When the medical portion of a personal injury case settles, sometimes it is necessary for a Special Needs Trust (SNT) to be established in order to protect an individual’s financial and medical benefits, including Medicaid, Medi-Cal, housing benefits, and Supplemental Security Income (SSI). The Special Needs Alliance, a national nonprofit of attorneys who serve people with disabilities and their families, defines an SNT as:
"a trust that will preserve the beneficiary’s eligibility for needs-based government benefits because the beneficiary does not own or control the assets being held on his or her behalf. This enables the beneficiary to meet strict asset limits at the same time that a trustee can use the funds to cover expenses not covered by public benefits. SNTs can be used to cover a wide variety of expenses incurred for the sole benefit of the beneficiary."
In certain cases, Medicare requires that a portion of settlement funds be allocated to a Medicare set aside (MSA) to cover related future expenses that Medicare would otherwise pay for. The guidelines for worker’s compensation cases are clear and are often used for other personal injury settlements, as well. Creating an MSA should be considered if:
- The plaintiff is currently on Medicare and the settlement is greater than $25,000 or
- The plaintiff is likely to begin Medicare coverage within 30 months and the settlement is greater than $250,000.
If the plaintiff will need an SNT, the MSA should be incorporated within the trust document. Creation of an SNT and/or MSA should be handled at settlement time. These are complex instruments, and there are strict regulations concerning the necessary sequence of events when creating and funding them with a settlement. In fact, failing to protect a client’s benefits can leave a personal injury attorney open to liability.
Personal injury attorneys and special needs attorneys should ideally begin collaborating from the beginning of a personal injury case in order to protect the plaintiff’s interests. The attorney members of the Special Needs Alliance know the ins and outs of setting up SNTs and are extremely qualified to assist personal injury attorneys and their clients. While injured parties are going through the settlement process, it is always good idea to engage a medical administration firm like Ametros. Ametros can explain the road ahead and ensure that the injured party’s medical care will continue to be taken care of and that they will be compliant with the guidelines and requirements of Medicare and Medicaid.
Ametros’ professional administration service, CareGuard, is a great partner to bring in for the medical portion of an SNT. Ametros establishes a bank account for the settlement funds in the name of the SNT, maintaining the protections provided by the trust. From there, CareGuard handles payments for medical treatment, and the injured party is able to freely treat their injury. CareGuard completes all of the reporting to Medicare and reports annually back to the trust so the trust’s regulations and thresholds are accommodated.
Ametros has another service called Amethyst that allows the trust company to keep the medical settlement funds in the trust’s bank account. With Amethyst, the information of the trust account is shared with Amethyst and, when the individual has medical expenses, Amethyst bills the trust account directly.
The flexibility of CareGuard and Amethyst means that Ametros can work with on any settlement with any trust company to make sure the healthcare portion of the settlement is managed professionally and those funds are preserved. With CareGuard, the injured person saves on average 28% off of the healthcare in their settlement projection and, with Amethyst, they can save up to 21%. Especially folks that have SNTs recognize the importance of preserving those medical funds so that they can last as long as possible.
It is important to note that state regulations differ regarding the creation and administration of SNTs. Ametros’ team is always ready to answer any questions regarding what will happen post- settlement, and how medical bills will be paid, processed and reported. They have vast experience with SNTs and will collaborate with attorneys and other authorities to plan for future medical needs and make sure the injured party can protect their government benefits.
Still have questions about special needs trusts? Call our experts at 877.275.7415 or email us at [email protected].