Monthly Archives: November 2018

2019 Spousal Impoverishment and Home Equity Figures Released

November 29, 2018

The Centers for Medicare and Medicaid Services (CMS) has released its Spousal Impoverishment Standards for 2019, confirming the earlier projections of Pennsylvania ElderLawAnswers member Robert Clofine, who based his estimates on the consumer price index for urban consumers for September.

The official spousal impoverishment allowances for 2019 are as follows (we include Medicaid’s home equity limits, which Clofine did not project):

Minimum Community Spouse Resource Allowance: $25,284

Maximum Community Spouse Resource Allowance: $126,420

Maximum Monthly Maintenance Needs Allowance: $3,160.50 

The minimum monthly maintenance needs allowance for the lower 48 states remains $2,057.50 ($2,572.50 for Alaska and $2,366.25 for Hawaii) until July 1, 2019.

Home Equity Limits:

Minimum: $585,000

Maximum: $878,000

For CMS’s complete chart of the 2018 SSI and Spousal Impoverishment Standards, click here.

Representative Pallone Wants to Fix the LTSS Financing System

November 28, 2018

courtesy of NAELA News:

By Morris Klein, CELA, CAP, and David M. Goldfarb, Esq.

Morris Klein, CELA, Fellow, CAP, Attorney At Law

Ranking-Member Frank Pallone (D-NJ) of the House Energy and Commerce Committeeis on a mission. The lead Democratic House sponsor of the Special Needs Trust Fairness Act wants to fix the long-term services and supports (LTSS) financing system.

His last major effort to give Americans a new LTSS benefit was the Affordable Care Act’s Community Living Assistance Services and Supports (CLASS) Act. The CLASS Act was a voluntary, government run LTSS insurance program. It tasked the Secretary of Health and Human Services to develop actuarially sound premiums and benefits, which most estimated would be around $75 dollars a day.

The program was criticized for allowing individuals with pre-existing LTSS needs to join the program and receive benefits after a five-year vesting period, and actuaries did not believe the program could sustain itself on its own over a 75-year window. Ultimately, it was repealed in 2013.

Now after over a year of defending against Medicaid cuts and the ACA repeal and replace efforts, Rep. Pallone has turned his eyes back toward LTSS by introducing rough draft legislation to create a new guaranteed benefit.

The current draft is just a sketch with many details to follow, but it follows a similar pattern to the CLASS Act except it’s universal, not merely voluntary.

National Academy of Elder Law Attorneys

David M. Goldfarb, Esq.

The minimum benefit would cover 5 hours of home health per day or roughly $100 per day nationally. As someone requires more assistance, the benefit would increase. By how much still remains unclear.

An individual who receives Medicare Part A, or has at least 40 Social Security Act credits, could qualify for the benefit. It’s essentially a cash benefit, giving individuals the ability to choose their own providers, and linked to a debit card.

In order to receive benefits, the person must either: a) meet a two-activities-of-daily-living (ADL) trigger and wait two years; or b) meet a three-ADL trigger and pay a yet to be determined deductible.

NAELA provided feedback on the concept. In particular, we noted that, like the Aid and Attendance pension for veterans, it could help some individuals stay out of institutions by paying for in-home care or by helping them with their assisted-living bill.

However, we noted that for those with the most needs, a $100-a-day benefit will not prevent impoverishment. Those individuals may still require Medicaid.

As with other benefit programs, a key question will be how to finance it. “Pay-fors” in this context are both political and economic. Politically, Republicans, who control Congress, are often skeptical about new government-run benefit programs. Economically, program costs will increase an ever-widening federal deficit unless a financing source can be found. Even if the Democrats take control of the House, House Minority Leader Nancy Pelosi (D-CA) has signaled a commitment to the “pay-for” rules. This means that for a benefit like this to pass, it must include offsetting cuts or by raising new revenue.

Ironically, tax reform may play into hands of the Democrats, who can now revert back to the old system while “paying for” perhaps $1.5 trillion in new spending without running afoul of the rules.

The legislation likely has a long time before it becomes law. But, the time to develop policy is now. When an opportunity — or a crisis ­— hits, Congress looks for what’s on the shelf to pass. With America getting older, the demand for a new LTSS benefit will only increase.

Not wanting to wait for federal action, some states are considering similar programs. Hawaii enacted a law last year to provide modest care benefits, and Washington is considering such legislation. Like the federal proposal, determining a funding source is a major challenge to get such programs running.

About the Authors
Morris Klein, CELA, CAP, is co-chair of the NAELA Public Policy Steering Committee and a member

of the Board of Directors. He is a NAELA Fellow. David Goldfarb, Esq., is NAELA’s Senior Public Policy Manager.

Seniors, Scams, and Identity Theft

November 28, 2018

Steven J.J. Weisman, Esq.

courtesy of NAELA News

By Steven J.J. Weisman, Esq.

What are some common scams that seniors can fall prey to and how can we help our clients?

Millions of older Americans are targeted as victims of scams and identity theft each year at a cost estimated to be $2.9 billion1 and this figure is undoubtedly smaller than the actual figure as older scam victims are less likely to report being a victim of a scam.2

Why Are Seniors So Much More Likely to Be Targeted for Scams?
To some extent, it may reflect the thinking exemplified by bank robber Willie Sutton who when asked why he robbed banks responded, “because that is where the money is.” So it is with many seniors who may have a lifetime of accumulated savings that provide a tempting target for scammers.

It has been thought that seniors might be more susceptible to scams due to being more trusting and two studies may have found a physiological basis for that opinion. A study by researchers at Cornell University published in the Journals of Gerontology concluded that naturally occurring changes in the brains of older people make them vulnerable to financial exploitation. The changes noted were in a part of the brain that alerts us when facing a risky situation as well as another part of the brain that controls the ability to read social cues.3

This deterioration of the brain can be and is exploited by scam artists, the only criminals we refer to as artists, who often appear to have a knowledge of psychology that Freud would have envied.

An earlier study done by researchers at the University of Iowa also found naturally occurring changes in the prefrontal cortex of the brain in the elderly that make older people less skeptical and therefore more likely to be victimized by a scam.4

In early 2018, Attorney General Jeff Sessions announced the largest coordinated sweep of elder fraud cases in history involving more than 250 defendants from around the world who victimized more than a million mostly elderly Americans at a cost of more than $500 million. The charges encompassed a wide variety of scams including telemarketing fraud, investment fraud, lottery scams, the grandparent scams, romance scams, IRS imposter scams, and identity theft.

Scams and Social Security
Social Security presents a launching area for a wide variety of scams targeting seniors. When the Social Security Administration (SSA) announced a 2 percent cost-of-living adjustment (COLA) beginning in January 2018, scam artists promptly called unwary seniors posing as representatives of SSA telling their intended victims that in order to receive their cost-of-living adjustment, they would need to confirm personal information including their name, birth date, and Social Security number.

As we know, this information is not required to be provided or confirmed for a person to receive their automatic cost-of-living adjustment to their benefits. Providing them to a scammer over the phone only leads to the senior becoming a victim of identity theft. Making the problem worse is the fact that scammers can use a technique called “spoofing” to manipulate their victim’s Caller ID so that the call appears to come from SSA.

The truth is that whenever you receive a telephone call, you can never be sure as to who is really calling and therefore we should teach our clients never to provide personal information over the phone to anyone who calls them unless they are absolutely sure that the call is legitimate and the information must be provided.

Another Social Security scam relates to the SSA’s helpful My Social Security Account online service, which allows you to set up a personal online account with the SSA that enables you to view your earnings history and estimates of benefits as well as manage your benefits online including changing your address or starting or changing direct electronic deposits of your benefit check into a bank account you may designate. This is a tremendously convenient service, but it also provides a great opportunity for scammers who have been setting up My Social Security Accounts on behalf of seniors who have not already set up such accounts for themselves. The scammers then make changes to the victim’s account by directing their benefit checks be sent to bank accounts controlled by the scammers. Even though the SSA requires verification of personal information by asking questions that only the Social Security recipient should know as part of the process for opening a My Social Security Account, too often this information is available to a determined identity thief who is thereby able to fraudulently open an account in the name of their intended victim.

In order to improve the security of the My Social Security Accounts program, the SSA is now requiring people to use dual factor authentication to access their accounts once they have been initially set up. At the user’s option, the dual factor authentication is done by the SSA sending a one-time code either to the user’s email or cell phone. Using an email address for dual factor authentication may prove to be problematic because it is not particularly difficult for a sophisticated hacker to gain access to someone’s email account. Even having the one-time code being sent to the senior’s cell phone can be risky when the scammer uses a technique called “porting” to have the victim’s SIM card transferred to a phone controlled by the scammer thereby having the one-time code sent to the phone of the scammer.

The best defense against this type of fraud is to set up a My Social Security Account for the senior with a strong username and password. For information about signing up for a My Social Security Account, go to https://ssa.gov/myaccount/. It is also helpful in setting up the account to require that any changes in the bank account into which the benefits check is electronically deposited only be done at a Social Security Administration branch office rather than through the online account.

Other Types of Senior Scams
The most common scams involving seniors are IRS impersonation scams, phony lottery scams, robocalls, tech support scams, grandparent scams, romance scams, and government benefit scams. Also, scams related to computer use by seniors are increasingly common. Educating seniors about these scams and how to avoid them is essential. Unfortunately, the limitations of this short article do not permit me to go into detail about how to avoid these scams.

Phony lottery scams, particularly the infamous Jamaican Lottery do, however, merit some mention. To a great extent these scams have targeted seniors. The scam begins with a telephone call from the scammer telling the targeted victim that he or she has won a lottery worth millions of dollars. The scammers convince the victims into paying huge amounts of money as administrative fees or taxes in order to claim their prize. Of course, there is no prize and the victims end up with nothing. While income taxes are owed on lottery winnings, no legitimate lottery ever collects the income taxes on behalf of the IRS; they either deduct the taxes from the prize or leave the matter of taxes entirely up to the lottery winner. Also, no legitimate lottery requires any kind of administrative fee in order to claim a prize.

Finally, the simple rule to remember is that it is very hard to win a legitimate lottery for which you have bought a ticket. It is impossible to win a lottery you have not entered.

Just Do the Best You Can
Presently I am a professor at Bentley University, but before that I taught in the Massachusetts state prison system where I met a student who was serving two consecutive life sentences, which meant that when he died he would start his second sentence. He told me that when he received his sentence, he yelled at the judge, “How do you expect me to do two consecutive life sentences?” to which the judge replied, “Just do the best you can.” And so it is with us. Nothing can totally protect our clients from becoming victims of identity theft or scams, but we can do the best we can to help them avoid these problems.

Citations
1 AARP. AARP Poll: Nearly One in Five Americans Report They’ve Been Victimized by Fraud.Washington, D.C: 1999. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3916958/#R2.

2 Pak K., Shadel D. AARP Foundation National Fraud Victim Study. Washington DC: 2011.

3 R. Nathan Spreng, et al., Financial Exploitation Is Associated With Structural and Functional Brain Differences in Healthy Older Adults, 72 The Journals of Gerontology: Series a, 1365–1368, (2017), https://doi.org/10.1093/gerona/glx051.

4 Erik Asp, et al., A neuropsychological test of belief and doubt: damage to ventromedial prefrontal cortex increases credulity for misleading advertising, frontiers in Neuroscience, July 9, 2012, https://www.frontiersin.org/articles/10.3389/fnins.2012.00100/full#h4.

About the Author
Steven J.J. Weisman, Esq., is a professor at Bentley University, and Of Counsel to Margolis and Bloom in Boston, Mass.

Pet Trusts

November 27, 2018

courtesy of NAELA News:

Brian F. Mahoney, Esq.

By Brian F. Mahoney, Esq.

A pet trust, if written with care, can ensure the pet owner’s wishes for his or her pet are kept.

Pets are beloved and cherished and over time they become part of the family. This is especially true among seniors or people with disabilities whose pets or service dogs can become daily lifetime companions. Some of your clients will want to make provisions for the care of their pets. Since a beloved animal’s life and lifestyle is at risk and because money is involved, your client should take this very seriously.

A pet trust, if written with care, can make sure the pet owner’s wishes for his or her pet are kept.

I practice in Massachusetts, and pet trust laws vary by state.1 The Massachusetts statute has the following important limitations:

• Except as otherwise expressly provided in the trust instrument, no portion of the principal or income shall be converted to the use of the trustee, other than reasonable trustee fees and expenses of administration, or to any use other than for the benefit of covered animals.2
• A court may reduce the amount of property held by the trust if it determines that the amount substantially exceeds the amount required for the intended use and the court finds that there will be no substantial adverse impact in the care, maintenance, health, or appearance of the covered animal. The amount of the reduction shall pass as unexpended trust property in accordance with subsection (d).3

Limitations
Most statutes I have reviewed have limitations, so you must meticulously examine your state statute to determine if:

1. There is a limit on how much money you can set aside for a pet.
2. There is a specific time limit on the trust aside from the typical rule against perpetuities. Is the measuring life the animal’s life?
3. You can establish a stand-alone living pet trust, or if it has to be a testamentary trust in the Will.

Considerations When Writing a Pet Trust
I write this article less in regard to black letter law, and more toward how to draft a pet trust that includes many considerations.

Your client will want to establish a record of what the expenses could be and/or how the money would be used. Providing for a pet is expensive. Calculate all costs to determine the appropriate amount of funding required for the expected lifespan of the pet.

The following practical information will be needed in order to structure the pet trust document properly. Whenever possible, calculate a dollar amount that covers the life expectancy of the pet. You will need to know:

• The name and address of the pet.

• A specific description of the pet. Specifically identify the animal by category (dog, cat, pig, horse, etc.), breed, color, and weight (i.e. “… my dog, a 95-pound German Shepherd named Dutch. Please see the attached photo of Dutch taken in the year 2018, incorporated herein by reference).

• The name and address of the pet’s veterinarian and the pet’s health history. You will need information on injuries and illnesses and discuss potentially expensive medical treatment and how it should be handled. For example, some pet owners may love their animal dearly, but might not want to or be able to pay $3,500 for life-saving surgery.

• Include information on regular medications and immunizations including routine protocols for the animal such as tick prevention applications. Will the state law for immunizations be different in the state where the Trustee resides?

• The animal’s diet. What and how much does the pet eat? Feeding even a small animal gets expensive over time. If a 15-pound dog eats $3.50 per day of food, and its life expectancy is 4 years, food costs for four years would exceed $5,000.

• Who are the groomers, walkers, or animal-sitters? Identify them by name and address.

• Living conditions at home/lifestyle. What is the standard of living one wishes to provide for their pet? Is the pet housebound except for daily walks or is the pet outside in a fenced-in yard with a doghouse? If the pet is a housebound dog, how many times a day must the pet be brought outside for its bodily functions? How many walks per day should the pet have? If a dog walker charges $10 per walk for two walks per day, more than $7,000 per year will need to be left just for dog walking.

• The pet’s disposition: If the pet is a snarling, barking, nasty beast, then the Trustee should be instructed to keep that pet away from children or strangers.

• Where will the pet be cared for when the owner dies? Is there a facility where the animal would be sheltered until post death administration of their estate and/or pet trust is completed? What is the current daily rate of that facility? What happens if the Trustee travels once they possess the animal?

• If there are multiple pets, would it be possible for them to be kept together after death of the owner? If not, then you would need separate trusts or separate trust provisions per pet within the same pet trust document.

• Discuss Trustee compensation amounts. In regard to Trustee selection: A pet lover would be great as a Trustee because they would take the owner’s wishes more seriously than one who dislikes or is indifferent to animals. As with a human beneficiary, I tell clients to look for a trustee who is altruistic and will likely do the right thing.

• Shipping impacts the amount of funding needed for the trust. Will the pet need to be shipped to another town or another state where the Trustee resides? We recently called a major airline and were told the estimated rate to send a dog from Boston to California is $271 plus taxes. The animal may need a new kennel/crate. What does that cost?

• Does the Trustee live in another town or state? If so, then all the connections to the animal where it presently lives are relevant only to the extent to calculate estimated future cost for the animal’s shelter, food, medical care, grooming, walking, etc., over the animal’s life span.

• Disposition of a pet after its death. Will there be a burial or cremation?

• Be careful to name remainder beneficiaries.

Make the Trustee Aware of the Trust and Its Contents
In order for the client’s wishes for their pet to be followed, the client should discuss the Pet Trust with their trustee before signing the trust.

A pet trust contains virtually all the considerations inherent in providing for human beneficiaries and more. To be drafted properly, a trust requires a considerable amount of time and effort from the attorney and client. n

Citations
1 The American Society for the Prevention of Cruelty to Animals (ASPCA) website has a list of every state’s statute regarding Pet Trusts. See www.aspca.org/pet-care/pet-planning/pet-trust-laws.

2 M.G.L.A. 203E § 408(b).

3 M.G.L.A. 203E § 408(c).

About the Author
Brian F. Mahoney, Esq., is a member of the NAELA News Editorial board. He has been practicing law in Massachusetts since 1982.

State regulators warn of deceptive Medicare marketing

November 27, 2018

NAELA News:

By  Star Tribune
OCTOBER 31, 2018

State officials are warning Medicare beneficiaries not to be fooled by deceptive advertising and sales offers during the current shopping season for health plans.

One of the big concerns is that beneficiaries recognize what information is coming from Medicare or a legitimate insurance company or agent, vs. information that might be from “a scam artist trying to steal your money,” the state Commerce Department said Wednesday in a news release.

Next year, a popular form of coverage known as the Medicare Cost health plan is ending across 66 counties in the state, pushing more than 300,000 Minnesotans to find a new health plan for 2019.

“We have had some complaints about potentially misleading advertisements and sales solicitations,” said Ross Corson, a Commerce Department spokesman, via e-mail on Wednesday. The department’s alert to consumers is “a preventive measure,” Corson said.

Open enrollment for Medicare health plans started Oct. 15 and runs through Dec. 7. It’s the shopping season for those losing their Cost plans, plus the general Medicare population.

There’s been a spike in legitimate Medicare marketing in recent weeks, as insurance companies try to woo seniors with Medicare Advantage health plans as well as Medigap supplementary policies that work with original Medicare. Carriers also have launched more Part D prescription drug plans, which also work in conjunction with original Medicare.

Commerce offered a series of tips for consumers.

“When looking for Medicare on the internet, make sure you go to the official website at Medicare.gov,” the agency said. “Don’t be fooled by private websites with similar addresses such as Medicare.com, Medicare.org and Medicare.net.”

Medicare shoppers should read the fine print and not be deceived by appearances, since some advertisements and sales materials may look like they are from Medicare. “If it is misleading in appearance, it may also be misleading in what it is really offering,” the department said.

The state agency said consumers should not believe any agent who claims to work for Medicare, or any advertising that claims to offer plans “sponsored” or “endorsed” by Medicare, which is the massive federal government health insurance program for people age 65 and older plus certain groups of younger people.

“Hang up on any phone calls, either live or recorded, trying to sell you a Medicare plan,” Commerce said. “Insurance companies and agents are not permitted to make unsolicited Medicare-related calls.”

Federal law is forcing health insurers next year to eliminate Medicare Cost plans across 66 counties in Minnesota. The elimination of these health plans is prompting an unusually large number of beneficiaries — more than 300,000 people in the state — to switch coverage all at once.

When the Cost plans go away, some enrollees will be steered toward a comparable Medicare Advantage plan from their existing health insurer. Cost and Advantage plans are similar in providing Medicare benefits via private insurers, but differ in how insurers get paid by the government.

Not all Cost plan enrollees will be steered to an Advantage plan, and those who are can make other choices. Another option is original Medicare, where consumers often buy a Medigap policy and a Part D prescription drug plan to supplement the traditional government insurance program.

A Star Tribune analysis in October showed the number of Advantage, Medigap and Part D plans is on the rise, although there tend to be more choices in the Twin Cities than in many greater Minnesota counties. What’s more, the Advantage plans have more limits on which doctors and hospitals are available to subscribers at in-network rates.

Minnesotans can call the state’s Senior LinkAge Line for free help in understanding Medicare choices at 1-800-333-2433.

People who think they have received a Medicare advertisement or sales solicitation that’s deceptive, misleading or a scam can report it to the Minnesota Commerce Department by e-mail at consumer.protection@state.mn.us or by phone at 651-539-1600 or 1-800-657-3602 (greater Minnesota).

Hang up on spoofed SSA calls

November 26, 2018

NAELA News:
by Lisa Weintraub Schifferle
Attorney, FTC, Division of Consumer & Business Education

If you get a call that looks like it’s from the Social Security Administration (SSA), think twice. Scammers are spoofing SSA’s 1-800 customer service number to try to get your personal information. Spoofing means that scammers can call from anywhere, but they make your caller ID show a different number – often one that looks legit. Here are few things you should know about these so-called SSA calls.

These scam calls are happening across the nation, according to SSA: Your phone rings. Your caller ID shows that it’s the SSA calling from 1-800-772-1213. The caller says he works for the Social Security Administration and needs your personal information – like your Social Security number – to increase your benefits payments. (Or he threatens to cut off your benefits if you don’t give the information.) But it’s not really the Social Security Administration calling. Yes, it is the SSA’s real phone number, but the scammers on the phone are spoofing the number to make the call look real.

What can you do if you get one of these calls? Hang up. Remember:

• SSA will not threaten you. Real SSA employees will never threaten you to get personal information. They also won’t promise to increase your benefits in exchange for information. If they do, it’s a scam.

• If you have any doubt, hang up and call SSA directly. Call 1-800-772-1213 – that really is the phone number for the Social Security Administration. If you dial that number, you know who you’re getting. But remember that you can’t trust caller ID. If a call comes in from that number, you can’t be sure it’s really SSA calling.

• If you get a spoofed call, report it. If someone calls, claiming to be from SSA and asking for information like your Social Security number, report it to SSA’s Office of Inspector General at 1-800-269-0271 or https://oig.ssa.gov/report. You can also report these calls to the FTC at ftc.gov/complaint.

For more tips, check out the FTC’s How to Stop Unwanted Calls and Government Imposter Scams. If you think someone has misused your personal information, go to IdentityTheft.gov to report identity theft and find out what steps to take.

IRS Announces Higher 2019 Retirement Plan Contribution Limits For 401(k)s and More

November 26, 2018

NAELA news:
Ashlea Ebeling, 

Get ready to save more for retirement in 2019! The Treasury Department has announced inflation-adjusted figures for retirement account savings for 2019, and there are a lot of changes that will help savers stuff these accounts.
After six years stuck at $5,500, the amount you can contribute to an Individual Retirement Account is being bumped up to $6,000 for 2019. The amount you can contribute to your 401(k) or similar workplace retirement plan goes up from $18,500 in 2018 to $19,000 in 2019. Catch-up contribution limits if you’re 50 or older in 2019 remain unchanged at $6,000 for workplace plans and $1,000 for IRAs.

That means that many high earners and super-savers age 50-plus can sock away $32,000 in these tax-advantaged accounts. If your employer allows aftertax contributions or you’re self-employed, you can save even more. The overall defined contribution plan limit moves up to $56,000, from $55,000.

Do these limits seem unreachable? During 2017, 13% of employees with retirement plans at work saved the then-statutory maximum of $18,000/$24,000, according to Vanguard’s How America Saves. In plans offering catch-up contributions,14% of those age 50 or older took advantage of the extra savings opportunity.

We outline the numbers below; see IRS Notice 2018-83 for technical guidance.

401(k)s. The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan, is $19,000 for 2019—a $500 boost over 2018. Note, you can make changes to your 401(k) election at any time during the year, not just during open enrollment season when most employers send you a reminder to update your elections for the next plan year.

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The 401(k) Catch-Up. The catch-up contribution limit for employees age 50 or older in these plans stays the same at $6,000 for 2019. Even if you don’t turn 50 until December 31, 2019, you can make the additional $6,000 catch-up contribution for the year.

SEP IRAs and Solo 401(k)s. For the self-employed and small business owners, the amount they can save in a SEP IRA or a solo 401(k) goes up from $55,000 in 2018 to $56,000 in 2019. That’s based on the amount they can contribute as an employer, as a percentage of their salary; the compensation limit used in the savings calculation also goes up from $275,000 in 2018 to $280,000 in 2019.

Aftertax 401(k) contributions. If your employer allows aftertax contributions to your 401(k), you also get the advantage of the $56,000 limit for 2019. It’s an overall cap, including your $19,000 (pretax or Roth) salary deferrals plus any employer contributions (but not catch-up contributions). For how to rollover aftertax 401(k) money into a Roth IRA, see Roth Road To Riches.

The SIMPLE. The limit on SIMPLE retirement accounts goes up from $12,500 in 2018 to $13,000 in 2019. The SIMPLE catch-up limit is still $3,000. Here’s how a SIMPLE works in practice.

Defined Benefit Plans. UPDATE The limitation on the annual benefit of a defined benefit plan goes up from $220,000 in 2018 to $225,000 in 2019. These are powerful pension plans (an individual version of the kind that used to be more common in the corporate world before 401(k)s took over) for high-earning self-employed folks.

Individual Retirement Accounts. The limit on annual contributions to an Individual Retirement Account (pretax or Roth or a combination) is moving up to $6,000 for 2019, up from $5,500. The catch-up contribution limit, which is not subject to inflation adjustments, remains at $1,000. (Remember that 2018 IRA contributions can be made until April 15, 2019.)

Deductible IRA Phase-Outs. You can earn a little more in 2019 and get to deduct your contributions to a traditional pretax IRA. Note, even if you earn too much to get a deduction for contributing to an IRA, you can still contribute; it’s just nondeductible.

In 2019, the deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $64,000 and $74,000, up from $63,000 and $73,000 in 2018. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $103,000 to $123,000 for 2019, up from $101,000 to $121,000.

For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000 in 2019, up from $189,000 and $199,000 in 2018.

Roth IRA Phase-Outs. The inflation adjustment helps Roth IRA savers too. In 2019, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $193,000 to $203,000 for married couples filing jointly, up from $189,000 to $199,000 in 2018. For singles and heads of household, the income phase-out range is $122,000 to $137,000, up from $120,000 to $135,000 in 2018.

If you earn too much to open a Roth IRA, you can open a nondeductible IRA and convert it to a Roth IRA as Congress lifted any income restrictions for Roth IRA conversions. To learn more about the backdoor Roth, see Congress Blesses Roth IRAs For Everyone, Even The Well-Paid.

Saver’s Credit. The income limit for the saver’s credit for low- and moderate-income workers is $64,000 for married couples filing jointly for 2019, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married filing separately, up from $31,500. See Grab The Saver’s Credit for details on how it can pay off.

QLACs. The dollar limit on the amount of your IRA or 401(k) you can invest in a qualified longevity annuity contract remains unchanged at $130,000. See Make Your Retirement Money Last For Life for how QLACs work.

Best & Worst Cities for People with Disabilities

November 2, 2018

Oct 2, 2018  |  Adam McCann, Financial Writer

NAELA News:

When searching for a new home, people with disabilities often have a longer and more complicated list of considerations compared with other individuals. In addition to common wish-list items, such as reliable public transportation and diverse entertainment options, people with disabilities also must think about things like the accessibility of facilities or even the cleanliness of the air.

To read on, click here

What’s the Dollar Cost of Caring for a Loved One With Alzheimer’s?

November 2, 2018

By Steven Reinberg
HealthDay Reporter

NAELA News: WEDNESDAY, Sept. 26, 2018 (HealthDay News) — Almost $200,000 over the course of two years. That is the cost of the care that a family member typically gives a loved one with Alzheimer’s disease.

That’s according to a new study that attempted to put a price tag on the burden of the day-to-day help that millions of folks with the memory-robbing disease need for shopping, cooking, cleaning, eating, taking medicine and looking after their well-being.

“The costs of caregiving depend on the needs of the [patient], and median costs range between $144,000 to over $200,000 over the course of two years,” said study author Norma Coe. She’s an associate professor of medical ethics and health policy at the University of Pennsylvania in Philadelphia.

More than 35 million Americans provided care to someone aged 50 or older in 2015, but the real costs of this so-called informal care aren’t really clear, the researchers said.

When these costs are usually taken into account, researchers multiply the hours of care by the wage that paid home health care workers would earn. But this falls short of the real-world costs of care given by family members.

That’s because family caregivers often give up activities such as leisure time or jobs, the study authors explained.

These costs totaled at least $277 billion in 2011, Coe said. “As baby boomers age and policies shift long-term care towards the community, these costs will likely rise substantially,” she added.

For this study, Coe and her colleagues looked at the costs to daughters between the ages of 40 and 70 who would be taking care of their mother in the near future.

The researchers specifically studied different scenarios of the mothers’ health. These included mothers who were healthy, those who had difficulty with daily activities, those with memory loss, those who had difficulty with daily activities and had memory loss, and moms who needed constant care.

For mothers who had memory loss but no difficulty preforming daily activities the researchers estimated the cost over two years at $163,000.

The costs of caring for someone who had difficulty with daily activities was $167,000 over the same period.

When memory problems were combined with difficulty with daily activities, however, the costs of caregiving actually dropped to $144,000, the researchers found.

But when a mother cannot be left alone for more than one hour, costs increased to more than $200,000, Coe’s team reported.

The average cost of a semi-private bed in a nursing home in 2017 was $85,775, which suggests that two years of nursing home care would cost $171,550, the study authors explained.

“As we move away from institutional care, it is important to remember the costs to the family and informal caregivers,” Coe said. “Caregiving involves significant costs, in line with the costs of a nursing home.”

Keith Fargo, director of scientific programs and outreach at the Alzheimer’s Association, said Alzheimer’s disease is exceptionally demanding for caregivers and the scope of the problem is likely to get worse.

“Our best estimate is that there are 5 million Americans with Alzheimer’s and lots of caregivers for those folks,” Fargo said. “And when you project out to 2050, that’s going to increase to 13.8 million.”

People caring for someone with Alzheimer’s need training and time off from giving care, he said. Support can include adult daycare and workplace policies that can help caregivers continue to work while they’re providing care, Fargo said.

Giving care can go on for many years, and caregiving can become more demanding over time, he said.

People need to start thinking about the cost of caring for someone with Alzheimer’s and how to manage before it happens, Fargo said. They should consider long-term care insurance and options for care in their community, he suggested.

“People should look at these options before it’s too late,” he said. “No matter how you slice it or dice it, it’s very expensive.”

In the study, Coe and colleagues used data from the Health and Retirement Study, conducted by the University of Michigan.

The report was published online recently in the Journal of the American Geriatrics Society.

More information

Visit the Alzheimer’s Association for more on caring for someone with Alzheimer’s.

SOURCES: Norma Coe, Ph.D., associate professor, medical ethics and health policy, University of Pennsylvania, Philadelphia; Keith Fargo, Ph.D., director of scientific programs and outreach, Alzheimer’s Association; Sept. 17, 2018, Journal of the American Geriatrics Society, online

Medicare Advantage Plans Found to Improperly Deny Many Claims

November 2, 2018

By Robert Pear

More and more beneficiaries are choosing Medicare Advantage because the plans offer potential advantages, including a doctor who can coordinate care. Christopher Capozziello for The New York Times

WASHINGTON — Medicare Advantage plans, the popular private-insurance alternative to the traditional Medicare program, have been improperly denying many medical claims to patients and physicians alike, federal investigators say in a new report.

The private plans, which now cover more than 20 million people — more than one-third of all Medicare beneficiaries — have an incentive to deny claims “in an attempt to increase their profits,” the report says.

The findings, by the inspector general at the Department of Health and Human Services, come as policies in Washington are creating new incentives for older Americans to enroll in Medicare Advantage plans. Some experts predict that the share of Medicare patients in the private plans could grow to one-half in a few years.

“Because Medicare Advantage covers so many beneficiaries, even low rates of inappropriately denied services or payment can create significant problems for many Medicare beneficiaries and their providers,” said the report by the inspector general, Daniel R. Levinson.

Medicare’s annual open enrollment period starts on Monday, and beneficiaries can join Medicare Advantage plans, switch plans or return to original Medicare. A vast majority of beneficiaries will have access to 10 or more private plans.

But the inspector general’s report underlines potential concerns for consumers. Investigators found “widespread and persistent problems related to denials of care and payment in Medicare Advantage.”

Relatively few people appeal the denial of claims, leaving insurers free to avoid payment. But those who do appeal often succeed. About 75 percent of appeals are successful at the first level of review.

More and more beneficiaries are choosing Medicare Advantage because, as the name indicates, the plans offer potential advantages, including a doctor who can coordinate care. Private plans have an annual limit on out-of-pocket expenses; traditional Medicare does not.

Federal officials predict that enrollment in Medicare Advantage plans will climb next year to 22.6 million, or 36 percent of beneficiaries. The total number of people covered by Medicare is expected to reach 72 million by 2025, up from 60 million today.

Even as the inspector general’s report was issued, on Sept. 27, doctors and patients and members of Congress were expressing concern about some practices of Medicare Advantage plans.

“Patients may be encountering barriers to timely access to care that are caused by onerous and often unnecessary prior authorization requirements,” said a letter sent to the Trump administration this past week by a bipartisan group of more than 100 lawmakers.

Insurers defend the requirements. They “protect patients from unnecessary and inappropriate care” and help reduce costs, said Matt Eyles, the president and chief executive of America’s Health Insurance Plans.

The growth of Medicare Advantage is driven not only by consumer choice, but also by policies set in Washington. Several factors have contributed to a favorable environment for Medicare Advantage plans, allowing them to reduce premiums or add benefits:

■ The Trump administration approved a big increase in payments to private plans for 2019, saying it was “committed to unleashing and strengthening the Medicare Advantage program.”

■ In addition to the general business tax cuts enacted last year, Congress provided additional tax relief to health insurers for 2019, suspending a fee imposed on them by the Affordable Care Act.

■ Medicare Advantage plans will be able to offer extra benefits, which could include transportation to the doctor’s office, home delivery of hot meals and safety features in the home like wheelchair ramps and bathroom grab bars. Such benefits, which are generally not available in the traditional Medicare program, may be attractive to older Americans who want to combine social and medical services.

“One in two American seniors will be in Medicare Advantage by 2021, given the industry-friendly rate and tax policies of the Trump administration,” said Ana Gupte, a health care analyst at Leerink Partners in New York.

John K. Gorman, a former Medicare official who is a consultant to many insurers, offered a similar forecast, predicting that 50 percent of beneficiaries would be in Medicare Advantage plans by 2025.

Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said the agency was not trying to steer beneficiaries to Medicare Advantage rather than original Medicare.

“We think it’s very important for our beneficiaries to make the choices that are going to work best for them,” she said, adding, “We are not steering any Medicare beneficiary anywhere.”

Medicare plans receive fixed monthly payments from the government. In return, they are supposed to provide the full range of services that patients need. If they keep patients healthy and reduce the need for hospitalization, they can often keep costs below what they are paid by Medicare.

But denying services can also keep down costs. In the last two years, Medicare has imposed more than $10 million in fines and taken other enforcement actions against private plans for overcharging beneficiaries, denying or delaying coverage for prescription drugs, and failing to respond to patients’ complaints.

When a health plan refuses to authorize a service, the beneficiary may go without it. And when doctors are improperly denied payment for services provided, the report said, they sometimes try to bill patients.

“Some Medicare Advantage beneficiaries and providers were denied services and payments that should have been provided,” the inspector general concluded.

Insurers have for years been accused of similar tactics in other lines of business. “They save money when they don’t provide care,” said David A. Lipschutz, a lawyer at the nonprofit Center for Medicare Advocacy.

Medicare evaluates the performance of private plans and uses a five-star rating system, with five being the best rating. Officials encourage beneficiaries to consider the ratings when selecting a plan.

But federal investigators questioned the usefulness of the ratings as a tool for beneficiaries. Health plans cited for serious violations of Medicare rules “can still receive high star ratings” and the bonus payments that go along with high grades, the inspector general reported.

Beginning in 2019, the report said, “audit violations will no longer be reflected in star ratings.”

New ratings will give additional weight to patients’ experiences, as reported by beneficiaries. Insurers say that 90 percent of people in Medicare Advantage are satisfied with their plans.

Administration officials accepted the inspector general’s recommendation that they step up the supervision of Medicare Advantage plans and “provide beneficiaries with clear, easily accessible information about serious violations” of Medicare requirements.