by Jose D. Roman | Feb 25, 2025 | Medicaid, Medicaid Planning, Trusts
Planning for the financial future of individuals with disabilities can often be challenging, especially when trying to maintain eligibility for essential public benefits. In New Jersey, ABLE accounts provide a solution that empowers individuals with disabilities and their families to save money without jeopardizing their eligibility for benefits such as Medicaid and Supplemental Security Income (SSI). Let’s explore what NJ ABLE accounts are, who qualifies, their benefits, and how they differ from Special Needs Trusts.
What Are NJ ABLE Accounts?
NJ ABLE accounts are tax-advantaged savings accounts established under the federal Achieving a Better Life Experience (ABLE) Act of 2014. These accounts are designed to help individuals with disabilities and their families save for disability-related expenses while protecting their eligibility for means-tested government programs.
Funds in an ABLE account can be used to pay for “qualified disability expenses,” which include costs related to education, housing, transportation, employment training, assistive technology, personal support services, funeral expenses, and health and wellness, among others.
To learn more about NJ ABLE accounts, visit NJ ABLE.
Eligibility Requirements for NJ ABLE Accounts
To open an NJ ABLE account, individuals must meet specific criteria:
- Disability Onset Before Age 26: The individual’s disability must have begun before their 26th birthday.
- Eligible Disability: The individual must have a qualifying disability as defined by the Social Security Administration (SSA) or blindness.
- U.S. Residency: The account holder must be a U.S. citizen or legal resident.
If someone qualifies, only one ABLE account is permitted per individual. However, family members and friends can contribute to the account.
Benefits of an NJ ABLE Account
- Maintain Public Benefits Eligibility:
- Medicaid: Funds in an ABLE account are not counted as resources when determining Medicaid eligibility.
- SSI: Up to $100,000 in an ABLE account is excluded from SSI resource limits. If the balance exceeds $100,000, SSI payments may be suspended until the balance no longer exceeds the limit, and Medicaid eligibility is preserved.
- Tax Advantages: Earnings on funds in the ABLE account grow tax-free. Withdrawals for qualified disability expenses are also tax-free.
- Financial Control and Independence: Individuals with disabilities can manage their own accounts, fostering greater financial independence.
- Broad Range of Uses: The account can cover a variety of disability-related expenses, enhancing the quality of life and long-term planning.
- Family Contributions: Family members, friends, and employers can contribute to an ABLE account, up to the annual federal gift tax exclusion amount (currently $19,000 in 2025). With the ABLE to Work Act, employed individuals with disabilities can contribute additional funds beyond the annual limit.
- Significant Savings: The current account balance limit is $305,000.00. This allows individuals who do not receive SSI to save even more.
NJ ABLE Accounts vs. Special Needs Trusts
While both ABLE accounts and Special Needs Trusts (SNTs) serve individuals with disabilities, they have key differences:
- Eligibility:
- ABLE accounts require the onset of disability before age 26, whereas SNTs do not have this restriction.
- First party SNTs must be established before the individual reaches the age of 65. There is no such restriction for ABLE accounts.
- Control: ABLE accounts are managed directly by the individual with a disability or an authorized legal representative. SNTs are controlled by a trustee.
- Contributions and Limits:
- ABLE accounts have an annual contribution limit ($19,000 in 2025) and a total cap tied to state 529 plan limits (in NJ, $305,000).
- SNTs have no annual contribution or total balance limits but must comply with complex legal and tax requirements.
- Usage Restrictions: ABLE accounts may be used for anything that helps a person with a disability improve their quality of life, while SNT funds may not be used to cover benefits paid for by a public assistance program.
How NJ ABLE Accounts Protect Public Benefits
For individuals receiving SSI or Medicaid, maintaining strict resource limits is crucial. Without tools like ABLE accounts, individuals are often unable to save more than $2,000 in personal assets without risking benefit eligibility. NJ ABLE accounts provide a way to build savings well above this threshold while ensuring compliance with program rules.
Additionally, an ABLE account can reduce reliance on credit or loans, allowing individuals to meet unexpected costs with funds already set aside. This fosters greater financial stability and reduces long-term financial stress.
Conclusion
NJ ABLE accounts offer a powerful tool for financial security and independence for individuals with disabilities. By allowing individuals to save and invest in their future without fear of losing essential benefits, these accounts provide a critical benefit for long-term financial planning. Whether you’re a person with a disability, a family member, or a caregiver, understanding and utilizing a NJ ABLE account can be a transformative step toward a more secure and fulfilling life.
by Jose D. Roman | Feb 24, 2025 | Medicaid
Navigating the healthcare system can be challenging, especially for “Dual Eligible” individuals who are already on Medicare. Low income Medicare recipients in New Jersey may also qualify for Aged Blind Disabled (ABD) Medicaid which provides crucial support to help cover medical expenses and services that are not covered by Medicare. This blog will walk you through the basics of qualifying for ABD Medicaid in New Jersey, including eligibility criteria, and the application process.
What is Aged Blind Disabled Medicaid?
ABD Medicaid is a federally funded program designed to supplement the coverage provided by original Medicare Part A (hospital) and B (medical). The program pays Medicare premiums, covers Medicare co-pays and deductibles, and offers services not covered by original Medicare Part A and B such as dental coverage. The ABD program is available to individuals who are (a) aged (65 or older), blind, or determined disabled, (b) have limited income, and (c) limited resources.
Eligibility Criteria
To qualify for ABD Medicaid in New Jersey, applicants must meet specific financial and non-financial requirements.
- Aged, Blind, or Disabled: The program is open to individuals who are “Aged” – 65 years or older, Blind according to Social Security standards, or meet Social Security’s definition of Disabled, which generally requires a physical or mental condition that substantially limits one’s ability to work and is expected to last at least 12 months or result in death.
- Low Income: Income limits for ABD Medicaid are based on the Federal Poverty Level (FPL) and vary depending on household size. As of 2025, the income limit is 100% of the FPL, which is $1,304 for an individual and $1,763 for a married couple.
- Limited Resources: Applicants must have limited resources to qualify. For individuals, the resource limit is $4,000, and for couples, it is $6,000. Some assets, such as a primary residence, one vehicle, and personal belongings, are excluded from these limits.
- Citizenship and Residency: Applicants must be U.S. citizens or qualified non-citizens and reside in New Jersey.
Dual Eligibility for Medicare and Medicaid
Dual eligibility means that an individual receives benefits from both Medicare and Medicaid, which can significantly reduce out-of-pocket healthcare costs. Individuals 65 and over are required to enroll in Medicare, and low income individuals are often surprised when this happens because their primary insurance transitions from Medicaid to Medicare. Many even lose Medicaid access altogether because ABD Medicaid income and asset eligibility is much harder to meet than the ordinary New Jersey Family Care Medicaid that is available to people 64 and under. Nonetheless, Medicare recipients who meet the eligibility criteria outlined above can have access to both Medicare as their primary insurance and ABD Medicaid. Even those who don’t qualify for ABD Medicaid may still have access to a Medicare Savings Program, which can help cover Medicare premiums, deductibles, and co-pays.
How to Apply
Applying for ABD Medicaid in New Jersey involves several steps. Here’s a quick guide to help you through the process:
- Gather Necessary Documents – Before applying, collect all required documentation to support your application. This will include, Social Security disability determination letter, proof of income (pay stubs, Social Security award letters, etc.), asset statements (bank accounts, property deeds, etc.), proof of U.S. citizenship or qualified non-citizen status, proof of New Jersey residency (lease agreements, utility bills, etc.).
- Submit Your Application – You can apply for ABD Medicaid online, by mail, or in person at your county’s Board of Social Services.
- Respond to Requests for Additional Information – After submitting your application, you may be contacted for additional information or documentation. Be sure to respond promptly to avoid denial of the application or delays in processing.
What Happens After Approval?
Once approved, you’ll receive a state Medicaid ID card, as well as a card from the insurance company administering your benefits, also called a Managed Care Organization or MCO. You choose your MCO when filling out the application. New Jersey currently has 5 MCOs, including, Aetna Better Health of New Jersey, Fidelis Care, Horizon NJ Health, UnitedHealthcare Community Plan, and Wellpoint (formerly Amerigroup New Jersey).
You should keep your address updated with your MCO and the state because you must renew your Medicaid eligibility annually to ensure continued coverage. The state will send you a renewal notice with instructions.
What If You Don’t Qualify?
If your application is denied, you have the right to appeal the decision. You can request a Fair Hearing. You may also reapply, which is recommended if you did not provide necessary documentation in a timely manner or were ineligible at the time of the application, but now are eligible. Additionally, other programs, such as the Specified Low-Income Medicare Beneficiary (SLMB) or the Pharmaceutical Assistance to the Aged and Disabled (PAAD) programs, may help provide assistance with Medicare premium and drug costs.
Tips for a Successful Application
- Get Organized: Collect the documets you will need for the application before submitting the application.
- Stay Organized: Keep copies of everything you submit and all letters you receive in response. It is also a good practice to use cover letters listing the documents you are sending as well as responses to questions. Also make sure you date your letters to show when responses were sent.
- Seek Assistance: If you’re unsure about the process, contact your county’s Board of Social Services or a local advocacy group for help.
- Be Honest and Thorough: Provide accurate information to avoid delays or complications.
Conclusion
ABD Medicaid is a lifeline for many aged, blind, and disabled individuals in New Jersey. While the application process may seem daunting, understanding the eligibility criteria and following the steps outlined above can make it more manageable. For those who qualify for both Medicare and Medicaid, dual eligibility provides additional financial relief and expanded coverage, ensuring access to comprehensive healthcare services. If you have questions or need further assistance, don’t hesitate to reach out to your county’s Board of Social Services or explore online resources provided by the New Jersey Department of Human Services.
by Jose D. Roman | Feb 20, 2025 | Legal Bulletin, Medicaid
Public health advocates applauded the Court’s decision in D.C. v. Division of Medical Assistance & Health Services, 464 N.J. Super. 343 (App. Div. 2020), because it resolved a longstanding logistical issue that caused severe hardship for people transitioning from one Medicaid program to another. Specifically, the New Jersey Appellate Division ruled that state Medicaid agencies must screen beneficiaries for eligibility in alternative programs before terminating their existing benefits, ensuring a seamless transition and continuous benefits. Despite the Court’s clear mandate, over four years later, New Jersey has repeatedly failed to implement an effective “screen before terminate” system, leaving many vulnerable individuals exposed to gaps in coverage and financial hardship. Let’s revisit the case.
Factual Background
A married couple receiving Social Security Disability benefits were enrolled in New Jersey’s Aged, Blind, and Disabled (ABD) Medicaid Program. The program provides Medicaid health coverage for people with limited income who are blind, have been determined disabled by the Social Security Administration, or are 65 and over. However, following a change in circumstances the couple’s income exceeded the limit ABD eligibility. As a result, the Essex County Board of Social Services sent them a letter indicating that their ABD coverage would terminate effective August 31, 2017. Although they no longer qualified for ABD Medicaid, the couple still qualified for the Specified Low-Income Medicare Beneficiaries (SLMB) Program, which covers Medicare Part B premiums for low-income Medicare beneficiaries. The couple applied for the SLMB Program on August 30, 2017. Although they clearly qualified, the Essex County explained that their application could not be processed until their ABD benefits were officially terminated, which caused a gap in benefits. They filed for a Fair Hearing before an Administrative Law Judge who concluded that since benefits could be applied retroactively for 90 days, the state could terminate benefits without first assessing eligibility for other programs. The ALJ’s decision was adopted by the Division of Medical Assistance & Health Services (DMAHS) and the matter was then appealed to the Superior Court, Appellate Division.
Appellate Division Decision
The couple argued that federal regulations, including provisions found at 42 CFR 435.916(f)(1), mandate that state agencies screen beneficiaries for eligibility in other Medicaid programs before terminating existing benefits. They contended that the Division of Medical Assistance and Health Services (DMAHS) failed to perform this pre-termination screening for the SLMB Program, thereby causing a gap in benefits. DMAHS argued that the SLMB Program was “a Medicare savings program that allows states to pay Medicare Part B premiums,” rather than a Medicaid program, and since beneficiaries cannot be eligible for Medicaid and SLMB in the same month, they had to wait until coverage was terminated before applying. They argued that the requirement to screen for other programs prior to termination did not apply because SLMB was not a Medicaid program.
Importantly, the ALJ and DMAHS relied heavily on the 90 day retroactivity of New Jersey Medicaid to justify forcing people to have a disruptive gap in benefits, rather than implement a more efficient system. Under these rules, SLMB benefits could be applied retroactively for up to three months. The agency’s rationale was that even if there was a gap in immediate coverage, the retroactive provisions would compensate for the period during which the petitioners were without benefits. However, the couple argued that this reasoning did not absolve the agency of its responsibility to ensure a seamless transition in coverage. They also noted that the gap created a hardship because they had current obligations such as rent, food, and utilities.
The court found that SLMB was clearly a Medicaid program and that DMAHS erred by not screening the couple for eligibility in the SLMB Program before terminating their ABD benefits. The court held that relying on retroactive benefits subverted the purpose of pre-termination screening and did not justify a policy that permitted gaps in essential healthcare coverage. The court held that this was a circumstance where DMAHS acted in a way that was clearly inconsistent with its statutory mission and legislative policy. The court concluded that DMAHS’s decision was arbitrary, unreasonable, and erroneous, and therefore subject to being overturned. The decision was clear: DMAHS was required to proactively assess eligibility for other programs to prevent the disruption of benefits.
Current Challenges – County-Level Variability
In New Jersey, a significant portion of Medicaid eligibility decisions are handled by county-level agencies. As a result, compliance with the pre-termination screening requirement varies considerably from one county to another. Limited resources, inexperienced staff, and clerical errors lead to inconsistent application of the screening mandate. Instead of proactively transferring eligible beneficiaries between various Medicaid programs—such as SSI Medicaid, NJ Family Care/MAGI Medicaid, ABD Medicaid, MLTSS Medicaid, Workability Medicaid, and SLMB—the county offices often merely provide a referral or a new application and leave beneficiaries to navigate the system on their own.
Despite the clear mandate from the court, DMAHS has yet to develop and implement a robust, statewide system for conducting the required pre-termination eligibility screening and facilitating seamless transitions between programs. In practice, many beneficiaries continue to experience gaps in coverage because DMAHS appears to lack an integrated, automated system that cross-references a beneficiary’s eligibility for other Medicaid programs prior to terminating existing benefits. This means that the court’s requirement is not uniformly applied, leaving beneficiaries vulnerable to disruptions in care.
These challenges underscore the need for DMAHS and county agencies to collaborate on developing a comprehensive, statewide protocol. Or perhaps eliminate the county system altogether. Such a system should not only automate the screening process but also establish clear guidelines and accountability measures to ensure that beneficiaries do not experience unnecessary interruptions in their Medicaid benefits.
Final Thoughts
The ruling in D.C. v. Division of Medical Assistance & Health Services emphasizes the critical need for proactive administrative practices in the management of Medicaid benefits. By failing to pre-screen for eligibility in alternative programs, DMAHS not only violated federal regulatory requirements but also jeopardized the well-being of vulnerable low income people. Moreover, the lack of a cohesive, state-wide system to implement this requirement further compounds the problem, resulting in inconsistent and often inadequate protections for those most in need. This case just one example highlighting the need to reexamine and overhaul Medicaid administrative processes.
by Jose D. Roman | Feb 12, 2025 | Estate Planning, Legal Bulletin, Power of Attorney
Recently it was reported that an Asbury Park resident was detained by ICE after dropping his child off at school. Situations like this raise the question of who will care for the child if the parent remains in custody or is deported. Will someone be appointed guardian? Navigating New Jersey’s guardianship laws can be daunting, especially when a parent is temporarily unable to care for their child. Fortunately, N.J.S.A. 3B:12-39 provides a practical, court-free solution: it allows parents and legal guardians to delegate parental authority through a properly executed Power of Attorney. This flexibility is a lifeline for families, particularly immigrant parents who face the ever-present risk of detention, removal, or deportation in today’s unpredictable socio-political climate.
A Modern Solution for Modern Challenges
Under N.J.S.A. 3B:12-39, parents, custodians, or guardians can delegate their authority over a minor child’s care, custody, or property to a trusted individual. The delegation can take effect immediately or upon the occurrence of a specific “activating event.” The statute explicitly identifies several such events, including:
- A determination by the parent’s, custodian’s, or guardian’s attending physician that they are incapacitated or debilitated.
- Immigration administrative action, such as detention, removal, or deportation, which may separate a parent from their child.
- Criminal proceedings.
- Military service.
This streamlined process empowers families to plan ahead, avoiding the delays, costs, and complexities of court-appointed guardianship.
Why This Law is a Game-Changer for Immigrant Families
For immigrant parents, the fear of sudden detention or deportation can cast a long shadow over their ability to care for their children. In a political landscape where immigration policies are constantly in flux, this law provides a critical safety net. By including “immigration administrative action” as an activating event, N.J.S.A. 3B:12-39 directly addresses the unique challenges immigrant families face, offering several key advantages:
- Proactive Planning: Parents can execute a Power of Attorney in advance, designating a trusted individual to step in if an immigration action occurs.
- Avoiding Traumatic Placements: With a delegation in place, children are less likely to end up in temporary group settings and can remain with someone the family knows and trusts.
- Preserving Parental Rights: Even after delegating authority, parents retain the right to revoke the Power of Attorney or resume decision-making when circumstances allow.
- Peace of Mind: Knowing that a legal framework exists to protect their children allows immigrant parents to face their challenges with greater confidence.
This legal tool ensures that children continue to receive the care and stability they deserve, even in the face of immigration-related disruptions.
Practical Steps for Parents and Guardians
If you’re considering delegating parental authority under N.J.S.A. 3B:12-39, here are some key steps to keep in mind:
- Free Forms v. Paying a Lawyer: While it is always best to consult an experienced lawyer, there are free forms available. In fact, the text of the law itself actually provides a form you can use. If you can’t afford an attorney you should stick with the language from N.J.S.A. 3B:12-39 or use forms published by trusted sources such as local law school legal clinics or government websites. Here is a form from Rutgers Law School, along with an FAQ to answer common questions. Here is a form published by the New Jersey Department of Children and Families.
- Tailor the Power of Attorney: The document should clearly outline the scope of delegated powers and specify which activating events will trigger the delegation (including immigration-related issues).
- Address Consent Requirements: Obtain the consent of both parents or explain why the other parent is unable to provide consent (deceased, incapacitated, whereabouts unknown, etc.). This is outlined in the law and should be addressed in the form.
- Execute Properly: New Jersey requires a Power of Attorney to be notarized. However, it is recommended that you execute the document before two witnesses and a notary.
- Understand Renewal and Revocation: Be aware that the delegation expires after one year (with possible extensions under exigent circumstances). It can also be revoked by you at any time.
By taking these steps, parents can create a safety net for their families, ensuring stability even in the most uncertain times.
Final Thoughts
The Minor/Parental Power of Attorney under N.J.S.A. 3B:12-39 is a testament to New Jersey’s commitment to protecting families in crisis. By allowing parents to delegate parental authority without court intervention, the law provides a practical, compassionate solution for families facing emergencies. For immigrant parents, who often bear the brunt of shifting immigration policies, this legal mechanism is more than just a tool—it’s a vital safeguard for their children’s well-being.
by Jose D. Roman | Feb 10, 2025 | Estate Planning, Guardianship, Power of Attorney
A Springing Power of Attorneyis a legal document that allows someone you appoint as your agent to manage your financial affairs, but only when a specific condition is met—typically, your incapacitation. Unlike a typical Power of Attorney, which takes effect upon signing, a Springing Power of Attorney “springs” to life when you (“the principal”) become unable to handle your own financial matters.
How to Create a Springing Power of Attorney in New Jersey
To create a valid Springing Power of Attorney in New Jersey, be mindful of the following:
- State Clearly that it is Springing: The Power of Attorney should clearly state that it is springing and specify the triggering event, usually incapacitation. The document should also outline how incapacity is determined. In New Jersey, this often requires written certification from two licensed physicians confirming that the principal is unable to manage their affairs.
- Appoint a Trusted Agent: Choose a responsible individual who will act in the your best interest and handle your financial matters effectively.
- Choose Alternates: It is highly recommended that you choose alternate agents in case your first choice is unwilling or unavailable to serve.
- Include Specific Powers: The document should explicitly list the powers granted to the agent, as powers not listed are often not recognized, especially by banks and other financial institutions.
- Meet Legal Requirements: New Jersey law requires the Power of Attorney to be signed before a notary public or an attorney. Because other states may require two witnesses as well, it is recommended that you also sign it before two witnesses. Any person you are designating as an agent should not serve as a witness.
- Distribute Copies: Provide copies to the appointed agent, financial institutions, and any relevant parties who may need to recognize the Power of Attorney when the time comes. Keep the original in a safe place that is accessible by your agent.
Why Choose a Springing Power of Attorney?
A Springing Power of Attorney offers additional protections over an immediate Power of Attorney. Reasons people may choose a Springing Power of Attorney often include:
- Discomfort with Relinquishing Control: Since the agent’s authority only activates upon incapacity, the principal retains sole control of their financial affairs while competent. With an immediate Power of Attorney, your agent may act right away, which may not be desirable if you are uncomfortable with the idea of an immediate Power of Attorney.
- No Close Relatives or Friends Available: Individuals often appoint their spouse, children or a close friend as agent. If you don’t anyone close to you who can serve as your agent, you may want to opt for a Springing Power of Attorney.
- Trust Issues: Perhaps you don’t completely trust your designated agent but still want to appoint the person in case something happens to you. A Springing Power of Attorney may be the appropriate solution in these circumstances.
Ultimately, aSpringing Power of Attorney provides a safeguard against financial mismanagement, as no one can act on the principal’s behalf unless they truly become incapacitated. However, there are potential downsides. Proving incapacity can be challenging, as physicians may be hesitant to certify incompetency, and financial institutions may require additional proof before recognizing the agent’s authority. After all one of the purposes of having a Power of Attorney is to make your life and your loved one’s lives easier often during a difficult time. A Springing Power of Attorney may add extra hurdles and stress.
When Does a Springing Power of Attorney Go Into Effect?
A Springing Power of Attorney becomes effective upon the happening of a condition specified in the document — most commonly when the principal is deemed incapacitated. Typically, this means:
- Two physicians certify in writing that the principal is mentally or physically unable to manage their own affairs.
- The agent presents these certifications along with the Power of Attorney document to banks and financial institutions.
- The entity accepting the Power of Attorney determines that the incapacity provisions have been satisfied.
Because banks and other financial institutions may have their own standards for verifying incapacity, the agent might face hurdles in getting the Power of Attorney recognized. To avoid complications, you should inquire about any such issues with your financial institutions ahead of time and consider opting for an immediate Power of Attorney.
Is a Springing Power of Attorney Different from a Durable Power of Attorney?
No is the short answer. A Durable Power of Attorney remains valid even after the principal becomes incapacitated. However, a Durable Power of Attorney can be either immediate (effective upon signing) or springing (effective upon incapacity). All springing Powers of Attorney must be durable; otherwise, they would become invalid when the principal loses capacity, defeating their purpose.
Conclusion
A Springing Power of Attorney in New Jersey can be a valuable tool for those who wish to retain sole control over their finances while they are capable but ensure that someone can manage their affairs if needed. When drafting a Springing Power of Attorney, it is crucial to carefully define the terms of incapacity and ensure that the document meets all legal requirements to avoid delays or challenges in enforcement. Consulting an estate planning attorney can help tailor a Power of Attorney to fit individual needs and ensure it aligns with New Jersey law.