The IRS has raised the deductibility limits for long term care policies purchased in 2011. The premiums you pay for your long term care insurance are deductible as itemized medical expenses (subject to the 7.5% AGI threshold) based on your age at the end of the year. Individual taxpayers can treat premiums paid for tax-qualified long term care insurance for themselves, their spouse or any tax dependents (such as parents.)
The 2011 limits are as follows:
Age 40 or less before close of taxable year - $340
More than 40 but not more than 50 - $640
More than 50 but not more than 60 - $1270
More than 60 but not more than 70 - $3390
More than 70 - $4240
LTC insurance premiums may be paid from a Health Savings Account up to the limits shown above. In addition, a self employed individual can deduct 100% of his/her out of pocket LTC premiums up to the amounts listed above. This is an "above the line deduction" and does not require the meeting of the 7.5% AGI threshold to take the deduction.
The payment of this premium could be a great gift for those who have parents or other relatives who may benefit from this type of coverage. It's tax deductible to you and provides both you and the covered individual(s) with peace of mind that future care has been addressed. Keep in mind that it is only one part of a solid estate plan.
Source: Rosanne Roge, 2/24/11, www.rwroge.com.
Join us Thurs, April 7th at Noon at The Miller Place Inn
Learn a few simple steps that can safeguard your family from having to make painful decisions in the event of a crisis. This Elder Law and Estate Planning seminar and luncheon are FREE but reservations are required, call 631-234-3030 or email jgrisolia@davidowlaw.com today!
Friday, March 11, 2011
Friday, February 18, 2011
The 10 Warning Signs of Alzheimer's
Memory loss that disrupts daily life is not a typical part of aging. It may be a symptom of Alzheimer's, a fatal brain disease that causes a slow decline in memory, thinking and reasoning skills. Every individual may experience one or more of these signs in different degrees. If you notice any of them, please see a doctor.
10 warning signs of Alzheimer's:
Memory loss that disrupts daily life
One of the most common signs of Alzheimer's is memory loss, especially forgetting recently learned information. Others include forgetting important dates or events; asking for the same information over and over; relying on memory aides (e.g., reminder notes or electronic devices) or family members for things they used to handle on their own.
What's a typical age-related change? Sometimes forgetting names or appointments, but remembering them later.
Challenges in planning or solving problems
Some people may experience changes in their ability to develop and follow a plan or work with numbers. They may have trouble following a familiar recipe or keeping track of monthly bills. They may have difficulty concentrating and take much longer to do things than they did before.
What's a typical age-related change? Making occasional errors when balancing a checkbook.
Difficulty completing familiar tasks at home, at work or at leisure
People with Alzheimer's often find it hard to complete daily tasks. Sometimes, people may have trouble driving to a familiar location, managing a budget at work or remembering the rules of a favorite game.
What's a typical age-related change? Occasionally needing help to use the settings on a microwave or to record a television show.
Confusion with time or place
People with Alzheimer's can lose track of dates, seasons and the passage of time. They may have trouble understanding something if it is not happening immediately. Sometimes they may forget where they are or how they got there.
What's a typical age-related change? Getting confused about the day of the week but figuring it out later.
Trouble understanding visual images and spatial relationships
For some people, having vision problems is a sign of Alzheimer's. They may have difficulty reading, judging distance and determining color or contrast. In terms of perception, they may pass a mirror and think someone else is in the room. They may not realize they are the person in the mirror.
What's a typical age-related change? Vision changes related to cataracts.
New problems with words in speaking or writing
People with Alzheimer's may have trouble following or joining a conversation. They may stop in the middle of a conversation and have no idea how to continue or they may repeat themselves. They may struggle with vocabulary, have problems finding the right word or call things by the wrong name (e.g., calling a "watch" a "hand-clock").
What's a typical age-related change? Sometimes having trouble finding the right word.
Misplacing things and losing the ability to retrace steps
A person with Alzheimer's disease may put things in unusual places. They may lose things and be unable to go back over their steps to find them again. Sometimes, they may accuse others of stealing. This may occur more frequently over time.
What's a typical age-related change? Misplacing things from time to time, such as a pair of glasses or the remote control.
Decreased or poor judgment
People with Alzheimer's may experience changes in judgment or decision-making. For example, they may use poor judgment when dealing with money, giving large amounts to telemarketers. They may pay less attention to grooming or keeping themselves clean.
What's a typical age-related change? Making a bad decision once in a while.
Withdrawal from work or social activities
A person with Alzheimer's may start to remove themselves from hobbies, social activities, work projects or sports. They may have trouble keeping up with a favorite sports team or remembering how to complete a favorite hobby. They may also avoid being social because of the changes they have experienced.
What's a typical age-related change? Sometimes feeling weary of work, family and social obligations.
Changes in mood and personality
The mood and personalities of people with Alzheimer's can change. They can become confused, suspicious, depressed, fearful or anxious. They may be easily upset at home, at work, with friends or in places where they are out of their comfort zone.
What's a typical age-related change? Developing very specific ways of doing things and becoming irritable when a routine is disrupted.
Source: www.alz.org
Make a Difference in the Lives of Critically Ill Children.
Join the Walk/Run for Friends of Karen at the Long Island Marathon
- taking place with a 5K Run/Walk on Saturday, April 30 and 10K, Half and Full Marathons on Sunday, May 1, Eisenhower Park, East Meadow, New York. New runners and walkers are welcome to join the Friends of Karen team. For a brochure and donor and sponsor opportunities, please contact Patricia Conway at Friends of Karen at 631.473.1768, ext. 303 or patriciaconway@friendsofkaren.org
There is nothing worse than a child with a life-threatening illness and nothing worse than the day to day issues the families of these children must face. Friends of Karen, now in its 33rd year, provides financial, emotional and advocacy support to families living in the tri-state region with children suffering from cancer and other life-threatening illnesses. In 2010 alone, 1,291 children were helped with services from Friends of Karen.
10 warning signs of Alzheimer's:
Memory loss that disrupts daily life
One of the most common signs of Alzheimer's is memory loss, especially forgetting recently learned information. Others include forgetting important dates or events; asking for the same information over and over; relying on memory aides (e.g., reminder notes or electronic devices) or family members for things they used to handle on their own.
What's a typical age-related change? Sometimes forgetting names or appointments, but remembering them later.
Challenges in planning or solving problems
Some people may experience changes in their ability to develop and follow a plan or work with numbers. They may have trouble following a familiar recipe or keeping track of monthly bills. They may have difficulty concentrating and take much longer to do things than they did before.
What's a typical age-related change? Making occasional errors when balancing a checkbook.
Difficulty completing familiar tasks at home, at work or at leisure
People with Alzheimer's often find it hard to complete daily tasks. Sometimes, people may have trouble driving to a familiar location, managing a budget at work or remembering the rules of a favorite game.
What's a typical age-related change? Occasionally needing help to use the settings on a microwave or to record a television show.
Confusion with time or place
People with Alzheimer's can lose track of dates, seasons and the passage of time. They may have trouble understanding something if it is not happening immediately. Sometimes they may forget where they are or how they got there.
What's a typical age-related change? Getting confused about the day of the week but figuring it out later.
Trouble understanding visual images and spatial relationships
For some people, having vision problems is a sign of Alzheimer's. They may have difficulty reading, judging distance and determining color or contrast. In terms of perception, they may pass a mirror and think someone else is in the room. They may not realize they are the person in the mirror.
What's a typical age-related change? Vision changes related to cataracts.
New problems with words in speaking or writing
People with Alzheimer's may have trouble following or joining a conversation. They may stop in the middle of a conversation and have no idea how to continue or they may repeat themselves. They may struggle with vocabulary, have problems finding the right word or call things by the wrong name (e.g., calling a "watch" a "hand-clock").
What's a typical age-related change? Sometimes having trouble finding the right word.
Misplacing things and losing the ability to retrace steps
A person with Alzheimer's disease may put things in unusual places. They may lose things and be unable to go back over their steps to find them again. Sometimes, they may accuse others of stealing. This may occur more frequently over time.
What's a typical age-related change? Misplacing things from time to time, such as a pair of glasses or the remote control.
Decreased or poor judgment
People with Alzheimer's may experience changes in judgment or decision-making. For example, they may use poor judgment when dealing with money, giving large amounts to telemarketers. They may pay less attention to grooming or keeping themselves clean.
What's a typical age-related change? Making a bad decision once in a while.
Withdrawal from work or social activities
A person with Alzheimer's may start to remove themselves from hobbies, social activities, work projects or sports. They may have trouble keeping up with a favorite sports team or remembering how to complete a favorite hobby. They may also avoid being social because of the changes they have experienced.
What's a typical age-related change? Sometimes feeling weary of work, family and social obligations.
Changes in mood and personality
The mood and personalities of people with Alzheimer's can change. They can become confused, suspicious, depressed, fearful or anxious. They may be easily upset at home, at work, with friends or in places where they are out of their comfort zone.
What's a typical age-related change? Developing very specific ways of doing things and becoming irritable when a routine is disrupted.
Source: www.alz.org
Make a Difference in the Lives of Critically Ill Children.
Join the Walk/Run for Friends of Karen at the Long Island Marathon
- taking place with a 5K Run/Walk on Saturday, April 30 and 10K, Half and Full Marathons on Sunday, May 1, Eisenhower Park, East Meadow, New York. New runners and walkers are welcome to join the Friends of Karen team. For a brochure and donor and sponsor opportunities, please contact Patricia Conway at Friends of Karen at 631.473.1768, ext. 303 or patriciaconway@friendsofkaren.org
There is nothing worse than a child with a life-threatening illness and nothing worse than the day to day issues the families of these children must face. Friends of Karen, now in its 33rd year, provides financial, emotional and advocacy support to families living in the tri-state region with children suffering from cancer and other life-threatening illnesses. In 2010 alone, 1,291 children were helped with services from Friends of Karen.
Wednesday, February 9, 2011
Comparing Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)
The two primary disability income programs, SSI and SSDI, sound similar, but they are very different programs with different benefits and different eligibility requirements. This article is a brief summary of these two important benefit programs.
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) is a cash assistance program administered by the Social Security Administration (SSA) for people who have a sufficient work history and are either blind or disabled. An individual is considered disabled for purposes of SSDI eligibility if she or he is incapable of performing any substantial gainful activity due to severe physical or mental impairment that has lasted, or is expected to last, at least 12 consecutive months or to result in death.
Federal regulations provide a list of certain impairments and illnesses considered to be of such severity as to entitle an individual to a presumption of disability for SSDI eligibility. Even without a "listed impairment," an individual would be disabled if he or she has a "medically determinable" impairment equal in severity to those listed, or suffers from several physical or mental conditions which, when combined, are considered equivalent to those listed impairments.
With respect to whether a qualifying impairment renders an individual disabled and unable to work, Federal law provides that individuals who have demonstrated an ability to earn in excess of $1,000/month in wages are considered to have engaged in "substantial gainful activity" and, by definition, are not disabled. Therefore, in most cases, an individual who earns income in excess of $1,000/month will not be entitled to SSDI even if he or she has a "listed impairment" or disabling conditions that equal a qualifying impairment. This earned income limit is slightly higher for individuals who are blind.
In addition to meeting the criteria for being considered disabled and evidencing an inability to engage in substantial gainful work activity, individuals between the ages of 31 and 65 who are seeking SSDI benefits based on their own work history must have worked for five out of the last ten years, or twenty out of the last forty quarters, prior to the onset of disability. Fewer work quarters are required for workers under the age of 31 but the same standard of disability applies.
If an individual with disabilities has worked the requisite number of quarters, SSDI provides monthly cash benefits to the worker and his or her eligible dependents. The benefit amount is the same amount that the worker would have received if he or she waited until full retirement age to retire. Disability benefits terminate, however, when an individual is able to return to substantial gainful activity or has reached his or her normal retirement age and is eligible for a Social Security retirement pension.
SSDI is also available to certain disabled individuals who don't have a work history of their own but have specified relationships to workers who are disabled, retired, or deceased. For example, SSDI may be paid to a person who has been disabled prior to age 22 whose parent is retired, disabled or deceased, or to a disabled widow age 50 or over.
Since SSDI is only paid to those individuals who have worked and paid into the Social Security system over a certain period of time (or to their eligible disabled relatives), SSDI actually is an insurance program, not a welfare program. SSDI is not "needs based." A person's assets or other income have no effect on eligibility for receipt of SSDI benefits, and making gifts doesn't affect a person's eligibility. SSDI recipients who are eligible for benefits for at last twenty-four months also are entitled to medial insurance under the Medicare program.
Supplemental Security Income
Supplemental Security Income (SSI) also is administered by the SSA, and is a cash assistance program available to financially eligible individuals who are over the age of 64, blind or disabled. Since SSI is based on financial eligibility and not work history, it is a welfare program, not an insurance program. The same definition for disability applies to SSI as to SSDI, but individuals who are eligible for SSI generally have insufficient work history to meet the requirements for SSDI.
To be financially eligible for SSI, the individual must be both "income eligible" and "resource eligible." To be income eligible, an individual's "countable income" must be less than the "standard of need." For 2011, the standard of need is $674/month for an individual. Countable income includes earned and unearned income, as well as the value of any "in-kind support and maintenance" provided to the individual (examples: payment by a family member or a trust for food, utilities or rent; a parent providing free room and board), subject to certain limits.
Gifts of cash received by the individual are counted as unearned income. The first $20 of income received each month is not counted. In addition, with respect to earned income, the first $65 each month is not counted, and one-half of the earnings over $65 in any given month is not counted. Countable income also includes "deemed" income, which is the income of certain household members such as a spouse or the parents of a minor child. Individuals with countable resources of $2,000 or more per month are not eligible for SSI, and making gifts will affect SSI eligibility.
Unlike SSDI recipients, most individuals receiving SSI will not be entitled to Medicare coverage because they have not sufficiently paid into the federal system through wages. In most but not all states, SSI recipients automatically are eligible for Medicaid benefits. This is not the case in other states, where applicants must file an independent application for Medicaid and may have to meet a more stringent definition of disability.
Although SSI and SSDI are administered by the same federal agency and use the same medical disability criteria, they otherwise are very different programs.
Source: www.specialneedsalliance.com
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) is a cash assistance program administered by the Social Security Administration (SSA) for people who have a sufficient work history and are either blind or disabled. An individual is considered disabled for purposes of SSDI eligibility if she or he is incapable of performing any substantial gainful activity due to severe physical or mental impairment that has lasted, or is expected to last, at least 12 consecutive months or to result in death.
Federal regulations provide a list of certain impairments and illnesses considered to be of such severity as to entitle an individual to a presumption of disability for SSDI eligibility. Even without a "listed impairment," an individual would be disabled if he or she has a "medically determinable" impairment equal in severity to those listed, or suffers from several physical or mental conditions which, when combined, are considered equivalent to those listed impairments.
With respect to whether a qualifying impairment renders an individual disabled and unable to work, Federal law provides that individuals who have demonstrated an ability to earn in excess of $1,000/month in wages are considered to have engaged in "substantial gainful activity" and, by definition, are not disabled. Therefore, in most cases, an individual who earns income in excess of $1,000/month will not be entitled to SSDI even if he or she has a "listed impairment" or disabling conditions that equal a qualifying impairment. This earned income limit is slightly higher for individuals who are blind.
In addition to meeting the criteria for being considered disabled and evidencing an inability to engage in substantial gainful work activity, individuals between the ages of 31 and 65 who are seeking SSDI benefits based on their own work history must have worked for five out of the last ten years, or twenty out of the last forty quarters, prior to the onset of disability. Fewer work quarters are required for workers under the age of 31 but the same standard of disability applies.
If an individual with disabilities has worked the requisite number of quarters, SSDI provides monthly cash benefits to the worker and his or her eligible dependents. The benefit amount is the same amount that the worker would have received if he or she waited until full retirement age to retire. Disability benefits terminate, however, when an individual is able to return to substantial gainful activity or has reached his or her normal retirement age and is eligible for a Social Security retirement pension.
SSDI is also available to certain disabled individuals who don't have a work history of their own but have specified relationships to workers who are disabled, retired, or deceased. For example, SSDI may be paid to a person who has been disabled prior to age 22 whose parent is retired, disabled or deceased, or to a disabled widow age 50 or over.
Since SSDI is only paid to those individuals who have worked and paid into the Social Security system over a certain period of time (or to their eligible disabled relatives), SSDI actually is an insurance program, not a welfare program. SSDI is not "needs based." A person's assets or other income have no effect on eligibility for receipt of SSDI benefits, and making gifts doesn't affect a person's eligibility. SSDI recipients who are eligible for benefits for at last twenty-four months also are entitled to medial insurance under the Medicare program.
Supplemental Security Income
Supplemental Security Income (SSI) also is administered by the SSA, and is a cash assistance program available to financially eligible individuals who are over the age of 64, blind or disabled. Since SSI is based on financial eligibility and not work history, it is a welfare program, not an insurance program. The same definition for disability applies to SSI as to SSDI, but individuals who are eligible for SSI generally have insufficient work history to meet the requirements for SSDI.
To be financially eligible for SSI, the individual must be both "income eligible" and "resource eligible." To be income eligible, an individual's "countable income" must be less than the "standard of need." For 2011, the standard of need is $674/month for an individual. Countable income includes earned and unearned income, as well as the value of any "in-kind support and maintenance" provided to the individual (examples: payment by a family member or a trust for food, utilities or rent; a parent providing free room and board), subject to certain limits.
Gifts of cash received by the individual are counted as unearned income. The first $20 of income received each month is not counted. In addition, with respect to earned income, the first $65 each month is not counted, and one-half of the earnings over $65 in any given month is not counted. Countable income also includes "deemed" income, which is the income of certain household members such as a spouse or the parents of a minor child. Individuals with countable resources of $2,000 or more per month are not eligible for SSI, and making gifts will affect SSI eligibility.
Unlike SSDI recipients, most individuals receiving SSI will not be entitled to Medicare coverage because they have not sufficiently paid into the federal system through wages. In most but not all states, SSI recipients automatically are eligible for Medicaid benefits. This is not the case in other states, where applicants must file an independent application for Medicaid and may have to meet a more stringent definition of disability.
Although SSI and SSDI are administered by the same federal agency and use the same medical disability criteria, they otherwise are very different programs.
Source: www.specialneedsalliance.com
Friday, January 21, 2011
The Patient Protection and Affordable Care Act of 2010
The Patient Protection and Affordable Care Act of 2010 (ACA) embodies many reforms of the health insurance industry in the United States. The principal objective of the ACA is to ensure access to health insurance for everyone. As of 2014, almost everyone in the United States will be required to have health insurance. In addition, no one may be denied coverage by health insurance companies, regardless of age, preexisting conditions, or the amount of coverage that may be subsequently needed. The rationale for these reforms is that if all Americans are members of the insured pool, the risks for insurance companies will be spread across a larger group of persons so that the cost of private insurance will be less.
The ACA is in some respects similar to Medicare, a health insurance system run by the federal government, funded by a 2.9% tax imposed on everyone who earns wages, with 1.45% each paid by the worker and the employer. Medicare provides health insurance coverage for all individuals who are over age 65 and eligible for Social Security or Railroad Retirement benefits and for those who have received Social Security Disability Insurance benefits for two years or more. There are no exclusions for preexisting conditions, degree of health need, or age after 65. The pool of the insured under Medicare includes those who are healthy and those who are not.
The ACA provides that, by 2014, the pool for private health insurance coverage will be expanded to include nearly everyone. The pool will include younger, healthier citizens than the current Medicare pool. The Congressional Budget Office worked over the numbers daily during the legislative deliberations on the ACA, and the conclusion was that this should work.
Beginning in 2014, health insurance exchanges will be created through the ACA to provide a mechanism for access to health insurance with sufficient coverage -- that is, hospitalization, prescription drug coverage, rehabilitation, mental health services, substance abuse treatment, preventive and wellness health coverage, chronic disease management, pediatric coverage (including dental and vision for children) and maternity coverage.
The health insurance exchanges will provide a marketplace in which to compare plans. The four types of plans that will be available will be labeled Bronze, Silver, Gold and Platinum. Health insurance companies that intend to participate in the exchanges must offer at least one Silver and one Gold plan. The Bronze plan will pay 60% of the insured’s costs, the Silver 70%, the Gold 80% and the Platinum 90%. Bronze plans will have a $5,950 annual limit for out of pocket expenses.
Small businesses will be able to access health insurance for their employees through the exchanges. As noted earlier, health insurance companies will not be able to exclude anyone from coverage for a preexisting condition or set a cap for the amount of coverage.
Beginning in 2014, all individuals in the United States who do not have health insurance coverage will pay a penalty. There is a sliding scale of assistance and premium credits to make health insurance affordable. The term “affordable” means that the premiums may not exceed 8% of the family’s annual income.
If an individual refuses to obtain health insurance, a penalty of the greater of $95 or 1% of his or her annual taxable income will be charged in 2014. In 2015, the penalty is $325 or 2% of taxable income, and in 2016, $695 or 2.5% up to a maximum of $2,085. If a person’s income is too low, there is an exemption from the penalty. In 2014, employers with more than 50 employees will be required to provide health insurance coverage for employees or the employer will be penalized.
There will be a uniform enrollment form for health coverage through the exchanges. The exchanges can be a clearinghouse to determine eligibility for Medicaid, the Children’s Health Insurance Program, or premium credits using this uniform enrollment form. Moreover, the exchanges can screen for families that may be exempt from tax penalties.
Until the ACA, the only health care coverage available to persons with disabilities has been either Medicare or Medicaid. Medicare is only available to workers (and certain dependents of workers) who have a sufficient work history to be eligible for Social Security benefits. For persons with disabilities who have a limited work history, unless they became disabled before age 22 and later qualified for Medicare upon the worker parent’s retirement, disability or death, Medicaid has been the only available source of health care coverage.
Because Medicaid provides health coverage only to the poor, disabled individuals often require special needs trusts in order to shelter so-called excess resources. For special needs planners, assuring access to Medicaid has been a primary focus of planning.
Because the ACA eliminates the option for health insurance companies to deny coverage for a preexisting condition, new health insurance options will open up for some folks with disabilities. As of September 23, 2010, health insurers are no longer permitted to deny coverage to children under the age of 19 who have a preexisting condition.
Depending on the disability, a disabled child who has recovered a personal injury settlement does not necessarily have to plan exclusively for continuing eligibility for Medicaid by transferring the recovery to a special needs trust. Parents who have health insurance through employer-sponsored group health plans can now add a disabled child to their coverage, and can enroll a child up to age 26 as a dependent on the parent’s health plan if the child is without alternative coverage. Thus, there is significant relief here.
Although the ACA will provide near universal access to health insurance in 2014, it does not expand the services available for the long term care needs of people with disabilities or long term chronic diseases. It is still the case that these types of services are available only through private resources or Medicaid.
Look for future newsletterss that will cover some of the ACA’s provisions in greater detail. For example, we plan to discuss one provision in the ACA called the CLASS Act, which may provide some relief for long term care needs, and the extension of Medicaid eligibility to adults who have less income than 133% of the federal poverty guidelines ($14,412 for a single person in 2010).
We will also describe coverage available to persons with preexisting conditions that would otherwise make them uninsurable. These provisions also will open up health coverage for some disabled individuals.
Source: www.specialneedsalliance.com
The ACA is in some respects similar to Medicare, a health insurance system run by the federal government, funded by a 2.9% tax imposed on everyone who earns wages, with 1.45% each paid by the worker and the employer. Medicare provides health insurance coverage for all individuals who are over age 65 and eligible for Social Security or Railroad Retirement benefits and for those who have received Social Security Disability Insurance benefits for two years or more. There are no exclusions for preexisting conditions, degree of health need, or age after 65. The pool of the insured under Medicare includes those who are healthy and those who are not.
The ACA provides that, by 2014, the pool for private health insurance coverage will be expanded to include nearly everyone. The pool will include younger, healthier citizens than the current Medicare pool. The Congressional Budget Office worked over the numbers daily during the legislative deliberations on the ACA, and the conclusion was that this should work.
Beginning in 2014, health insurance exchanges will be created through the ACA to provide a mechanism for access to health insurance with sufficient coverage -- that is, hospitalization, prescription drug coverage, rehabilitation, mental health services, substance abuse treatment, preventive and wellness health coverage, chronic disease management, pediatric coverage (including dental and vision for children) and maternity coverage.
The health insurance exchanges will provide a marketplace in which to compare plans. The four types of plans that will be available will be labeled Bronze, Silver, Gold and Platinum. Health insurance companies that intend to participate in the exchanges must offer at least one Silver and one Gold plan. The Bronze plan will pay 60% of the insured’s costs, the Silver 70%, the Gold 80% and the Platinum 90%. Bronze plans will have a $5,950 annual limit for out of pocket expenses.
Small businesses will be able to access health insurance for their employees through the exchanges. As noted earlier, health insurance companies will not be able to exclude anyone from coverage for a preexisting condition or set a cap for the amount of coverage.
Beginning in 2014, all individuals in the United States who do not have health insurance coverage will pay a penalty. There is a sliding scale of assistance and premium credits to make health insurance affordable. The term “affordable” means that the premiums may not exceed 8% of the family’s annual income.
If an individual refuses to obtain health insurance, a penalty of the greater of $95 or 1% of his or her annual taxable income will be charged in 2014. In 2015, the penalty is $325 or 2% of taxable income, and in 2016, $695 or 2.5% up to a maximum of $2,085. If a person’s income is too low, there is an exemption from the penalty. In 2014, employers with more than 50 employees will be required to provide health insurance coverage for employees or the employer will be penalized.
There will be a uniform enrollment form for health coverage through the exchanges. The exchanges can be a clearinghouse to determine eligibility for Medicaid, the Children’s Health Insurance Program, or premium credits using this uniform enrollment form. Moreover, the exchanges can screen for families that may be exempt from tax penalties.
Until the ACA, the only health care coverage available to persons with disabilities has been either Medicare or Medicaid. Medicare is only available to workers (and certain dependents of workers) who have a sufficient work history to be eligible for Social Security benefits. For persons with disabilities who have a limited work history, unless they became disabled before age 22 and later qualified for Medicare upon the worker parent’s retirement, disability or death, Medicaid has been the only available source of health care coverage.
Because Medicaid provides health coverage only to the poor, disabled individuals often require special needs trusts in order to shelter so-called excess resources. For special needs planners, assuring access to Medicaid has been a primary focus of planning.
Because the ACA eliminates the option for health insurance companies to deny coverage for a preexisting condition, new health insurance options will open up for some folks with disabilities. As of September 23, 2010, health insurers are no longer permitted to deny coverage to children under the age of 19 who have a preexisting condition.
Depending on the disability, a disabled child who has recovered a personal injury settlement does not necessarily have to plan exclusively for continuing eligibility for Medicaid by transferring the recovery to a special needs trust. Parents who have health insurance through employer-sponsored group health plans can now add a disabled child to their coverage, and can enroll a child up to age 26 as a dependent on the parent’s health plan if the child is without alternative coverage. Thus, there is significant relief here.
Although the ACA will provide near universal access to health insurance in 2014, it does not expand the services available for the long term care needs of people with disabilities or long term chronic diseases. It is still the case that these types of services are available only through private resources or Medicaid.
Look for future newsletterss that will cover some of the ACA’s provisions in greater detail. For example, we plan to discuss one provision in the ACA called the CLASS Act, which may provide some relief for long term care needs, and the extension of Medicaid eligibility to adults who have less income than 133% of the federal poverty guidelines ($14,412 for a single person in 2010).
We will also describe coverage available to persons with preexisting conditions that would otherwise make them uninsurable. These provisions also will open up health coverage for some disabled individuals.
Source: www.specialneedsalliance.com
Friday, January 7, 2011
NAPA Becomes Law
Following the unanimous approval of Congress earlier this month, and the thousands of e-mails and messages advocates sent to the White House last week, President Obama signed the National Alzheimer's Project Act (NAPA) into law. Once implemented, NAPA will ensure our nation has what Health and Human Services Secretary, Kathleen Sebelius calls an "aggressive and coordinated national strategy" to confront the present and rapidly escalating Alzheimer crisis.
Today is a day to celebrate. This is a victory for the 5.3 million people who live with Alzheimer's in this country and the nearly 11 million caregivers. It is a victory for you and more than 300,000 other advocates who stood up and demanded that our nation's leaders create a plan for combating this disease. The journey to take NAPA from concept to law of the land is a victory for all of us.
Tomorrow we will return to the hard but rewarding work that lies ahead. NAPA is a milestone and a very important step forward, but it is not the destination. Our destination is a world without Alzheimer's and we can only arrive there through therapies that stop this disease and improved care and support for those contending with it. Rest assured that we will work tirelessly to maintain the momentum evident today. We will work to ensure NAPA is implemented effectively so that it lives up to its promise, and we will work to advance our other legislative priorities for 2011, including a major, immediate increase in research funding.
As you know, there is no time to waste.
-Harry Johns, President and CEO, Alzheimer's Association
A brief description of NAPA (National Alzheimer's Project Act)
NAPA is the largest legislative victory in many years for the Alzheimer cause. Over the last several years, the Alzheimer's Association has been the leading voice in urging Congress and the White House to pass the National Alzheimer's Project Act. NAPA will create a coordinated national plan to overcome the Alzheimer crisis and will ensure the coordination and evaluation of all national efforts in Alzheimer research, clinical care, institutional, and home and community-based programs and their outcomes. Alzheimer's advocates were instrumental in moving NAPA through Congress. More than 50,000 e-mails, nearly 10,000 phone calls and more than 1,000 meetings by the Alzheimer's Association and its advocates led us to the historic legislative victory for the Alzheimer community.
Source: alz.org
Today is a day to celebrate. This is a victory for the 5.3 million people who live with Alzheimer's in this country and the nearly 11 million caregivers. It is a victory for you and more than 300,000 other advocates who stood up and demanded that our nation's leaders create a plan for combating this disease. The journey to take NAPA from concept to law of the land is a victory for all of us.
Tomorrow we will return to the hard but rewarding work that lies ahead. NAPA is a milestone and a very important step forward, but it is not the destination. Our destination is a world without Alzheimer's and we can only arrive there through therapies that stop this disease and improved care and support for those contending with it. Rest assured that we will work tirelessly to maintain the momentum evident today. We will work to ensure NAPA is implemented effectively so that it lives up to its promise, and we will work to advance our other legislative priorities for 2011, including a major, immediate increase in research funding.
As you know, there is no time to waste.
-Harry Johns, President and CEO, Alzheimer's Association
A brief description of NAPA (National Alzheimer's Project Act)
NAPA is the largest legislative victory in many years for the Alzheimer cause. Over the last several years, the Alzheimer's Association has been the leading voice in urging Congress and the White House to pass the National Alzheimer's Project Act. NAPA will create a coordinated national plan to overcome the Alzheimer crisis and will ensure the coordination and evaluation of all national efforts in Alzheimer research, clinical care, institutional, and home and community-based programs and their outcomes. Alzheimer's advocates were instrumental in moving NAPA through Congress. More than 50,000 e-mails, nearly 10,000 phone calls and more than 1,000 meetings by the Alzheimer's Association and its advocates led us to the historic legislative victory for the Alzheimer community.
Source: alz.org
Thursday, December 23, 2010
Portability Provision of Estate Tax law may be "Wolf in Sheep's Clothing"
The new Estate Tax law may create complications for middle class married couples: The recently enacted Tax Relief Act of 2010 brings back the federal estate tax with a whimper not a bang. But one provision, intended to help married couples, may result in new tax complexities and expense for those of even very modest wealth.
Under the new rules, individuals who die in 2011 or 2012 will have an exemption amount of $5 million dollars (reduced if they made large gifts during lifetime). If their taxable estate does not consume the entire $5 million exemption, the unused portion can be passed on to their surviving spouse. However, the unused exemption amount is available to the surviving spouse only if an election is made and the amount is calculated on a timely filed estate tax return of the deceased spouse. This estate tax return must be filed to pass on the unused exemption even if no return is otherwise required.
In its December 10th technical explanation of the provisions of the law, the Congressional Joint Committee on Taxation gives the following example of how this "portability" provision will work:
"Example 1: Assume that Husband 1 dies in 2011, having made taxable transfers of $3 million and having no taxable estate. An election is made on Husband 1's estate tax return to permit Wife to use Husband 1's deceased spousal unused exclusion amount. As of Husband 1's death, Wife has made no taxable gifts. Thereafter, Wife's applicable exclusion amount is $7 million (her $5 million basic exclusion amount plus $2 million deceased spousal unused exclusion amount from Husband 1), which she may use for lifetime gifts or for transfers at death."
In the Joint Committee example, it is pretty obvious that the relatively wealthy surviving spouse should hire a lawyer to prepare a federal estate tax return for her deceased husband. At a 35% tax rate, the unused $2 million dollar exemption could someday be worth $700,000 to her heirs.
But doesn't this same logic hold true in the situation of a married couple with a much more modest net worth? Who knows what the future holds for the surviving spouse.
Assume that you are the lawyer meeting with a surviving spouse soon after the death of her husband. The deceased had an "I love you" estate plan which leaves everything to his wife. The value of his estate, for federal estate tax purposes, is $400,000. There is no federal (or state) tax and there is no requirement that a federal estate tax return be filed.
But there is a $5 million dollar unused exemption that can be passed on to the surviving spouse -- IF your client is willing to go to the hassle and expense of having an estate tax return prepared and filed. As the lawyer, how can you not suggest the filing of estate return to calculate the unused exclusion and elect to pass it on? How can you guarantee that the unused exclusion will not someday be incredibly valuable to your client's children or other heirs? At 35% tax rate, an unused $5 million exclusion could someday be worth as much as $1.75 million dollars.
Note that the more modest the estate of the deceased spouse, the more potentially valuable the unused exemption.
Also consider that surviving spouses can acquire unanticipated wealth as a result of fluctuating real estate values as an example.
As a lawyer, I don't want to find myself sitting across the table from my client's children someday trying to explain why a million dollars in avoidable federal estate taxes is due because mom didn't file an estate tax return when dad died. I'm not sure I would feel that much better even if I had some kind of a wavier signed by mom.
So, it seems to me that the portability provision in Title III of the new Tax Relief Act may be the proverbial wolf in sheep's clothing. It may create a lot of additional work for lawyers, and expense for widowed estate administration clients of only modest net worth.
Source: Jeffrey A. Marshall, Certified Elder Law Attorney, 12/19/10.
Under the new rules, individuals who die in 2011 or 2012 will have an exemption amount of $5 million dollars (reduced if they made large gifts during lifetime). If their taxable estate does not consume the entire $5 million exemption, the unused portion can be passed on to their surviving spouse. However, the unused exemption amount is available to the surviving spouse only if an election is made and the amount is calculated on a timely filed estate tax return of the deceased spouse. This estate tax return must be filed to pass on the unused exemption even if no return is otherwise required.
In its December 10th technical explanation of the provisions of the law, the Congressional Joint Committee on Taxation gives the following example of how this "portability" provision will work:
"Example 1: Assume that Husband 1 dies in 2011, having made taxable transfers of $3 million and having no taxable estate. An election is made on Husband 1's estate tax return to permit Wife to use Husband 1's deceased spousal unused exclusion amount. As of Husband 1's death, Wife has made no taxable gifts. Thereafter, Wife's applicable exclusion amount is $7 million (her $5 million basic exclusion amount plus $2 million deceased spousal unused exclusion amount from Husband 1), which she may use for lifetime gifts or for transfers at death."
In the Joint Committee example, it is pretty obvious that the relatively wealthy surviving spouse should hire a lawyer to prepare a federal estate tax return for her deceased husband. At a 35% tax rate, the unused $2 million dollar exemption could someday be worth $700,000 to her heirs.
But doesn't this same logic hold true in the situation of a married couple with a much more modest net worth? Who knows what the future holds for the surviving spouse.
Assume that you are the lawyer meeting with a surviving spouse soon after the death of her husband. The deceased had an "I love you" estate plan which leaves everything to his wife. The value of his estate, for federal estate tax purposes, is $400,000. There is no federal (or state) tax and there is no requirement that a federal estate tax return be filed.
But there is a $5 million dollar unused exemption that can be passed on to the surviving spouse -- IF your client is willing to go to the hassle and expense of having an estate tax return prepared and filed. As the lawyer, how can you not suggest the filing of estate return to calculate the unused exclusion and elect to pass it on? How can you guarantee that the unused exclusion will not someday be incredibly valuable to your client's children or other heirs? At 35% tax rate, an unused $5 million exclusion could someday be worth as much as $1.75 million dollars.
Note that the more modest the estate of the deceased spouse, the more potentially valuable the unused exemption.
Also consider that surviving spouses can acquire unanticipated wealth as a result of fluctuating real estate values as an example.
As a lawyer, I don't want to find myself sitting across the table from my client's children someday trying to explain why a million dollars in avoidable federal estate taxes is due because mom didn't file an estate tax return when dad died. I'm not sure I would feel that much better even if I had some kind of a wavier signed by mom.
So, it seems to me that the portability provision in Title III of the new Tax Relief Act may be the proverbial wolf in sheep's clothing. It may create a lot of additional work for lawyers, and expense for widowed estate administration clients of only modest net worth.
Source: Jeffrey A. Marshall, Certified Elder Law Attorney, 12/19/10.
Monday, December 20, 2010
House Sends Tax-Cut Compromise to President
A massive bipartisan tax package preventing a big New Year's Day tax hike for millions of Americans is on its way to President Obama for his signature.
The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to.
The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138). Opposed were 112 Democrats and 36 Republicans.
NBC News reported that Obama was set to sign the bill and make a statement on Friday afternoon.
In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.
"There probably is nobody on this floor who likes this bill," said House Majority Leader Steny Hoyer, D-Md. "The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."
'Good for Growth'
Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 -- a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.
The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Workers' Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.
"This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force," said Treasury Secretary Timothy Geithner.
Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn't make all the tax cuts permanent.
Obama talks tax cuts, business investment
Rep. Ginny Brown-Waite, R-Fla., called it "a bipartisan moment of clarity."
The bill's cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
"I know that we are going to borrow every nickel in this bill," Hoyer lamented.
At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple's estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.
House Speaker Nancy Pelosi, D-Calif., called the estate tax the "most egregious provision" in the bill and held a vote that would have imposed the higher estate tax. It failed, 194 - 233.
No Pelosi vote
On the bill's final vote, House Speaker Nancy Pelosi, D-Calif., did not vote; House GOP leader John Boehner, R-Ohio, and Majority Leader Steny Hoyer, D-Md., voted for the bill, and Majority Whip James Clyburn, D-SC, voted against the bill, NBC News reported.
Boehner, after the vote, called the bill's passage "critically important."
"Stopping all the tax hikes is a good first step in our efforts to reduce the uncertainty family-owned small businesses are facing, but much more needs to be done, including cutting spending, permanently eliminating the threat of job-killing tax hikes, and repealing the job-killing health care law," Boehner, House speaker-designate, said in a prepared statement.
House Republicans who will move into powerful posts when the GOP takes control in January urged passage of the bill.
Rep. Eric Cantor of Virginia, in line to become majority leader, said the measure, while not perfect, marked a "first step" toward economic recovery.
Largely marginalized in the negotiations leading to the bill, Democrats emphasized their unhappiness with Obama.
"We stand today with only one choice: Pay the ransom now or pay more ransom later," said Rep. Brad Sherman of California. "This is not a place Democrats want to be. But, ultimately, it is better to pay the ransom today than to watch the president pay even more, and I think he'd be willing to pay a bit more next month."
Source: NBC News and The Associated Press contibuting to msnbc.com, 12/17/10.
The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to.
The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138). Opposed were 112 Democrats and 36 Republicans.
NBC News reported that Obama was set to sign the bill and make a statement on Friday afternoon.
In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.
"There probably is nobody on this floor who likes this bill," said House Majority Leader Steny Hoyer, D-Md. "The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."
'Good for Growth'
Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 -- a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.
The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Workers' Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.
"This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force," said Treasury Secretary Timothy Geithner.
Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn't make all the tax cuts permanent.
Obama talks tax cuts, business investment
Rep. Ginny Brown-Waite, R-Fla., called it "a bipartisan moment of clarity."
The bill's cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
"I know that we are going to borrow every nickel in this bill," Hoyer lamented.
At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple's estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.
House Speaker Nancy Pelosi, D-Calif., called the estate tax the "most egregious provision" in the bill and held a vote that would have imposed the higher estate tax. It failed, 194 - 233.
No Pelosi vote
On the bill's final vote, House Speaker Nancy Pelosi, D-Calif., did not vote; House GOP leader John Boehner, R-Ohio, and Majority Leader Steny Hoyer, D-Md., voted for the bill, and Majority Whip James Clyburn, D-SC, voted against the bill, NBC News reported.
Boehner, after the vote, called the bill's passage "critically important."
"Stopping all the tax hikes is a good first step in our efforts to reduce the uncertainty family-owned small businesses are facing, but much more needs to be done, including cutting spending, permanently eliminating the threat of job-killing tax hikes, and repealing the job-killing health care law," Boehner, House speaker-designate, said in a prepared statement.
House Republicans who will move into powerful posts when the GOP takes control in January urged passage of the bill.
Rep. Eric Cantor of Virginia, in line to become majority leader, said the measure, while not perfect, marked a "first step" toward economic recovery.
Largely marginalized in the negotiations leading to the bill, Democrats emphasized their unhappiness with Obama.
"We stand today with only one choice: Pay the ransom now or pay more ransom later," said Rep. Brad Sherman of California. "This is not a place Democrats want to be. But, ultimately, it is better to pay the ransom today than to watch the president pay even more, and I think he'd be willing to pay a bit more next month."
Source: NBC News and The Associated Press contibuting to msnbc.com, 12/17/10.
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