Senior woman and doctor both wearing masks

Medicare Awareness: An Annual Wellness Exam is Covered; An Annual Physical Examination is Not

People who went for annual physicals throughout their adult lives are surprised to learn that Medicare does not cover an annual physical. It seems counterintuitive–wouldn’t you want to have more care, not less, so you can age well? But Medicare rules are different.

Many people learn about this the first time they go for an annual physical after signing up for Medicare and getting a bill. Figuring out which services Medicare covers and those not covered is confusing. Choosing the wrong coverage can cause substantial costs.

Here is what you need to know about Medicare and annual care. Medicare believes you need an “Annual Wellness Visit”- an overview of your general health.

Medicare Part B covers an individual for an Annual Wellness Visit if:

  • they have had Part B for over 12 months, and
  • have not received an Annual Wellness Visit in the past 12 months.

When making an appointment, it is essential to stick with the right phrase: You want an “Annual Wellness Visit,” not a checkup or an annual physical. Often, the Annual Wellness Visit may uncover a condition requiring further diagnosis. If this happens, the examination and tests for the condition will qualify for payment under Part B.

The doctor will review both you and your family’s medical history and any potential risk factors like diabetes and hypertension during the visit. They will check your height, weight, BMI (Body Mass Index), and BP (blood pressure). They will also ask you to fill out a risk-assessment questionnaire and create a schedule for the next ten years for tests, including colonoscopies, mammograms, and other screenings. During the visit, the healthcare provider will also observe your cognitive functions and look for signs of depression.

A wellness visit is not a physical examination, where your physician performs a literal hands-on examination. Doctors learn a lot by palpating various parts of your body. They check the head and neck, listen to lungs and heart, make sure the eyes track moving objects correctly. Blood work measures vital health indicators like lipid and sugar levels. Urine tests check kidney functions. Usually, you come away with a sense of relief and a vow to take better care of yourself.

So why won’t Medicare pay for an annual physical? When first enacted, Medicare’s primary goal was to cover the medical diagnosis and treatment of the elderly. Preventive services and routine physical checkups are still excluded. That is why Medicare does not cover items like glasses and hearing aids.

Medicare Advantage plans recently received permission to add services not covered by traditional Medicare, physical exams, and other services such as dental care, glasses, and hearing aids. However, not all Medicare Advantage plans offer limited or no expanded care, and the copays and deductibles are often high. It only adds to consumer confusion. Those with traditional Medicare can buy separate vision and dental plans and are usually more comprehensive than those offered by Medicare Advantage.

And add to that a “Welcome to Medicare” preventive visit that patients can have when Medicare coverage begins. But you cannot have both a Welcome visit and an Annual Wellness Visit in the same 12-month period.

Patients are not the only ones confused. Providers do not always know the current rules. Most healthcare providers ask patients to sign agreements to pay for any services not covered by Medicare. That is when the patients get a surprise bill.

This confusion is why we offer a free Medicare consultation for seniors during the open enrollment season. We invite you to call our office at 516-307-1236 for a free consultation about your Medicare coverage. We want people to have the information they need to make an informed decision about their Medicare coverage. Since we are not an insurance agency, we have no bias for or against any insurance plan. Our goal is to make sure our clients have the best coverage.

 

Medicare Open Enrollment

Medicare Open Enrollment Season and Our Free Medicare Consultations

Open enrollment for Medicare Advantage plans and Part D prescription coverage begins on October 15 and ends on December 7, 2020. When it’s over, whatever decisions you may have made will be set in stone for a full calendar year.

Mistakes are costly, especially for people who require multiple prescriptions. Also, if you do not enroll in Medicare when you are eligible, there is a 10% increase in premiums for every year you failed to enroll (i.e., if you enroll in Part B or D three years late, your annual premium is increased by 30%) for the rest of your life.

Among changes you can make include switching from original Medicare, Part A for hospital insurance and Part B for medical coverage to a private Medicare Advantage plan. You can also change from one Medicare Advantage plan to a different one. And you can join a prescription drug plan under Medicare Part D.

It’s very tempting to shrug your shoulders and go with the same plan you had last year. Don’t. Plan changes, networks change, doctor’s participation in networks change. The plan you had last year might not work this year.

Medicare is challenging to navigate. Over the years, we have made a point of speaking with clients about their Medicare plan when we meet during the enrollment season. In recent years, we’ve noted that it has become even more complicated. This especially true of Medicare Part D. Currently, there are over thirty different Part D plans available on Long Island.

The Center for Medicare and Medicaid Service, the federal agency which runs the programs, introduced the Medicare Plan Finder to assist seniors in August 2019. Unfortunately, the Finder had numerous technical glitches and incorrect information; many seniors could not access the Finder. It proved a hardship to seniors. There were reports of Inflated costs and higher premiums. Complaints came from Medicare enrollees, consumer advocates, U.S. Senators, state insurance commissioners, and even the insurance brokers who sell these plans.

As a public service to assist Seniors in making an informed decision about their Medicare coverage, our office is offering complimentary consultations by phone, video conference, or in office.

We are attorneys. We are not an insurance agency or broker and sell no product. Our review is impartial. We want to help seniors avoid mistakes. Medicare is confusing. We are pleased to help.

A few steps to take, as described by CNBC in the article “Medicare open enrollment is coming up. Three steps to save money this fall.”

1 – Know your plan. Look for a piece of mail from Medicare, “Annual Notice of Change.” This letter will have information about changes to coverage and costs, including premiums, deductibles, and co-pays. If you do not participate in Medicare, you will not receive the letter.

2 – Gather up all of your medical expenses from the last year and a list of the doctors you see regularly and the medications you take. If you use a single pharmacy, they will gladly give you a printed list. You’ll need that to figure out which one will be best for you in 2021.

3 – Your modified adjusted gross income (“MAGI”) from two years ago determines your premiums for Medicare Part B. MAGI includes capital gains, Social Security, and required minimum distributions from retirement funds and 401(k) plans. Your 2019 income determines the premium you’ll pay in 2021. It’s too late to do much about that now, but if you can curtail income in 2020, you may reduce Medicare costs.

We invite you to call our office and request a free consultation to discuss your Medicare coverage. Call our office at 516-307-1236.

 

Get Your Important Documents, Including Advance Directives, Ready Now

There has never been a time in our lives when the need for an estate plan has been more critical. The sheer numbers of people who have died from COVID-19, in our community and worldwide, is something we have never witnessed. And while it may have seemed at first that the elderly were the most vulnerable, we know better now.

What should you be doing now to protect yourself and your loved ones? At the very least, you need a Will, Power of Attorney, and Advance Care Directive.

Find your most recent Will. If you cannot find it, you need a new one. Now!

Our office is open, and we are working with clients through phone, email, and videoconferences. We take all necessary precautions as recommended by the CDC for anyone who wishes to meet with us in person.

If your Will is over four years old, it probably is out-of-date. Your life may have changed, and it may not reflect new children, grandchildren, spouses, divorces, deaths, etc.

If your Will is out of date, it does not consider the changes in the law that have occurred in recent months. IRA distribution rules for heirs are among many changes that resulted from the SECURE Act (effective January 1, 2020). The CARES Act, passed in response to the economic impact of COVID-19, further modified these rules. What you had intended years ago may not come to pass because of these and other changes.

A will does not take long to create, but not having one creates unnecessary costs and stress for your loved ones.

Power of Attorney – Names a person who manages your finances and may transfer assets in certain situations. A POA allows your designated agent to pay your bills and handle health insurance problems during a medical emergency. Without one, if you are incapacitated, your assets will be inaccessible, and your family will need to undertake a costly Guardianship proceeding.

Healthcare Proxy – Names a person who may make medical decisions if you cannot do so for yourself. Without this document, family members can argue about who should decide what medical care you receive.

Living Will – Tells your health care proxy and family what your wishes are for end-of-life care. Without a Living Will, doctors can keep you alive in a vegetative state for years with no chance of recovery.

Three young women, Karen Ann Quinlan, Nancy Cruzan, and Terri Schiavo, became household names as their families battled over whether to keep them alive by artificial means. Even young adults admitted to intensive care units with COVID-19 are often struck suddenly. There’s no time for them to express their wishes.

We can create a plan tailored to your needs to protect your family. Call our office at (516) 307-1236 or email sbsilverberg@sjslawpc.com for a free consultation by phone, video, or in person.

Legislative Update: Paycheck Protection Flexibility Act

The Paycheck Protection Flexibility Act was signed into law on June 5, 2020. The new legislation modifies the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Here are the details:

Extension of loan utilization period. Originally, the PPP required borrowers to spend their full loan within eight (8) weeks after the loan originated. This was called the “Covered Period.” The new law changes the Covered Period from eight (8) weeks to either twenty-four (24) weeks after the loan origination date or December 31, 2020, whichever one is earlier.

The borrower may spend the entire loan proceeds and request forgiveness before the end of the Covered period.

The goal is to help PPP borrowers to weather the crisis by giving them more time to use the PPP loan on forgivable expenses. These include payroll costs, rent, utilities and interest on real property and personal property debt. Restrictions to what the money can be used for have not changed.

Payroll cost spending requirement. The prior PPL required borrowers to spend at least 75% of their loan proceeds on payroll costs, but the new act changes that requirement to 60%. However, all borrowers must hit this percentage if they are to qualify to have the loan forgiven. Any borrower that does not meet the 60% amount cannot have the loan forgiven and will need to pay it back.

Forgiveness reduction based on full time employees. PPL loans are subject to a reduction calculated by multiplying the forgivable loan amount by a fraction. The numerator of the fraction is the average number of full-time equivalent employees (FTEs) during the Covered Period. The borrower decides which of  two denominators works best:  the average number of FTEs between February 15, 2019 and June 30, 2019, or the average number of FTEs between January 1, 2020, and February 29, 2020.

The new law lets the borrower include any employees terminated between February 15, 2020 and April 26, 2020 who are rehired before June 2020 in the numerator to ensure maximum loan forgiveness. The PPP Flexibility Act extends the rehire provision deadline date to December 31, 2020.

If the PPP borrower meets required conditions, the forgiveness reduction test is eliminated if the borrower is:

1 – Unable to rehire a terminated employee who was an employee of the borrower by February 15, 2020,

2 – Able to demonstrate an inability to hire a similarly qualified employee to replace the terminated employee,

3 – Able to demonstrate an inability to return to the same level of business activity  commensurate with the activity level as of February 15, 2020.

Eliminating the FTE reduction test helped business owners unable to return to full operation because of the coronavirus crisis, but the borrower must still expend at least 60% of the loan on payroll cost, or risk having to pay the loan back.

Payroll tax deferral. The CARES act allows businesses to defer the employer portion of their Social Security payroll tax obligations for 2020 —  one half is due on December 31, 2021 and the second half is due by December 31, 2022. But the CARES act provided that any business receiving PPP loan forgiveness was not eligible to defer Social Security payroll tax obligations. The Treasury Department recently issued guidelines that allow PPP borrowers to defer their Social Security payroll taxes until their forgiveness status was determined.

The new Flexibility Act lets PPP borrowers defer their 2020 Social Security payroll taxes regardless of whether some, part, or all of their PPP loan is forgiven. The employer’s share of the Social Security payroll tax is not treated as a forgivable payroll expense.

Some of the new aspects of the Flexibility Act will be welcome, but the 60% payroll tax requirement remains a challenge for many. If business does not return and permit the borrower to ramp back up before the end of the Covered Period, the loan will not be forgiven, adding another burden to strained businesses.

 

What Are The Benefits Of Naming A Corporate Fiduciary?

Many individuals who establish trusts choose to name a close friend or relative as trustee.  However, there are many situations where naming a corporate fiduciary is a far better alternative.

Acting as a trustee requires that the person have a good background in finance and tax. Failing that, the liability of making poor financial decisions may be overly burdensome for someone selected primarily because of their relationship with you. Depending on the size of the estate, performing as a trustee may require more time and energy than the person is able to devote to the required duties.

Here’s another problem, and one that we see often. It is unfair to the beneficiaries of the trust to pay a trustee for services rendered if the trustee is not qualified to perform the services, or does not have the necessary credentials to manage the trust. Even if friends or family members are professionals in finance, law or tax, they may not necessarily have the right knowledge of estate tax. They may be capable and trustworthy without being qualified. Paying them if they are not qualified may lead to bad feelings between family members and/or friends.

Along those lines, naming a friend or relative may subject the individual to highly charged and emotional disputes. If they are a friend, they may not appreciate being thrust into a family argument, and if they are a family member, they may bring their own emotional baggage that may complicate even the simplest of arrangements.

An alternative is the corporate fiduciary, which will take on a more business-like approach to the tasks and responsibilities of managing a trust without becoming emotionally involved in any disputes among the beneficiaries. Naming a corporate fiduciary also adds permanence to the choice and ensures that individuals who are skilled in money management, taxes, and conservation of trust principal will administer the trust.

Selecting a bank or independent trustee does not preclude family participation in the trust decisions. A friend or family member might be named as a co-trustee, with power to make or participate in decisions regarding discretionary distributions to beneficiaries.

The best estate plan in the world can be undermined by poor trustee selection. This is a decision to discuss with advisors, including the family estate attorney, CPA, financial advisor, and other trusted professionals.

Spousal Refusal Saved – But Look Back for Homecare Timeframe Shrinks

Good news for New Yorkers regarding Medicaid and Spousal Refusal – the New York State Education and Health Budget Bill is making progress through the New York State legislature. Due to the efforts of the NYS Bar Association Elder Law Section and the New York Chapter of the National Academy of Elder Law Attorneys, the state legislature has rejected proposals to eliminate Spousal Refusal and severely reduce the minimum Community Spouse Resource Allowance (CSRA).

However, it is not all good news. Beginning October 1, 2020, there will be a 30 month (2 ½ years) look back for all home care services. Any asset transfers made during or after that date will cause a penalty period determined the same way as for Skilled Nursing Level Medicaid. This change will mainly affect single people. Married couples can still use Spousal Refusal, and transfers between spouses are not subject to the look back or penalty periods.

The earliest effective date for the Home Care Look Back is October 1, 2020. If we are still in a New York State-declared state of emergency (and let’s hope we are not),  the Director of the Budget can delay the effective date for another 90 days.

Some of the other changes are not great.

To determine whether a person is eligible for care, they must need assistance performing three (3) Activities of Daily Living (ADL); previously, the requirement was the inability to perform only two (2) ADLs.  There are exceptions for individuals with a diagnosis of Alzheimer’s or other Dementia diagnoses; in those cases, they will need to show a need for assistance with only one ADL. That also starts on October 1, 2020.

Effective October 1, 2020, the individual’s personal treating physician necessarily may not be permitted to approve their treatment plan for Medicaid Personal Care Services (PCS) and Consumer Directed Personal Assistance Program (CDPAP) services. A “qualified independent physician” selected or approved by the Department of Health must determine the plan of treatment. There is no guidance as to what this means.

Finally, there is a long-range plan for Local Departments of Social Services (LDSS), Managed Long Term Care (MLTC), and Medicaid Managed Care (MMC) for the assessment and approval of the number of hours. It will require using a Task-Based Assessment Tool developed, starting on April 1, 2021, and the date for the full takeover of the Assessment and approval process by DOH is October 1, 2022.

The above are significant changes. There are still questions about implementing these changes. My colleagues and I are reviewing these provisions, and I’ll continue to keep you posted.

Congress Waives Required Minimum Distributions

The CARES Act ( the “Act”) waives the required minimum distribution rules for certain defined contribution plans and IRAs for calendar year 2020. This provision provides relief to individuals otherwise required to withdraw funds from such retirement accounts.

This also includes individuals who turned 70 1/2 in 2019 but elected to defer their initial distribution to April 1, 2020. If an individual has taken their RMD, they can redeposit it if sixty days have not elapsed since the date of the distribution.

Hardship IRA/401(k) Withdrawals

The Act will allow coronavirus related withdrawals from their 401(k) and IRA accounts up to $100,000 during 2020 and avoid the normal 10% penalty for those not of the required minimum age of 59.5.

Reasons for Coronavirus related withdrawals include

(1)    An account owner diagnosed with COVID-19, or

(2)    A spouse or dependent is diagnosed with COVID-19, oe

(3)    An individual who experiences adverse financial consequences because of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to the coronavirus, or

(4)    closing or reducing hours of a business owned or operated by the individual due to coronavirus, or

(5)    or other factors as determined by the Treasury Secretary.

You are still required to pay income taxes but don’t have to pay the full amount in one year. You can spread that tax due over three years. Another option is to redeposit the withdrawn amounts back within three years.

Treatment of Charitable Deductions.

Generally, taxpayers must itemize their deductions to take advantage of charitable deductions. This itemized deduction requirement is eliminated for charitable deductions of up to $300 for most contributions for the 2020 tax year. Note that not all charitable deductions are eligible for this treatment. Specifically, charitable contributions made to a private foundation or donor-advised fund, are not eligible for the above-the-line charitable deduction.

In addition, the limitation that applies to the amount of a charitable deduction that can be claimed by individual taxpayers is based on a percentage of the individual taxpayer’s adjusted gross income is also eliminated for 2020.

Finally, a reminder – if you do not have a healthcare proxy in place, visit our website www.sjslawpc.com and fill in the contact form. We will send you a personalized healthcare proxy with directions. Print it out, insert a date, sign your name on the line indicated in front of two unrelated witnesses. Make sure that the document is readily available in an emergency. We can ONLY do this through the website.

If you have questions, please send them to sjs@sjslawpc.com.

Be safe,

Stephen J. Silverberg, Esq.