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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

February 8, 2021

Nursing Homes, Medicaid, and Your COVID-19 Stimulus Payments: What You Need to Know

In late December, the federal government began releasing the second round of COVID-19 stimulus payments to eligible individuals. Those payments will be in the amount of $600 for individuals and $1,200 for married couples filing jointly. Generally, residents of nursing homes and adult care facilities will be eligible to receive these payments. If the nursing home resident receives Social Security via direct deposit, the stimulus payment will arrive in the same manner.

Questions have been raised regarding nursing home residents who are receiving long-term Medicaid benefits and the effect these stimulus payments will have on their benefits. The stimulus payments are not considered income for Medicaid purposes and will not count as a resource or asset for 12 months. The stimulus payment is not taxable income and is not part of the Medicaid recipient’s net available monthly income for Medicaid. (See GIS 20 MA/05.) After 12 months, the stimulus funds become a countable asset, so the Medicaid recipient must make sure that after 12 months they are under the applicable Medicaid resource allowance (currently $15,900). The Medicaid recipient can spend the stimulus funds on whatever they choose and they can also gift the funds. Generally, these stimulus payments will not jeopardize eligibility for means-tested programs like Medicaid, SSI, SNAP, or public housing.

Additionally, the Medicaid recipient is under no obligation to turn over the stimulus funds to the nursing home or to Medicaid; the funds are to be used by the recipient as they choose. The nursing home administrator or director cannot require the resident to pay their stimulus funds to the nursing home for their care and they may not seize those payments received on behalf of the resident. Whether through mistake or misinformation, there have been instances of nursing home facility operators retaining their residents’ stimulus payments. Government guidance has been issued federally by the Federal Trade Commission (May 2020), the Internal Revenue Service (June 2020), the Social Security Administration (January 2021), and the House Ways and Means Committee (June 2020) and at the state level by the New York State Department of Health (June 2020) clarifying that the COVID-19 stimulus payments belong to the residents and may not be usurped by the adult care facility. This is true even if the facility is the resident’s representative payee for their retirement or social security benefits. The COVID-19 stimulus payment is not part of those benefits and the representative payee should discuss how the resident wishes to receive the stimulus funds. Even if the resident’s payment status is in arrears, the facility may not keep the stimulus funds without consent from the resident. If a resident’s stimulus check was taken by their care facility or nursing home, they or their representative should alert the facility operator and demand that the funds be returned and placed into the resident’s personal needs account or transferred back using whatever method the resident requests. Keeping the resident’s stimulus funds is a misappropriation of residents’ property and also violates regulations that guarantee residents the right to manage their financial affairs. If the facility will not cooperate with that request, the resident’s representative can file a complaint with the NYS Department of Health.

If you have any questions regarding this alert, please contact Terry Emmens, Elder Law & Medicaid Planning Team leader, at temmens@barclaydamon.com; Lisa Arrington, partner, at larrington@barclaydamon.com; Bridget Dehmler, associate, at bdehmler@barclaydamon.com; or another member of the firm’s Elder Law & Medicaid Planning Team.

We also have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. Please contact Yvonne Hennessey, COVID-19 Response Team leader, at yhennessey@barclaydamon.com or any member of the COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.

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