Financial and legal considerations of brain injury
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There are a number of legal and financial issues that need to be addressed for persons with a brain injury, including care designations, disability claims, insurance coverage, etc. Because each situation is unique, guidelines should be verified with the appropriate source(s). These issues include the following:
Guardianship – A person who has suffered a brain injury will often be unable to make decisions regarding his care immediately after the injury. A guardian may need to be appointed to make decisions on a long term basis. A guardian is a court appointed individual who is given the right to make decisions for the injured individual. There are different levels of guardianship. Some are related to medical issues only, or to financial issues only, or both. You will need an attorney to represent you and file the papers with the court. To maintain guardianship, periodic reports from the guardian and the doctor are required. (1)
Power of Attorney – A power of attorney is a document which you, “the principal,” sign giving another person, “the attorney in fact,” the authority to handle your affairs. There are important differences between a power of attorney and a guardianship. These include the following: 1.Giving a power of attorney is voluntary. You choose to give the power, you choose the exact powers to give and you choose the person to whom you give these powers. 2. You cannot create a power of attorney unless you are capable at the time you give the power, although your power of attorney continues to take effect after you become incapacitated or unless you otherwise direct. On the other hand, a guardian is appointed for you only if you are incapacitated. 3. You can revoke a power of attorney at any time by giving notice to your attorney in fact. It is very difficult to terminate a guardianship as there must be a court determination of your capacity. (3)
Short-Term/Long-Term Disability – If the person with the injury was employed at the time he acquired the brain injury, he or she may be eligible for short-term and long-term disability coverage through his employer. You should check with the individual’s employer for details regarding the availability of any possible short-term and long-term benefits he or she may have. There is a possibility that the individual with the injury who carries his own insurance may be terminated from his job after 90 days from date of injury. This leaves the individual with the injury without coverage for medical costs. There are often opportunities through COBRA to extend the insurance for an additional time period by paying the premium. Please be sure to check with the employer about this. (1,2)
Medicaid – Medicaid is a federal/state funded program administered by the Indiana Family and Social Services Administration (FSSA) through individual county offices. A wide variety of health and medical services are available including, but not limited to, physician care, home health care and therapy services.
To qualify for Medicaid based on disability, there are three requirements an individual must meet:
- The individual must be substantially impaired per the definition of disability in state law.
- The individual must be substantially impaired per the definition of disability in state law: The individual must have a physical or mental impairment, disease or loss, which appears reasonably certain to last 12 months or more, and substantially impairs his or her ability to perform labor or services or to engage in useful occupation.
- Determination of disability is based on the individual’s age, education, work experience and functional limitations.
- The individual must meet certain income and resource limits.
- The income standard in 2009 is $674 for an individual and $1011 for a couple. Individuals whose income exceeds the income standard can receive Medicaid under the spend-down provision if their monthly ongoing or expected medical expenses exceed their surplus income.
- Monetary resource (e.g., savings account) limits are $1,500.00 for an individual or $2,250.00 for a married couple.
- The individual must be a resident of Indiana.
- A resident of Indiana is one who is living in Indiana voluntarily with the intention of making a home here and not for a temporary purpose. Residence does not depend upon the reason for which the individual entered Indiana, except insofar as it may bear upon whether he is here voluntarily or for a temporary purpose.
- Individuals who are receiving assistance from another state while in Indiana are presumed to be residents of that state. Verification of the termination of assistance from that state is needed in order to establish eligibility in Indiana. (2)
Medicaid waiver services – Persons eligible for Medicaid can also potentially receive not only medical services, but also some non-medical services known as “waiver services.” They are referred to as waiver services because Indiana had to obtain a waiver from the federal government to provide them. To qualify for these services a person must qualify for nursing home placement. (3)
Social Security Disability Insurance (SSDI) – Title II. SSDI is an earned entitlement that enables former workers, who due to a disability are unable to work, to receive monthly cash benefits and Medicare insurance. To be eligible for SSDI a person must:
- Have worked and paid Social Security taxes for enough years – roughly one half the number of years between the age 21 (or earlier) and the onset of disability – to be entitled to benefits under Social Security;
- Be considered medically disabled; and
- Not be working, or working and earning less than the Substantial Gainful Activity (SGA) level.*
A second entitlement under Title II that falls under the Social Security Act is Social Security Disabled Adult Child (SSDAC). To be eligible for SSDAC a person must:
- Be a dependent of an insured worker who is disabled, retired, or deceased;
- Be an adult disabled before age 22; may be eligible for child’s benefits if a parent is deceased or starts receiving retirement or disability benefits;
- Be an unmarried child, under age 18 or 19 and still in school up to 12th grade; and
- Not be working, or working but earning less than the Substantial Gainful Activity level.*
Note: From the date of onset of disability there is a 5-month waiting period prior to the receipt of SSDI benefits.
*SGA is the establishment of a pattern of performing significant physical or mental activities in work for remuneration or profit over a continuous period of time (at least 3 months). It applies to the SSDI program during the initial application and on an ongoing basis. Except in rare cases (such as when SGA varies on economic factors, such as a depressed area or an area with high inflation), as of January 1, 2007 the SGA amount for individuals with disabilities is $900 per month and the SGA amount for an individual with blindness is $1500 per month. Since 2001, the SGA has been automatically adjusted annually based on increases in the national average wage index. (2)
Supplemental Security Income (SSI) – SSI is a federal income supplement program funded by general tax revenues. It is designed to help people who are aged, blind, and disabled, who have little or no income. It provides cash to meet basic needs for food, clothing and shelter. SSI disability payments are made on the basis of financial need. For more information on the SSI disability program, contact any Social Security office. (2)
Special Needs Trust – To qualify and then continue to receive SSI, Medicaid, and some other assistance programs, there are strict limits on the value of assets the person with a disability may own. This may pose a problem when you or your family try to provide for the long-term needs of the person with the brain injury. For example, if someone in the family plans to leave an inheritance or life insurance benefit to the brain injured person, that act may affect their eligibility. If the person suffered a brain injury as a result of an accident, there may be an insurance settlement involved, which again can affect their eligibility.
A way to preserve a person’s eligibility for these assistance programs while also putting aside for long-term care is the Special Needs Trust. This is a special kind of trust which holds title to property for the benefit of a child or adult who has a disability. The Special Needs Trust can be used to provide for the needs of the disabled person to supplement benefits received from various governmental assistance programs. A trust can hold cash, personal property, or real property, or can be the beneficiary of life insurance proceeds. The trust is established through a local probate court and will require the services of a lawyer. A person will be named as trustee and that person will maintain control of the assets. (1)
With regard to all guidelines mentioned above, please check with your local Social Security office. Guidelines mentioned here may or may not apply to your specific situation.
Vocational Rehabilitation – When a person with a brain injury has recovered enough to consider returning to work, services from the state’s Vocational Rehabilitation Program may be a possibility. These services may include training, work programs, and other services to help transition back to work. Contact the Vocational Rehabilitation office in the county in which the person with a brain injury resides.(1)
Workers’ Compensation – If the person with a brain injury was injured while on the job he or she may be able to qualify for workers’ compensation. This is insurance that provides cash benefits or medical care for workers who are injured or become ill as a direct result of their job. Workers’ compensation laws are designed to ensure that employees who are injured or disabled on the job are provided with fixed monetary awards, eliminating the need for litigation. (1)
Family and Medical Leave Act (FMLA) – Federal legislation that required covered employers to grant an eligible employee up to 12 workweeks of unpaid leave for any of the following reasons: birth and care of a newborn child of the employee, placement of a son or daughter for adoption or foster care, care of a family member with a serious illness, or medical leave when the employee is unable to work because of a serious health problem.
(1) The Brain Injury Recovery Network - www.tbirecovery.org
(2) Moving Ahead Without Fear: Work, Benefits, and You. 2009 edition. A manual designed to assist professionals, consumers, and other interested parties with a basic understanding of Social Security, Medicaid (in Indiana), and other work incentives.
(3) Taken from Indiana Laws of Aging, a publication developed in partnership by the Indiana Bar Foundation and the Indiana State Bar Association.
(4) American Heritage® Dictionary of Business Terms. 2010: Houghton Mifflin.
Suggested Web site
Brain Injury Association of Indiana - www.biausa.org/Indiana - Provides information and links to various Web sites pertaining to brain injury with a focus on Indiana resources.