This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled (ABD) program coming in 2016-2017. The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.) The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system. The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care. The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month. The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust. The July 1, 2016 installment discussed the need to empty the Miller Trust account every month. The July 7 installment discussed the need to balance the Miller Trust with the desire to have health insurance. Today’s installment will discuss the confusing deposit rules for Miller Trusts.
The Ohio Department of Medicaid has finalized its new rule on Miller Trusts (aka Qualified Income Trusts or QITs.) A copy of the final rule is available here. The form Miller Trust from the Ohio Department of Medicaid can be found here. Because the rule calls them QITs and today’s installment makes a number of references to the new rule, for this installment, I’ll usually call them QITs.
As discussed previously, someone in Ohio who needs Medicaid support to pay for long term care whose gross monthly income exceeds the Special Income Level ($2,199.00 at this time) must use a QIT to make the income over the Special Income Level not “income” anymore in the eyes of Medicaid. (Yes, the process is as hard to follow in real life as it is to follow in that sentence.) In order to get the benefits of the QIT, the amount of income over the $2,199 must be placed into the QIT each month so that the remaining “countable” income is $2,199 or less each month. (It’s not getting any more understandable, is it?)
So, the people who must comply with this rule must place a certain amount of money (the amount over $2,199) into the QIT bank account each month. (Sounds easy, when you reduce it to that level. Right?) Unfortunately, the QIT rule does not make it that easy. Sections D(4) and H describe the requirements on placing money into the QIT each month.
Section H provides that money should be “transferred” into the QIT account each month. Despite the headline of this article, the rule doesn’t require “deposits” into the QIT account, but instead requires “transfers” into the QIT account. What’s the difference?
Section D(4) states that the person cannot “cannot transfer or assign to the trust his or her right to receive income.” I believe that means that income cannot be place directly into the QIT. For example, someone who receives a monthly Social Security payment cannot change the account where that payment is deposited to the QIT account. I believe that, to comply with section D(4), the social security payment must get deposited by Social Security (Remember, Social Security uses direct deposit for the vast majority of its monthly payments.) into an account in the name of the person and then, sometime during the month, get transferred into the QIT account.
Unfortunately, I cannot explain why the rules have this requirement. I can only show you that the requirement is there.