COBRA FAQ's

In 2009, the American Recovery and Reinvestment Act (ARRA, also called the Stimulus Act) provided a 65% reduction in monthly COBRA premiums for individuals who met the qualifications.

Below you'll find some helpful facts on this Health Insurance coverage option.

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Question:
I was recently laid off of my job. I was told that I may be able to get a reduction in my COBRA premiums? Is this true?

Answer:
The answer to this question depends on when you were laid off and under what circumstances. The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% reduction of COBRA premiums in some cases. You can pay only 35% of the full COBRA premium for up to 15 months if you are eligible for the premium assistance. To qualify, you must have involuntarily lost your job between September 1, 2008 and February 28, 2010. If your job ended on or after March 1, 2010 you will not be eligible for the premium assistance. You will also not be eligible for premium assistance if you quit your job – but you can still use COBRA to continue your employer-sponsored group health coverage.

Here are two examples. In the first case, my job ended on February 7, 2010. I did not quit but was laid off. My health coverage from my job will end at the end of February. Under COBRA, I can choose to continue the group health coverage for myself and for any dependents after February. I will have to pay a monthly premium to keep this coverage. Because my job ended before March 1, 2010 I am eligible to pay a reduced monthly premium (only 35% of the full premium) for up to 15 months. After 15 months, if I still need the coverage, I will have to pay the full premium amount each month.

In a second example, I am laid off on March 4, 2010. I am not eligible for premium assistance under ARRA because my job ended after February 28, 2010. I can still use COBRA however to continue the health coverage for myself and any dependents. I can continue my health coverage for up to 18 months (or 29 months if I have been determined disabled by Social Security).

What Is COBRA Continuation Coverage?

COBRA law was enacted in 1985 under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows an employee to choose to continue employer-sponsored group health coverage after the employee stops working. The employee can choose to pay a monthly premium and continue the health coverage for themselves and any dependents who were covered by the plan. To qualify for continuation coverage under COBRA, an employee must have lost group health coverage because of: 1) voluntary or involuntary termination of employment, for reasons other than gross misconduct, or 2) a reduction in the hours they work. There are other events (such as the death of a covered employee, divorce, or a child's loss of dependent status) that can provide someone with an opportunity to continue health coverage under COBRA. The employee can continue health coverage for up to 18 months, or up to 29 months if they are found disabled according to Social Security rules.

When a beneficiary is considering using to use COBRA, it is important that they consider all other possible health coverage options, such as Medicaid. COBRA premiums can be very expensive for many of the beneficiaries we work with. The ARRA premium assistance program has made COBRA premiums more affordable, but this program will not be available to workers whose jobs end after February 28, 2010. Often individuals will use up all of their savings paying COBRA premiums, when there are other less expensive alternatives that can provide them with health coverage.

Employers with 20 or more employees are subject to federal COBRA rules. In your state, additional employers may be required to offer continuation coverage. 40 states have laws that expand the federal COBRA laws. You can find information on your state COBRA laws at:

http://www.statehealthfacts.org/comparetable.jsp?cat=7&ind=357&typ=5&gsa=1

Full information on COBRA, including how to enroll in COBRA continuation coverage, can be found at the U.S. Department of Labor website:

http://www.dol.gov/ebsa/cobra.html

This website provides a Fact Sheet on COBRA Premium Reduction under the ARRA:

http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html

There is also “An Employee's Guide to Health Benefits Under COBRA” will at:

http://www.dol.gov/ebsa/publications/cobraemployee.html

Any questions may be directed to: rsi5@srt.com

Bill Proposed to Raise SSI Asset Limit

On March 24th, Congresswoman Tsongas (D-MA), along with Congressman Petri (R-WI), introduced the SSI Savers Act of 2010 (H.R. 4937) proposing to reform the asset test in the Supplemental Security Income (SSI) program, the primary provider of subsistence cash to extremely low-income individuals, seniors, and people with disabilities.

In general, eligibility for SSI is limited to those who have assets of $2,000 or less for an individual and $3,000 or less for a couple. The SSI test generally counts all resources deemed accessible to an individual, including defined-contribution retirement accounts, such as 401(k)s and IRAs, under the asset limit.

H.R. 4937 proposes to remove savings disincentives in SSI by:

• Raising the asset limit to $5,000 for single and $7,500 for joint tax filers and indexing these limits for inflation;
• Excluding retirement savings from inclusion in the asset test for noninstitutionalized individuals under the age of 65;
• Excluding savings in qualified retirement accounts below a specified ceiling of (indexed for inflation) $10,000 for an individual and $15,000 for a couple or household for noninstitutionalized individuals age 65 or older;
• Disregarding one third of the funds drawn down from retirement accounts when calculating household income for noninstitutionalized individuals age 65 or older;
• Removing the requirement that SSI recipients, if eligible, must apply for periodic payments from their retirement savings, and;
• Excluding Education Savings Accounts and Individual Development Accounts funded all or in part with federal dollars or defined in federal programs for those under age 65.

For more information go to http://www.washingtonwatch.com/bills/show/111_HR_4937.html

Source: Justice for All http://jfactivist.typepad.com/jfactivist/current_affairs/

Any questions may be directed to: rsi5@srt.com

Health Care Reform - Changes Important to People With Disabilities

The recently passed Patient Protection and Affordable Care Act (Public Law 111-148) and Health Care and Education Reconciliation Act (Public Law 111-152) will result in significant reform of our nation's health care system, including extending coverage to many more millions of Americans. There's a lot to learn about the new laws, and many people have questions about how the changes will take effect. It's important to remember that some changes in the new laws will not happen immediately, but will happen over a period of years, through 2019.

The attached summary was created by the World Institute on Disability. It is intended to be a "plain language" overview for the general public, with a timeline showing major implementation dates, so that people can get a better understanding of the changes that will affect them in the short-term, to help people prioritize what to focus on first, and learn the details in stages.

2010-04-02 - Health Care Reform Article

Any questions may be directed to: rsi5@srt.com

Pomeroy Heads Social Security Subcommittee

Decisions made by the Social Security Subcommittee of the Ways and Means has significant and direct impact on people with disabilities in the state of North Dakota.

With Pomeroy's March 11th appointment as chairman of the Social Security Subcommittee, our state's influence over Social Security funding and legislation is assured.

Comment from Representative Earl Pomeroy

Any questions may be directed to: rsi5@srt.com

Effect ‘American Recovery and Reinvestment Act of 2009’ has on SSI

On February 17, 2009, the President signed the “American Recovery and Reinvestment Act of 2009” (ARRA). ARRA includes several provisions that may affect an individual’s or couple’s Supplemental Security Income (SSI) eligibility or payment amount. Below is a link to the policy and procedures for how to treat the payments that result from the following provisions:

• The one-time $250 Economic Recovery Payment (ERP).

• The Making Work Pay (MWP) tax credit for tax years 2009 and 2010.

• An increase of $25 weekly in an individual’s unemployment compensation benefit.

• The first-time homebuyer’s tax credit and deemed first-time homebuyer’s tax credit.

The full description can be found HERE


Any questions may be directed to: rsi5@srt.com

FAQ's About Taxes and SSA Disability Benefit Programs

These common questions about taxes and disability benefits that we hear as CWIC's around this time of the year are worth a lengthy post.

The text below was produced by our National Training Center at Virginia Commonwealth University and, although a bit lengthy - it is quite thorough.

If you have a question about taxes and SSA disability benefits, there's a good chance you'll find it here. If you can't find it here, please feel free to contact me.
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QUESTION: I have been getting services from my local Work Incentives Planning and Assistance (WIPA) project – can my CWIC help me with tax issues related to my disability benefits?

Your CWIC can offer you some very general information about certain tax issues related to SSA disability benefits, but the assistance provided will be very limited. CWICs are not qualified tax professionals and are not trained to assist with tax issues – even those related to SSA disability benefits. Your CWIC will probably refer you to either the IRS or a local tax professional if you have questions requiring a response beyond what is contained in this document.

QUESTION: Are my disability benefits taxable?

Well, that depends on which benefits you get and how much your total income is. If you receive Supplemental Security Income (SSI), you will owe no Federal or State taxes on this benefit. If you have other forms of income in addition to your SSI (such as wages) you may owe taxes on that income.

If you receive a title II disability benefit (SSDI, CDB or DWB), then you may have to pay taxes on your benefits, depending on how much your total income is. SSA reports that about one-third of their current beneficiaries do pay taxes on their benefits. Here are the situations in which taxes may be due:

· If you file a federal tax return as an “individual” and your income is more than $25,000, you have to pay taxes.

· If you file a joint return, you may have to pay taxes if you and your spouse have a combined income that is more than $32,000.

· If you are married and file a separate return, you will probably pay taxes on your benefits.

Beneficiaries who are unsure about whether or not they have to pay taxes should contact the Internal Revenue Service (IRS) or seek the services of a qualified tax professional.

­­­­­­­­­­­­­­­QUESTION: I am getting a Federal income tax refund this year. Do I need to report this to SSA?

No, you do not need to report this no matter whether you are on SSI or a title II disability benefit.

Federal and/or State income tax refunds are specifically disregarded as a form of income by the SSI program. This is because SSI counts your gross income when it is received so your SSI check has already been adjusted without regard to any taxes withheld. However, if you retain your income tax refund and your countable resources exceed the limit ($2,000 for an individual or $3,000 for a couple) you could become ineligible for SSI and Medicaid.

NOTE: Income tax refunds are not income for SSI purposes even if the income taxes were excluded from countable income as Blind Work Expenses.

In the title II program, SSA is only interested in earned income – money you receive in exchange for work performed. Income tax returns would not be considered earned income. Since the title II program is a form of insurance which is not means-tested in any way, resources are never considered. Putting your refund in the bank would have no affect on your benefits.

QUESTION: I will be getting an Earned Income Tax Credit payment this year – is that something I need to report to SSA?

The earned income tax credit (EITC) is a special tax credit that reduces the Federal tax liability of certain low income working taxpayers. This tax credit sometimes results in a payment to the taxpayer, either as an advance from an employer or as a refund from IRS. For more detailed information about the EITC go to the IRS website at: http://www.irs.gov/individuals/article/0,,id=96466,00.html

The Earned Income Tax Credit (EITC) is not counted as income for either the SSI program or the title II disability benefits and does not need to be reported to SSA. In addition, for the SSI program, any unspent Federal tax refund or payment made by an employer related to an EITC that is received on or after 3/2/04 is excluded from resources for the 9 calendar months following the month the refund or payment is received. For more information, refer to POMS SI 01130.675 Tax Advances and Refunds Related to Earned Income Tax Credits and Child Tax Credits.

NOTE: These same rules apply to the Child Tax Credit (CTC). The child tax credit (CTC) is a special refundable Federal tax credit that is available to certain low income taxpayers with earned income. They must be parents, step-parents, grandparents or foster parents with a dependent child. This child tax credit may provide a refund to individuals even if they do not owe any tax. The CTC may result in a tax refund payment to the taxpayer from IRS beginning with tax year 2001. There is no advance payment with the CTC.

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QUESTION: Is it possible for the IRS to take some of my disability benefit check if I owe money for delinquent taxes?

Yes, this is possible – but only with title II disability benefits. The SSI program does not permit garnishment, attachment or levies against payments for any reason since the assumption is that persons on SSI have very little income or resources. Effective 7/1/89, the Taxpayer's Bill of Rights (P.L. 100-647) specifically prohibits IRS levies against SSI payments.

In the title II program, the IRS may take a portion of your monthly benefit payment to recover delinquent taxes. IRC Section 6331 states that individuals and businesses with delinquent tax liabilities may be subject to a continuous 15% levy against funds owed them by the federal government (including SSA benefits) beginning in July 2000. To do this, the IRS has to file something called a “Notice of Levy” with the SSA. A Notice of Levy is continuous until the IRS tells SSA to stop levying. In processing levies, SSA is merely acting to assist IRS in its duty to collect delinquent taxes. Except for seeing that the processing requirements are met, SSA has neither the authority nor obligation to question the correctness of an IRS levy.

If a levy is received for an individual who is receiving benefits on behalf of someone else as a representative payee, it will be returned to the IRS. SSA can only levy an individual’s own benefits.

A taxpayer whose title II disability payments are subject to levy may contact the IRS to resolve the issue by paying the tax bill, entering into an installment agreement or proposing an offer in compromise. For more information about SSA’s role in processing IRS levies, refer to POMS GN 02410.100 - Internal Revenue Service (IRS) Levy.

QUESTION: Can I have taxes withheld from my Social Security Disability Benefits?

Yes, this is possible. Public Law No.103-465 amends the Internal Revenue Code (IRC) to allow individuals to request that monies be withheld from certain Federal payments to satisfy their Federal income tax liability. An amendment to Section 207 of the Act allows this withholding from title II benefits. SSA refers to this process as “Voluntary Tax Withholding” or VTW. All title II beneficiaries (adults as well as children) are eligible for VTW. However, only the beneficiary or his/her representative payee can request VTW. Voluntary Tax Withholding does NOT apply to SSI payments and there is no way to have State income taxes withheld from any SSA benefit.

Beneficiaries (or their representative payees) need to complete and sign IRS form W-4V (Voluntary Withholding Request) for a VTW request to be valid. This includes a request to stop and as well as start VTW. The withholding rates set by IRS are 7%, 10%, 15%, and 25%. Only these percentages can be used. No other percentages or flat dollar amounts are acceptable. Beneficiaries can start or stop VTW at any time. For more information on VTW processes, refer to POMS GN 02410.015 - Voluntary Tax Withholding (VTW).

QUESTION: Are there special tax deductions that people with disabilities can claim?

Yes, the IRS rules contain myriad deductions and exemptions related to disability and these would apply equally to SSI recipients and title II disability beneficiaries. There are far too many special rules for people with disabilities to describe in this document, but a helpful overview may be found in IRS Publication 907 – Tax Highlights for Persons with Disabilities. This pamphlet can be found online at: http://www.irs.gov/pub/irs-pdf/p907.pdf.

In addition to these IRS rules, many States offer additional income tax deductions and some city and county governments offer discounts on property taxes or special taxes such as fees charged for fishing or hunting licenses. Beneficiaries are encouraged to search online for State and local deductions related to disability, or to seek the assistance from a qualified tax professional.

QUESTION: I will be receiving the first-time homebuyer’s tax credit at the end of the year- Is that something I need to report to SSA?

Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit applies only to homes used as a taxpayer's principal residence, reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar, and Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed. For more information, see http://www.irs.gov/newsroom/article/0,,id=204671,00.html.

Yes, for the purposes of the SSI program, this tax credit is considered to be countable income. It would also count as a resource in the month after it was received.

In the title II program, SSA is only interested in earned income – money you receive in exchange for work performed. Tax credits would not be considered earned income. Since the title II program is a form of insurance which is not means-tested in any way, resources are never considered. Putting your tax credit in the bank would have no affect on your benefits.


Any questions may be directed to: rsi5@srt.com

Children With Medically Fragile Needs Medicaid Waiver

The goal of this waiver is to assist families in keeping their child at home.

This waiver is "parent driven" meaning the parent determines what their family can and cannot do.

The waiver is designed to assist qualifying medically fragile children between the ages of 3 and 18 years old.

The child needs to be living at home, be Medicaid eligible, and be able to meet Level of Care criteria for nursing home.

The following waiver services are in addition to what the ND Medicaid State Plan covers: Transportation, Dietary Supplement, Individual and Family Counseling, In Home Support, Equipment and Supplies, Environmental Modifications, Institutional Respite, and Case Management.

To begin the process, contact the Program Manager at 701-328-3701 or 800-755-2604 and complete an application.

Any questions may be directed to: rsi5@srt.com