Q: I am a 28-year-old with SMA. I have been working full-time for the last six years, and I’m presently making $40,000 a year, but I realize that my career may be cut short and/or change in the not too distant future. I have health care and dental insurance through my employer, but I wonder what other benefits I may be entitled to and what planning I should be considering?
A: Several things need to be taken into consideration when we’re working with someone with your diagnosis:
- Is your goal to keep working as long as possible?
- Do you have Short Term and/or Long Term Disability?
- Does your existing health insurance remain in effect if you are on Short Term or Long Term Disability?
- Do you have or will you have any expenses related to your condition that allow you to continue to work? (This includes adaptive equipment, transportation, etc.)
- What assets are presently in your name? (Example: savings bonds, life insurance, stocks, mutual funds, homes, etc.)
- Is there a possibility of inheriting any money or assets?
Once we have answered these questions, we’re ready to look at what benefits you may be eligible to receive and how to best position your assets and income.
Here is a brief explanation of government benefits that you may or may not be eligible for but that you may want to investigate:
- SSI – Supplemental Security Income. This is a federal income supplement program funded by general tax revenues (not Social Security taxes). Its purpose is to help the aged, blind and disabled who have little or no income. It currently provides a maximum of $552 per month to be used for basic needs such as food, clothing and shelter.
- SSDI – Social Security Disability Insurance. This is a federal cash benefit that may be available if a person is disabled. It pays benefits to you and certain members of your family if you are “insured,” meaning that you worked long enough and paid Social Security taxes.
- Medicare – This is a federal health insurance program for people 65 years of age or older, certain younger people with disabilities and people with end-stage renal disease (permanent kidney failure with dialysis or a transplant). Medicare does not cover everything, and it does not pay the total cost for most services or supplies that are covered.
- Medicaid – This program provides medical assistance for certain individuals and families with low incomes and resources. Medicaid eligibility is limited to individuals who fall into specific categories. Although the federal government establishes general guidelines for the program, the Medicaid program requirements are actually established by each state. In addition to paying for some medical services and prescriptions, Medicaid may also pay for residential facilities, workshops and other programs.
In addition to the above mentioned programs, individuals with SMA may have additional needs or may encounter other situations where additional funds are required. For example, some may have worked and have money in various savings plans.
Is there a way the individual with SMA can shelter some of his or her money yet still qualify or maintain the above benefits without being impoverished? Yes. An individual may set up a Special Needs Trust that will permit this. The following are the most common types of Special Needs Trusts:
Discretionary Supplemental Needs Trust or 15.1 – A trust than can hold cash, personal property or real property or can be the beneficiary of life insurance proceeds. Simply stated, other people’s money or property that they chose to contribute or leave to you.
Discretionary Supplemental Care Trust or d(4)A – A trust that can hold cash, personal property or real property that is owned by the individual with SMA. This can only be set up by parents, grandparents, legal guardians or the court.
When thinking about trusts, it is imperative that you speak with an attorney who has extensive experience and knowledge in the Special Needs Trusts arena.
I hope this answers your questions. It would be in your best interest to meet with a planner and attorney who are familiar with your type of situation and are able to give you the sound advice you need to better prepare for the future.