Public Policy Review SNA Fall Meeting St Petersburg

Public Policy Review SNA Fall Meeting St. Petersburg, FL October 22, 2016 Morris Klein 4520 East-West Highway, Suite 700 Bethesda, MD 20814 301 -652 -4462 morrisklein@morrisklein. com

There is never a dull moment

Overview • • ABLE VA regulations Housing policy Pending federal legislation

The Latest on ABLE • States begin to offer ABLE Accounts – Ohio, Tennessee, Florida and Nebraska among early starters • Florid participation limited to residents; other three state programs accept out-of-state account holders – 48 states and DC have authorized legislation for ABLE accounts – Some states have formed an alliance • Alaska, Illinois, Iowa, Kansas, Minnesota, Missouri, Nevada, New Jersey, Pennsylvania, and Rhode Island

The Latest on ABLE • Three new bills introduced in Congress – ABLE to Work Act (S. 2707/H. R. 4795) allows an ABLE beneficiary who earns income from a job could save up to the Federal Poverty Level (currently $11, 770). – ABLE Financial Planning Act (S. 2703/H. R. 4794) allows portability to and from 529 college savings plans – ABLE Age Adjustment Act (S. 2704/H. R. 4813) will raise the age limit for ABLE accounts to age 46. • Senate Finance Committee advances only the first two bills, does not approve the Age Adjustment Act, causing a rift in the disability community

Other ABLE News • IRS has not issued final rules and is not expected to do so in the near future

VA Regulations Update • Proposed rules published Jan. 23, 2015 (80 Fed. Reg. 3840) – Goal to make adjudications consistent and offer “bright-line” standards – 3 -year “look-back” period proposed – Could affect how VA treats special needs trusts by excluding only transfers to a vet or vet spouse’s child who is “incapable of self-support” • VA now expected to issue final rules by April 2017

New Housing Legislation • Housing Opportunity Through Modernization Act of 2016 (H. R. 3700) P. L. 114 -201 • Persons affected: – Nearly five million families and individuals receive housing rental assistance, including the Section 8 program assisting about two million low-income recipients – Under Section 8, tenants pay about 30% of their income towards rent • Lowers the amount of child care expenses as well as medical expenses that can be deducted for elderly and disabled families, • Increases the amount that can be deducted for dependents.

New Housing Legislation • Income cap – 120% of median income for area • Households with more than $100, 000 in countable assets would be ineligible for assistance • Enforcement of the assets cap would be left to local housing authorities

New Housing Legislation • Section 104 - Asset test – Cannot receive HUD subsidy if net family assets exceed $100, 000 (annually adjusted for inflation); or – who has a present ownership interest in, a legal right to reside in, and the effective legal authority to sell, real property that is suitable for occupancy by the family as a residence (unless property is for sale)

New Housing Legislation • Section 104 – Asset Test - Exclusions – personal property (unless has significant value) – retirement accounts – real property for which the family does not have the effective legal authority to sell such property; – any amounts recovered in any civil action or settlement based on a claim of malpractice, negligence, or other breach of duty owed to a member of the family and arising out of law, that resulted in a member of the family being disabled; – the value of any Coverdell education savings account under section 530 of the Internal Revenue Code of 1986 or any qualified tuition program under section 529 of such Code • Note ABLE not mentioned but see Sec. 103 of ABLE law (Pub. L. 113 -295 Division B) excluding ABLE accounts “notwithstanding any other provision of Federal law that requires consideration of… financial circumstances of an individual”)

New Housing Legislation • Section 104 – Asset Test – Exclusions – In cases in which a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund shall not be considered an asset of a family if the fund continues to be held in trust. Any income distributed from the trust fund shall be considered income, …except in the case of medical expenses for a minor.

Housing & SNTs • De. Cambre v. Brookline Housing Authority – Federal district court permits local housing authority to include distributions from SNT as income in determining rental payment – June 14, 2016 First Circuit reverses – October 11, 2016 Petition for a writ of certiorari filed. (Response due November 14, 2016)

Legislation - SNT Fairness Act • To amend Section 1917(d)(4)(A) (42 U. S. C. 1396 p(d)(4)(A)) to allow a mentally capable person with disabilities to establish their own SNT • S. 349 passed by Senate unanimously Sept. 9, 2015 • House in companion legislation (H. R. 670) adds postnatal Medicaid benefit and Botox use limitations as a pay -for • House passes law (“Special Needs Trust Fairness and Medicaid Improvement Act”) as amended 383 -22 Sept. 20, 2016 • Because House versions differs from Senate version, the bill returns to the Senate • “Lame-duck” session of Congress may approve SNFTA

Legislation - House Energy and Commerce Committee Activities • H. R. 1771 – ½ of income for Medicaid spousal annuities (except annuities from spouse’s IRA) payable for cost of care • H. R. 1361 – Limit home equity for Medicaid eligibility to $552, 000 (adjusted for inflation) • Republican members have established a Medicaid task force – Preparation for legislation after the election

Legislation -Disability Integration Act (S. 2427) • Introduced by Senator Schumer (D-NY) 12/18/15 • Reframes HCBS as a civil right, not a welfare entitlement • No public entity or LTSS insurance provider shall deny an individual with an LTSS disability who is eligible for institutional placement, or otherwise discriminate against that individual in the provision of, community-based longterm services and supports that enable the individual to live in the community and lead an independent life. • Requires affordable, accessible, and integrated housing • 5% FMAP Incentive During 10 year Transition • Private/Public Litigation Enforcement Mechanisms

Future Congressional Actions • Tax Bill • CHIP Sunset • MFP Sunset

COLA • 0. 3% increase for 2017 – Legislation to prevent huge Part B increase for some Social Security beneficiaries?

. Questions?