2015 Advanced Elder Law Review January 27 & 28 Newport Beach, CA

Housing Options/Employment Advice

Helping Clients Maintain or Achieve Independence

B. Bailey Liipfert, CELA

January 27, 2015

 Housing Choices and Issues for Elder Law Attorneys
Now that I am having trouble walking, where can I live? I value my independence! I dont want
to be a burden to my family! I took care of my mother for years and dont want my children to
do so for me!

I may have trouble walking, and my memory isnt as good as it used to be, but nobody is going
to put me in a nursing home! My daughter can take care of me just fine! I dont need any legal
papers, do I? I can get help from the government to stay in my home, cant I?

Im 35 years old and forced to live in a nursing home because of a car accident! Are there any
options to let me move back home? Can I spend some time outside of the nursing home? Can I
go on vacation?

Most attorneys have had clients ask questions similar to the ones above. We elder law attorneys
have an obligation to know the answers. We need to have an understanding of services available
in our communities, as well as the types of supportive housing and Medicaid waiver programs
which may help clients maintain as much independence as possible. Giving good, realistic advice
on where to live can be the most important service we offer clients.

In working with clients, we should ask ourselves and our clients where the clients are living
today, where they are likely to live in the near and more distant future, and how they plan on
paying for care they may require. By asking these questions, or analyzing the clients living
situation, we will give better long-term advice.

Where and How to Locate Services in Your Community

Each elder law attorney must strive to become a local expert on housing options available in his
or her community. If you are uncomfortable advising clients on housing issues or if you want to
learn more about housing options in your community, find local experts through your Area
Agency on Aging (AAA) or find other aging and disability network resources, such as your local
chapter of the Alzheimers Association, the local Center for Independent Living (CIL) or local
hospital discharge planners. Many services, particularly those funded by block grants to the
states under the Older Americans Act, are unique to the state or locality. Some elder law
attorneys have a social worker or a geriatric care manager on their staff available to help clients
locate appropriate assistance in the home and to aid clients in finding appropriate new housing
based on the clients needs. We must plug ourselves into the aging and disability networks in our
communities to become experts.

Many states are setting up Aging and Disability Resource Centers (ADRCs). ADRCs are
information and referral centers serving as single points of entry for elders and adults with
disabilities requiring public benefits and access to community services. Rather than having to
visit several agencies individually, elders and their families should be able to locate services
easier than in the past. In theory, elder law attorneys may be able to direct clients to ADRC's to
help locate services needed to stay at home longer or, at least, to avoid the need for nursing
facility care. More information on ADRC programs in your state may be found at the following
website: http://www.aoa.gov/AoA_programs/HCLTC/ADRC/index.aspx. One potential risk with
ADRCs is that clients may inadvertently make Medicaid applications prematurely without
guidance of the elder law attorney.

The federal long-term care clearinghouse website www.longtermcare.gov serves as a good portal
into many online resources of information on housing and supports both on a national and a state
level. It is a resource that can help attorneys and families looking for answers concerning the
specific options in their communities. Many of the topics covered in this manuscript can also be
found on this website.

This manuscript will cover the basics of advising clients and their families of housing options on
a national level and ways to fund your care. It will be up to you to learn the details as to what
housing options are available in your community. We will first begin with the least restrictive
options and progress to the most restrictive (the nursing facility).

The Spectrum of Housing Options

The spectrum of housing options range from continuing to live at home to living in a nursing
facility and any sort of arrangement between these. For most clients, maintaining their
independence as long as possible is critical. Some elders prefer living in communities of mainly
older adults while others prefer multi-generational housing with supportive services nearby.
These supportive services can be anything from government-funded respite care, to paid
caregivers through an agency, to voluntary assistance of a daughter who lives next door. We do
not give up our individuality as we age. If we stay flexible in our thinking enough as we age, we
can increase our odds of avoiding nursing home care by choosing a place to live that increases
our odds of living independently.

The Most Popular Option--Staying at Home

Most clients prefer living in their own home independently. How long clients can continue
living at home depends on their personal financial resources and the availability of assistance in
the community. A memory-impaired client may want to stay at home; however, staying at home
safely will require locating attendant care and other services. Successfully staying at home will
often require the continual help of a responsible family member, a friend, or the services of a
professional geriatric care manager to locate assistance and supervise the provision of services.1
Clients who are open to receiving help in the home are at an advantage in maintaining their
independence.

Elder law attorneys should not unrealistically promise a client that he will be able to continue
living at home forever, unless the client can afford around-the-clock attendant care (which could
easily cost $80,000 to $120,000 per year or even more if the client requires skilled nursing).
While children may promise to do everything within their power to keep a parent at home,
situations can change. Even the most devoted children can end up with health problems
associated with being caregivers, and many cannot devote themselves to being full-time
caregivers.

For home care to work in the long-term, the client must be patient, and the family must be
willing to devote sufficient time to deal with problems which are inherent to home care. First,
home care providers must be supervised, and not just by their agency. What happens when an
attendant does not show up? What happens when grandmothers silver begins to disappear?
Make sure any agency which is employed is both bonded and insured. Ask questions: Does the
agency do background checks on potential employees? What are the agencys policies
concerning supervision of attendants? How does the agency respond when an attendant fails to
show up? What happens when there is a snow storm?

I tell clients who want to stay at home as long as possible that I cannot eliminate all risks that
they may need care in a nursing facility, either temporarily or permanently. I can promise to let
them know what alternatives there may be to nursing facility care, and make sure that their estate
and life planning will help them to maximize staying at home. Later, when the client faces a
crisis, and I can see no other reasonable choice than nursing facility care, the client should find it
easier to make the decision to move to a nursing facility.

The Importance of Surrogate Decision-Makers to Staying at Home

As a practical matter, failure to plan for incapacity puts clients at risk of institutionalization.
Should a client living at home become unable to manage his own affairs, a guardian or
conservator may be appointed. While the guardian or conservator2 should consider the best
interests of the ward, it is much simpler for the guardian to choose an institutional solution over

1
The author has hired a social worker to assist clients in finding appropriate services in the home and to help with
locating alternative living arrangements in non-crisis situations.
2
Henceforth the term guardian shall be used to include powers over personal decision-making and over finances. In
many jurisdictions, conservators are the court-appointed fiduciaries with powers over financial matters.
keeping the ward at home. Encourage your clients to take charge themselves and name decision-
makers empowered to follow their instructions. Durable powers of attorney and advance
medical directives can be crafted to express the clients wish that home care options be
investigated and favored over nursing home care.

Durable Power of Attorney

Be sure to review the powers in your clients durable power of attorney. Consider including
provisions indicating the clients intention of staying at home so long as practicable if that is the
clients desire. The attorney-in-fact should have the power to hire agents, such as a care
manager, an elder law attorney or a bill-paying service. If family members will likely serve as
caregivers, the client should consider expressly giving permission to the attorney-in-fact to
contract with the caregiver family member for rendering such services.3

Where the attorney-in-fact may also be the caregiver, consider requiring accountings to the non-
caregiving children or other family members to lessen the chances of misdealing and
miscommunications between family members. In cooperative families, naming two
attorneys-in-fact with the power to act independently, but with the obligation to account to one
another, may be appropriate. On occasion, I have had clients who named a trusted brother or
sister as the person to whom the child/attorney-in-fact must report and account. Giving the
sibling a power to remove the child with or without cause ensures the sibling some voice in
decision-making.

Prepare for the unexpected contingencies, particularly the death of the attorney-in-fact. Consider
naming successor attorneys-in-fact and some system for appointing and removing successors. A
well-drafted durable power of attorney helps avoid potential litigation in the future.

One of the most powerful tools for long term care or tax planning is a gifting power in a durable
power of attorney. Frequently, powers of attorney do not include express gifting powers or may
make reference to insufficient statutory gifting powers.4 In most states, in the absence of an
express gifting power in a durable power of attorney, attorneys-in fact may not make gifts of the
principals property, particularly to themselves.

Revocable Living Trusts and Testamentary Trusts

3
In light of the Deficit Reduction Act of 2005s transfer penalties, the use of payment for services, arranged in
advance of disabilities, may help avoid possible legal entanglements should Medicaid ever be required.
4
North Carolina includes an optional gifting power in its statutory short form power of attorney. Some
attorneys are unaware that the statutory gifting powers require there to have been a prior history of gifting to make
gifts. Most of my elder law clients are middle class people who never needed to make annual exclusion gifts, so this
power is practically useless.
Centering estate planning for a person with a progressive disability, such as Alzheimers disease,
on a revocable living trust can ease transitions as the disease progresses. Successor trustees can
take over greater control of the persons assets with less risk of complications, such as the need
for a court-supervised guardian. Financial institutions are used to sending financial records to
trustees and the transitions as capacity diminishes can be controlled by the terms of the trust. In
drafting a revocable living trust, great care should be put into capacity determination provisions
and the trust should state the grantor/trust-makers intentions concerning where he or she intends
to live and how aggressive the successor trustee should be in keeping the grantor at home.

While a revocable living trust may be an excellent tool in planning for incapacity, it is not the
right planning tool to protect spouses who will likely require Medicaid to cover nursing home
care. The better planning tool for the spouse of an incapacitated person will likely be a trust
under a will. Such testamentary trusts are exempted from the OBRA 93 provisions that make
spousal special needs trusts created under revocable living trusts countable resources.5 Similar
language concerning where the surviving spouse prefers to live should be considered in these
testamentary trusts as well.

Durable Health Care Power of Attorney

Often, decisions concerning housing options must be made in a crisis, such as during a hospital
stay. In the age of managed care and prospective payor systems, speedy discharges make
hospitals and HMOs more profitable. As discharge planners are forced to make quicker
decisions, poor discharge decisions are becoming epidemic. Locating appropriate home care
providers may take longer than sending someone to an assisted living facility with 50% of its
rooms vacant. One way for your client to maintain control over the discharge planning is with a
durable health care power of attorney.

A well-drafted HCPOA allows physicians and discharge planners to know your clients desire to
stay at home. It also appoints someone your client trusts to approve or disapprove of proposed
plans for care. The author prefers to draft precatory statements of desire to remain at home
rather than in a nursing facility. Mandatory provisions prohibiting treatment in nursing facilities
may not be enforceable and could lead to the necessity of appointing a guardian to approve of the
treatment where the healthcare surrogate is unable to approve of treatment in a nursing facility.

Some clients may wish to express a desire to avoid hospitalizations and express a desire to opt
for palliative care and hospice whenever practicable, particularly where already diagnosed with a
progressive and untreatable condition. One recent academic study of statistical data on nursing
facility residents with severe cognitive impairment showed that increased hospitalizations toward

5
42 U.S.C. 1396p(d)(2)(A).
the end of life greatly increased the likelihood of feeding tubes being used.6 In jurisdictions with
physician orders for scope of treatment (POST), the client facing a deteriorating condition, or the
health care agent, should consider requesting that a physician limit hospitalization and unwanted
treatment in a POST.

Ancillary Home Services/Adult Day Care/Older Americans Act

In addition to the home care option, the elder law attorney should be acquainted with other
services available to older adults in the community. Such services include programs funded
through Title III of the Older Americans Act such as Meals on Wheels, senior financial
counseling, bathing or limited home health services, adult day care, care management, assistive
technology loan programs, etc. Be aware of generally how long one must wait in order to
become eligible for such programs and who receives priority services in your community.
Waiting lists for such services vary greatly from state to state. Availability of specific services
depends on choices made at both a state and local level. Most of these services can be provided
to anyone 60 years of age or older. Contributions based on financial ability to pay are often
required for these services.

Adult daycare in particular can extend the time a person can live in the home. In North
Carolina, for example, adult daycare costs approximately one-third the rates for care in nursing
facilities. Since North Carolinas Medicaid community waiver program has austere income
limits (monthly income on which to live is limited to $262, including $20 disregard) for those
who must qualify as medically needy, paying privately for adult daycare can be quite cost
effective. The extent to which adult daycare is regulated varies greatly from state to state. Be
sure you and your staff become familiar with daycare options in your community. I prefer
daycare programs which are supervised or visited regularly by nurses or physicians. Skilled
medical supervision can be helpful in spotting potential medical problems in a person with
impaired communication abilities, such as persons suffering from dementia.

Some communities have comprehensive care programs designed to help at-risk elders continue
living at home or return home from nursing facilities. These PACE programs (Programs for All-
Inclusive Care for the Elderly) frequently are built around an adult daycare program.
Participants receive all services, including medical, social and rehabilitative services, through a
team of physicians and allied medical professionals through the PACE program. As with most
programs for the elderly, PACE programs vary greatly depending on the community. Elder law
attorneys should become familiar with any PACE programs in their communities.

6
Churning: The Association between Health Care Transitions and Feeding Tube Insertion for
Nursing Home Residents with Advanced Cognitive Impairment, Journal of Palliative Medicine,
Volume 12, No. 4, 2009.
Investigate unique services available in your community. Some local agencies may provide a
service to help locate victims of Alzheimers disease who wander and some may be covered
using the Older Americans Act. One such program uses an identification bracelet that is
connected to a GPS system for quicker recovery of a person with dementia who wanders. As
elder law attorneys, we are in a unique position to advocate for additional uses of technology to
deal with the impaired older adult. Emergency communications devices can be rented or
purchased through many hospitals and burglar alarm system dealers as well. Some systems can
even be set up to remind persons to take medicines at scheduled times. These types of systems
can be investigated at the community level. Become the expert!

Modifying a Home to Make the Home More Accessible

In order to make homes more accessible to the disabled elder client, consider making
modification to the home. Some improvements, if ordered by a physician, may be deductible
medical expenses, such as wheelchair ramps or a wheelchair accessible shower. Others, as a
practical matter, may be necessary to attract and retain attendants, such as adding a guest room or
central air and heating. If a client is prone to falls, recommend someone, such as a geriatric care
manager or social worker, to inspect the home for dangerous conditions, such as general clutter
and slippery throw rugs. A few minor changes in the arrangement of the home can often make a
difference in the risk your client faces each day when he walks around his home.

Keep in mind that some community waiver programs may cover the expense of making a home
accessible. It is critical to have such requests included in the plan for care submitted by the
caseworker to the state at the start of the year. Many Money Follows the Person programs have a
budget for such modifications, perhaps $3,000 to $6,000.

Find a New Home to Stay Independent

Sometimes the home in which we raise our children is not the right home in which to retire. Our
elder clients may consider purchasing a smaller residence or renting an apartment. A residence
or apartment could be located in a community catering only to those persons age 55 or older,
thanks to an exemption in federal and state fair housing acts. Living amongst other older persons
means access to services should be easier (since service providers such as home health agencies,
care managers and other services tend to be located near older adult communities). Others may
simply choose to move closer to a child or into a one-story house.

While living near family members may be critical in choosing a new home, there are other
factors to consider as well. Our elder clients should consider communities close to grocery
stores, drug stores, their physicians and hospitals. Those facing likely mobility issues or likely
inability to drive should consider whether public transportation is accessible and whether
sidewalks in the community can be navigated in a wheelchair or a scooter. Considering
accessibility before moving into a community can have a great impact on the long-term success
of the move.

Federal or State Subsidized Housing Programs

As elder law attorneys, we should be aware of publicly subsidized housing in general.7 Public
funding of housing comes from the Department of Housing and Urban Development (HUD) at
the federal level and by state-level agencies.

Housing programs fall into two broad categories: those operated by public housing authorities
(PHAs), including tenant-based and project-based Section 8 funded by HUD, and programs
funded by HUD which support the development of low income housing in the private or
nonprofit sectors through low interest loans in exchange for providing low income housing in a
development. These programs are authorized under Sections 231 and 236 of the National
Housing Act of 1959.8 In order to qualify for lower than market-rate loans, the owners of the
development must provide a certain number of units for persons with low incomes.

Eligibility for subsidized housing is dependent on monthly income. To qualify, monthly income
cannot exceed set thresholds. Assets are usually deemed sources of income even if they do not
produce income. For example, an applicant with a gross income of $600 and a $100,000 CD or a
$100,000 house may be deemed to have an imputed income of 2% ($166.66/month) or the actual
income produced, depending on which is greater. Transferred assets continue to be deemed to
produce imputed income for two years after the transfer. Assuming the renter qualifies, the
renter must typically pay one-third of his monthly income (including imputed income) as rent.
The percentage of imputed income is subject to change and may vary depending on the particular
public housing authority.

Of particular interest to older persons are the Section 202 programs. These offer housing
exclusively for persons 62 and over with incomes of 50% of median income and Section 811
programs exclusively for persons with disabilities who are 18 or older with the same income
standards.9 These programs provide low interest loans to nonprofit corporations to support
housing for the disabled and elderly in the form of congregate care with programs. Supportive
services for the elderly and/or disabled residents are also required for residents requiring
assistance with activities of daily living.

7
A good source of information on subsidized housing is HUDs website www.hud.gov. You can
find regulations and policies concerning each subsidized housing program here. In addition, you
may obtain manuals on each program from HUD online as well.
8
National Housing Act of 1959 codified at 12 U.S.C. 1701q.
9
Section 202 of the National Housing Act of 1959 codified at 12 U.S.C. 1701q.
An interesting new demonstration program funds intergenerational housing for heads of
household 62 and over with children or grandchildren under 18 living with them. This will allow
these intergenerational families to live in communities offering the young children playmates
while their grandparents gain access to supports to maintain their independence and continue
their caregiving role in the grandchildrens lives.

HUD funds its Section 8 Housing Choice Vouchers Program through local PHAs. The income of
families and individuals who qualify must be less than 50% of the median income of the
metropolitan area or the county with at least 75% having an income of less than 30% of the
median income. Each PHA maintains a waiting list for its Housing Choice Voucher Program.
These waiting lists may be closed to new applicants at any time, so one should advise interested
clients to sign up as soon as possible. Unfortunately, the client must prove eligibility to get one
the waiting list, so any planning for eligibility must occur in advance. Once your client has a
voucher, the client may look for a landlord willing to accept the voucher. The Tenant pays the
landlord the familys portion of the rent, while the PHA pays the housing assistance payment
(referred to by HUD as the HAP). As a general rule, the family or individual pays one-third of
their income in the form of rent and utilities, making their housing affordable. Once a family or
an individual has a voucher, they can move out of the PHAs area and use their voucher
anywhere in the United States.

Section 8 also covers some housing projects as well. Section 8 project-based voucher can only
be used in that particular community unlike the tenant-based vouchers described above. These
projects are often ones specifically for elders and the non-elderly disabled.

Almost Home--Moving into an Accessory Apartment or Sharing a Home with

the Children

Some children opt to keep a parent out of an institution by moving in with a parent, building onto
their homes (an accessory apartment) or, particularly in the country or in smaller towns, adding a
double-wide mobile home to their home lot. By bringing the parent closer geographically, the
child or children can better tend to the needs of the parent. As elder law attorneys, we should
encourage families entering into such a relationship to formalize the agreement. Often, parents
and children informally share the costs of such additions and verbally agree that the parents will
contribute so much per month to the family budget. Such oral agreements can lead to problems
when a child is unable to continue caring for a parent or when a Medicaid application must be
filed.

Life Care Contract

A written life care contract (or a personal care contract) solves some of the problems associated
with this type of living arrangement. Elder law attorneys can anticipate the types of problems
which may develop between the caregiver child and the parent, such as unanticipated illnesses,
caregiver fatigue and financial disputes. We can provide realistic ways in the life care plan to
cope with these events and hopefully avoid destruction of family relationships. Such a contract
may avoid conflicts between a caregiver child and his or her siblings by making clear what the
caregiver child is entitled to receive.

In some states, a written life care contract may be needed to avoid a transfer sanction imposed by
a state Medicaid agency. So long as the parent pays the child under the life care contract no
more than the rates for equivalent care in a home care setting or a facility setting, payments
under the contract should not be considered transfers. Such contracts are extremely useful in
jurisdictions where transfers are aggressively challenged. Be sure to check your Medicaid
regulations and policies carefully before advising clients on personal needs contracts.

Promise to Provide for Caregiver Child in Will and Alternatives

Some parents promise to reward a caregiver child by leaving them the house or other property
under the will. If a parents estate is modest, the parent may opt to leave the entire estate to the
child. Several potential problems with such planning include: the parent never getting around to
doing the will; the parent becoming ill and exhausting the promised assets before passing away;
or the siblings raising a claim that the parent was unduly influenced to make the will. Of course,
one way of avoiding such complications is to pay the caregiver child as services are rendered
under a written life care contract; however, some clients are unwilling to pay attorneys to draft
such contracts.

Another method of rewarding the caregiver child with real property is for the parent to make a
gift to the caregiver child but retain a special power of appointment over the property conveyed.
The special power of appointment allows the parent to divest the caregiver child of the interest
conveyed either by deed or by will. The parent can convey ownership of the property to anyone
other than himself, his creditors, his estate or the creditors of his estate. Since he cannot return
ownership to himself, the property should be considered non-countable in most states and should
not be subject to estate recovery, at least in states which do not use an augmented definition of
estate for recovery purposes. While the parent may change his mind, at least the conveyance is
already completed. With the transaction completed before the onset of illness, the chances of
legal action or Medicaid ineligibility in the future is reduced.

Housing Choices--When Staying Home Is Not Feasible

Even when an elder can no longer safely stay at home, there are many options that might be
preferred over going to a nursing facility. What sort of living arrangements are available
depends largely on the community in which the elder lives. While the names facilities go by
vary from place to place, most can be categorized. Charlie Sabatino, Director of the ABA
Commission on Law and Aging, has defined the types of facilities available nationally, as
follows10:

Foster Care (Residential Care in NC, primarily with mental illness) is a social service that
places an older person who is in need of a modest amount of daily assistance into a family home.
The program is similar to foster care programs for children. The costs vary and may be covered
in part by the state social services program. Availability of the program is limited.

Congregate Care/Independent Living refers to complexes with separate apartments (including

kitchen) and some housekeeping services; usually one or more daily group meals are available.
Many congregate care facilities are subsidized under federal housing programs such as the 202
and 8 programs, and 801 and 802 of the 1900 National Affordable Housing Act. Personal
care and health oversight are usually not part of the facilitys services (however, they may be
provided through community social services), with the exception of 202 which now requires
supportive services for those requiring assistance with activities of daily living. Some private
facilities operate congregate care-type facilities, sometimes called independent living facilities,
which do not provide supervision but do provide meals. Since they do not provide supervision,
states do not require them to be licensed as assisted living or board and care facilities.

Board and Care (Assited Living or Adult Care Homes in NC) describes a living arrangement in
which a room with meals, help with activities of daily living, and possibly medication
supervision and protective supervision are provided to individuals who cannot live
independently, but who do not need institutional care. Board and care is known by a variety of
names (e.g., domiciliary care homes, personal care homes, adult care homes, assisted living, and
other terms). Todays board and care industry has grown dramatically and generally avoids the
term board and care and prefers the terms Residential Care Facility for smaller mom-and-
pop facilities, and Assisted Living Facility for larger, more expensive, professionally
managed, group-living complexes.

Continuing Care Retirement Communities (CCRCs) are retirement facilities that provide
shelter, health services, and support services for as long as one lives in the facility, normally in
return for a large one-time entrance fee and adjustable monthly fees. Most often, three levels of
care will be provided: independent living apartments, some form of assisted living, and nursing
home care.

Nursing Homes are long-term care institutions that provide various types of nursing care and
other specialized services. Nursing Homes must be licensed under state law. Most are also
certified under Medicare, Medicaid, or both.

10
The author left accessory apartment off this list, since it is covered above and seems to be
more a means of staying at home or in a home-like environment.
Problems Our Clients Will Likely Face in Adult Care Home, Assisted Living
or Residential Care Homes

The problems clients confront in board and care or foster homes are similar to the problems our
clients are confronted with in nursing facilities:

1. How do I get into the facility?

2. How do I pay for the facility?
3. Will the facility adjust to my idiosyncrasies or will they throw me out?
4. If I must go to the hospital, will the facility keep my room available for me?
5. What sort of assistance will the facility give me?

Unlike the nursing home setting, there are few federal laws or regulations to protect residents. In
the absence of federal and state regulation, we must turn to the standard remedies of state law:
landlord-tenant law and contract law. State regulation varies greatly from state to state and
should be investigated thoroughly by the elder law attorney.

There are, however, the protections from discrimination, including discrimination on the basis of
age, gender, race, religion, national origin or handicap under the federal Fair Housing
Amendments Act of 1988 (FHAA) which may protect clients seeking entry or trying to remain a
resident of a facility.11 Our clients may typically have claims under the FHAA for discrimination
based on handicap, particularly where a facility refuses to make reasonable accommodations in
its policies to cope with peculiar needs of a resident. For example, a congregate living facility
which normally does not allow pets should allow a blind resident to have a Seeing Eye dog.

The FHAA defines as disabled persons who have a physical or mental impairment that
substantially limits one or more major life activities, or persons with a record of having, or
regarded as having or presumed to have, such an impairment.12 The FHAA also protects persons
associated with disabled persons, such as family members in the household.

Clients may also have a cause of action against facilities that discriminate under the
Rehabilitation Act of 1973 if the facility accepts federal funding in the form of subsidized
housing payments or Medicaid/Medicare payments.13 The definition of disability under the
Rehabilitation Act is almost identical to the one contained in the FHAA.

11
Fair Housing Amendments Act of 1988, 42 U.S.C. 3601 et seq., 24 C.F.R. 100 et seq. While the anti-
discrimination discussed in the following paragraphs applies in assisted living facilities and nursing facilities, they
may be the only recourse for the foster home resident or the board and care resident.
12
42 U.S.C. 3602(h). Current users of controlled substances are excluded from protection.
13
Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, 24 C.F.R. Part 8, Subpart C.
Where discrimination occurs in the common areas of the facility, such as a dining room or family
room of a facility, the Title II of Americans with Disabilities Act (ADA) may apply. For
example, if the facility refuses to allow disabled residents who need assistance with feeding to
eat with non-disabled residents, the disabled residents might have a claim under the ADA against
the facility for discrimination.

For example, North Carolina has recently entered into an agreement with the United States
Department of Justice, Civil Rights Division (US DOJ) concerning warehousing of persons with
mental illnesses as a primary diagnosis in adult care homes instead integrating them into the
community with appropriate services. US DOJ found that North Carolina was violating the
Americans with Disabilities Act by not providing appropriate services to people with mental
illness, and, by agreement North Carolina has agreed to remedy the situation.
http://www.ada.gov/olmstead/documents/nc-settlement-olmstead.pdf . The state is required to
monitor persons transferring out of ACHs at risk of being deemed IMDs and will be lowering the
States reliance on large mental hospitals and residential facilities in favor of community-based
supports.

The Office of Civil Rights is aggressively pursuing potential violations of the ADA involving
elders, persons with developmental disabilities and persons with mental illnesses. One hopes
that this type of litigation opens the doors for more community-based options for care versus the
traditional nursing facility model so prevalent in the United States.

Getting Good Care in Assisted Living Facilities

Who knows what assisted living facilities are? In my community, assisted living varies greatly
from facility to facility. The philosophy behind assisted living is that older persons should be
able to age in place and avoid the need for nursing facility care, at least until skilled care beyond
mere custodial care is required. ALFs supposedly can help make this a reality thanks to less
regulation. Facilities vary from the old rest home with a new name to the posh luxury five-star
hotel variety. Unfortunately, few offer the combination of services which would enable residents
to truly age in place.

The United States General Accounting Office studied assisted living facilities in four states and
categorized them in four categories based on the level of services and the amount of privacy.14

The majority of ALFs, 58%, were low service/low privacy and practically
indistinguishable from board and care facilities. Most residents in these facilities

14
For more information on this topic, see Stephanie Edelstein & Patricia B. Nemores manuscript entitled Assisted
Living: Medicaid Financing and Consumer Issues, presented at the 1999 NAELA Institute from which this
information was derived.
 lived in semi-private rooms and had few services provided other than 24-hour
supervision.

About 18% were low service/high privacy facilities or luxury hotels. Such
facilities would likely be unable to care for persons with greater staffing needs,
such as incontinent residents or wandering residents with dementia.

Another 12%, high service/low privacy, followed more the traditional nursing
home model with nursing onsite and few private rooms.

Only 11% of the ALFs provided a combination of higher medical and attendant
services together with private roomsthe model most often presented as ideal by
the industry.

As for aging in place, almost half the residents of ALFs in the GAO report (46%) eventually had
to move to nursing facilities and 12% had to move to other ALFs. How do residents in assisted
living pay? In 1999, the GAO report 81% paid privately, the remainder paid either through
community waiver programs or through state funding. This is up from 90% private funding in
1995. Make sure your client is aware of the trap some people fall into by paying for the private
pay ALF until their funds are exhausted. Few facilities are willing to keep such residents whose
incomes are all that remain. Most of these residents end up suddenly needing a higher level of
care, usually in a less desirable nursing facility than most long-term private paying residents
would have found.

Become familiar with the various ALFs in your community and be able to advise your clients
concerning what types of care they can expect to receive in those ALFs. The newest, most
pristine facility may be of little use to your incontinent client if the staffing ratios are too low for
him or her to get changed. Stays in such facilities often lead to higher medical needs which
sooner or later require the resident to move to a nursing facility.

Thus far, assisted living facilities have enjoyed very little regulation. As consumers complain,
the trend recently has become for states to increase regulation of the industry. North Carolina, a
many other states have adopted ALF residents rights and other regulations quite similar to those
required of nursing homes. A compilation of assisted living regulation in all 50 states can be
found on the website of the National Center for Assisted Living at
http://www.ahcancal.org/ncal/resources/Documents/2010AssistedLivingRegulatoryReview.pdf
In particular, regulation of facilities claiming to offer special care units for persons suffering
from dementia has become a hot topic with Alzheimers Association Chapters and other
advocacy groups. Legislators are tiring of constant stories of unsubstantiated promises by
facilities that do not provide promised care.
While the majority of states do not regulate ALFs as strictly as nursing facilities, there is a trend
toward greater regulation and consumer protection.15 Some states are instituting grading systems
to provide the public with some indication of quality, but, in general, clients and their families
must investigate their options by on-site visits even with such systems.

Special Issues Involving Continuing Care Retirement Communities

Unlike the above types of facilities, continuing care retirement communities (CCRCs) offer a
broad range of types of care. Typically, CCRCs take healthy individuals or couples into homes
or apartments in the community and provide higher levels of care to residents in need of more
assistance. Residents progress from total independence to independent living, to assisted living
and nursing facility levels of care. Most often facilities require applicants to be healthy and able
to perform activities of daily living at the time of admission.

Entrance to the CCRC always requires signing a contract and most often requires an up-front
entrance fee which may or may not be refundable. These entrance fees range from $30,000 to
$200,000. Monthly fees for care must be made in addition to the entrance fee. Some CCRCs
charge the same monthly fee no matter the level of services required. Others charge more as a
resident requires more care and supervision, but discount over what one would pay for similar
services in the community. Still others charge the same rates as non-CCRC facilities,
particularly when a resident requires skilled nursing.

Clients should be advised to read the CCRCs contract thoroughly before signing. No two
contracts are alike. Many clients prefer that you review the contract with them prior to them
signing it. You can get a checklist for reviewing CCRC contracts from the ABA. Many states
require that financial disclosure be made by CCRCs up front. You may consider referring your
client to a CPA to review the financial statement since the client often is investing a large sum of
money to live in the CCRC.16

Many CCRCs include a provision in their contracts requiring that a residents financial
resources be used to pay for their care. Particularly where the owner of the CCRC is a not-for-
profit and has donated funds available to cover resident expenses when the residents funds are
exhausted, it is understandable why such provisions are common. Many CCRCs, however,
operate nursing facilities which accept Medicaid and/or Medicare and are prohibited from
discriminating against Medicaid recipients or requiring ones assets be spent on the facility as a
condition of admission or of continued stay. 42 USC 1396r(c)(5)(A)(i); 42 CFR 483.12(d).
Until now, it seemed likely such contract provisions would be unenforceable, if not illegal, at
15
The author recently learned that the State of Minnesota has filed a class action suit against one ALF provider for
unfair and deceptive trade practices in its advertising and pricing structure. In the absence of greater legislation,
elder law attorneys should consider such actions.
16
The author personally experienced the effects of an insolvent CCRC when his great aunts refundable admission
fee was lost when the CCRC declared bankruptcy.
least as applied to nursing home residents. As part of the Deficit Reduction Act of 2005,
Congress specifically permitted CCRCs to include such contract provisions as part of their
agreements, including those of nursing facility residents.

Unlike some states, North Carolina regulates continuing care retirement communities and
requires that CCRCs make some financial disclosures public and in a common format for
comparison. N.C. Gen. 58-64 et seq. Regulation of CCRCs in North Carolina falls upon the
Department of Insurance which may require CCRCs to withhold greater reserves in order to
follow through on their commitments. Annual reports may be reviewed at
http://www.ncdoi.com/SE/Documents/CCRC/CCRCList.pdf.

Sources of Payment for Long-Term Care

The primary sources of payment of long-term care expenses are voluntary care provided
typically by family members, out of pocket payment and Medicaid. Due to the bias in favor of
institutions inherent in most state Medicaid programs, Medicaid is often not an option for frail
elders at risk of needing institutional care. This is due in large part to home and community
based supports being options and often the first places states look when cutting their budgets.

There are some alternative sources of payment, including governmental assistance through Title
III of the Older Americans Act, Veterans Benefits and Medicare. Also, private long-term care
insurance and reverse mortgages, may, in the right situations, offer opportunities to cover the cost
of long term care.

In addition to waiver programs, some states have supplemental income programs tied to the
federal SSI program. These programs offer a supplement paid to persons with incomes below a
certain threshold either at home or in an adult care home together with Medicaid eligibility.

Title III Programs under the Older Americans Act

The Older Americans Act of 1965 as amended in 2006 provided for an agency under the
Department of Health and Human Services, the Administration on Aging, empowered to
advocate for the older people of our national and to support state area agencies on aging.17 Title
III of the Act sets forth block grants to the states to provide any of a number of services for older
people, including but not limited to meals on wheels, multipurpose senior centers, caregiver
support programs and in-home services for frail older persons. Each state proposes a plan to
support funding of its block grant from the federal government and each states choices of
programs are unique to the state and even particular parts of a state. Area agencies on aging

17
42 U.S.C. 3001 et seq.
administer their share of the states block grant on a local level and fund various programs,
typically operated by various aging network non-profit agencies on a local level.

Individuals receiving assistance through Title III programs may be asked to make voluntary
financial contributions for the services they receive but do not have to go through any formal
eligibility process similar to applicants for Medicaid of SSI. Due to the limited size of the block
grants to the states, waiting lists and geographic variations in services are the norm. You must
learn the specifics on Title III programs where you practice to effectively advocate for your
clients.

As many Title III programs are extremely local, be sure to check with your local area agency on
aging for your local options. If your state Aging and Disability Resource Centers (ADRCs),
become familiar with one in your community, and have your staff assist clients with investigating
options. ADRCs can serve as a one-stop intake center for all of the benefits available in a
community. Information on ADRCs in your community can be found at www.adrc-tae.acl.gov.
While all states have accepted funding for ADRCs, not all communities have them and quality
can vary.

Veterans Benefits

Veterans may be entitled assistance in paying for long-term care based on priorities set by the
Veterans Administration. This assistance may come in the form of direct cash payments to the
veteran or certain survivors of the veteran or may be received by direct payment for care to a
facility by the Veterans Administration.

Veterans may have suffered a service related injury and be entitled to compensation based on
their percentage disability based on their injuries. Veterans who have served during a wartime
period whose incomes are low enough, taking into account their medical expenses, may qualify
for a pension based on need. These veterans, receiving compensation or a pension, may qualify
for additional supplements to their compensation or pension if they are house-bound or in need
of aid and attendance.

Veterans who qualify for medical care through the VA may take advantages of VA-run
community living centers (primarily on campuses of VA hospitals) or state veterans homes
funded by the VA. Priority is given based on disability or inability to pay. Certain high priority
veterans unable to access care directly through the VA may have their care paid for by the VA in
non-VA nursing facilities or alternative facilities. The limited supply of assistance for veterans
means waiting lists for many veterans who could potentially qualify.
 Medicare

Medicare can be a source of limited coverage of long-term care in three ways; however Medicare
is not a long-term provider of custodial care for chronically ill persons. 1) Medicare covers
limited skilled nursing facility stays of up to 100 days in a spell of illness subject to a co-
payment beginning the 21st day under Part A. 2) Medicare may cover home health care under
Parts A or B on a part-time or intermittent basis. As with skilled nursing facility coverage,
Medicare home health care coverage is not intended to cover custodial care long-term and its
system for paying providers stacks the odds against clients in maximizing benefits. Thanks to
the settlement of Jimmo v. Sebelius,18 Medicare has agreed to clarify its policy concerning home
care to make clear to its contractors and home care agencies that maintaining a current condition
and avoiding further deterioration can justify continuing Medicare home health benefits, making
longer term utilization more likely in the future.

3) Medicare also covers hospice care which may include medications to alleviate pain, case
management and respite care for caregivers. Hospice does not replace community-based long-
term care nor nursing home care, but may enable caregivers to continue or take over care of a
loved one. To qualify for hospice a physician must certify that in the normal course of an illness,
the Medicare beneficiary requesting services would not be expected to live longer than six
months. Unfortunately, persons with dementia and many other chronic, progressive conditions
unutilized hospice due to the inability of physicians to comfortably predict their life
expectancies.

Long Term Care Insurance in Planning to Stay Home

Consider recommending to your clients who want to maximize their chances of staying at home
to purchase long term care insurance (LTC insurance), including a home health care rider. If the
client has a support network of family or friends to make it likely the client could stay at home
with assistance, insurance might help in a couple of ways. First, long term care insurance may
cover not only the cost of limited attendant care but also for some case management. The care
manager can help the client and the family to decide how long home care can safely and
economically be provided. Second, facilities know that a person with sufficient LTC insurance
will pay privately for some period of time, making access to facilities easier should home care
become impracticable. For this reason, spending money on home care may be done with less
concern regarding future access to assisted living facilities or nursing facilities.

Be sure that your clients are aware of the limitations of home care under their policies. Policies
rarely allow family members to be paid for informal caregiving services. Also, LTC policies
are not designed to cover 24-hour-per-day nursing care, even for shorter periods of time.
Without adequate family support in the form of payment or hours of caregiving, the addition of
18
Jimmo v. Sebelius 2011 WL 5104355 (D.Vt. Oct. 25, 2011).
the home care rider might not be cost effective. The cost of the home care rider may raise the
cost of the policy significantly.

Long-Term Care Partnership Programs may be an option in your state. Long-Term Care
Partnership programs reward purchasers of long-term care insurance meeting certain standards
with greater asset exclusion for Medicaid and estate recovery avoidance up to $250,000,
depending on use of the long-term care insurance to avoid the need for Medicaid dollars. Sadly,
there is no inflation factor built into the law, so the maximum protected amount will remain
$250,000. The American Association for Long-Term Care Insurance website www.aaltci.org
includes a list of states having approved LTC partnership programs.

Reverse Mortgages: Using the Equity in the Home to Stay Home Longer

Many older persons have relatively low incomes, but they long ago paid off the mortgage, which
is their most valuable asset. With the goal of staying home, finding a way to access the value of
the home may make the difference between living at home a few more years or having to move.
An equity line mortgage may be one way to access the equity value of the home, but equity lines
must be paid back. Reverse mortgages provide access to the equity in the home but defer the
necessity to pay the loan back until the borrower dies or must vacate the home.19 A reverse
mortgage may also be a way to pay off a remaining balance on a traditional forward mortgage
in order to save a home for a retiree without the income or resource to keep paying a mortgage.

Many reverse mortgages are FHA approved (often called Home Equity Conversion Mortgages or
HECM). To qualify for a HECM, a borrower must be at least 62 years old and there are limits
on the value of the home based on the region in which the borrower lives. HECM's become due
should the borrower have to vacate the home for 12 months or longer. In 2014, loans of up to at
least $417,000 may be made through a HECM insured by FHA, with the limit being higher in
some parts of the country. Due to losses on HECMs in recent years, HUD has recently made
major changes to the program. The cost of the mortgage insurance at application on a HECM is
2.5% if more than 60% is borrowed or borrowable in the first year, with the upfront mortgage
insurance being .5% for lesser amounts. Annually thereafter, a mortgage insurance premium of
1.5% must be paid to HUD.

HUD is in the process of instructing lenders on a required financial assessment of HECM

borrowers to determine the borrowers ability to pay ongoing expenses such as property taxes
and maintenance. Borrowers who do not meet the yet to be proposed standards will be required
to have additional reserves set aside by the lender.

19
Visit the National Center for Home Equity Conversion at www.reverse.org and AARPs at
http://www.aarp.org/revmort/for information on reverse mortgages.
The greater expenses of HECMs along with the new limits on what can be borrowed will make
reverse mortgages somewhat less viable tools in the future for elders having difficulty making
the financial ends meet. Elder law attorneys should be mindful of any attempts to
inappropriately sell reverse mortgages to elders, in order to fund annuities. This scam remains
common and is being monitored and publicized by FINRA, the Financial Industry Regulatory
Authority and is discussed in an investor alert curiously listed under retirement accounts at
https://www.finra.org/Investors/ProtectYourself/InvestorAlerts/RetirementAccounts/p038113.
This alert also mentions a new problem being encountered by families upon the death of the
borrower where lenders attempt foreclosure without giving the family the option of purchasing
the home of the deceased for 95% of the appraised value of the hom.

Proprietary reverse mortgages from mortgage lenders may be an option but cost more than
federally subsidized loans. Proprietary mortgages might be the only option for clients with the
most valuable homes needing to access more equity than can be borrowed under the FHA HECM
program.

Generally, interest rates on reverse mortgages are higher because the lender will not be paid until
a later date. How much can be borrowed depends on the age of the borrower and the value of the
home. Generally, the older the borrower, the larger the loan can be. FHA requires credit
counseling as part of the reverse mortgage loan process and will soon require financial
assessments on borrowers as well.

The Home Owner Equity Disclosure Act of 1994 requires lenders offering reverse mortgages to
standardize disclosures of the costs of the mortgages. Pub. L. 103-325, 108 Stat. 2160. Lenders
must calculate the Total Annual Loan Cost (or TALC), so that borrowers can compare various
mortgages options.

For Medicaid and SSI purposes, loans are generally not considered countable income; thereby
making reverse mortgages a potentially valuable tool for lengthening ones stay at home. Other
loans, such as an equity line mortgage, may be similarly useful.

One way for family members to supplement living expenses is to pay off equity loan and reverse
mortgages or other debt such as credit cards. For Medicaid and SSI, the worst result would be
such payment of debt being considered in-kind support (ISM).

So, Your Client Must Make the Nursing Facility Home? Its Still Home.

While a nursing facility does not look or feel like home, for some, it may be the only alternative
for some clients. The Nursing Home Reform Act (as called, OBRA-87) requires that Medicaid or
Medicare nursing facilities must provide services and activities to attain or maintain the highest
practicable physical, mental and psychosocial well-being of each resident regardless of payment
source.20 This means on a practical level that nursing facility care should be personalized to the
resident based on their personal needs and desires. Residents should be able to have visitors and
have services, such as meals and wake up times, delivered based on personal preference.

In addition, as elder law attorneys, we should keep in mind that living in a nursing facility does
not mean that our client must be there 24-hours-per-day, seven days a week, even when Medicare
is paying for skilled care. Both Medicare and Medicaid on a federal level recognize the concept
of therapeutic leave. For example, a physician may certify that a vacation to visit family
members for Christmas may be therapeutic. During the absence, the nursing home resident may
be entitled to have the bed held available either by Medicaid or by the family paying a bed hold
fee or the fee for the room under Medicare. http://www.medicareadvocacy.org/you-can-leave-
the-nursing-home/

Residents whose care is being paid by Medicare or Medicaid should be able to leave their
nursing facility and return before midnight without negatively impacting payment for the day.
One can describe this as the Cinderella Rule- be back at the facility no later than midnight.
Where Medicare is paying for the care, the resident must avoid missing scheduled treatment or
therapy sessions, but dinner out should be permitted. Of course, the specifics on this depend on
you states law.

Elder law attorneys should understand the concepts of bed-holds, leaves of absence, the
Cinderella Rule and therapeutic leave in their state.21 We can empower clients to have a life
outside the walls of their nursing facilities.

Money Follows the Person

In many states, making the transition from a nursing facility to home for elders and others with
chronic disabilities has become problematic with many spending the balance of their lives
institutionalized for lack of other options.

Money Follows the Person (MFP) demonstration projects across the country enable elders and
other disabled persons to return home through waiver programs which often in the past were
subject to long waiting lists. Currently, to participate in MFP, an applicant must reside in a
nursing facility for 3 months past any Medicare-paid days, be eligible for Medicaid by the time
applying for MFP and plan on returning to qualified residence. A qualified residence can include
20
42 U.S.C 1396r (Medicare) ; 42 U.S.C. 1395i-3 (Medicaid), regulatory authority at 42 CFR
483.
21
For Medicaid bedhold policy in your state see:
http://www.ltcombudsman.org/sites/default/files/library/documents/State-BedHold-Chart-Feb-
2011.pdf. Typically, nursing facilities must report their midnight census, so if you are there at
midnight , they can get paid for the entire day by Medicaid.
the applicants own home or his or her familys home, an apartment or possibly a small group
home. MFP can cover some of the transition costs of returning home, including widening of
doorways, building of ramps, and payment of deposits for utilities. There are currently 44 states
and the District of Columbia participating in MFP.22 Once eligible for MFP, the participant
becomes eligible for the states waiver program or program of all inclusive care for the elderly
(PACE).

As a reward to states participating, the federal government absorbs the cost of MFP participants
for the first year. The federal government then awards the state what they would have paid with
the requirement that the funds be spent in a specific manner. The state must use the savings to
expand their community alternatives to institutionalization. MFP remains the hotbed for creative
thinking on alternatives to institutionalization.

Conclusion

In a time when elder law and Medicaid planning have been popular areas for attorneys to
practice, we elder law attorneys can best differentiate ourselves by becoming experts on housing
options and supports available in our individual communities. By helping our clients be open to
options other than staying at home with little or no support, we can increase the likelihood that
they will be able to defer or avoid the need for nursing care. In this age of harsher and harsher
transfer penalties and budget cut, helping our clients to avoid or defer the need for nursing
facility care may be one of the most value services we can offer.

B. Bailey Liipfert, III, C.E.L.A. by the National Elder Law Foundation

Wells Liipfert, PLLC
380 Knollwood Street, Suite 620
Winston-Salem, NC 27103
Ph. 336-283-8700
Fax 336-283-8701
bailey@wellsliipfert.com
www.wellsliipfert.com

22
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long-Term-
Services-and-Support/Balancing/Money-Follows-the-Person.html
 Basic Employment Issues for the
Elder Law and Disability Planning
Attorney
Older Americans and persons with disabilities, whether still employed, seeking employment, or
retired, often face issues relating to their employment and a veritable potpourri of acronyms for
employment-related federal law. Elders who were once employed may be impacted by the
Employee Retirement Income Security Act of 1974 (ERISA) and its rules governing defined
benefit plans and defined contribution plans. These same elders and their dependents will often
have medical insurance provided through their employers or former employers group health
plan and must, once again, confront ERISA. ERISA limits recourse when medical services are
denied by sending complaints against health plans to federal court. When facing retirement,
termination or disability, the employed elder must contend with the Consolidated Omnibus
Budget Reconciliation Act (COBRA) and make decisions concerning continuing health benefits
with deadlines or choosing other insurance options. This manuscript will attempt to provide a
basic roadmap to the most common issues facing an employee or retired employee, including
ERISA relating pension benefits and group health plans, COBRA relating to continuation of
group health insurance, unemployment benefits, and remedies for age discrimination in the
workplace.
We will also cover some of the issues facing people with disabilities or on Medicaid when they
attempt to transition from disability back to the workforce or attempt to maintain benefits while
continuing to work to the extend they are able to work. We will be focusing on employment
issues and Social Security benefits, as well as Medicaid earned income issues.
ERISA and Pensions
Congress originally passed ERISA to set federal ground rules concerning employee benefits.
The plan participants and their beneficiaries were entitled to the disclosure of financial
information concerning plans; plan fiduciaries were held to standards in their administration of
these plans; and ERISA provided remedies in the federal courts for plan participants and their
beneficiaries when pension plans or group health plans failed to honor commitments made.
ERISA also established the Pension Benefit Guaranty Corporation charged with guaranteeing the
viability of terminated defined benefit plans, and regulating the financial viability of such plans.
Some predict that the next wave of financial disasters may come from pension failures or
terminations and great strain being placed on the PBGC.
ERISA regulates both defined benefit plans and defined contribution plans, such as IRAs and
401(k) Plans. One requirement of ERISA familiar to most elder law attorneys is the requirement
to a defined benefit plan or a 401(k) pay out to a married participant in the form of a joint and
survivor annuity unless both the participant and the participants spouse consent in writing.
ERISA and Group Health Plans
ERISA controls employer offered group health benefits as well as welfare and pension plans.
The Department of Labor establishes minimum standards for these group health plans, regulates
administration of plans, and provides an exclusive remedy through the federal courts to
aggrieved plan participants. Frustratingly for many plan participants, ERISA makes calls to the
state insurance department or commission futile. For practical purposes, appeals outside of those
permitted and required under the plan will require appeals to federal court and limited rights of
appeal. Amendments to ERISA relating to group health plans have included provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, discussed below) giving
plan participants and their depends the right to continued coverage in certain life-changing
situations, such as when the participant dies or leaves employment, and The Health Insurance
Portability and Accountability Act of 1996 addressing discriminatory practices in granting
coverage for preexisting conditions and misuse of private medical information against the plan
participant and his or her dependents.
COBRA Continuation of Health Benefi ts and Health Benefi t
Considerations
COBRA requires employers of 20 or more employees in the last year, as well as
state and local government employers, to offer continuation of healthcare to certain
employees and their families. In addition to electing coverage under COBRA, an
employee, a spouse or child may be entitled to a special enrollment into a spouses
or parents policy. Depending on the timing, eligibility for an ACA policy or another
individual policy may be another less-costly option.

COBRA covers qualified beneficiaries after a qualifying event. The employee must
not have been fired for gross misconduct or due to a reduction in number of work
hours by the employee. COBRA applies in the following situations:
1. Termination (if not gross misconduct);
2. Reduction in hours by employer;
3. Covered employee becomes Medicare eligible with ineligible family;
4. Divorce, or separation, of spouse from covered employee;
5. Death of covered employee; or
6. Loss of dependent child status by a formerly dependent child.

The employer has an obligation to give notice to the covered employer or his or her
family within 30 days of a termination or reduction in hours, when the covered
employee becomes eligible for Medicare or when the employer becomes bankrupt.
The covered employee or a family member must notify the employer as outlined in
the plan but must be given no less than 60 days to provide the notice of other
changes known to covered employee.

Once the plan administration has received notice of a qualifying event, the plan
administrator must give a COBRA Election Notice to all qualified beneficiaries within
14 days. The qualified beneficiaries have at least 60 days to request COBRA
coverage. Coverage will continue for at least 18 months for persons terminated or
reduced in work hours by the employer, while others qualify for a minimum of 36
months. The cost of coverage cannot exceed 102% of the cost of the plan for the
employer except as described below concerning disabled qualified beneficiaries
entitled to only 18 months of COBRA extension.

COBRA for Disabled Qualified Beneficiaries

A qualified beneficiary with a disability determination from Social Security (such as

a disabled child on a waiver community program, can extend coverage for another
11 months for 150% of the cost to the employer of the plan. This is limited to those
whose initial term under COBRA was 18 months.

Age Discrimination in Employment Act

The Age Discrimination in Employment (ADEA) protects workers over age 40 from
discrimination in the workplace and also the hiring and termination of employees as well as
discrimination in training of employees, promotions and in the provision or administration of
fringe benefits.23 It covers discrimination by employers, employment agencies, and labor
organizations such as labor unions. ADEA applies to employers and labor organizations
employing or representing 20 or more employees or individuals.
Discrimination by Employers
Under ADEA it is unlawful for employers:
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any
individual with respect to his compensation, terms, conditions, or privileges of employment,
because of such individuals age;
(2) to limit, segregate, or classify his employees in any way which would deprive or tend to
deprive any individual of employment opportunities or otherwise adversely affect his status as an
employee, because of such individuals age; or
(3) to reduce the wage rate of any employee in order to comply with ADEA.
Discrimination by Employment Agencies
It is unlawful under ADEA for employment agencies:
to fail or refuse to refer for employment, or otherwise to discriminate against, any individual
because of such individuals age, or to classify or refer for employment any individual on the
basis of such individuals age.
Discrimination by Labor Organizations
Under ADEA it is unlawful for Labor Organizations (Unions):
23
29 U.S.C. 621-634.
 (1) to exclude or to expel from its membership, or otherwise to discriminate against, any
individual because of his age;
(2) to limit, segregate, or classify its membership, or to classify or fail or refuse to refer for
employment any individual, in any way which would deprive or tend to deprive any individual of
employment opportunities, or would limit such employment opportunities or otherwise adversely
affect his status as an employee or as an applicant for employment, because of such individuals
age;
(3) to cause or attempt to cause an employer to discriminate against an individual in violation
of the ADEA.
Retaliation for Exercising Rights
Similar to other anti-discrimination laws, the ADEA prohibits retaliation by employers,
employment agencies and labor organizations against persons who file lawsuits, who participate
in investigations or who file complaints against unlawful practices.
Harassment
ADEA prohibits harassment of employees or labor organization members based on age.
Employers and labor organizations are not expected to protect employee or members from every
slight, but may face liability where the employers creates or tolerates a hostile environment or
where the employee is demoted or fired due to the harassment.
Enforcement before the EEOC
Claims of employment discrimination must be brought before the Equal Employment
Opportunity Commission (EEOC) through the filing of a Charge of Discrimination.24 Generally,
claims under the ADEA must be made within 180 of the incident of discrimination, with
exceptions based on state or federal law. EEOC investigates and may attempt to mediate a
situation. EEOC issues a Notice of Right to Sue either when it determines there was no violation
of the law or when EEOC decides against filing a lawsuit itself. At this stage, the person who
filed the Charge of Discrimination has a right to file a lawsuit. Failure to timely file a Charge of
Discrimination cuts off the aggrieved individuals right to sue.
Disability Discrimination
Claims of disability discrimination at work are covered under Title I of the Americans with
Disabilities Act.25 Disability discrimination and age discrimination are not mutually exclusive.
In other words, persons claiming disability discrimination may also have a claim for disability
discrimination as well. One must remember that the definition of disability under the ADA is
quite broad and includes persons having a physical or mental impairment limiting one or more
major life activities, persons having a record of such impairment or being regarded as having
such impairment.26 So even a non-disabled person may have a claim for employment disability
based on a perception of disability. The ADA applies to employers in interstate commerce who
have 15 or more employee. It may also apply to labor unions as well.

24
42 U.S.C. 2000e-2000e-17.
25
42 U.S.C. 12111 through 12117.
26
42 U.S.C. 12102.
Employers are required to make reasonable accommodations for workers having a physical or
mental impairment and must avoid discrimination in their hiring, firing, and advancement
practices. Reasonable accommodation may include hiring an interpreter to enable a deaf person
to work, purchasing speech recognition software for a person with physical limitations or
allowing an employee to bring a service dog to work to cope with a disability.
As with age discrimination, complaints should be made to the EEOC as outlined above. Similar
processes and procedures would apply as well.

Social Security and Medicaid Issues Impacting Those

Returning or Starting Employment
Elders and persons with disabilities will face barriers to employment where maintaining
eligibility for Social Security SSDI or SSI are vital. The best source of information accessible to
attorneys and clients with disabilities who are considering work is the Social Security Red
Book.27 It includes explanations of processes and procedures Social Security uses when
evaluating work attempts by persons on SSI or on SSDI. While the Red Book primarily applies
to persons with disabilities, elders on SSI can benefit from its explanation of how income is
counted for employment in general.
As a practical matter, your clients local Social Security office will have a Work Incentive
Liaison (WIL) who is charged with helping people with disabilities learn to work in hopes of one
day gaining independence from public benefits. Social Security can print out a Benefits
Planning Query to help with disabled person in planning a return to work.
Earned Income for SSI and Medicaid
For aged or disabled persons on or seeking eligibility for SSI or for Medicaid in a private living
arrangement, Social Security or the State Medicaid agency counts earned income differently than
unearned income. Earned income for Medicaid in long term care and Medicaid for families and
children as well as for nondisabled adults under age 65, will instead be controlled by income
methodology not covered here. Of course, non-SSI 209(b) states may have different income
methodologies as well.
For SSI income determinations, Social Security does not count the first $20 of monthly income
from any source, then does not count an additional $65 of earned income. It then counts one-half
of any remaining earned income. In addition, impairment-related work expenses (IRWE) may be
deducted from income as well, such as the cost of medications to work or cost of someone
assisting with work. The Redbook lists a plethora of examples for creative ideas.
Example An SSI recipient, George Costanza, currently receives the full SSI federal benefit rate
of $721 and has no unearned income. This workers gets a job and earns $685 per month and
reports these earnings to Social Security. Social Security should disregard the first $20, then
disregard an additional $65, then count only one-half of the remaining $600. Social Security
should reduce Georges SSI check from $721 to $421. George will have $1,106 ($685 + $421)

27
https://www.socialsecurity.gov/redbook/
to live on and will keep his SSI and Medicaid in most if not all states.
Work incentives for younger persons with disabilities include plans to achieve self-support
(PASS), the student earned income exclusion and Section 1619(a) continuation of SSI as long as
the beneficiary remains under a state-set income threshold, taking into account the usual income
and resource rules. The young person (or anyone eligible at any age) remains eligible for
Medicaid as long as income is under a much higher income cap.
A PASS is set by an agreement between the person with a disability to set aside a portion of
income and accumulated resources needed to eventually enable the person to work and get off of
SSI.
Persons under age 22 on SSI can exclude up to $7,060 per year so long as the young person is
regularly attending school for a sufficient number of hours. This exclusion applies before even
the $20 income exclusion making it quite valuable for encouraging work!
Incentives to Work for Persons on SSDI
To encourage attempts at returning to work, or starting to work for the first time, Social Security,
allows many incentives to make the process more attractive to the beneficiary. The process starts
with a trial work period (TWP) during which SSDI continues until 9 months are completed with
income above the TWP threshold of $770 per month in a 5 year period. The 9 months does not
have to be a consecutive 9 months. With impairment-related work expenses, the person with a
disability could have a much higher monthly income than Social Security would consider. Once
past the TWP, the beneficiary continues to receive the SSDI check for 3 months, then begins a 3
year extended period of eligibility. During the EPE, SSDI checks are received for any month
during which the beneficiary earned less than the substantial gainful employment amount
($1,070 in 2014). Once past this 3 year period, the former SSDI beneficiary can file an
expedited redetermination and become SSDI eligible without reproving disability.
Maintaining Medicare
Medicare eligibility continues for 93 months past the end of the TWP. Even past this time, the
beneficiary can continue to be eligible for Medicare by purchasing both Part A and Part B,
sometimes at a reduced cost ($234 versus $436 per month) while the beneficiary continues to
work.
Conclusion
In January of 2014 there was a 13.3% unemployment rate amongst people with disabilities who
are actually able to work. There are many others who are not looking because of the
complications and risks that working brings. WE elder law and disability planning attorneys can
help clients and the disability community know the laws which attempt to somewhat level the
playing field when the person with a disability attempts to work and live independently. I
encourage all readers to actively learn the incentives found in your state and help clients with
disabilities to navigate the minefields they face when seeking to live independently.

B. Bailey Liipfert, III, CELA

Wells Liipfert, PLLC
380 Knollwood Street, Suite 620
Winston-Salem, NC 27103
Ph: 336-283-8700
Cell: 336-283-8701
Email: bailey@wellsliipfert.com
Website: www.wellsliipfert.com