Impact of Medicaid after paying caregiver off the books. What do we do?

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We paid my MIL's home caregiver off the books for 4 yrs. She is afraid to sign an affidavit saying she was the caregiver and was paid x amt of $, because she has not paid taxes on her income. We are on the last $80k, and will need to apply for Medicaid. What do we do?

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Medicaid is a joint federal and state program but is administered uniquely by each state and must be within overall federal guidelines for both “at need” medical and financial for all Medicaid programs..... whether it’s a WIC program for expecting mom or elder needing skilled nursing care LTC in a NH. The federal $ is based on the demographics of your states population & interdependent on census data. The state $ is based on just how much your state wants to dedicate $ to these programs beyond the minimum the feds require.

For LTC medicaid in a NH (skilled nursing facility), the daily room&board reimbursements paid to the NH & personal needs allowance that a LTC Medicaid resident can withhold from their required income copay is set by each state. Medicaid LTC daily R&B pays a flat rate, unlike private pay or Medicare post hospitalization rehab in a NH which can bill the resident by type of services used. Medicare has a pretty precise set of rehab codes used to pay the NH that is based on discharge orders.

$ 175 R&B & $50 PNA is overall average Medicaid R&B.

But it varies by state, for 2015 TX was #49 in lowest payment at $143.48 a day, only SD was lower at $133.74; then you have Alaska at $435.64 a day as #1, followed by DE at $356.69 for #2. Ditto for PNA too, like MN has a PNA of $115 a mo, while TX PNA is $60.

Billing office at the NH can tell you to the penny what your state Medicaid pays as daily R&B. What that amount is on the date of the filing of your mom’s Medicaid application is basically what the transfer penalty divisor figure will be should your mom face a transfer penalty placed on her application. Imho dealing with transfer penalty inquiry is not ever a DIY. Medicaid caseworker can have ?s that a dpoa can answer without an atty - I had 2 with my mom’s application that I was able to deal with - but $$ gifting transfer penalty imho needs atty.

if your mom still has 80k to spend down before needing to deal with the Medicaid application, it buys her & you time. You all need to get with a NAELA or CELA level of elder law attorney before the end of this year is my suggestion. If she just went into a NH, then she could file w-2 with fica needed on the amount paid to caregiver for this year/2018 taxes. Whether & how to do this is really to me what the atty can best guide you to do. Plus atty will have CPA he works with to do it all correctly. And then let the atty deal with the caregiver and then the atty shepherds mom’s Medicaid application in 2019.

If the amount paid under the table table was significant and your in a low reimbursement state, the days of ineligibility for LTC Medicaid could be beyond a budget buster for you as dpoa & family to ever private pay.
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Reply to igloo572
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In regards to "where did you get the $175 a day amount. I spoke to a Elder Care group in NY and said the amount was $10,300/mth, and that amount went down this yr. Now I am wondering if the amount is diff by State."

Nursing home "Room and Board" rates vary from state to state (the East and West Coast states being much more expensive than the Midwest states) and they vary depending on the amount of assistance the resident requires. Rates can vary from $150-- $250+/day for someone who needs "Supervision" with occasional assistance with ADLS (Activities of Daily Living, such as dressing, grooming, toileting , mobility, transfers & behavior issues), as high as $250--$400+ for someone who needs assistance with MOST or ALL ADLS or who has major behavioral issues.

As to your other issues, you need to talk to an Elder Care Attorney.
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Reply to DeeAnna
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Bet your not the first or last to do this - check around about how to do this
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Reply to moecam
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Elder Attorney.
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Reply to RayLinStephens
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as igloo suggested, talk to lawyer. Filing and fighting with someone for 4 years retro may cost as much long term as penalty. You can prove person paid, but will they say it’s a gift or get their own lawyer...
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Reply to Guestshopadmin
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iggy, late tax filings will incur penalties and interest for mom as it’s been 4 years as employer and no filings. Big can of worms. Were expenses paid cash or check? Ugly if they hire atty for hardball and expensive.
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Moskop Oct 9, 2018
Expenses were paid by check.
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Your not going to like my suggestions, you could
- offer to pay whatever taxes the IRS is going to want from her for all those years she worked under the table. It maybe that 3-5 of you pay this so it’s gifting within the annual 14k irs rules.
However If she was getting some some type of other low income benefits - like Medicaid, SNAP, kids got free lunch, etc. - it may not be worth it for her to ever sign a form. It causes too many issues.
OR
- You just have to deal with a transfer penalty from Medicaid
OR
- You could hardball and this and file taxes for previous year(s) for your mom, and file w-2 on caregiver if you know her name and address and you as DPOA or get an atty to file a letter stating she wold not comply with a request to submit a W-9 & I-9 with documentation as to attempt to get them. An attorney or DPOA would have to do the W-9 & I-9 request (allow 5 weeks between each mailing) probably twice to her either via USPO certified mail with return registered receipt or via Fed Ex with signature required. Only after that can you do the late tax filing. So like 4 months from now to file taxes for past years, then deal with caseworker or his regional supervisor to get over penalty issues.

Now whether or not facility will let her stay there “medicaid Pending“ while all this happening is a whole other issue. If Medicaid has been applied for and the $ has already caused a ? from he caseworker, then her application has likely been red flagged for transfer penalty inquiry. NH probably will want her as private pay or dpoa signs a binding contract to be responsible for payment.

Medicaid nationally average is daily $175 Room&Board reimbursement.
So 50k gifting penalty = 286 days ineligibility.
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Reply to igloo572
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Moskop Oct 11, 2018
where did you get the $175 a day amount. I spoke to a Elder Care group in NY and said the amount was $10,300/mth, and that amount went down this yr. Now I am wondering if the amount is diff by State. I am going to have that answered.
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Get a lawyer to see if there is any possible way to get a good outcome from this. I hate to say it but this is one of the consequences of working outside of the law - you may be out of luck.
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