By Joanne Marcus, MSW, Executive Director, Commonwealth Community Trust
When the call comes from the plaintiff’s attorney asking what should be done about the client’s public benefits, be prepared to answer. The case is about to settle, or the verdict is in, and now the client wants to know how it will affect his or her benefits. First, you will likely have to help the PI attorney assess the type(s) of benefits the client is receiving and determine if the settlement puts those benefits in jeopardy. How did the client receive these benefits – through means-testing or due to work history? Perhaps the PI attorney has not considered benefits but understands that the client is incapacitated and will need their assets managed; or perhaps public benefits may be necessary in the future.
Medicaid, the means-tested public benefit for disabled individuals who are also impoverished, will need to be protected. More than $2,000 in resources and the client will lose this valuable benefit; personal injury proceeds are plainly resources. Medicare, the benefit received by disabled workers who have earned enough quarters to qualify for disability benefits, may also need to be protected as well. In addition, Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) need to be considered. Both benefits provide a monthly income to the disabled. SSI is meanstested, just as Medicaid is, but SSDI, like Medicare, is not. Therefore, SSI income will need to be considered when planning.
Centers for Medicare and Medicaid Services (CMS) has begun enforcing the Secondary Payor Act for liability cases, meaning these clients should have a Medicare Set-Aside account. Some clients are eligible for both Medicare and Medicaid, but can they both be protected? The answer is yes, but not without some planning from the PI attorney and with your help. Adding complexity, many plaintiffs are choosing a Structured Settlement as a part of their proceeds. While providing important benefits to the client, these also have pitfalls to be avoided.