June 2010, Volume 13, Number 2
A CLASS Act
While it hasn’t yet gathered much media attention, a new federal program called the Community Living Assistance Services and Supports (CLASS) Act is buried inside congress’s recent healthcare legislation. The CLASS Act is not going altogether unnoticed, however, and groups of supporters and detractors are firmly forming around the new legislation.
CLASS will help offset the cost of enrollees’ long-term healthcare. It will be offered through employers; and employees who are not interested can opt out of the program. While congress has yet to come up with the specific details of the plan, estimates predict that CLASS premiums will cost between $150 and $250 a month. In return for these premiums, eligible CLASS enrollees can receive financial assistance of approximately $50 per day for long-term healthcare.
As it stands, Medicaid programs such as ALTCS are the major providers of long-term healthcare coverage, but some congressmen are promoting CLASS as a way to reduce the strain on these programs. Like ALTCS, CLASS payments could go towards not only nursing home care, but also towards care provided in enrollees’ homes. Eligibility for payout will be based on enrollees’ ability to perform activities of daily living, such as grooming and eating.
We should not expect to see CLASS take effect until late 2012, at the earliest, as it will take this long to implement procedures for carrying the legislation out. Employees will need time to learn about the program and determine whether they want premiums automatically deducted from their paychecks. The biggest catch for employees is that they must pay in to the system for five full years before becoming eligible to collect payments. As such, CLASS will not begin paying benefits until approximately 2018.
The full debate on CLASS has yet to transpire, but criticisms are already mounting. High on this list is the national expense that CLASS may bring. One theory says that only those with foreseeable health problems will opt in to the program, which will lead to increased premiums. The high premiums, then, could cause only the unhealthiest people to enroll because those in good health will rarely pay for expensive products of this variety. This scenario creates a cycle in which enrollees’ medical expenses continue driving premiums up until they become virtually unaffordable to everyone.
While CLASS aims to help with long-term healthcare expenses, it is quite dissimilar to ALTCS. To begin with, CLASS is only available to people who have paid into the program for a minimum of five years. ALTCS, on the other hand, does not have premiums, and thus no minimum pay in period. Also, CLASS may be more suitable for in-home care than skilled nursing care, as its payouts are substantially less than what it costs to obtain skilled nursing care. Conversely, ALTCS is suitable for in-home care and skilled nursing care alike. Another key difference between the two programs is that ALTCS members must meet financial eligibility requirements before receiving assistance, and CLASS assistance will be based solely on medical need once enrollees have paid in to the program.
Congress has yet to decide on the details of the CLASS program, but it looks promising in many regards. It certainly will not replace ALTCS as a provider of long-term healthcare coverage, but it will provide another alternative. It will be interesting to see how CLASS changes the landscape of long-term healthcare planning in years to come.
Personal Representatives Must Take Caution to Avoid Conflicts of Interest
Personal representatives have a fiduciary duty to act in the best interest of the estate they are appointed to administer. Many times, however, those appointed as personal representatives are also situated to inherit a portion of that estate. Because these situations are susceptible to conflicts of interest, Arizona has passed specific legislation with instructions on how to approach them.
When a personal representative enters into a transaction that creates a conflict of interest, any person with an interest in the estate can petition to have the transaction voided. There are some exceptions to this general rule. Transactions cannot be voided for conflict of interest where:
- The person seeking to have the transaction voided consented to the transaction after fair disclosure.
- The Will expressly authorizes the transaction.
- A contract entered into by the estate’s decedent authorizes the transaction.
- The personal representative gave notice to interested persons and received approval by the court.
Personal representatives, then, are generally prohibited from acting in their own interest when administering a probate estate. However, they are permitted to act in accordance with the Will, even if it promotes their self-interest. Where the Will does not give express permission, personal representatives may still be able to enter into certain transactions by obtaining the approval of the court and providing adequate notice to interested parties.
None of this should be handled without the assistance of legal counsel. When entering into transactions that create the appearance of a conflict of interest, personal representatives should seek legal assurance that their efforts will be upheld. An Arizona probate attorney is best qualified to assist in this manner. For a consultation with a probate attorney at JacksonWhite, please call (480) 464-1111 and ask speak to someone in the Elder Law department.
FREE ALTCS Trainings for Health Care Professionals
There is always new information and things to learn about ALTCS eligibility. Make sure your up-to-date by attending one of JacksonWhite’s free trainings for health care professionals.
Tuesday, June 15th
13012 N. Cave Creek Rd. Suite #3
Phoenix, AZ 85022
1:30 – 3:30 p.m.
Tuesday, August 10th
5200 E. Cortland Blvd. Suite A-15
Flagstaff, AZ 86004
2 – 4 p.m.
Thursday, August 12th
JacksonWhite Mesa Office
40 N. Center St. Suite 200
Mesa, AZ 85201
9:30 – 11:30 a.m.
Thursday, September 23rd
Plaza Del Rio
13215 N. 94th Dr.
Peoria, AZ 85381
9 – 11 a.m.
Thursday, October 28th
Foundation for Senior Living
1201 E. Thomas Rd.
Phoenix, AZ 85014
1:30 – 3:30 p.m.
Seats for all free health care professional trainings are limited. Please RSVP at arizonaseniorlaw.com.
Featured 2010 ALTCS Eligibility Numbers & Tips
Monthly Income Limit for an Individual – $2,000
Tip: Resources include assets, pensions, IRAs, etc. Some resources are exempt and not included in this resource limit. Review these exemption rules with someone knowledgeable prior to submittal of application. If the ALTCS applicant is married, Community Spouse Resource Deduction (CSRD) rules apply. (Maximum CSRD – $109,560, Minimum CSRD – $21,912).
This newsletter is provided for informational purposes only and is not intended to replace individual legal advice. Please consult a knowledgeable attorney regarding your specific needs. For more information on Elder Law issues, contact Richard A. White or Eric K. Macdonald.
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