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What to Look for When Choosing a Medicare Advantage Plan

As Medicare premiums rise, a Medicare Advantage plan can seem like an attractive option. But if you are considering switching from Original Medicare to a Medicare Advantage plan, you need to know what to look for.

Medicare Advantage plans are run by private insurers, unlike Original Medicare, which the federal government operates, although the medical providers are private. The government pays Medicare Advantage plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The plans often look attractive because they offer the same basic coverage as original Medicare plus some additional benefits and services that Original Medicare doesn’t offer.

To compare Advantage plans, go to the Medicare Plan Finder at Medicare.gov. When deciding whether a Medicare Advantage plan is right for you, the following are the main factors to consider:

  • Cost. Since Medicare Advantage plans are offered by private insurers, the cost of the plan varies depending on where you live. While Medicare Advantage plans usually have lower premiums than paying for Original Medicare plus a Medigap plan, they can have higher deductibles and co-pays in certain circumstances, so you need to take those into account when calculating the cost of each plan. Medicare Advantage plans do have a cap on out-of-pocket costs, while Original Medicare does not. Check the annual maximum out-of-pocket costs for the plan. If you have a high level of health costs, a low out-of-pocket maximum may be the best option.
  • Coverage. What coverage does the plan offer? Medicare Advantage plans must cover everything that Original Medicare covers, but some plans offer additional benefits, such as dental, hearing, and vision. Plans may require your doctor to get approval for certain procedures. If the plan administrators disagree with your physician that a procedure is medically necessary, the plan may refuse to pay for it.You will want to find out how the plan is about approving treatments, referring patients to specialists or allowing patients to remain in the hospital if they are not ready to leave. You may want to check with your doctor to find out their experience with the plan and whether the plan frequently overrules the doctor.
  • Doctors. Original Medicare does not have any restrictions on which doctor you use, but Medicare Advantage plans are HMOs and PPOs, meaning that not every doctor accepts the insurance. With an HMO, if you visit a doctor outside of the network, you will likely have to pay out of pocket (except in an emergency). With a PPO, you can usually see any doctor you want, but you will pay less for an in-network doctor. You will want to check if your doctor and hospital are part of the plan’s network. The best way to do this is to call your doctor’s office to confirm.
  • Prescription drugs. Most Medicare Advantage plans include prescription drug coverage, so you should check to make sure the plan covers all the medications you take. You should also check if you need any special authorizations for any of your medications or if there any limits on the amount you can get. Other questions include whether your pharmacy is a preferred provider and whether you can get prescriptions by mail.
  • Quality of care. The Medicare Plan Finder includes a rating system that measures how well the plan manages health screenings and chronic conditions as well as how many customer complaints it receives, among other things. The ratings aren’t perfect, but they can give you an idea of plan’s quality.

How to Fix a Required Minimum Distribution Mistake

The rules around required minimum distributions from retirement accounts are confusing, and it’s easy to slip up. Fortunately, if you do make a mistake, there are steps you can take to fix the error and possibly avoid a stiff penalty.

If you have a tax-deferred retirement plan such as a traditional IRA or 401(k), you are required to begin taking distributions once you reach a certain age, with the withdrawn money taxed at your then-current tax rate. If you were age 70 1/2 before the end of 2019, you had to begin taking required minimum distributions (RMDs) in April of the year after you turned 70. But if you were not yet 70 1/2 by the end of 2019, you can wait to take RMDs until age 72. If you miss a withdrawal or take less than you were required to, you must pay a 50 percent excise tax on the amount that should have been distributed but was not.

It can be easy to miss a distribution or not withdraw the correct amount. If you make a mistake, the first step is to quickly correct the mistake and take the correct distribution. If you missed more than one distribution – either from multiple years or because you withdrew from several different accounts in the same year — it is better to take each distribution separately and for exactly the amount of the shortfall.

The next step is to file IRS form 5329. If you have more than one missed distribution, you can include them on one form as long as they all occurred in the same year. If you missed distributions in multiple years, you need to file a separate form for each year. And married couples who both miss a distribution need to each file their own forms. The form can be tricky, so follow the instructions closely to make sure you correctly fill it out.

In addition to completing form 5329, you should submit a letter, explaining why you missed the distribution and informing the IRS that you have now made the correct distributions. There is no clear definition of what the IRS will consider a reasonable explanation for missing a distribution. If the IRS does not waive the penalty, it will send you a notice.

A Modest Social Security Increase for 2021

The Social Security Administration has announced a 1.3 percent rise in benefits in 2021, an increase even smaller than last year’s.

Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021. The 1.3 percent increase is similar to last year’s 1.6 percent increase, but much smaller than the 2.8 percent rise in 2019. The average monthly benefit of $1,523 in 2020 will go up by $20 a month to $1,543 a month for an individual beneficiary, or $240 yearly.

The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $137,700 to $142,800.

For 2021, the monthly federal Supplemental Security Income (SSI) payment standard will be $794 for an individual and $1,191 for a couple.

Some years a small increase means that additional income will be entirely eaten up by higher Medicare Part B premiums. But this year, that shouldn’t be the case. The standard monthly premium for Medicare Part B enrollees is forecast to rise $8.70 a month to $153.30. However, due to the coronavirus pandemic, under the terms of the short-term spending bill the increase for 2021 will be limited to 25 percent of what it would otherwise have been.

Most beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2020. While you can still receive your increase notice by mail, you have the option to choose whether to receive your notice online instead of on paper.

For more on the 2021 Social Security benefit levels, click here.

Webinar: Benefits Overview from Westchester County Veterans Service Agency

Wednesday, November 11th
10:00 – 11:00

Register for this FREE webinar for Seniors & their Families: http://bit.ly/WestVeterans

(Dial-in by phone also available; numbers obtained on registration or by calling and leaving a message for Paul at 914.231.3227)

The Westchester County Veterans Service Agency services veterans, dependents and survivors, along with those currently serving, by providing trained and Accredited Veterans Service Officers (VSO), This webinar will review the VSO program, which provides advice on Veterans Federal, State and County benefits and assists those eligible with filing the necessary claims. We will cover pensions, burial benefits, vocational rehabilitation, healthcare, real property tax exemption and several other veterans benefit areas.

Speaker: Charlotte Trotter, Deputy Director of the Westchester County Veterans Service Agency

Limited to first 100 participants

Estate and Elder Care Plan Article by Patricia Bave, Esq.

An article titled “A Plan that Makes a Difference: How To Implement An ‘Effective’ Estate and Elder Care Plan” by Patricia Bave, Esq. was recently featured in Coming of Age Magazine in Westchester. Click here to download the article.

Should Seniors Who Lose Their Job During the Coronavirus Pandemic Claim Social Security Benefits Early?

In the wake of the coronavirus pandemic, unemployment is skyrocketing. Seniors who lose their jobs may be tempted to claim Social Security benefits early, but should they, given the resulting reduction in future benefits? The answer depends on your situation, but you may be able to claim and not sacrifice much in terms of future benefits.  

While you can claim Social Security benefits as early as age 62, the better financial decision is usually to wait to take benefits as long as you are able. If you take Social Security between age 62 and your full retirement age, your benefits will be permanently reduced to account for the longer period you will be paid. Individuals who file at age 62 this year will receive 72 percent of their full benefit. On the other hand, if you delay taking retirement beyond your full retirement age, depending on when you were born, your benefit will increase by 6 to 8 percent for every year that you delay, in addition to any cost of living increases. This extra income could be very welcome, especially if you live into your 80s or beyond.

Unfortunately, many seniors who lose their job due to the coronavirus pandemic may find it necessary to apply for benefits early, potentially losing hundreds of thousands in future benefits. Before rushing to apply for early retirement benefits, you should consider all of your options. If you are lucky enough to have substantial savings, it may make sense to spend your savings rather than take benefits early. You may also be able to apply for unemployment benefits to allow you to further delay taking benefits. 

If you do not have any savings or unemployment benefits to fall back on, your only option may be to claim benefits. However, if you do claim early and then go back to work, you may have the ability to increase those benefits. If you are able to stop the benefits within 12 months of starting, you can withdraw the application, repay the benefits collected, and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest-free loan. For more information, click here.

If you take benefits early but are not able to stop the benefits within 12 months of starting, you can still suspend your benefits in order to earn higher benefits. For example, if you start collecting at age 62 but no longer need the income once you reach your full retirement age, you could suspend benefits until age 70. You won't get a complete do-over, but between your full retirement age and 70 you would earn delayed retirement credits, which would increase your ultimate benefit amount when you collect at age 70. 

Whatever you decide, consider all of your options carefully before making any rash decisions. 

For a New York Times article about taking benefits early, click here.

For more about Social Security, click here.

Law Firms Devising Creative Strategies to Help Clients Safely Execute Documents During Pandemic

Attorney Doris Gelbman assists a client with a document execution.  Photo: Megan Flowers

As the COVID-19 pandemic continues to spread through the country, more people are realizing the importance of getting their estate planning documents in order. Those over age 60 are particularly at risk for developing complications from the novel coronavirus infection. Having in place documents — including a durable power of attorney, a health care proxy, a medical directive, a HIPAA release and a will — is essential in the event that illness strikes.

Although planning one’s estate is a top priority, people don’t want to put themselves or others at risk while doing it. Elder law and estate planning firms across the U.S. are well aware of this concern – both for their clients and their own staff — and have devised creative solutions for clients to execute their documents while limiting or eliminating contact between participants. Strategies include the drive-up solution, taking special precautions with office meetings, and (in some states) executing the documents remotely.

The Drive-Up Solution

This method involves all parties driving to a parking area – perhaps a lot adjacent to the attorney’s office, the client’s driveway, or an assisted living facility parking lot. At a minimum, the attorney and client will need to be present, although witnesses and/or a notary may also be required, depending on the document being executed and state law. One person, usually a law firm staff member, takes documents from car to car so the parties can roll down their windows and sign with minimal contact. Everyone can bring antibacterial wipes with them to clean their hands after the document execution has been completed. It’s unorthodox but it works and keeps everyone safe.

The Charlottesville, Virginia, firm of Gelbman Law PLLC has started using the drive-up approach for signings (see photo).  In Virginia, a will must be notarized and witnessed by two individuals, which could make for a crowded and unsafe condition if the signing is done indoors.

“We started thinking about how we could safely accommodate our clients, who are almost all elderly and at greater risk, and so the idea of drive-up will signings seemed like the safest move,” firm principal Doris Gelbman told The Daily Progress, a local newspaper. “I would say that, uniformly, our clients have been appreciative that we’re taking these safety measures.”

It's also possible to employ the drive-up method without an intermediary shepherding documents between vehicles.  Patricia D’Agostino of the Massachusetts elder law firm of Margolis & Bloom described in a recent firm blog post the three-car process she used for a signing that required witnesses and a notary:

I served the notary from my car, [the two witnesses] were witnessing from their car and the client was in his car in the middle. We were all on our conference line to communicate. The client showed me his driver's license through the car window. We had already sent the original documents to the client by Federal Express and I had copies. After the client signed the documents, he placed them outside of his car and when he was back in his car, I got out and put them in my backseat. I’ll leave them there for a few days to be safe before we process them. Since our understanding is that the coronavirus dies out on all surfaces within three days, [the witnesses] will be able to witness the documents and I will be able to notarize them at a later date.

Some firms are using still another variation of the car method: the attorney drives to the clients’ house and from the car witnesses them signing the documents on their porch.

Meeting at the Office

In cases where the physical law office remains fully or partially open, some firms are executing documents in the office but taking precautions to social distance and to make the process go quickly.

The firm may use a large conference room – or perhaps several separate rooms – to prevent close contact between the parties. All surfaces are thoroughly sanitized, pens not shared, and careful hand-washing encouraged both before and after the document execution process. Gloves may be used by everyone to avoid contact.

Many firms spread out appointment times – perhaps even scheduling them in the evening or on weekends – to keep the number of people in the office at one time to a minimum. Key to safe in-office signings is for the clients to review the documents thoroughly and communicate any concerns by phone or video conference before physically meeting so the document execution can be completed as quickly as possible.

Virtual Solutions

Like everything else these days – work, schools, doctor visits, birthday parties, and more – document execution is also going digital during the COVID-19 crisis. Details of elder law and estate planning documents can be worked out over the phone or through video conference calls or email exchanges. When everything has been prepared successfully, the actual document execution may be able to take place online. In some states, such as Florida, legislation has already been enacted to allow parties to conduct document executions virtually through Zoom, Google Duo, or other virtual platforms. In the wake of the pandemic, New York State now allows for video notarization. A number of other state legislatures are moving towards passing similar temporary laws so that clients can seamlessly execute their estate planning or other documents without endangering themselves or their attorneys.

Allaying Fears

No one wants to think about death or incapacity, and people come up with many reasons to put off planning their estates.  But in this unprecedented health crisis, worries about the safety of executing essential documents should not be a factor in the decision.

 

 

 

Important NYS Medicaid Updates

We hope that you and your loved ones are staying safe and healthy during this uncertain time.

As of April 3, 2020, there have been two major updates to the Medicaid program in New York State.

Please download the full letter here.

Medicare and Medicaid Will Cover Coronavirus Testing

With coronavirus dominating news coverage and creating alarm, it is important to know that Medicare and Medicaid will cover tests for the virus. 

The department of Health and Human Services has designated the test for the new strain of coronavirus (officially called “COVID-19”) an essential health benefit. This designation means that Medicare and Medicaid will cover testing of beneficiaries who are suspected of having the virus. In order to be covered, a doctor or other health care provider must order the test. All tests on or after February 4, 2020 are covered, although your provider will need to wait until after April 1, 2020, to be able to submit a claim to Medicare for the test.

Congress has also passed an $8.3 billion emergency funding bill to help federal agencies respond to the outbreak. The funding will provide federal agencies with money to develop tests and treatment options as well as help local governments deal with outbreaks. 

As always, to prevent the spread of this illness or other illnesses, including the flu, take the following precautions:
•    Wash your hands often with soap and water
•    Cover your mouth and nose when you cough or sneeze
•    Stay home when you're sick
•    See your doctor if you think you're ill

For Medicare’s notice about coverage for the coronavirus, click here.

For more information about Medicare, click here.

For more information about Medicaid, click here

Medicaid Protections for the Healthy Spouse

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

The so-called “spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple's assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total “countable” assets up to a maximum of $128,640 (in 2020). Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $25,728 (in 2020).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $128,640 (in 2020), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.

The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple's income is in the name of the institutionalized spouse and the community spouse's income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,113.75 to a high of $3,216 a month (in 2020). If the community spouse's own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse's income.

Example: Joe Smith and his wife Sally Brown have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith's name and $700 is in Ms. Brown's name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Brown's MMMNA is $2,200 (based on her housing costs). Since Ms. Brown's own income is only $700 a month, the Medicaid agency allocates $1,500 of Mr. Smith's income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $140 a month ($1,700 – $1,500 – $60 = $140).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.

Contact your attorney to find out what you can do to make sure your spouse has enough income to live on. 

 

 

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