Monday, May 22, 2017

How to Deduct Long-Term Care Costs

Long-term care can be very expensive. Can you deduct the costs on your income tax return?
What is Long-Term Care?
“Long-term care” refers to the ongoing personal assistance you need when you have a prolonged physical illness, disability or severe cognitive impairment (such as Alzheimer’s disease). It may involve help carrying out basic self-care tasks, such as bathing, dressing or eating, which are called “Activities of Daily Living” (ADLs). And you may need assistance with “Instrumental Activities of Daily Living” (IADLs), including meal preparation, money management, house cleaning, medication management, and transportation.
The long-term supportive care may be provided in various settings including the care recipient’s home, a personal care facility, or a nursing home.  
Long-term care is expensive. The cost can quickly wipe out the financial resources of the care recipient.. Being able to deduct the cost of care to reduce income tax liability can help preserve funds and extend the taxpayer’s ability to meet future needs.  
Are Long-Term Care Expenses Tax Deductible?
Section 213 of the Internal Revenue Code allows for the deduction of unreimbursed medical expenses paid by a taxpayer for himself, spouse, and dependents to the extent that the expenses exceed 10% of the taxpayer’s adjusted gross income. Medical expenses are somewhat broadly defined to include costs like dental expenses, medical equipment and supplies, the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care.  Medical expenses are not deductible if they are reimbursed by insurance.
You can generally deduct medical expenses either when the services were provided or when you paid for them. If the care recipient has died IRC 203(c) allows medical expenses which are paid out of the taxpayer’s estate within a year of death to be treated as paid by the taxpayer at the time incurred.
Medical expenses generally include the unreimbursed cost of care in a hospital or skilled nursing facility if a principal reason for being there is to get medical care. This includes the cost of meals and lodging. 
But what about expenses incurred for long-term care provided by non-medical personnel at the recipient’s home or in a personal care home or assisted living facility? Can these expenses be deducted? The answer may be yes, depending on the situation and the taxpayer’s compliance with certain requirements of the Internal Revenue Code.
Section 322 of the 1996 Health Insurance  Portability and Accountability Act (HIPAA) allows taxpayers to include amounts paid for “qualified” long-term care services (QLTCS) as deductible medical expenses.
What Are Qualified Long-Term Care Services (QLTCS)?
QLTCS are defined in Internal Revenue Code Section 7702B(c) as follows:
(c)Qualified long-term care services For purposes of this section—
(1)In general The term “qualified long-term care services” means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, which—
(A) are required by a chronically ill individual, and
(B) are provided pursuant to a plan of care prescribed by a licensed health care practitioner.
(2)Chronically ill individual
(A)In general The term “chronically ill individual” means any individual who has been certified by a licensed health care practitioner as—
(i) being unable to perform (without substantial assistance from another individual) at least 2 activities of daily living for a period of at least 90 days due to a loss of functional capacity,
(ii) having a level of disability similar (as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of disability described in clause (i), or
(iii) requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.
Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the preceding 12-month period a licensed health care practitioner has certified that such individual meets such requirements.
(B)Activities of daily living For purposes of subparagraph (A), each of the following is an activity of daily living: (i) Eating. (ii) Toileting. (iii) Transferring. (iv) Bathing. (v) Dressing.(vi) Continence.
 (3)Maintenance or personal care services
The term “maintenance or personal care services” means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).
(4)Licensed health care practitioner
The term “licensed health care practitioner” means any physician (as defined in section 1861(r)(1) of the Social Security Act) and any registered professional nurse, licensed social worker, or other individual who meets such requirements as may be prescribed by the Secretary.
Jeff’s Analysis
Can you deduct long-term care expenses? Frequently, the answer is yes. It’s not easy, but it may be well worth the effort.
Expenses paid to non-medical personnel for care provided at home or in a personal care home or assisted living facility can be tax deductible if they meet the QLTCS rules.  Internal Revenue Code Section 7702B(c) establishes a number of requirements that must be met in order for an expense to be a deductible QLTCS.
  1. The services must be necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later), that are 
  2.  required by a chronically ill individual, and 
  3.  provided pursuant to a plan of care prescribed by a licensed health care practitioner. [Emphasis added]

Maintenance and personal care services. Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). [Note that this covers personal assistance provided by non-medical personnel.]
Chronically ill individual. An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions.
1.   He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence, or
2.   He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

Annual Certification. An individual is not a chronically ill individual for tax purposes unless within the preceding 12-month period a licensed health care practitioner has certified that such individual meets such requirements.
Licensed Health Care Practioner.  A physician, registered professional nurse, or licensed social worker/
The caregiver providing the QLTCS need not be a licensed healthcare professional. In Estate of Lillian Baral (U.S. Tax Ct., No. 3618-10, July 5, 2011), Lillian Baral suffered from severe dementia and her doctor recommended that she get 24-hour-a-day care. Her brother hired personal caregivers to assist her. The Tax Court agreed that the payments to the caregivers were deductible medical expenses, even though the caregivers were not medical personnel, because a doctor had found that the services provided to Ms. Baral were necessary pursuant to the plan of care he was prescribing.
Deducting the cost of QLTCS (or any medical expenses) requires good bookkeeping. IRS regulations provide for substantiation of medical deductions: “In connection with claims for deductions under section 213, the taxpayer shall furnish the name and address of each person to whom payment for medical expenses was made and the amount and date of the payment thereof in each case.” 26 CFR 1.213-1(h). [Emphasis added]
In addition, each year you should get a new written certification from a licensed health care practitioner that the care recipient is a chronically ill individual. I also suggest that you consult with your tax advisor and elder law attorney to make sure you are complying with all the deduction requirements. On the taxpayer's 1040 deduct the expenses on Schedule A.
Additional Information:
Estate of Lillian Baral (U.S. Tax Ct., No. 3618-10, July 5, 2011)

Thursday, May 18, 2017

Are You Liable for your Mother's Unpaid Nursing Home Bills?

[Can you be held financially responsible for your parent's unpaid hospital, nursing home, and other care costs? In some states the answer is yes. Here is an article on the subject written by Elizabeth White, Certified Elder Law Attorney* with Marshall, Parker and Weber. It is based on the current law in Pennsylvania.]
As an elder law attorney, I am often asked this excellent question: “If I cannot pay for my nursing home care, is my child required to pay my unpaid bills?”
In Pennsylvania, the answer to that question is “Yes”. However, there is a “But” that I will explain after I elaborate on the “Yes”.
The “Yes” part of my answer comes from a law in Pennsylvania called a Filial Support Law. The law states that a child is responsible for the care or the cost of care for their indigent parent.
The filial support law can be used by a parent to sue a child for care and support. It can also be used by facilities, such as nursing homes, to sue children to collect unpaid bills for their parent’s care. This happens frequently.
There are a few exceptions built into the law. One is for a child who was abandoned by their parent for at least 10 years of their minority. The second is for the child who does not have sufficient financial ability to support the indigent parent. However, the threshold for being deemed to have the financial ability to support a parent has been set very low. Courts have held children financially responsible to pay for their parent’s care even though the children have their own families to support as well.
When is your parent considered to be “Indigent?” There is no definition of indigent in the law, but courts have determined that a person is indigent if they have insufficient means to provide themselves with the care and support that they need.
The law imposes the filial responsibility on children even when there is no claim of financial wrongdoing by a child. Further, when there is a situation of a transfer of a parent’s assets to a child or another party, the law can be applied to any of the children, not just the child who benefited from the transfer.
In a family with more than one child, just being the “good” child does not shield you from liability. For example, assume that there are two children in the family and one child transfers his mother’s home or funds to himself (“bad” child). This kind of transfer can create a lengthy period during which Mom will be ineligible for certain government nursing home benefits. Unpaid bills can result. Under the support law the other child (“good” child) can be held solely responsible for the payment of the care costs for the indigent mother, even if the “good” child was unaware of and/or did not benefit from the transferred funds.
Finally, an explanation of the “But” part of the answer. The “But” is that proper planning can prevent a child from becoming personally responsible for the cost of their parent’s care. If correct planning is completed, there are programs, such as Medical Assistance and Veterans benefits, for which a parent may be able to qualify. These benefit programs can help pay for nursing home and other care costs. With this kind of expert planning in place the parent’s care costs get paid and children don’t end up getting sued.
* Elizabeth White has been Certified as an Elder Law Attorney by the National Elder Law Foundation

Monday, April 24, 2017

Concerns Raised about Aging Department Consolidation

Pennsylvania legislators are currently considering Governor Wolf’s proposal to merge four Pennsylvania human service agencies. The Governor would like to consolidate the current Departments of Aging (PDA), Drug and Alcohol Programs (DDAP), Health (DOH), and Human Services (DHS) into a unified Department of Health and Human Services (DHHS).  
In recent weeks legislators have heard testimony from Wolf Administration officials offering support for consolidation, and from groups and individuals who expressed various degrees of opposition. Many of the concerns relate to the impact of the merger on the Department of Aging.
The Pennsylvania Department of Aging (PDA) has a 40 year history in Pennsylvania. In 1973 an amendment to the federal Older American’s Act required states to establish Area Agencies on Aging (AAAs) to provide programs and services for older adults. In response Pennsylvania established a network of county or non-profit based local agencies. In 1978 the Legislature established the PDA as a cabinet level position.
The PDA currently has 117 employees. The agency coordinates and funds a broad range of programs and services that benefit older (age 60 and over) Pennsylvanians and their families and caregivers. Most of these services are made available through the 52 local AAAs. About 2/3rds of the PDA funding to local AAAs comes from the Pennsylvania lottery.  
The Wolf Administration states that consolidation of PDA with other human services agencies makes sense “in order to promote more effective collaboration and service delivery, enhance program effectiveness, and eliminate duplicative processes.” Seniors could benefit from having a single agency as their point of contact for state provided health and human services. The hope is that consolidation will reduce complexity and confusion for seniors and individuals with disabilities by providing one door to needed services instead of several. Consolidation has the potential to reduce red tape for providers. And it should result in modest, but ongoing cost savings. For more on the Administration’s rationales, see the Governor’s press release here. And the Administration has posted updated information on its "unification" proposal here.
Many organizations across the state have expressed reservations about the merger of the PDA into the new DHHS super-agency. Organizations testifying about concerns with this aspect of the proposal have included the PA Association of Area Agencies on Aging (P4A), the Center for the Advocacy for the Rights and Interests of the Elderly (CARIE), the Southwestern Pennsylvania Partnership for Aging (SWPPA). The Pennsylvania Association of Elder Law Attorneys, of which I am a past President, has come out against including the PDA in the consolidation. A number of legislators have also expressed reservations.
Here are some of the concerns being raised:
Loss of a cabinet level voice advocating for seniors. Since 1978 Pennsylvania seniors have had cabinet level representation. As expressed by House Aging and Older Adult Services Chairman Tim Hennessey at a House Appropriations Committee meeting: “What position do you think would be the most effective advocate for the elderly: a cabinet secretary sitting beside other cabinet secretaries with the governor; or a deputy secretary three levels down from the governor, as the consolidation plan proposes?”
Buried in Bureaucracy. Aging may get lost in the large DHS dominated super-agency bureaucracy. It could get “buried in bureaucracy” according to Representative Gene DiGirolamo, chair of the Human Services Committee. Aging has only 117 employees compared with the 17,000 total projected employees of DHHS.  
Potential reduction in lottery funding. As we often see noted in its advertising, proceeds from the Pennsylvania lottery go to support programs benefiting older residents. The PDA and AAAs use lottery funds for senior centers and meals, low cost prescription assistance (PACE and PACEnet), transportation, property tax and rent rebates, home and community based services and other care related services. They fund education and outreach activities, ombudsman services, protective services, family caregiver supports, the nursing home transition program and the OPTIONS program.
Approximately 78 percent of PDA funding comes from the Pennsylvania Lottery with the other 22 percent being derived from federal funds. The lottery funds are used by the PDA and AAAs to benefit older adults who are not on Medicaid. As described by Rebecca May-Cole, Executive Director of P4A, “the typical senior receiving services through an AAA is a 79-year-old widowed female living just above the poverty level; she is not eligible for Medicaid, but also has a very limited income.”
But lottery funds can also be distributed to the Department of Human Services and used to fund the state’s share of the cost of Medicaid long term care services. In other words, the lottery funds can be used to replace General Funds. The fear is that after consolidation lottery funding will be diverted from the PDA and AAAs to DHS and used reduce state General Fund outlays for Medicaid.
“If it ain’t broke, don’t fix it.” As noted by Chairman Hennessey there is no need to include the PDA in the DHHS merger because PDA already functions smoothly. DHS, on the other hand, has a recent record of failure with its assumption of handling enrollment in the Aging Waiver program. In 2016 the enrollment functions of the PDA Waiver program were removed from AAAs and outsourced by DHS to a private company. The transition was poorly implement and the failure has delayed critically needed services for untold numbers of seniors. This recent misadventure casts doubt on the ability of a DHS controlled super-agency to oversee PDA functions.  
Conflicts of Interest: There are potential conflicts of interest in having one super-agency (DHHS) handling federally funded programs which require separation of function. For example, is it appropriate to have the Long-Term Care Ombudsman Program (currently a PDA function) housed with the same agency charged with nursing home licensing and enforcement? Would this violate the federally mandated independence of the Ombudsman?  
Lack of Stakeholder Input: The consolidation proposal was developed without meaningful external stakeholder input.
Lack of adequate study: There has been no study to determine if the consolidation makes sense. More study should be required before moving forward with its implementation.
For all of these reasons legislative approval of the proposed consolidation seems to be in doubt. We may learn its fate in the next few months. If you want to provide your legislators with your opinion on the merger you can find their names and contact information here.  
A video of the April 17, 2017 Joint House Aging and Older Adult Services, Health, and Human Services Committees hearing on the consolidation is available here.

Saturday, April 15, 2017

What is the difference between a health-care power of attorney and a living will?

There is a lot of misunderstanding about living wills and health care powers of attorney. Even health care professionals can be confused. Here is my explanation of the major differences between these two forms of health care directive. 
If you are medically competent you get to make health decisions for yourself. But a problem arises if you are not competent to make your own decisions. In that case, who decides, and what can you do to make sure the decisions will be consistent with your intentions?That is where advance health care directives come in.
Two notable advance health care directives are the health care power of attorney and the living will. You can use these documents to help ensure that you always get the kind of health care treatment you want even if you are unable to speak up for yourself.
What are the differences between these two documents? Do you need to have both?
What is a health care power of attorney?
A health-care power of attorney authorizes another person to make health-care decisions for you when you cannot make them yourself. The person you choose is called your health care agent.
The document must be signed by you while you are competent. In it you can describe the types of treatment that you would and would not want to receive at the end of your life. But you do not have to do so. The document can give your agent the authority to make any and all health-care decisions you could make, if you were competent. It is important to note that the health care power of authority is only stand-by authority. You will continue to make decisions for yourself as long as you can do so.
What is a living will?
A living will is a written declaration that instructs your doctor regarding the use, withholding or withdrawal of life-sustaining treatment if you are terminally ill and lack the capacity to make decisions. A living will directs your doctor’s actions when the use of life-sustaining treatment would serve only to postpone the moment of death or maintain you in a permanent unconscious state, but would not provide a cure for the condition.
A living will applies only in the limited situation where you have an end-stage medical condition or are permanently unconscious. It is not relevant to other circumstances.   
Under Pennsylvania’s living will statute you may appoint someone to make decisions regarding life sustaining treatment for you if you are ever both incompetent and either terminally ill or permanently unconscious. This person is called a surrogate.
What is the difference between a health-care power of attorney and a living will?
One significant difference is that the health-care power of attorney is much more broadly applicable. A living will comes into effect only when the issue is whether to use a life-sustaining treatment to postpone the moment of death or maintain you in a permanent unconscious state. In that limited circumstance, a living will gives instructions regarding life-sustaining treatments. 
A health care power of attorney is not limited to terminal illness situations but can be used to address the broad range of health-care decisions that may arise whether you are terminally ill or not. 
Both documents allow you to select someone else to make decisions for you when you are unable to do so, but with a living will that person can only act if you are terminally ill. 
A living will forces you to anticipate the circumstances that will arise in the future and give your instructions before you have knowledge of your specific medical situation. A health care power of attorney can provide for better informed decisions because it allows your agent to evaluate the specific situation that has arisen and make a decision based on the actual circumstances.
Should I have both documents?
Ideally your advance directive will include guidance as to the medical treatments you would want to refuse in specific situations, and will name a person to make decisions for you in other situations or if your intentions are not clear. You can set forth your desires on these related but separate issues in separate documents if you wish, but it is also possible for you to combine your living will instructions and health care power of attorney appointment in one document.
It makes sense to use only one document so that health care professionals can find all of the relevant information in one place, and your health care agent will be fully aware of your specific instructions. I suggest that the best document for most people is a health care power of attorney that also provides some instructions regarding the use of life sustaining treatment in the event of your terminal illness.

I personally have just one document – a health care power of attorney. It gives my agent wide discretion in making decisions for me, including treatment at the end of my life. And I have talked to my agent and other family members about my philosophy towards end of life care. That communication is a key element in helping ensure that the appropriate decisions will be made for me. 

Monday, April 10, 2017

Going Home - How to Prepare for your Hospital Discharge - Part 2

This is part 2 of my series on how to prepare to go home after a hospital discharge. Click here for Part 1.
Being in the hospital is tough on the patient. If you are in the hospital for a few days, you should expect that your functional abilities will decline. When you return home there is a good chance you will need assistance and supportive care for a while. But, you will no longer have the professional care support that was available to you when you were in the hospital. You may qualify for some limited licensed home health services. But most or all of your care needs will have to be met by your non-professional family caregivers. Hopefully, your family will be prepared. 
Recently I wrote about the importance of advance preparation by caregivers when a loved one is being discharged from a hospital. See Preparing for your Hospital Discharge. As I noted, one way your family can prepare is by taking full advantage of the support that should be available from the hospital in conformity with the new Pennsylvania CARE Act.
This article provides some additional information on what you can do to prepare for a hospital discharge. Better preparation can improve the post-hospital quality of care, reduce the likelihood of re-admission, and limit the physical and emotional stress on caregivers.
Medicare Discharge Requirements
Medicare regulations require hospitals to follow rules to help you with your discharge and make your transition home safe. These discharge planning rules only apply if you are considered a hospital inpatient. (They do not apply if you are an outpatient or on observation status). 
The hospital must provide a discharge planning evaluation to all patients who are likely to suffer adverse health consequences upon discharge if there is no adequate discharge planning, and to other patients upon the patient's request, the request of a person acting on the patient's behalf, or the request of the physician. A nurse, social worker, or other appropriately qualified personnel normally will develop the evaluation.  A discharge plan must be developed if the evaluation indicates it is needed or if the patient’s physician requests it. (42 CFR 482.43(c)).
CARE Act Requirements
In addition to the Medicare rules, the Pennsylvania CARE Act requires hospitals to provide discharge planning assistance when a hospital inpatient is being discharged to home. When an inpatient is to be returning to their residence, the CARE Act requires the hospital to consult with the patient’s designated lay caregiver and issue a discharge plan that describes the patient's after-care assistance needs at the residence.
The CARE Act discharge plan also must include contact information for any health care, community resources, long-term care services and support services necessary to successfully carry out the patient’s discharge plan and contact information for a hospital employee who can respond to questions about the discharge plan. Hospitals are also to provide lay caregivers with instructions in all after-care tasks described in the discharge plan.
Questions to Ask
When you learn that a discharge is planned, find out who the hospital has assigned as your “discharge planner.” Recognize that the patient and family home caregiver are critically important members of the discharge planning team. This should be an interactive process. Be prepared to ask lots of questions to get the guidance and assistance you need. Express your concerns. Take notes. Try to have another person (e.g. another family member or friend) involved in discharge planning discussions. They can help ask questions and listen to directions.   
Here are some questions to consider asking prior to the discharge: 
  • Who on the hospital staff will assist with the discharge planning?
  • When will the discharge take place?
  • How will the patient get home safely?
  • What equipment and supplies will be needed? How can they best be obtained?
  • What patient care procedures will the home caregivers need to perform?  Do the caregivers have the physical ability and knowledge needed to perform them?
  • How can the home caregivers get the training, practice and support they need to be able to perform required tasks and procedures?
  • What special foods and diet will the patient require?
  • What medications will be required? Will the caregiver require training in administering medications?
  • What changes in condition or other problems might occur at home? How should the patient and caregivers respond if problems arise?
  • What resources will be available to provide respite time for the home caregivers?
  • What follow up care will be needed? When is the first follow-up appointment?
  • Who can the patient and/or caregivers call with questions and concerns?
  • Will professional in-home assistance (such as physical therapy or occupational therapy) be needed? Who will arrange for those services?
  • What costs will be encountered and how will they be paid (e.g. Medicare, Medicaid. VA benefits, out of pocket)?   

Additional tips on preparing for a hospital discharge to home are available online. The Medicare website includes a planning checklist: Your Discharge Planning Checklist [opens as a .pdf file]. I suggest that the patient and/or primary caregiver print out this Medicare booklet and take it with you to the hospital.
Another helpful checklist is Going Home: What you need to know
The Next Step in Care website has wonderful resources for patients, caregivers and providers.Visit to learn about home health services.

Thursday, March 30, 2017

How to Become an Organ Donor in Pennsylvania

[The following article was written by Jody Lose, an Estate Planning Case Manager at my law firm, Marshall, Parker and Weber.]
Most people already have some knowledge of organ donations. When you apply for or renew your driver’s license or photo ID you are asked if you want to become an organ donor.
Anyone can decide to be a donor. If you are under age 18, however, you will need the signature of a parent or guardian to have the donor designation placed on your driver’s license or photo ID. If you are over age 18, you can request the Organ Donor designation be placed on your driver’s license or photo ID at the Photo Center at the time you have your photo taken.
You can also now apply online if you do not want to wait to renew your driver’s license or photo ID by going to This is an online database for Organ Donor Registrations, with a link through the PennDot website as well. Separate donor cards are not mailed out. You can call Gift of Life in Philadelphia toll-free at 1-877-DONORPA (366-6772) or you can go online to to obtain more information.
For people who are interested in contributing to scientific study or teaching to promote medical science, your entire body can be donated to the Humanity Gifts Registry in Philadelphia. The Humanity Gifts Registry is a non-profit agency in the Commonwealth of Pennsylvania that handles receipt and distribution of entire bodies donated to medical and dental schools in the state for teaching purposes.  For more information or to pre-register as a donor, you can contact the Registry at 1-215-922-4440 or go online to .
We are often asked about placing donor information in a person’s Last Will and Testament. This is not a good choice for designating your wishes for organ, tissue and/or body donations because your Will may not be reviewed until days or even weeks after you have passed away.
Organ, tissue and/or body donation directions can be placed in your Health Care Power of Attorney. If you do this be sure to talk about it with your family members and the person(s) designated as your health care agent(s). You want them to be aware of your wishes for donation and any designations or registrations you have done in advance.
With the advancement in technology for donations and the types of donations that are available today, many of our clients prefer to discuss their wishes with their health care agent(s) and family members and have them make the ultimate decision for donation based on the circumstances at the end of life.

People of all ages and medical histories should consider themselves potential donors.  Qualified medical personnel will review the donors’ medical and social history to determine what organs, tissues, or body parts may be able to be donated.  The Humanity Gifts Registry will make a determination at death for acceptance of remains.  It is only under the most unusual of circumstances that a donor’s body would be rejected.

Wednesday, March 29, 2017

Pennsylvania ABLE Accounts to Open for Enrollment

The Pennsylvania Department of Treasury has announced that the PA ABLE Savings Program will open on April 3, 2017. On that date the Department will officially begin accepting applications for enrollment.
In December 2014, the Federal government enacted a law which authorizes states to create “Achieving a Better Life Experience” [ABLE ] tax free savings account programs. ABLE accounts allow certain individuals with disabilities to accumulate savings without losing their eligibility for means tested SSI, Medicaid and other government benefit programs. To be eligible for an ABLE account an individual’s blindness or disability must have occurred before the individual reached age 26.
An ABLE account is established by and owned by the disabled individual (or by a parent or fiduciary acting on behalf of an eligible individual who is a minor or who lacks capacity). Anyone can contribute to it.
The money in an ABLE account can be used to pay for a broad range of “qualified disability expenses.” Funds can be used to pay for education, housing, health, transportation, personal support, employment training, legal and financial assistance, and more.
If the rules are followed, earnings on the ABLE account will not be subject to federal income tax, and perhaps more importantly, the funds in the account will not disqualify the owner from continued benefits under the Supplemental Security Income (SSI) and Medicaid programs. (If the account balance exceeds $100,000, SSI is suspended but Medicaid eligibility can continue.)
Ohio opened the first ABLE program in June 2016. Since then, many states have established ABLE account programs. Pennsylvania is now joining that group. For an updated listing of state programs click here.
ABLE accounts represent an important additional planning option for individuals who qualify. To understand the benefits and pitfalls and achieve optimal results ABLE accounts should be integrated and coordinated with other planning options like special need trusts. Check with a certified elder law attorney[1] or other experienced special needs planning lawyer in your state. Pennsylvania residents can contact Marshall, Parker and Weber for planning assistance.
Here are links to further information:
PA ABLE Program website:
The National ABLE Resource Center:
Marshall, Parker and Weber blog articles:
NewLaw Authorizes PA ABLE Savings Accounts (MPW blog, April 19, 2016)

[1] Certified Elder Law Attorneys are Certified by the National Elder Law Foundation. In Pennsylvania, this certification has been reviewed and authorized by the Pennsylvania Supreme Court. These attorneys are typically knowledgeable about special needs planning including ABLE.  

Friday, March 24, 2017

Going Home - How to Prepare for your Hospital Discharge

Are you or a loved one being discharged too home from a hospital? It’s important to be prepared before the discharge. Advance preparation will make life easier for both patient and family, help ensure that the proper home care is received, and prevent readmission to the hospital.
Research shows that about 34% of Medicare recipients are readmitted to the hospital within 90 days of their discharge and more than half (56.1%) within one year. Primary causes for readmissions include lack of preparation for discharge, poor hospital communications with patient and caregivers, and inadequate follow up care.
Medicare has long required hospitals to provide their patients with “discharge planning.” Medicare defines discharge planning as “a process used to decide what a patient needs for a smooth move from one level of care to another.” But the mere existence of a discharge plan does not mean it will be adequately implemented at home by the patient and his/her caregivers.
Home care can be difficult. Family caregivers are often called on to provide complex care that once was provided only by nursing professionals. This can include tasks like managing multiple medications, giving injections and providing wound care. Home caregivers need preparation, training, and ongoing support. 
On April 20, 2017 the Pennsylvania Caregiver Advise, Record and Enable Act (CARE Act) takes effect. The CARE Act recognizes the importance of preparing caregivers for home care and providing them with ongoing post-discharge support.
The CARE Act allows hospital in-patients to choose a “lay caregiver” to provide them with post-discharge assistance when the patient returns home. The hospital is required to consult with the lay caregiver regarding the care assistance tasks necessary to maintain the patient’s ability to reside at home. The hospital is also required to provide contact information for a hospital employee who can respond to questions about the discharge plan.
Lay caregivers should receive instructions in all after-care tasks described in the patient's discharge plan. Training and instructions may be conducted in person or through video technology at the discretion of the lay caregiver. The instructions must include (i) a live or recorded demonstration of the tasks, (ii) an opportunity for the lay caregiver and patient to ask questions, and (iii) answers to those questions.
Take full advantage of the Care Act.
If you are fully competent prior to your time of discharge, you can name your choice of lay caregiver. But what if you are not competent? 
If you have a health care power of attorney you should consider including a specific designation of your choice of lay caregiver in it. This could be the person designated as your health care agent, or it could be someone else who you expect to be involved with your hands-on post-discharge care. Your choice will apply in the event that you are not competent to name a "lay caregiver" at the time of a hospital discharge. 
If you don’t have a health care power of attorney, get one. It is a vitally important document. (See the recent article by my colleague Elizabeth White: “Health Care Decision Making and the CARE Act”).   
Click here to read the Pennsylvania CARE Act. 

 [This is Part 1 of a planned two part series on preparing for your hospital discharge. I’ll post Part 2 in the near future.]