​Getting benefits through the Social Security Disability Insurance (SSDI) program is a great relief to a person under age 65 who is unable to earn a living because of a disability. Its monthly payments guarantee some degree of financial security.
An added benefit to SSDI is health insurance coverage through Medicare. But there is a precarious two-year gap between receiving approval for disability benefits and becoming eligible for Medicare’s insurance coverage. The practical impact of this waiting period is that numerous SSDI beneficiaries are temporarily both unemployed because of their disabilities and without health insurance. 

Lower-income SSDI applicants may qualify for Medicaid, especially if they live in one of the 39 states that have expanded Medicaid to include anyone whose income is below 138 percent of the Federal Poverty Level, no disability required.  But this still leaves a large number with higher incomes who can face the life-threatening consequences of going without health insurance during the two-year waiting period. If this is the case for you, what are your options?

First of all, it might be possible to at least narrow the two-year gap by harnessing any delays in getting your case heard by the Social Security Administration (SSA). If, for example, you were on a waiting list for six months before a hearing with an ALJ (administrative law judge, the SSA official who adjudicates SSDI cases), that period might be counted toward the two-year delay in receiving Medicare coverage. In this instance, that would leave an 18-month period to cover.

Another possibility is individual insurance purchased on the exchanges made possible by the Affordable Care Act.  Although coverage can be expensive depending on where you live, be sure to research your options. You may be eligible for government subsidies to help you pay the premiums for an individual health plan if your modified adjusted gross income (MAGI) ranges from 100 to 400 percent of the previous year’s federal poverty guidelines.

The subsidies are tax credits that are available to help middle-income and low-income people afford health insurance when they don’t have access to affordable employer-sponsored coverage or government-sponsored coverage (Medicaid or Medicare). Most eligible enrollees take those tax credits in advance, paid directly to their health insurance carrier each month to offset the amount that has to be paid in premiums.
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It goes without saying that no one, least of all someone with disabilities, should be without health insurance coverage. With careful planning and research, you may manage to navigate this insurance gap at little or no cost. Be sure to consult with a special needs planner, who can advise you on your qualifications and the laws in your home state.

​In its first three weeks in office, President Biden’s administration reversed a range of high-profile Trump Administration regulations that affected people with disabilities -- rules covering Medicaid, disability reviews, immigration and housing discrimination.

Medicaid work rules: Since 2018, the Trump Administration had been pushing states to enact work requirements for certain Medicaid recipients to maintain benefits. In Arkansas, the only state that enacted these requirements, the program resulted in 18,000 people losing Medicaid coverage in three months before a court put the program on hold. This included many people with disabilities, despite being ostensibly exempt from the rules.

According to sources, the Biden Administration will withdraw the Trump Administration’s permissions to states to enact work requirements or invitations for states to apply for waivers to enact such requirements. It will also rescind existing waivers for Arkansas, Kentucky, and New Hampshire. Courts have uniformly ruled that the Medicaid Act prohibits these work mandates, although the question is now in front of the Supreme Court.

Disability reviews:  On January 28, 2021, the Social Security Administration (SSA) withdrew proposed regulations that would have subjected certain Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) recipients to more frequent reviews to ensure people receiving benefits still have qualifying disabilities. The SSA currently requires these reviews on a seven-year, three-year, or six- to 18-month basis, depending on if the person is classified as “Medical Improvement Not Expected,” “Medical Improvement Possible,” or “Medical Improvement Expected.”

The proposed regulations would have created a new category, covering an estimated 4.4 million people, called “Medical Improvement Likely.” These recipients would have been subjected to reviews every two years, and the every-seven-year requirement for people in the “Medical Improvement Not Expected” category would have been shortened to six years. Disability advocates, who had characterized the proposed rules as a way to harass SSDI and SSI recipients, applauded the SSA’s withdrawal of the proposed changes.

Public Charge Rule: President Biden signed an executive order February 2 ordering a review of regulations finalized by the Trump Administration that would permit the federal government to deny people citizenship on the grounds that they may be a “public charge,” meaning they are likely to need government benefits. While existing laws already permit the government to deny people citizenship on this basis if they are likely to need SSI, the Trump Administration’s regulations expanded the “public charge” definition to encompass people who have received or may need SNAP (food stamps), Medicaid and other benefits that many people with disabilities rely on for help.

For many advocates, the rules harkened to a time when immigration laws systematically excluded people with disabilities. The rule was also credited with sparking a significant drop-off in non-citizens seeking medical care out of deportation fears.

Housing discrimination: On January 26, President Biden issued an executive order rescinding proposed Department of Housing and Urban Development (HUD) regulations that would have made it significantly harder to prove discrimination under the Fair Housing Act (FHA). The proposed regulations targeted claims where discrimination is proven not by showing the intent of a policy but by demonstrating the policy’s discriminatory effects, such as through statistical analysis and other evidence. The Trump Administration would have created a higher, “robust” standard for plaintiffs to make FHA claims, thus making it significantly harder to prove housing discrimination based on disability.
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Disability discrimination claims have long been the most frequent type of claim brought under the FHA. They have traditionally been used to successfully challenging everything from bank lending practices, to landlords discriminating against people with housing subsidies, and zoning ordinances that limit the placement of group homes.

​How do cities stack up for people with disabilities seeking the best place to live? Which provide the most accessible sidewalks, transportation, entertainment, and parks? Which score high for low-cost housing, jobs, public hospitals, affordable home attendants, or a plentiful supply of doctors, therapists, and other services?

To help answer those and more questions, the consumer finance website WalletHub has issued its latest annual Best &Worst Cities for People with Disabilities. It assessed 182 major U.S. cities—including America’s 160 largest urban centers—scoring them on each of 34 key measures of disability friendliness under three main categories: Economy, Quality of Life, and Health Care.

Scottsdale, Arizona, tops the Best & Worst list overall, followed by St. Louis, Missouri, and, in third place, South Burlington, Vermont. At the bottom is Bridgeport, Connecticut, preceded by Gulfport, Mississippi, and, third from bottom, Providence, Rhode Island. But the survey delves a lot deeper for those seeking specific qualities in a city. For instance, Portland, Oregon, is number one for Quality of Life, followed by San Francisco, but both cities, notoriously lacking in affordable housing, rank 173 and 156, respectively, under Economy.  Similarly, Bismarck, North Dakota, is tops for Health Care, but 153 for Quality of Life. Virginia Beach, Virginia, comes first under Economy but ranks only 163 for Health Care.

The survey goes into even greater detail on specific issues important to people with disabilities. For instance, the most affordable cities for doctor visits are Laredo and Plano, both in Texas, and Virginia Beach, while the most expensive are Fargo, North Dakota; Anchorage, Alaska; and Tacoma, Washington. The cities with the highest percentage of people with disabilities living in the area are Cleveland, Ohio; Lewiston, Maine; and Huntington, West Virginia, while Santa Ana, California; Gilbert, Arizona; and Plano, Texas, have the lowest. The cities that are best when it comes to public parks within walkable distance are San Francisco, Boston, and New York.

To see how your city compares and learn more about the methodology used to arrive at the rankings, go here.
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For an article about WalletHub’s 2018 survey, click here.

Retirement plans often make up a significant portion of the assets of parents of children with special needs, or of individuals who have become disabled as adults.  In such cases, the question arises as to whether the retirement plan can be put into a special needs trust. The answer, as with many legal questions, is "it depends." Also, the answer has changed significantly since passage of the SECURE Act at the end of 2019.

There are three different questions that need to be answered:

• Can you transfer your own IRA or 401(k) into a special needs trust?
• Should you name a special needs trust as the beneficiary of a retirement plan?
• Can you transfer an inherited IRA into a special needs trust?

Can You Transfer Your Own IRA or 401(k) into a Special Needs Trust?
This question normally comes up for people who become disabled, whether due to injury or illness, after they have worked and accumulated retirement savings. The answer is a clear no. A disabled person cannot transfer a retirement plan into a special needs trust without first liquidating it and paying taxes on the realized income. If paying the taxes owed is necessary in order to shield the funds in a special needs trust and receive important public benefits, it may well be worth the cost. In fact, the tax cost may not be as high as it seems at first depending on the size of the retirement plan, the individual's other income, and whether medical expense or other deductions are available.

Should You Name a Special Needs Trust as Beneficiary of Your Retirement Plan?
More often, parents would like to leave all or part of a retirement plan to a trust for the benefit of their child with special needs. This can be done, but it's a bit complicated. Before passage of the SECURE Act, special needs planners would advise clients to avoid doing so, if possible, to keep the trust simpler. In order to be the beneficiary of a retirement plan and spread the plan withdrawals out over the beneficiary's lifetime, the trust must qualify as a so-called "accumulation" trust, which presents certain challenges. To avoid this, clients might name their non-disabled children as beneficiaries of their retirement plans and name the special needs trust as beneficiary of other assets.

However, the SECURE Act made it more difficult to stretch out retirement plan withdrawals for the lifetime of most beneficiaries, limiting the withdrawal period to the 10 years following the death of the primary owner. One of the exceptions is beneficiaries who qualify as disabled. So now, in many cases, planners give the opposite advice. If possible, the retirement plan should be payable to the special needs trust so withdrawals and the payment of taxes can be spread out over the disabled beneficiary's lifetime. In each case, the special needs planner and the client must balance the potential tax savings with the added complication of creating and managing an accumulation trust.

Can You Transfer an Inherited IRA to a Special Needs Trust?
Perhaps you have a special needs trust and have inherited an IRA. Can the IRA be transferred to your trust without having to be liquidated first? Here the answer is less definite. There's no regulation that directly answers this, but there are IRS rulings that have permitted such a transfer without having to liquidate the IRA first in individual cases. Absent a regulation that directly addresses this, the challenge may be less the law and more the willingness of the bank or investment firm where the account is located to permit such a transfer to the trust. They may well first require that the account owner obtain a ruling from the IRS that is specific to the account in question. The cost of obtaining such a private “revenue ruling” in most cases would outweigh the potential benefit of making the transfer to the trust.

​As you can see, the subject of retirement plans and special needs trusts is a complicated one.  If you want to know how a retirement plan can fit with your or a loved one’s special needs trust, talk to your special needs planner.