You may have heard that the state of Illinois changed the ABLE account laws to remove the required “pay back” when an account beneficiary dies. Families of people with ABLE accounts may think this change will help them. Unfortunately, the change does not apply to most people with intellectual or developmental disabilities.

The “pay back” cited by the new Illinois law refers to the requirement that the government seek payment from the estates of deceased Medicaid recipients for Medicaid dollars received. This is called Medicaid recovery. Illinois’s law was promoted to get rid of the required pay back for the estates of people with ABLE accounts. However, federal law overrules Illinois law on this topic, permitting recovery from the estates of certain Medicaid recipients anyway.

As a result, Illinois must seek Medicaid recovery from the estates of:

• People over age 55 who received Medicaid; and
• People who received Medicaid coverage for particular Long-Term Services and Supports (LTSS) and who were subject to “post-eligibility treatment of income” (PETI) rules.

The second category includes most people with intellectual or developmental disabilities. That is because most receive LTSS (which includes those who received Home Based Support Services or funding for a Community Integrated Living Arrangement commonly referred to as a “group home”) and are subject to the PETI rules.

The list of possible waivers that your relative with special needs might have is long, including waivers for people with developmental disabilities, brain injuries, developmental disabilities, and more. It is very likely that he or she has a waiver and receives LTSS, so the pay back would apply. This is true for both adults and children with special needs.

Practically speaking, you probably do not need to change your existing future planning due to the new Illinois law. It will likely not affect your need to plan for Medicaid recovery from the estate of your relative with special needs. The government can still seek payback from your relative’s ABLE account.

However, if your relative does not have a special needs trust, you may want to set one up. Third-party SNTs are not subject to the same payback requirements as ABLE accounts and self-settled SNTs. Seek legal advice for help properly setting up a trust and expanding your future planning.

 

Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at email@rubinlaw.com or call 866-TO-RUBIN.