TN 194 (07-20)

PS 01825.015 Idaho

A. PS 20-064 Analysis of the [Amended] National Foundation for Special Needs Integrity Pooled Trust for the State of Idaho

Date: June 11, 2020

1. Syllabus

This Regional Chief Counsel (RCC) opinion examines whether the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho, as amended, qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C). The opinion concludes that the amendments fix the trust's previous issues (outlined in opinion "PS 20-0006..." in this section) and therefore the trust now qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C).

2. Opinion

QUESTION PRESENTED

Does the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho (“NFSNI Trust”), as amended, qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D, such that the Trust must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for Supplemental Security Income (SSI) purposes?

BRIEF ANSWER

Yes. The NFSNI Trust, as amended, qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D. Accordingly, it must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

SUMMARY OF FACTS

P.S. (the claimant) is a disabled individual receiving SSI. See Joinder Agreement, art. II.C, at 6. In January 2014, when the claimant was a minor, his father, executed a joinder agreement on the claimant’s behalf with the NFSNI Trust. See Joinder Agreement, art. II.B, and at 17. The joinder agreement established an individual sub-account in the NFSNI Trust. In addition to the joinder agreement, The National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho agreement (“Master Trust”) dated September 14, 2009, governs the Trust and its sub-accounts. See Master Trust, at 20.

In January 2020, OGC issued an opinion concluding that the NFSNI Trust for the State of Idaho did not qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C). In March 2020, the NFSNI of Idaho sent SSA amendments to the trust documents. Below we address the amendments and whether they would cure the deficiencies noted in our earlier opinion.

ANALYSIS

A. To be a pooled trust, a trust must meet six requirements.

To be eligible for SSI, the dollar value of a claimant’s countable resources cannot exceed certain statutory limits. 42 U.S.C. § 1382(a)(1)(B) & (3)(B); 20 C.F.R. §§ 416.202(d), 416.1201, 416.1205; POMS SI 01110.003(A). A trust that meets the requirements of 42 U.S.C. § 1396p(d)(4)(C) is considered to be a pooled trust, which must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

First, to be a pooled trust, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); accord POMS SI 01120.203.D.2. Second, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); accord POMS SI 01120.203.D.3. Third, the association must maintain “[a] separate account . . . for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii); accord POMS SI 01120.203.D.4. Fourth, the accounts must be “established solely for the benefit of the individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.5. Fifth, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.6. Sixth, and finally, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan . . . .” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.D.8.

A trust that does not qualify as a pooled trust must be evaluated under POMS SI 01120.201 to determine if it is a countable resource for SSI purposes.

B. The amended NFSNI Trust qualifies as a pooled trust.

The NFSNI Trust, as amended, meets all six requirements for a pooled trust. Our analysis is based on the terms of the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho, as amended (hereinafter the Master Trust) and the Joinder Agreement, as amended (Joinder Agreement).

1. Disabled Individual

To begin, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); see also POMS SI 01120.203.D.2 (“[T]he individual whose assets were used to establish the trust account must be disabled for SSI purposes.”). That requirement is satisfied here. The claimant is a disabled individual who was receiving SSI payments when he enrolled in the NFSNI Trust. See Joinder Agreement, art. 2.C, at 6 (stating he receives SSI). The account may be funded only with assets belonging to the claimant. Master Trust, art. 5.C.

2. Established and Managed by a Nonprofit Association

Next, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); see also POMS SI 01120.203.D.3 (trust is “established and maintained by the actions of a nonprofit association”).

This requirement is satisfied. The National Foundation for Special Needs Integrity, Inc., a 501(c)(3) non-profit corporation, established the Trust and acts as Trustee. See Master Trust, declarations, at 2; art. 1; and at. 5.A. The Trustee has powers to manage the Trust, including the power to invest or not invest the Trust property and exercise sole discretion over disbursement decisions. Master Trust, art. 11.1, 11.7; see also art. 13.1, 13.2, Joinder Agreement, art. VII. The Trustee also has the power to designate a successor Trustee if one is required. Master Trust, art. 16.3.

3. Separate Accounts, Pooled for Investing

To be a pooled trust, the trust must maintain a separate account for each beneficiary. 42 U.S.C. § 1396p(d)(4)(C)(ii); see also POMS SI 01120.203.D.4. However, “for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii); see also POMS SI 01120.203.D.4. This requirement is further reflected in POMS, which notes that “the trust must be able to provide an individual accounting for each individual.” POMS SI 01120.203.D.4.

The Master Trust contains these requirements. The Master Trust states that the NFSNI Trust may pool together the assets in all of the sub-accounts for investment and management purposes, but that each sub-account constitutes a separate account. Master Trust, art. 2. The Master Trust also states that contributions; deductions and disbursements; earning and losses; and all other expenses specific to each beneficiary shall be recorded and accounted for separately for each beneficiary. Master Trust, art. 2.

4. Established for the Sole Benefit of the Disabled Individual

The next requirement for a pooled trust is that the trust account is “established solely for the benefit of individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); see also POMS SI 01120.203.D.5 (trust “must be established for the sole benefit of the disabled individual.”). The statute does not provide guidance on “sole benefit.” See 42 U.S.C. § 1396p(h) (setting forth definitions, but not defining this term). But POMS explains that a trust is “established for the sole benefit of an individual” when it “benefits no one but that individual, whether at the time the trust is established or at any time for the remainder of the individual’s life.” POMS SI 01120.201.F.1.

The NFSNI Trust meets this definition. The Master Trust states that “[a]ll disbursements made by the Trustee shall be for the sole benefit of the Beneficiary” and the Joinder Agreement contains similar language. Master Trust, art. 13.3; Joinder Agreement, art. VI. This language is compliant with the statute.

The amended NFSNI Trust clarifies a problematic termination clause in the earlier version. Specifically, language in that Trust agreement allowed for decanting, but did not specify such decanting must be to another 42 U.S.C. § 1396p(d)(4)C) trust, as is required. After amendment, the termination clause now specifies decanting to “a not-for-profit pooled special needs trust in compliance with 42 U.S.C. § 1396p(d)(4)(C).” Master Trust, art. 16.1 (as amended). This clarification means that the Trust now satisfies the sole benefit requirement.

Accordingly, the NFSNI Trust satisfies the fourth requirement for pooled trusts.

5. Established Through the Actions of the Individual, Parent, Grandparent, Legal Guardian, or Court

To qualify as a pooled trust, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.6. The claimant’s father executed a joinder agreement when the claimant was a minor, which established the claimant’s account in the NFSNI Trust. See Joinder Agreement, art. II.B, and at 17. Therefore, the NFSNI Trust meets the fifth requirement.

6. Remaining Amounts Paid to the State

Sixth, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan.” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.D.8.

The amended NFSNI Trust meets this requirement. The amendment removes problematic lifetime spending limit language found in the earlier version. The Master Trust and the Joinder Agreement now provide that to the extent that amounts remaining in the sub-account upon the death of the Trust Beneficiary are not retained by the Trust, the Trust will pay the State, or states as may be the case, from such remaining amounts in the sub-account, equal to the total amount of government assistance benefits paid to or on behalf of the Trust Beneficiary, both before and after the creation of the trust. See Master Trust, art. 14 (as amended); see also Joinder Agreement, art. IV (as amended).

CONCLUSION

In sum, the NFSNI Trust, as amended, qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D. Accordingly, the NFSNI Trust must be evaluated under POMS SI 01120.200.

B. PS 20-0006 Analysis of the National Foundation for Special Needs Integrity Pooled Trust for the State of Idaho

January 24, 2020

1. Syllabus

In this opinion, the RCC examines the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho to determine if it qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D. The trust does not meet the requirements pertaining to sole benefit and Medicaid payback and therefore does not qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C).

2. Opinion

QUESTION PRESENTED

Does [the claimant]’s trust sub-account with the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho (“NFSNI Trust”) qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D, such that the Trust must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for Supplemental Security Income (SSI) purposes?

BRIEF ANSWER

No. The NFSNI Trust does not qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D. Accordingly, it must be evaluated under POMS SI 01120.201 to determine if it is a countable resource for SSI purposes.

SUMMARY OF FACTS

[Name redacted] (the claimant) is a disabled individual receiving SSI. See Joinder Agreement, art. II.C, at 6. In January 2014, when the claimant was a minor, his father, [name redacted], executed a joinder agreement on the claimant’s behalf with the NFSNI Trust. See Joinder Agreement, art. II.B, and at 17. The joinder agreement established an individual sub-account in the NFSNI Trust. In addition to the joinder agreement, The National Foundation of Special Needs Integrity Pooled Trust for The State of Idaho agreement (“Master Trust”) dated September 14, 2009, governs the Trust and its sub-accounts. See Master Trust, at 20.

ANALYSIS

A. To be a pooled trust, a trust must meet six requirements.

To be eligible for SSI, the dollar value of a claimant’s countable resources cannot exceed certain statutory limits. 42 U.S.C. § 1382(a)(1)(B) & (3)(B); 20 C.F.R. §§ 416.202(d), 416.1201, 416.1205; POMS SI 01110.003(A). A trust that meets the requirements of 42 U.S.C. § 1396p(d)(4)(C) is considered to be a pooled trust, which must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

First, to be a pooled trust, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); accord POMS SI 01120.203.D.2. Second, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); accord POMS SI 01120.203.D.3. Third, the association must maintain “[a] separate account . . . for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii); accord POMS SI 01120.203.D.4. Fourth, the accounts must be “established solely for the benefit of the individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.5. Fifth, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.6. Sixth, and finally, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan . . . .” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.D.8.

A trust that does not qualify as a pooled trust must be evaluated under POMS SI 01120.201 to determine if it is a countable resource for SSI purposes.

B. The NFSNI Trust does not qualify as a pooled trust.

The NFSNI Trust does not meet two of the six requirements for a pooled trust. Our analysis is based on the terms of the National Foundation of Special Needs Integrity Pooled Trust for the State of Idaho (hereinafter the Master Trust) and the claimant’s Joinder Agreement (Joinder Agreement).

1. Disabled Individual

To begin, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); see also POMS SI 01120.203.D.2 (“[T]he individual whose assets were used to establish the trust account must be disabled for SSI purposes.”). That requirement is satisfied here. The claimant is a disabled individual who was receiving SSI payments when he enrolled in the NFSNI Trust. See Joinder Agreement, art. 2.C, at 6 (stating he receives SSI). The account may be funded only with assets belonging to the claimant. Master Trust, art. 5.C.

2. Established and Managed by a Nonprofit Association

Next, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); see also POMS SI 01120.203.D.3 (trust is “established and maintained by the actions of a nonprofit association”).

This requirement is satisfied. The National Foundation for Special Needs Integrity, Inc., a 501(c)(3) non-profit corporation, established the Trust and acts as Trustee. See Master Trust, declarations, at 2; art. 1; and at. 5.A. The Trustee has powers to manage the Trust, including the power to invest or not invest the Trust property and exercise sole discretion over disbursement decisions. Master Trust, art. 11.1, 11.7; see also art. 13.1, 13.2, Joinder Agreement, art. VII. The Trustee also has the power to designate a successor Trustee if one is required. Master Trust, art. 16.3.

3. Separate Accounts, Pooled for Investing

To be a pooled trust, the trust must maintain a separate account for each beneficiary. 42 U.S.C. § 1396p(d)(4)(C)(ii); see also POMS SI 01120.203.D.4. However, “for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii); see also POMS SI 01120.203.D.4. This requirement is further reflected in POMS, which notes that “the trust must be able to provide an individual accounting for each individual.” POMS SI 01120.203.D.4.

The Master Trust contains these requirements. The Master Trust states that the NFSNI Trust may pool together the assets in all of the sub-accounts for investment and management purposes, but that each sub-account constitutes a separate account. Master Trust, art. 2. The Master Trust also states that contributions; deductions and disbursements; earning and losses; and all other expenses specific to each beneficiary shall be recorded and accounted for separately for each beneficiary. Master Trust, art. 2

4. Established for the Sole Benefit of the Disabled Individual

The next requirement for a pooled trust is that the trust account is “established solely for the benefit of individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); see also POMS SI 01120.203.D.5 (trust “must be established for the sole benefit of the disabled individual.”). The statute does not provide guidance on “sole benefit.” See 42 U.S.C. § 1396p(h) (setting forth definitions, but not defining this term). But POMS explains that a trust is “established for the sole benefit of an individual” when it “benefits no one but that individual, whether at the time the trust is established or at any time for the remainder of the individual’s life.” POMS SI 01120.201.F.1.

The trust may pay third parties for goods or services for the beneficiary and still be for the “sole benefit” of the beneficiary. POMS SI 01120.201.F.3.a. The trust may pay certain travel expenses for the beneficiary’s medical treatment. POMS SI 01120.201.F.3.b. The trust also may “provide for reasonable compensation for a trustee(s) to manage the trust, as well as reasonable costs associated with investment, legal or other services rendered on behalf of the individual with regard to the trust.” POMS SI 01120.201.F.4.

The NFSNI Trust does not meet this definition. The Master Trust states that “[a]ll disbursements made by the Trustee shall be for the sole benefit of the Beneficiary” and the Joinder Agreement contains similar language. Master Trust, art. 13.3; Joinder Agreement, art. VI. This language is compliant with the statute.

However, the NFSNI Trust contains a problematic termination clause. The termination clause allows for transfer to “a qualified private or geographically appropriate and qualified not-for-profit pooled special needs trust.” Master Trust, art. 16.1. This provision is not compliant with the sole benefit requirement. First, the term “qualified” is not sufficiently clear. Additionally, even if it were clear that qualified indicated compliance with the law and policy relevant to the agency’s evaluation, the statement could contemplate not only the possibility of transfer to a (d)(4)(C) trust (account) but also the possibility of transfer to a (d)(4)(A) trust (“a qualified private . . . special needs trust”). To the extent that that is the intended meaning, the POMS does not allow for transfer to a (d)(4)(A) trust. See POMS SI 01120.199.F.2. Further, the Trust provides that Idaho law governs trust termination and its effect on resource eligibility, Master Trust at 15.3, but Idaho law does not restrict decanting of a (d)(4)(C) trust into another Medicaid payback trust. For these reasons, the Master Trust and the Joinder Agreement are not sufficiently specific to comply with the statute and agency policy.

Accordingly, the NFSNI Trust does not satisfy the fourth requirement for pooled trusts.

5. Established Through the Actions of the Individual, Parent, Grandparent, Legal Guardian, or Court

To qualify as a pooled trust, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.D.6. [the father] executed a joinder agreement, which established the claimant’s account in the NFSNI Trust. See Joinder Agreement, art. II.B, and at 17. [Name redacted] is the parent of the claimant, who was a minor when [the parent] executed the Joinder Agreement. Joinder Agreement, art. II.B. Therefore, the NFSNI Trust meets the fifth requirement.

6. Remaining Amounts Paid to the State

Sixth, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan.” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.D.8.

The NFSNI Trust does not meet this requirement. The Master Trust and the Joinder Agreement provide that to the extent that amounts remaining in the sub-account upon the death of the Trust Beneficiary are not retained by the Trust, the Trust will pay the State, or states as may be the case, from such remaining amounts in the sub-account, equal to the total amount of government assistance benefits paid to or on behalf of the Trust Beneficiary during the Beneficiary's lifetime. See Master Trust, art. 14; see also Joinder Agreement, art. IV.

Thus, the NFSNI Trust does not meet the Medicaid reimbursement requirement in POMS SI 01120.203.D.8 because the lifetime spending limit restricts the amount paid back to the states to funds conceivably less than the “total amount” contemplated by Section 1396p(d)(4)(c). Since a beneficiary could conceivably have received services prior to their death that are due to be paid by the State of Idaho but have not yet been paid, the lifetime spending limit prevents the Trust from meeting the Medicaid reimbursement requirement. Except for the lifetime spending limit emphasized above, Section 14 is otherwise consistent with the requirements in POMS SI 01120.203.D.8.

CONCLUSION

In sum, the NFSNI Trust does not qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.D. Accordingly, the NFSNI Trust must be evaluated under POMS SI 01120.201.

C. PS 18-072 Does the Idaho Charities Pooled Trust Meet Requirements for Exclusion for Supplemental Security Income

Date: April 2, 2018

1. Syllabus

This Regional Chief Counsel (RCC) opinion examines whether the Idaho Charities Pooled Trust (Idaho CPT) qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.B.2. The RCC concludes that the Idaho CPT meets all the requirements for a pooled trust and, accordingly, must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

2. Opinion

QUESTION PRESENTED

Does the Idaho Charities Pooled Trust (“Idaho CPT”) qualify as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.B.2, such that the trust must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for Supplemental Security Income (SSI) purposes?

BRIEF ANSWER

Yes. The Idaho CPT qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.B.2. Accordingly, it must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

SUMMARY OF FACTS

In April 2017, M~, a disabled individual receiving SSI, executed a joinder agreement with Idaho CPT. See Charities Pool Trust Joinder Agreement (“Joinder Agreement”). The purpose of the agreement was to “establish an Individual Benefit Account” in Idaho CPT for M~’s sole benefit. Id. M~ placed approximately $400,000 in her account. See id. (“Beneficiary is funding an IBA with the property listed in Schedule A below.”). This money came from a settlement. Id. M~ passed away in February 2018.[1]

ANALYSIS

A. To be a pooled trust, a trust must meet six requirements.

To be eligible for SSI, the dollar value of a claimant’s countable resources cannot exceed certain statutory limits. 42 U.S.C. § 1382(a)(1)(B) & (3)(B); 20 C.F.R. §§ 416.202(d), 416.1201, 416.1205; accord POMS SI 01110.003(A). A trust that meets the requirements of 42 U.S.C. § 1396p(d)(4)(C) is considered a pooled trust, which must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

First, to be a pooled trust, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); accord POMS SI 01120.203.B.2.b. Second, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); accord POMS SI 01120.203.B.2.a. Third, the association must maintain “[a] separate account . . . for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii); accord POMS SI 01120.203.B.2.a; see also POMS SI 01120.203.B.2.d. Fourth, the accounts must be “established solely for the benefit of individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.B.2.a. Fifth, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.B.2.a. Sixth, and finally, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan . . . .” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.B.2.a.

A trust that qualifies as a pooled trust must still be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI purposes.

B. The Idaho CPT qualifies as a pooled trust.

The Idaho CPT meets all six requirements for a pooled trust.

1. Disabled Individual

To begin, the trust must contain “the assets of an individual who is disabled.” 42 U.S.C. § 1396p(d)(4)(C); see also POMS SI 01120.203.B.2.b. (“[T]he individual whose assets were used to establish the trust account must meet the definition of disabled for purposes of the SSI program.”). That requirement is satisfied here. M~ was a disabled individual receiving SSI payments when she enrolled in the Idaho CPT. See Joinder Agreement (stating she receives SSI); 2/9/18 email from the Assistant Regional Commissioner’s office (stating that M~ is disabled). Moreover, M~ established her account with assets from a settlement. See Joinder Agreement (funding account with over $400,000).[2]

2. Established and Managed by a Nonprofit Association

Next, the trust must be “established and managed by a nonprofit association.” 42 U.S.C. § 1396p(d)(4)(C)(i); accord POMS SI 01120.203.B.2.a. (trust is “established and maintained by a nonprofit association”).

This requirement is satisfied, as well. According to the Idaho CPT, CPT is the settlor and manager of the Idaho CPT and is a not-for-profit corporation under Section 501(c)(3) of the Internal Revenue Code. See Idaho CPT Art. 2, § 2.1.[3]

3. Separate Accounts, Pooled for Investing

To be a pooled trust, the trust must maintain a separate account for each beneficiary. 42 U.S.C. § 1396p(d)(4)(C)(ii); accord POMS SI 01120.203.B.2.d. However, “for purposes of investment and management of funds, the trust pools these accounts.” 42 U.S.C. § 1396p(d)(4)(C)(ii);accord POMS SI 01120.203.B.2.d (the “trust may pool the funds in the individual accounts . . . for purposes of investment and management of funds”). This requirement is reflected in POMS, which notes that “the trust must be able to provide an individual accounting for the individual.” POMS SI 01120.203.B.2.d.

The Idaho CPT contains these requirements. According to the trust documentation, “[a] separate Trust Individual Benefit Account (‘IBA’) shall be established and maintained for the sole benefit of each Trust Beneficiary, but the Trustee may cause the amounts in the IBA to be pooled for investment and management purposes.” Idaho CPT Art. 4, § 4.1. The Idaho CPT also states that the trustee, or its agent, must “maintain records for each Trust IBA in the name of, and showing the Contributed Amount plus any income earned from the Contributed Amount for each Trust Beneficiary.” Idaho CPT Art. 4, § 4.1. The trustee must provide periodic reports, at least annually, about receipts and disbursements to and from the individual’s account. Idaho CPT Art. 9, § 9.4. These provisions satisfy the third requirement for a pooled trust.

4. Established for the Sole Benefit of the Disabled Individual

The next requirement for a pooled trust is that the trust account is “established solely for the benefit of individuals who are disabled.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.B.2.e. (trust “must be established for the sole benefit of the disabled individual.”). The statute does not provide guidance on “sole benefit.” See 42 U.S.C. § 1396p(h) (setting forth definitions, but not defining this term). But POMS explains that a trust is “established for the sole benefit of an individual” when it “benefits no one but that individual, whether at the time the trust is established or at any time for the remainder of the individual’s life.” POMS SI 01120.201.F.2.a.

The trust may pay third parties for goods or services for the beneficiary and still be for the “sole benefit” of the beneficiary. POMS SI 01120.201.F.2.b. The trust may pay certain travel expenses for the beneficiary’s medical treatment. Id. The trust also may “provide for reasonable compensation for a trustee(s) to manage the trust, as well as reasonable costs associated with investment, legal or other services rendered on behalf of the individual with regard to the trust.” POMS SI 01120.201.F.2.c.

The Idaho CPT meets this definition. The Idaho CPT states that the trustee must “hold, administer, and distribute all property, and all income therefrom from an Individual Trust Beneficiary’s IBA, for the sole benefit of the Trust Beneficiary during the Trust Beneficiary’s lifetime.” Idaho CPT Art. 6, § 6.1 (emphasis in original); see also id. § 6.2 (“Trust Beneficiary’s IBA is for the sole benefit of the Trust Beneficiary.”) (emphasis in original).

The Idaho CPT also allows for fees and expenses for administering the trust, in accordance with a written fee schedule. See generally Idaho CPT Arts. 9 and 10. The trust further states that the trustee will be compensated for “services rendered and reimbursed reasonable expenses incurred on behalf of the Trust or a Trust Beneficiary.” Idaho CPT Art. 10, § 10.5. These provisions pass muster. See 42 U.S.C. § 1396p(d)(4)(C)(iii); POMS SI 01120.201.F.2.b, c.

The Idaho CPT contains an early termination provision that allows the trust to terminate prior to the death of the beneficiary. See Idaho CPT Art. 8. An early termination provision is allowable under the pooled-trust exception so long as three criteria are met: (1) “[u]pon early termination (i.e., termination prior to the death of the beneficiary), the State(s), as primary assignee, would receive all amounts remaining in the trust at the time of termination up to an amount equal to the total amount of medical assistance paid on behalf of the individual under the State Medicaid plan(s);” (2) “[o]ther than payment for those expenses [for taxes, reasonable fees, and administrative expenses], no entity other than the trust beneficiary may benefit from the early termination (i.e., after reimbursement to the State(s), all remaining funds are disbursed to the trust beneficiary);” and (3) “[t]he early termination clause gives the power to terminate to someone other than the trust beneficiary.” POMS SI 01120.199.F.1 (emphasis in original). The trust may pay taxes, reasonable fees, and administrative expenses before reimbursing any state(s) for medical assistance. POMS SI 01120.199.F.3.

The Idaho CPT satisfies these criteria. Specifically, the Idaho CPT states that, if the trust terminates during the beneficiary’s life, all remaining funds in that account will be paid to reimburse each state for medical assistance paid on behalf of the beneficiary. See Idaho CPT Art. 8, § 8.1. The Idaho CPT also states that, after paying the state, “if there are any assets remaining [after Payback], the Trustee shall distribute all of the remaining assets to the Trust Beneficiary.” Idaho CPT Art. 8, § 8.1. Additionally, the beneficiary does not have the power to terminate the Trust or her trust account. Idaho CPT Art. 8, § 8.1.

In the end, the Idaho CPT provisions comport with the statute and POMS’s description of a trust that solely benefits the disabled individual. See 42 U.S.C. § 1396p(d)(4)(C)(iii); POMS SI 01120.201.F.2.b, c. Accordingly, the Idaho CPT satisfies the fourth requirement for pooled trusts.

5. Established Through the Actions of the Individual, Parent, Grandparent, Legal Guardian, or Court

To qualify as a pooled trust, the trust account must be “established . . . by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.” 42 U.S.C. § 1396p(d)(4)(C)(iii); accord POMS SI 01120.203.B.2.f. M~ executed a joinder agreement, which established her account in the Idaho CPT. See Joinder Agreement. Therefore, because M~ established her trust account through her own actions, the Idaho CPT meets the fifth requirement.

6. Remaining Amounts Paid to the State

Finally, “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan.” 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.B.2.g.

The Idaho CPT reflects this concept. Specifically, the Idaho CPT allocates remaining assets between the trust, the state, and the trustee’s heirs. See Idaho CPT Art. 7, § 7.2. If the state medical assistance amount is equal to or greater than the total amount left in the beneficiary’s trust account, the non-profit will retain 50% of that amount as a trust remainder share and the trustee will pay the remaining amount to the state. Idaho CPT Art. 7,§ 7.2(D)(1). If the state medical assistance amount is less than the total amount left in the beneficiary’s trust account, the non-profit will retain the first 5% of the amount as the trust remainder share; the trustee will pay the full amount owed to the state; and the trustee will pay any remaining amount to the beneficiary’s heirs. Idaho CPT Art. 7, § 7.2(D)(2). This distribution scheme comports with the statute, according to available case law. See Lewis v. Alexander, 685 F.3d 325, 348-49 (3d Cir. 2012) (Section 1396p(d)(4)(C)(iv) “leaves it to the trust to decide how much—if any—money should be provided to the State to reimburse it for Medicaid expenses,” while at the same time giving the state priority over the deceased’s estate).

In addition, the Idaho CPT allows certain administrative expenses, like taxes and reasonable fees and costs, to be paid before paying the state for medical assistance. Idaho CPT Art. 7, § 7.4(A). The Idaho CPT also excludes expenses that POMS disallows. See id. Idaho CPT Art. 7, § 7.4(B) (citing POMS). This, too, aligns with the statute and Agency policy. See 42 U.S.C. § 1396p(d)(4)(C)(iv); accord POMS SI 01120.203.B.3.a. Accordingly, the Idaho CPT satisfies the last requirement.

CONCLUSION

In sum, the Idaho CPT qualifies as a pooled trust under 42 U.S.C. § 1396p(d)(4)(C) and POMS SI 01120.203.B.2. Accordingly, the Idaho CPT must be evaluated under POMS SI 01120.200 to determine if it is a countable resource for SSI eligibility.


Footnotes:

[1]

. OGC expresses no opinion in this memo about M~’s eligibility for SSI retroactive benefits.

[2]

. The Idaho CPT states that, if a governmental agency has not yet determined whether a person is disabled, the trust may still accept the person as a beneficiary if it reasonably believes the person is or will be found disabled. See Idaho CPT Art. 3, § 3.5. It is not clear whether this provision satisfies the statute. However, we need not decide that issue now, because M~ was a disabled individual.

[3]

. Based on further research, CPT appears to be a fictitious name for Institute for Health Care Advocacy Inc., which is a non-profit company.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1601825015
PS 01825.015 - Idaho - 06/28/2018
Batch run: 07/21/2020
Rev:06/28/2018