Workers’ compensation attorneys often encounter clients with long-term medical needs resulting from workplace injuries. While workers’ compensation covers immediate medical care, long-term planning is essential for clients facing prolonged disabilities. Medicaid planning can play a pivotal role in ensuring your clients obtain or maintain their eligibility for essential public benefits while managing their workers’ compensation settlement.
This article will outline how Medicaid planning can support injured workers in qualifying for long-term care assistance without jeopardizing their settlements or financial well-being – and provide them with access to resource that they normally would not qualify.
What is Medicaid?
Medicaid is a critical safety net for individuals with limited resources who require long-term care. For workers’ compensation clients, two key Medicaid programs come into play:
1. The Institutional Care Program (ICP), which provides nursing home care for those with significant medical needs.
2. Home and Community-Based Services (HCBS) or Medicaid Waiver, which allows individuals to receive care at home or in assisted living rather than in a nursing facility.
Both programs help injured workers secure long-term care benefits while preserving their financial resources. However, strict income and asset limits apply, which is where Medicaid planning becomes crucial.
As Medicaid planning attorneys, we work with Floridians who normally would not qualify for these programs because their income or assets are too high, and we can legally and ethically protect their assets to bring them into program compliance.
Why Medicaid Planning Matters in Workers’ Compensation Cases
Your clients may go from thriving and independent to requiring assistance with their activities of daily living in a heartbeat due to a workplace accident. Workers’ compensation settlements can disqualify injured workers from Medicaid if the settlement pushes their assets or income beyond Medicaid eligibility thresholds. A workers’ compensation attorney who understands Medicaid planning can help clients protect their settlements and preserve their ability to access to public benefits – even if they did not qualify for public benefits before the injury!
Structured Settlements and Medicaid Eligibility
Structured settlements are common in workers’ compensation cases and offer an excellent opportunity for Medicaid planning. By arranging a structured settlement in a way that complies with Medicaid’s income and asset limits, attorneys can ensure that their clients remain eligible for benefits like Medicaid long-term care. Without careful planning, a lump-sum settlement could disqualify a client from Medicaid, forcing them to spend down their assets on care.
Special Needs Trusts (SNTs)
One of the most effective tools for protecting workers’ compensation settlements while maintaining Medicaid eligibility is a special needs trust (SNT). This legal arrangement allows the settlement to be placed in trust, where it can be used for the client’s benefit without counting as an asset for Medicaid purposes. The trust can cover expenses not provided by Medicaid, such as certain therapies, personal care, or home modifications, while ensuring the client remains eligible for essential public benefits.
Other Strategies Beyond Special Needs Trusts Exist and Should be Explored
Often the SNT is the only strategy offered to obtain or protect Medicaid long-term care benefits. While the SNT is an important tool it is not the only tool we have in our toolbelt. In Florida we have ways to pay family caregivers in large lump sums, Medicaid compliant annuities or promissory notes, even real estate investments can be used to legally and ethically protect assets to qualify someone for Medicaid assistance to help with home care or facility care.
Medicaid Waiver (HCBS)
For injured workers who prefer to stay at home or in assisted living, Medicaid Waiver programs allow them to receive long-term care services outside of a nursing facility. However, the Medicaid Waiver program often has a waiting list, and clients may face delays in accessing services. Workers’ compensation attorneys can work closely with elder law attorneys to ensure their clients are placed on the waitlist early and receive necessary care as soon as possible.
Avoiding Medicaid’s Look-Back Period
Another important consideration is Medicaid’s five-year ‘look-back’ period. Transfers of assets within five years of applying for Medicaid may trigger penalties, delaying the receipt of benefits. By involving a Medicaid planner early in the settlement process, workers’ compensation attorneys can help clients avoid costly penalties and ensure that their financial resources are structured appropriately from the outset.
In other words, there are Medicaid-compliant strategies that can be used to allow someone to obtain Medicaid long-term care benefits without having to wait five years, or sell their house, or go broke first!
Conclusion
For workers’ compensation attorneys, understanding Medicaid planning is essential for providing comprehensive service to clients who may now have long-term care needs. By incorporating tools such as special needs trusts, and other Medicaid planning strategies, attorneys can help their clients preserve their settlements while securing access to the care they need.
Injured workers often face a lifetime of medical care and assistance, and the intersection of workers’ compensation and Medicaid benefits requires thoughtful planning. Attorneys who are well-versed in Medicaid planning can ensure their clients achieve the best possible outcomes—both financially and in terms of long-term care.
Links to Author’s Resources
Free Webinars: https://www.elderneedslaw.com/webinars
YouTube Channel: https://www.youtube.com/@elderneedslaw
Medicaid Planning Book: https://www.amazon.com/Medicaid-some-your-long-term-expenses/dp/1513634712
Other articles: Jason Neufeld (medicaidplanninglawyer.com)