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Medicaid and Qualified Income Trusts

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

As a result of recent changes in the Ohio Medicaid system, a number of Medicaid recipients who are currently receiving long-term care services could have their benefits put in jeopardy.  The new rules went into effect August 1, 2016, but there will be a grace period until January 1, 2017.  The new Ohio rules state that if a Medicaid recipient’s monthly income is below $2,199.00 for the calendar year 2016, then their Medicaid benefits will not be affected.  However, if the Medicaid recipients’ income is over that amount, their benefits may be jeopardized if they or their representative do not act for their benefit. 


This action involves creating a Qualified Income Trust.  If a Medicaid recipient’s monthly income is over $2,199.00 per month, the Medicaid recipient can still retain their benefits if they deposit their monthly income into a Qualified Income Trust.  This would allow them to stay eligible for Medicaid. 


A Qualified Income Trust is a specialized trust which an individual establishes to assist with moving their monthly income into the hands of a trustee of the Qualified Income Trust.  The income that has been moved into a Qualified Income Trust is not counted in determining that individual’s eligibility for Medicaid. Thus for example, an individual receives social security in excess of $2199.00 that is directly deposited to their checking account in their individual name.  After this income is received, the funds in excess of $2199.00 are then transferred to a new account in the name of their Qualified Income Trust.  The individual’s expenses are then paid from the new account.  This extra step to remain qualified for Medicaid may seem unnecessary but is required to remain Medicaid eligible if the monthly income is over $2199.00.


The first step is for the Medicaid recipient who is over the income amount to create and execute a Qualified Income Trust.  This can be done a couple ways.  You can either contact your local attorney who is familiar with Qualified Income Trusts and they can establish such a trust for the Medicaid recipient, or the Ohio Medicaid s has hired a company called Automated Health Systems, who can assist Medicaid recipients with the establishment of a Qualified Income Trust.  Automated Health Systems can be contacted at 1 844 265 4722, or by email at OhioQIT@automated-health.com.  An individual can also visit the Ohio Medicaid site at https://benefits.ohio.gov/DDR.html to get a better understanding of these matters.


After the Qualified Income Trust is established, the Medicaid recipient should open a new checking or saving account in the name of the Qualified Income Trust in order to be able to make their monthly income deposits to that account.  The monthly expenses will then be paid from this new account as well.  The Medicaid recipient’s social security number should be the Tax I.D. number for the new account.  If the Medicaid recipient is not personally able to establish this type of trust and account due to a physical or mental disability, they can have a power of attorney or legal guardian act on their behalf. 


The new Medicaid law also provides for  two other changes.  The amount of assets that can be kept has gone from $1500 to $2000, and one car is exempt as long as it is used by the recipient for transportation.


If you or a loved one are a Medicaid recipient with income in excess of $2,199.00 per month for 2016, you need to establish a Qualified Income Trust in order to allow you to maintain your Medicaid benefits. 


NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.


James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., LPA
158 North Broadway
New Philadelphia, Ohio 44663
Phone:  (330) 364-3472
Fax:  (330) 602-3187
Email:  jcontini@kwgd.com

 
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