Where’s My New Medicare Card? How to Find Out the Status

The federal government has begun mailing new Medicare cards to 59 million Americans. You should keep track of when your new card will arrive and contact Medicare if you don't receive it.

To prevent fraud and fight identity theft, the federal government is issuing new cards to all Medicare beneficiaries that will no longer have beneficiaries' Social Security numbers on them. The government began mailing the cards in April 2018 and the new cards should be completely distributed by April 2019. The cards are being mailed in phases based on the state the beneficiary lives in.

To check the status of card mailing in your state, go here: https://www.medicare.gov/newcard/. The map will show whether Medicare has sent new cards to your state. Once Medicare starts mailing cards to your state, it can take up to a month to receive the card. If the government has finished mailing the cards to your state, and you did not receive a card, contact Medicare right away at 1-800-MEDICARE (633-4227) or 1-877-486-2048 for TTY users.

If the government hasn't begun mailing cards to your state yet, keep checking the website. You can also sign up to receive an email when the card is mailed to you. If your mailing address is not up to date, call 800-772-1213, visit www.ssa.gov, or go to a local Social Security office to update it.

If you haven't received the new card yet, keep using the old card. If you have a Medicare Advantage plan, the Medicare Advantage Plan ID card is your main card, but your doctor may want to see your new Medicare card as well, so keep it handy.

Phone scammers are using the introduction of the new cards as an opportunity to separate Medicare beneficiaries from their money. One of the main scams that has emerged is a call requiring payment before the card can be issued. The cards are free and you don’t need to do anything to get yours. For more on the scams and what to do if you fall victim, see Reuters columnist Mark Miller’s recent column.

For information on the new cards, go here: https://www.medicare.gov/newcard/.

 

 

Momentous Life Events Prompt Estate Plan Review

One of the most commonly asked questions we hear from our estate planning clients is “How often should I update my estate plan?” As a general rule, our recommendation is that – no matter your age or your health – you should review your plan every two to three years, and more frequently if you experience a significant life event.

Life events that merit an estate plan review include: the death of a close family member, the birth of a child, a marriage or divorce, a relocation to a different state, or a significant change in your financial circumstances. Basically, it’s anything that alters the course of your life or those you love and count on.

For example, one of our clients asked to change the person who was appointed guardian of her children when that family member became less available, geographically and emotionally; in another instance, the death of a spouse meant a widow selected each of her three children to take on the roles of medical decision-maker, executor and power of attorney.

As always, planning for your death or disability can be a difficult and confusing process. Failing to plan, however, can leave your loved ones facing greater confusion and added expenses at a time when they are most vulnerable.

We understand that our clients come to us for our depth of technical knowledge but we know, first-hand, they appreciate our sensitivity to their current circumstances, which may, at times, be challenging and overwhelming.

If you are a client of our firm, look for a reminder if it has been more than a few years since your documents were updated or executed. Or, if a significant life event has and you are not sure if you should review or update your plan, feel free to Kristen Prull Moonan here.

Lessons Learned from Barbara Bush’s End-of-Life Decisions

While Barbara Bush’s family recently made public her decision to pursue “comfort care” at the end of her life, it is estimated that nearly two out of three Americans do not have a health care directive in place. According to an April 2018 Forbes article, “This is no surprise to those who knew Mrs. Bush and worked with her over the years, as she was an early champion of hospice programs for the terminally ill.”

A health care directive (sometimes known as a living will, health care proxy, personal directive, advance directive, or medical directive) is a document that allows you to express your wishes with regard to end-of-life care should you be too ill or incapacitated to speak on your own behalf. You may also appoint a trusted agent to step in and make critical end-of-life decisions for you.

Your directed agent can make a wide range of decisions for you including which treatments or medicines you do or do not want to receive, where you received care, and who can access your medical records. Of course, these decisions should be based on candid conversation regarding your wishes with your proposed agent while you are still heathy.

When selecting an agent, consider a family member, a friend, or a spiritual advisor. Choose someone who you can trust and who will carry out your wishes … even if doing so may be difficult or upsetting.

Because we believe health care directives are critical – no matter your age or your health — to a solid estate plan, they are included in all of our estate planning packages. Other documents used in planning may include wills, revocable living trusts, irrevocable trusts, and financial powers of attorney. We also offer more sophisticated planning services including estate tax planning, charitable planning and asset protection planning.

Contact Kristen Prull Moonan if you want to learn how a health care directive will be valuable for you.

Medicare Extends Deadline for Relief from Part B Penalties

Medicare is extending its offer of relief from penalties for certain Medicare beneficiaries who enrolled in Medicare Part A and had coverage through the individual marketplace. Beneficiaries who qualify will be able to enroll in Medicare Part B without paying a penalty for late enrollment if they enroll by September 30, 2018.

Individuals who do not enroll in Medicare Part B when they first become eligible face a stiff penalty, unless they are still working and their employer’s plan is considered “primary.” For each year that these individuals put off enrolling, their monthly premium increases by 10 percent — permanently.

Some people with marketplace plans – that is, plans purchased by individuals or families, not through employers — did not enroll in Medicare Part B when they were first eligible. Purchasing a marketplace plan with financial assistance from the Affordable Care Act (aka Obamacare) can be cheaper than enrolling in Medicare Part B. However, Medicare recipients are not eligible for marketplace financial assistance plans. And because marketplace plans are not considered equivalent coverage to Medicare Part B, signing up late for Part B will result in a late enrollment penalty.

To address this problem, the Centers for Medicare and Medicaid Services (CMS) is allowing individuals who enrolled in Medicare Part A and had coverage through a marketplace plan to enroll in Medicare Part B without a penalty. It is also allowing individuals who dropped marketplace coverage and are paying a late enrollment penalty for Medicare Part B to reduce their penalty. CMS is now expanding the offer of possible relief to people who should have signed up for Part B during a special enrollment period that ended Oct. 1, 2013, or later but instead used exchange plans. It is also extending the deadline to September 30, 2018 (the earlier deadline was September 30, 2017).

To be eligible for the relief, the individual must:

Have an initial Medicare enrollment period that began April 1, 2013 or later; or

Have been notified on October 1, 2013, or later that they were retroactively eligible for premium-free Medicare Part A; or

Have a Part B Special Enrollment Period that ended October 1, 2013, or later

This offer is available for only a short time. To be eligible for the relief, individuals must request it by September 30, 2018. Gather any documentation you have to prove that you are enrolled in a marketplace plan. Individuals who are eligible should contact Social Security at 1-800-772-1213 or visit their local Social Security office and request to take advantage of the “equitable relief.”

For more information, click here.

For more information about Medicare’s late-enrollment penalties, click here.

The Little-Known Tax on Roth 401(k) Distributions

Employee retirement savings plans come in two main flavors: the traditional 401(k) and the Roth 401(k). The benefit of a Roth 401(k) over a traditional 401(k) after retirement is that distributions from a Roth 401(k) are tax-free, but there is a little-known situation where distributions can be taxed.

Contributions to a traditional 401(k) are made pre-tax, so while it reduces your taxable income in the year you contribute to it, you have to pay taxes on the money you withdraw during retirement. On the other hand, contributions to the Roth 401(k) are made after taxes. This means you won’t have to pay any taxes when you withdraw the money.

Some employers offer to match any contributions you make to your 401(k) as an employee benefit. If your employer matches your Roth 401(k) contribution, the contributions will be made before the employer pays taxes on it. This means you will have to pay income taxes on the match and any growth associated with the match when you take distributions. In other words, the employer match is treated like a traditional 401(k).

The maximum amount you can contribute to a Roth 401(k) (in 2018) if you are younger than age 50 is $18,500 per year. If you are older than 50, you can contribute $24,500 (in 2018). Your employer can match as much of your contribution as it wants, but the total contribution to a Roth 401(k) (in 2018) cannot exceed $55,000 or 100 percent of your salary, whichever is less.

For more information on the tax on employer contributions to a Roth 401(k), click here.

When Can an Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay. This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds. If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws. These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

 

Court Overturns Obama Rule Protecting Investors Saving for Retirement

A U.S. court of appeal has struck down a Department of Labor (DOL) rule that was intended to prevent financial advisers from steering their clients to bad retirement investments, but the Securities and Exchange Commission (SEC) has proposed new regulations to at least partially address the same problem.

Prompted by concern that many financial advisors have a sales incentive to recommend to their clients retirement investments with high fees and low returns because the advisors get higher commissions or other incentives, in February 2015 President Obama directed the DOL to draw up rules that require financial advisors to act like fiduciaries. A fiduciary must provide the highest standard of care under the law.

Several industry trade groups sued to overturn the so-called fiduciary rule, arguing that the DOL overstepped its authority in enacting the regulation. A federal court judge initially upheld the rule, but in March 2018, the U.S. Court of Appeals for the Fifth Circuit overturned it. According to the court, the DOL did not have the authority to enact the rule. The court criticized the DOL for overstepping its boundaries into an area that should be handled by the SEC. The Trump administration, which delayed the fiduciary rule at first but eventually allowed it to go into effect, has not appealed the decision.

While the fiduciary rule might be dead for now, the SEC has proposed new regulations that would require investment brokers to act in the best interest of their client when recommending an investment. It also requires brokers to disclose or mitigate conflicts of interest. The proposed regulations do not, however, define what “best interest” means, which may cause confusion for brokers and consumers. There is a long road ahead before these regulations are approved. The SEC is accepting comments on the regulations until August 7, 2018.

Even if the SEC’s regulations are approved, they do not solve every problem. Consumers should always use caution when selecting a financial adviser. In particular, consumers should check their financial adviser’s experience and credentials and beware of phony credentials.

To read the proposed SEC rule, click here.

To read an article about the proposed rule from Bloomberg, click here.

 

More States Asking to Eliminate Retroactive Medicaid Benefits

Arizona and Florida are the latest states to request a waiver from the requirement that states provide three months of retroactive Medicaid coverage to eligible Medicaid recipients.

Medicaid law allows a Medicaid applicant to be eligible for benefits for up to three months before the month of the application if the applicant met eligibility requirements at the earlier time. This helps people who are unexpectedly admitted to a nursing home and can’t file — or are unaware that they should file — a Medicaid application right away. Preparing an application for Medicaid nursing home coverage may take many weeks; the retroactive coverage gives families a window of opportunity to apply and get coverage dating back to when their loved one first entered the nursing home.  “Retroactive coverage is one of the long-standing safeguards built into the program for low-income Medicaid beneficiaries and their healthcare providers,” says the Kaiser Family Foundation.

Now Arizona and Florida are joining a growing list of states that are asking the federal Centers for Medicare and Medicaid Services (CMS) to eliminate the retroactive benefits. CMS has already approved similar requests by Iowa, Kentucky, Indiana, and New Hampshire to waive retroactive coverage. A lawsuit is challenging Kentucky’s waiver, which also imposes work requirements for Medicaid recipients.

Advocates argue that if Medicaid applicants cannot get coverage before the month of application, they may be saddled with uncovered medical bills or fail to receive needed health care because they cannot afford it. According to Justice in Aging, which filed a brief in the Kentucky lawsuit, Medicaid applicants often do not file an application right away because of the complexity of the Medicaid application process or a false belief that Medicare would cover nursing home care.

For more information about the implications of the elimination of retroactive benefits, click here.

If you need to file a Medicaid application, contact your attorney.

 

Finding the Best Retirement Calculators

Figuring out how much to save for retirement and when you can safely stop working can be difficult. A growing number of online retirement calculators, many of them free, are available to help. Although these calculators can yield vastly different results, they can still be useful tools.

Based on information about you and your finances, retirement calculators try to predict how much you need to save to achieve your retirement goals. There are many different types of calculators. Some are web-based while others require you to download a program or an app. The amount of information needed also varies from calculator to calculator.

While retirement calculators can be useful, you need to keep in mind that results can diverge significantly and they are not always accurate. A 2009 study found that while such calculators “can provide a rough idea of whether the user is on target for retirement,” they inadequately assess the risk of running out of money. It may be a good idea to use several different calculators to obtain a range of predictions.

Before getting started with any retirement calculator, you will need to gather information about your finances to have at your fingertips. Even the most basic calculator will want to know how much you currently have saved for retirement and how much you are saving each month. More advanced calculators might require more detailed investment information.

To help you find the best calculator for you, below are three sites that evaluate these financial tools. You can decide how much detail you want to provide and receive.

  • Can I Retire Yet? has a long list of retirement calculators with details about cost, platform, and how well it reproduces reality.
  • The Balance provides its own assessment of the accuracy and usability of what it considers the best retirement calculators.
  • Forbes shares information on five free retirement calculators, ranging from simple to more complicated.

 

New Brokerage Account Safeguards Aim to Protect Seniors From Financial Scams

New rules have been put in place to protect seniors with brokerage accounts from financial scams that could drain the accounts before anyone notices.

As the population ages, elder financial abuse is a mounting problem. Vulnerable seniors can become victims of scammers who convince them to empty their investment accounts. According to the Financial Industry Regulatory Authority (FINRA), the organization that regulates firms and professionals selling securities in the United States, its Securities Helpline for Seniors has received more than 12,000 calls and recovered more than $5.3 million for seniors whose investment funds were illegally or inappropriately distributed since the helpline opened in April 2015.

Now, FINRA has issued two new rules designed to help investment brokers or advisors better protect seniors’ accounts from financial exploitation. The rules, which went into effect in February 2018, apply when opening a brokerage account or updating information for an existing account.

First, the broker or investment advisor must ask the investor for the name of a trusted contact person. This is someone the broker can contact if there are questions about the account. The trusted contact is intended to be a resource for the broker to address possible financial exploitation and to obtain the customer’s current contact information and health status or learn about any legal guardian, executor, trustee or holder of a power of attorney.

The second rule allows a broker to place a temporary hold on disbursements from an account if those disbursements seem suspicious. This rule applies to accounts belonging to investors age 65 and older or investors with mental or physical impairments that the broker reasonably believes make it difficult for the investor to protect his or her own financial interests. Before disbursing the funds, the brokerage firm will be able to investigate the disbursement by reaching out to the investor, the trusted contact, or law enforcement.

Prior to the new rules, issues of privacy prevented a broker from contacting family members when suspicious activity was detected, and under previous FINRA rules brokerage firms risked liability for halting suspicious transactions.

To read more about the new rules, click here.

For Frequently Asked Questions about the new rules, click here.