A. The purpose of
an Income Trust is to allow an individual with excess income who has exhausted
all available resources to become eligible for Medicaid. The trust may be used
only for income belonging to the individual. No resources (assets) may be used
to establish or augment the trust. Inclusion of resources voids the trust
exception. It is intended to assist individuals with excess recurring monthly
income who have income that exceeds the Medicaid institutional limit in effect
at the time eligibility is requested but have insufficient income to pay the
private cost of institutional care. Individuals with income above the private
pay rate for the facility in which the individual resides will not be eligible
for Medicaid under the Income Trust provision.
B. This type of trust established for the
benefit of the individual is limited to institutionalized individuals, not
those in an acute care hospital setting. Persons participating in the home and
community-based services (HCBS) waiver may also utilize an Income Trust for
eligibility purposes.
C. An Income
Trust must meet all the following requirements:
1. The trust is composed only of the
pension(s), Social Security, and other income due the individual from all
sources, including accumulated interest in the trust. Total income does not
include income that is not countable under Medicaid rules, such as payments
from the Veterans' Administration for Aid and Attendance (A&A) and payments
for unreimbursed medical expenses.
2. Income Trusts, once accepted by the
Division of Medicaid, cannot be modified without the Division of Medicaid's
approval. An Income Trust must specify that the trust will terminate at the
individual's death, when Medicaid eligibility is terminated, when the trust is
no longer necessary or in the event the trust is otherwise terminated. Trusts
may need to be terminated prior to an individual's death due to changes in the
individual's income or changes in Medicaid policy regarding how certain income
must be counted or in the event the individual is discharged from the nursing
facility.
3. A portion of the
individual's income may be protected in the month of entry into a nursing
facility. When income protection is applicable, there is no cost of care
payable to the nursing facility for beneficiaries whose income is less than the
institutional income limit. However, income above the amount that is one dollar
($1.00) less than the Medicaid institutional limit is payable to the Division
of Medicaid for beneficiaries eligible under an Income Trust within thirty (30)
days after receipt of the notice approving eligibility issued by the Division
of Medicaid. The approval notice informs the Trustee of the amount payable for
the month of entry.
4. For all
subsequent month(s), if income of the individual is less than the individual's
cost of care at the nursing facility, all income of the individual, less
authorized deductions, must be paid directly to the nursing facility. In that
case no funds will be retained in the trust. If the income of the individual
exceeds the cost of care at the nursing facility in any month the individual is
eligible under an Income Trust, the trust must retain the income in excess of
the cost of care until such time that payment of the accumulated Income Trust
fund is requested by the Division of Medicaid.
5. Income Trusts for HCBS Waiver enrollees
require that the trust must distribute to the individual, or for his/her
benefit, an amount equal to not more than one dollar ($1.00) less than the then
current Medicaid income limit as approved by the Division of Medicaid. The
trust should not specify the amount of the individual's income as this amount
may change each year and the amount to be released from the trust will change
to an amount equal to one dollar ($1.00) less than the current Medicaid income
limit.
6. At the dissolution or
termination of an Income Trust, the death of the individual, loss of the
individual's Medicaid eligibility or in the event that the individual's income
no longer exceeds the current Medicaid income limits, the trust agreement must
provide that all amounts remaining in the trust up to an amount equal to the
total medical assistance paid by the Division of Medicaid on behalf of the
individual that has not previously been repaid will be paid to the Division of
Medicaid.
7. The trust agreement
must provide that at the time of each review of the individual's Medicaid
eligibility (at least annually) while this trust is in existence, when notified
by the Division of Medicaid, the Trustee must pay to the Division of Medicaid
the amount that should be accumulated in the trust up to the amount expended by
the Division of Medicaid on behalf of the individual that has not previously
been repaid. Failure to make the requested payments will result in the loss of
Medicaid eligibility for the individual.
8. The trust agreement must provide for an
accounting of all receipts and disbursements of the trust during the prior
calendar year when requested by the Division of Medicaid.
9. No fees are allowed to be paid to the
Trustee for their service. In the event funds are retained in the trust,
administrative fees are limited to ten dollars ($10.00) per month and are
intended to cover any bank charges required to maintain the trust account.
10. Any disbursements not approved
by the Division of Medicaid or provided for by the trust agreement will result
in a loss of the trust exemption.
11. The trust agreement must specify an
effective date. Unless the applicant is requesting retroactive eligibility of
up to ninety (90) days, which will require that the applicant have the funds
necessary to fund the trust for that period, the effective date will be the
date of execution. If a retroactive date is being sought, the effective date
will be determined through consultation with the Division of Medicaid's
Regional Office. In that case the Regional Office should be consulted to
determine the effective date prior to execution of the agreement.
D. An Income Trust will not be
allowed on a temporary or intermittent basis except in instances when monthly
excess income will be reduced at a future date. In such a case, an Income Trust
will be allowed until such time as the excess monthly income no longer requires
an Income Trust to allow eligibility. Income received less than monthly does
not qualify as recurring excess monthly income that allows the use of an Income
Trust. Income received irregularly or infrequently must be converted to monthly
income before evaluating the need for an Income Trust.
E. The Division of Medicaid will provide
model Income Trust agreements for individuals in need of an Income Trust. Model
agreements are provided for individuals in institutional care and for
individuals enrolled in an HCBS waiver that need an Income Trust in order to
qualify for Medicaid based on income. The only changes to these legally binding
documents that the Division of Medicaid will accept are to add language
regarding a successor trustee or co-trustee. Changes must be approved by the
Division of Medicaid prior to execution of the trust. In completing the Income
Trust document, the individual cannot be the Trustee of the Income Trust.
F. It is possible to have an
Income Trust during the time a transfer of assets penalty is in effect.
Although the Division of Medicaid will not pay for an individual's room and
board during a transfer penalty period, the Income Trust will allow an
individual with excess income who otherwise requires an Income Trust in order
to be eligible to qualify for all Medicaid covered services other than payment
of room and board and will allow the penalty period to be implemented.
G. An applicant or beneficiary
requiring an Income Trust who has a court appointed conservator must furnish a
copy of the Chancery Court Order authorizing the conservator to establish the
Income Trust. The court must be made aware of the Income Trust requirement to
pay the Division of Medicaid any accumulated trust funds up to an amount
expended by the Division of Medicaid under the terms of the trust.
42
U.S.C. §
1396p; Miss. Code Ann. §
43-13-121.
