Expert Tips for Georgia Medicaid: Qualified Income Trusts 101

As we have discussed several times in our blog (here and here), Georgia has an “income cap” that is currently set at $2,250/month for nursing home Medicaid eligibility (as well as the elderly and disabled waiver program). This means that anyone with over $2,250/month of income must jump through an extra hoop in order to qualify for Medicaid benefits. This extra hoop is called the Qualified Income Trust (or the Miller Trust).

Qualified Income Trusts can be overwhelming, and it is advisable to get an experienced professional to help with the process as errors could make someone lose Medicaid benefits, costing thousands of dollars in unpaid nursing home bills.

So what do you need to know about Qualified Income Trusts?

  1. Qualified Income Trusts deal only with income. Once a nursing home resident is otherwise eligible for Medicaid, a QIT must be established and funded with the nursing home resident’s income.  Every month after being established, the nursing home resident’s income (or at least the difference between the specified state income cap–minus a dollar–and the applicant’s total income will go through this account), and bills will then be paid from this account, leaving the account at zero each month. This trust has nothing to do with savings or any other assets.
  2. Qualified Income Trusts must be used correctly every month that Medicaid is needed. This means that every month the account must be properly funded. Only authorized payments can be made from this account.  Failure to comply with Medicaid’s rules for Qualified Income Trusts can cause the nursing home resident to lose his/her Medicaid benefits.
  3. Qualified Income Trusts must be established correctly. The QIT checking account ideally is non-interest bearing and carries no service charges. As a practical matter, however, it may be difficult to establish a trust account with a local bank that does not carry a service charge. Bank service charges are an allowable deduction from the individual’s income. The QIT bank account should be titled in such a way that it is identified as such, i.e. “The Qualified Income Trust.” The trustee is the authorized signer on the account. Checks are imprinted with the same format as the account title. The trustee will receive the monthly statements.
  4. Qualified Income Trusts have trustees. Only the trustee can write checks to get funds out of the QIT account. The trustee has a responsibility to manage the account correctly, keep detailed records, and be ready to report to the county Department of Family and Children Services (or even to the Department of Community Health). Currently trustees are required to make a reporting once every six months.
  5. Qualified Income Trusts should only have checks.  Do not get a bank cash card or credit card from the QIT account.
  6. Qualified Income Trusts only receive the resident’s income. Deposits into the trust must consist of the resident’s income. Never put any money other than the individual’s countable income into the QIT bank account.
  7. Qualified Income Trusts only pay certain bills.  According to the terms of the trust, the funds in the trust must be used “on behalf of the Beneficiary under the applicable Medicaid program, such as Nursing Home….” Such authorized payments include payments to the nursing home, monthly health insurance premiums and co-pays, spousal allowances, and incurred medical expenses. The list of allowed expenses is very small and specific.

In order to qualify for nursing home Medicaid (and to maintain Medicaid eligibility) it is critical that the resident’s income be handled correctly every month. Being out of compliance with Medicaid regulations can be costly and terrifying. If you have questions about setting up a Qualified Income Trust for Nursing Home Medicaid in Georgia, please contact Hurley Elder Care Law for a complimentary phone consultation by calling (404) 843-0121.

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