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So, Mom needs a home health aide.  Hire an agency or hire an aide directly?  As I explained last week, some of my clients make that decision based solely on cost.  They can pay an aide less than they would pay an agency.  That typically is because they are treating the aide as an independent contractor. By doing so, they are not withholding and paying taxes, including what is known as FICA.  If you are a salaried employee, what you receive is a net paycheck, after taxes.  Federal and state income tax withholding, Social Security, Medicare and state unemployment insurance contributions must be paid.  However, if you are an independent contractor, you are paid a gross amount and it is your responsibility to pay any taxes.  The independent contractor receives a 1099, reflecting the amount he/she was paid.  Sounds great.  If I’m hiring a home aide, then I’ll treat her as an independent contractor.  Except that it’s not my choice.  The IRS has guidelines about who is and isn’t an independent contractor. As I said last week, in some cases the line becomes blurred as to whether we have an employee or an independent contractor.  If I hire an aide for a

It’s a conversation we have with most of our clients at some point when guiding them through what we call the elder care journey.  Mom wants to stay at home but needs assistance with some of what are known as the activities of daily living – eating, bathing, dressing, walking and toileting. We recommend to our clients that they hire a home health agency for a variety of reasons which I have written about in previous blog posts.  That aide is going to be coming into Mom’s home.  The agency does background checks before hiring.  Proof of spend down for Medicaid isn’t an issue when hiring an agency.  The contract and payment to the agency is all that needs to be shown, unlike the cash payments that families often make when hiring an undocumented aide. There is another concern we discuss with clients and their families, but which they then generally push aside, and that is the question whether the aide they hire is an employee or an independent contractor. In many cases the line between the two is easy to draw.  For example, the contractor you hire to do work on your home is not your employee.  He is hired to do

Since I wrote about the issue of same sex partnerships and Medicaid 4 years ago in this blog (February 1, 2010), much has happened in the area of same sex marriage.  Last fall, the United States Supreme Court struck down a 1996 federal law, the Defense of Marriage Act (DOMA) which defined marriage as a legal union between a man and a woman. At the same time, the New Jersey Supreme Court last fall issued its own decision legalizing same sex marriages in the state.  This decision obviously has wide ranging ramifications, including in the area of Medicaid.  That’s because there are certain protections for a healthy spouse when the “institutional spouse” applies for Medicaid, that don’t exist for a non-married couple. Now that same sex marriage is legal in New Jersey, the healthy spouse can take advantage of the Community Spouse Resource Allowance rules that permit the healthy spouse to keep some of the couple’s assets.  In a single applicant case, all assets must be spent down to $2000. Until this recent New Jersey decision, however, the State did recognize civil unions of same sex partners.  The civil union law gave same sex couples some but not all of the benefits of

As most people know, in order to qualify for Medicaid, one must have no more than $2000 in countable assets.  But to get under that limit you cannot simply transfer assets out of your name, or gift them.  That’s because Medicaid imposes a penalty – a waiting period actually – before one can qualify.  The more money transferred, the longer the penalty period. But, how is that penalty calculated?  By taking the amount transferred and dividing it by the average monthly cost of nursing home care, what is known as the “Medicaid divisor”.  Each state has its own divisor because, when you think about it, the cost of nursing home care varies from state to state and region to region. The Medicaid divisor is a key piece of information in the Medicaid eligibility picture.  The lower that number is, the higher the Medicaid penalty is and the longer the waiting period for Medicaid.  For states looking to avoid paying benefits that’s a good thing since many people with penalties may pass away before those penalties expire.  The State will never have to pay any benefits in that case. As with many government laws and regulations, much is left unspoken.  As the cost of

I am often questioned about how Obamacare has affected long term care and Medicaid.  My answer is that it really hasn’t at all because mostly Obamacare addresses this country’s health insurance problem.   The Medicaid programs that pay for long term care haven’t changed as a result of the Affordable Care Act.  But there is a Medicaid program that covers basic medical needs for the indigent.  Because of Obamacare, more people are enrolling in that Medicaid program, NJ FamilyCare. A recent Star Ledger article about Medicaid estate recovery illustrates the confusion.  It talks about the prospect of having to pay the State back the benefits received from Medicaid.  The State places a lien on the estate when the person dies.  It is what is known as Medicaid estate recovery and is something I wrote about in last month’s blog (See March 17 and March 24 blog posts.)  It is not new and it is not unique to Obamacare.  Estate recovery has been the law for more than 20 years. The Affordable Care Act is supposed to make health care insurance available and affordable to millions of uninsured Americans.  It also encourages states to expand their Medicaid programs to cover some lower income citizens

For as long as I can remember, I have explained to clients that although Medicaid covers long term care in non-nursing home settings under what is now known as the Global Options program, it is very difficult to qualify and even if you can meet the requirements, more times than not these programs don’t cover everything you need. I have written previously in this blog about New Jersey’s assisted living Medicaid program and the difficulties in qualifying but New Jersey’s home based Medicaid program isn’t any better and actually is worse.  For years I have explained to families that at best, home based Medicaid will cover 40 or 50 hours a week of care. Apparently the State won’t even cover that much.  In speaking with a number of home care agencies we are finding that the New Jersey is paying for not more than 12 to 15 hours per week of care.  Think about that.  In order to qualify for Medicaid you have to spend down to $2000 in assets, have no more than $2163 per month in gross income – that’s before taxes – and you must medically need nursing home level care. You have to spend all your money and satisfy