responsible for debts that their deceased parents may have incurred."
Hmm. It seems that it is the intercept notice procedures that may be the focus of reexamination by the SSA, rather than giving up on the authority granted by Congress in 2008 to recover "stale" debts. Plus, it is unclear whether SSA will explain its theory for seeking recoveries against children of debtors.
Wednesday, April 2, 2014
University of Oklahoma Professor of Law Jonathan Barry Foreman writes on "Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products," for the Elder Law Journal in 2014.
He points to "longevity risk," defined as the risk of outliving one's retirement savings, as "probably the greatest risk facing current and future retirees" in the U.S. As several recent studies demonstrate, such as those cited on the Elder Law Prof Blog here, here and here, many people are not adequately prepared in terms of finances for retirement.
In responding to this risk, Professor Foreman writes thoughtfully, proposing systemic alternatives, including expansion of Social Security and SSI for "the oldest old." Professor Foreman suggests 90 years of age as the starting point for that category. In addition he proposes greater incentives for public and private employers to promote annuities and other "lifetime income products" as components of employment-based retirement packages.
He concludes with a warning based on our national history of frequently failing to make significant changes in advance of a predictable crisis:
"Social insurance programs like Social Security, Supplemental Security Income, and Medicaid will certainly need to be expanded. Workers will also need to be encouraged to work longer and save more for their eventual retirements, and both workers and retirees should be encouraged to annuitize more of their retirement savings.
While these kinds of solutions seem fairly predictable, the answers to two important policy questions have yet to be decided. First, how much will the government require the oldest old to save earlier in their lives? And second, how much will the government redistribute to benefit the oldest old? Unfortunately, if the history of the Social Security system is any indication, both government mandates and redistribution will be modest, and a significant portion of the oldest old will face their final years with inadequate economic resources."
Reading Professor Foreman's tightly focused paper suggests to me that there is, perhaps, a certain irony to all of this. The irony is that by not embracing systemic change, Americans are engaging in a form of financial roulette, betting we won't live long enough to care about the outcome of our gamble.
Monday, March 31, 2014
A few weeks ago, I posted the account of one family's struggle to find competent care for aging parents. Eventually they were referred to a team of two women who did provide good care, but who insisted on being paid in cash. I later learned that one person expected an additional "fee" for "managing" the arrangement. The family felt trapped, although the crisis was cut short when the parent died.
More recently, I read another family's story, where a non-family member provided proper senior care in exchange for "cash," and this time the arrangement lasted for several years. Eventually, however, the cared-for-individual's savings were exhausted, and her increasing health needs meant a nursing home was inevitable. But how to apply for Medicaid? Any review of bank records that accompanies a Medicaid application would show large, regular cash withdrawals from the elder's accounts, totaling more than two hundred thousand dollars. With no W-2s or other documentation of the use of that cash, would the state agency treat the transactions as gifts creating ineligibility for Medicaid? Would an affidavit or testimony by a family member be enough to satisfy the agency?
A group of experienced attorneys brainstormed the options in this fact pattern and raised a host of additional practical questions, including why the family had not sought help from an attorney or accountant at the outset of the arrangement. I suspect part of the answer was the family was operating in "survival" mode -- trying to solve a crisis with temporary help -- and failing to realize the potential for it to become long-term. In the meantime, their loved one bonded with the individual caregiver who either would not or could not be paid on the books. One lawyer observed that this fact pattern demonstrates why "Elder Law" needs better visibility and understanding by the public, as elder law attorneys can help prevent this legal nightmare from occurring.
During the brainstorming, someone provided a useful link to "Risks of Hiring Caregivers Under the Table: Why It Can Be Dangerous...." by Melanie Haiken from Caring.com.
For more detailed guidance, IRS Publication 926, the Household Employer's Tax Guide, is remarkably straight forward, if still probably intimidating for the average person.
Saturday, March 29, 2014
The Department of Labor recently posted a Final Rule that changes how the Fair Labor Standards Act is interpreted for domestic service. Of special interest is how the Rule impacts shared living programs under Medicaid.
The Department of Labor has also created guidance to assist stakeholders in determining whether an entity paying a direct care worker through a shared living arrangement is required to comply with the FLSA’s minimum wage and overtime requirements. The guidance also describes how certain FLSA principles apply to shared living arrangements.
These changes become effective January 1, 2015.