The question of whether a special needs trust (SNT) can cover telehealth copays not covered by insurance is complex, hinging on the trust’s specific language, the beneficiary’s Supplemental Security Income (SSI) eligibility, and current regulations. Generally, SNTs are designed to supplement, not supplant, public benefits like SSI and Medicaid. Therefore, directly paying for services that Medicaid *should* cover could jeopardize those benefits. However, the nuance lies in understanding what constitutes a permissible supplemental expense, and telehealth, particularly when insurance doesn’t fully cover it, falls into a gray area. Roughly 65% of individuals with disabilities rely on government assistance programs, making careful trust administration crucial to avoid benefit loss.
What Expenses *Can* a Special Needs Trust Pay For?
SNTs are exceptionally versatile, but their permitted uses are narrowly defined to protect public benefits. They can cover expenses that enhance the beneficiary’s quality of life *beyond* what Medicaid or SSI provide. This includes things like specialized therapies, recreation, travel, education, and even certain assistive technology. “The goal isn’t just to provide for basic needs, but to empower the beneficiary to live a fuller, more meaningful life,” Ted Cook, a San Diego estate planning attorney specializing in SNTs, often explains to his clients. However, direct payment for medical expenses typically covered by Medicaid is generally prohibited, as it could be construed as replacing Medicaid benefits and reducing SSI eligibility. This can be quite tricky with the rise of telehealth, where copays may exist even if the service *should* be covered, or coverage is delayed or denied.
What Happens If My Beneficiary’s SSI Is Jeopardized?
If an SNT payment is deemed improper and results in a reduction of SSI benefits, the consequences can be significant. SSI provides a vital safety net, and even a small reduction can drastically impact the beneficiary’s financial stability. In 2023, the maximum monthly SSI benefit was $914 for an individual and $1,371 for a couple. I recall a case involving a young man named David, who had cerebral palsy. His mother, hoping to ensure he had access to regular telehealth therapy sessions, began using the SNT to cover the small copays that his insurance didn’t cover. Unfortunately, the Social Security Administration (SSA) determined this constituted improper supplementation, and David’s SSI benefits were reduced by a substantial amount. The family was devastated, realizing their good intentions had inadvertently harmed David’s financial well-being.
How Can I Ensure My SNT Payments Are Compliant?
Navigating these complexities requires careful planning and expert guidance. Ted Cook always recommends a proactive approach, emphasizing the importance of documenting all expenses and seeking prior approval from the SSA when there’s any doubt about the permissibility of a payment. “Think of it as a layered approach: clear trust language, meticulous record-keeping, and, when necessary, seeking a determination from the SSA before making a payment.” One strategy is to structure payments as reimbursements for expenses the beneficiary *would* have paid if they had income, rather than direct payments. This creates a clearer distinction between supplementation and providing resources for needs the beneficiary already has. Another helpful practice is to engage a qualified attorney specializing in special needs planning to review the trust document and advise on compliance.
What Was the Resolution in David’s Case?
Thankfully, there was a path to resolution, though it was a lengthy and stressful process. David’s mother immediately engaged Ted Cook, who skillfully crafted a detailed appeal to the SSA, demonstrating that the telehealth services were truly supplemental, enhancing David’s quality of life beyond what Medicaid covered. He argued that the copays were a minimal amount and didn’t diminish the overall value of David’s care. After months of review and supporting documentation, the SSA ultimately reversed its decision and reinstated David’s full SSI benefits. This case highlighted the critical importance of having expert legal counsel and a proactive approach to SNT administration. It’s a reminder that even well-intentioned actions can have unintended consequences, and careful planning is essential to protect the financial security of individuals with special needs.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
Map To Point Loma Estate Planning Law, APC, an estate planning attorney near me: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
- wills attorney
- wills lawyer
- estate planning attorney
- estate planning lawyer
- estate planning attorneys
- estate planning lawyers
About Point Loma Estate Planning:
Secure Your Legacy, Safeguard Your Loved Ones. Point Loma Estate Planning Law, APC.
Feeling overwhelmed by estate planning? You’re not alone. With 27 years of proven experience – crafting over 25,000 personalized plans and trusts – we transform complexity into clarity.
Our Areas of Focus:
Legacy Protection: (minimizing taxes, maximizing asset preservation).
Crafting Living Trusts: (administration and litigation).
Elder Care & Tax Strategy: Avoid family discord and costly errors.
Discover peace of mind with our compassionate guidance.
Claim your exclusive 30-minute consultation today!
If you have any questions about: What are the long-term benefits of establishing a Special Needs Trust?
OR
What are the advantages of avoiding estate planning with an irrevocable trust?
and or:
When should an executor or trustee seek professional guidance?
Oh and please consider:
What are some common challenges faced during debt settlement in estate planning? Please Call or visit the address above. Thank you.