The Voice is the e-mail newsletter of The Special Needs Alliance. This installment was written by Special Needs Alliance member Barbara Isenhour, of the firm of Isenhour Bleck, PLLC in Seattle, Washington. The firm focuses on government benefits for individuals with disabilities and estate planning for families with special needs children. A board member of NAMI Eastside in Redmond, Washington, and Full Life Care in Seattle, Barbara frequently lectures around the state of Washington on issues involving special needs trusts and government benefits for the elderly and disabled.
This article is a continuation of a previous Voice article, addressing the effect of employment on a person’s eligibility for Title II disability benefits (Social Security Disability Income, Child Disability Benefits and Disabled Widow(er)s Benefits). The article addresses three work incentives when a recipient of Title II disability benefits attempts to work: Ticket to Work, extension of Medicare benefits, and extension of Medicaid benefits. This article also addresses the reporting requirements when a Title II disability recipient starts earning a wage.
Ticket to Work
Social Security has a work incentive program called “Ticket to Work,” designed to help individuals with a disability transition into a job and employment. The Ticket to Work program actually applies both to disabled Title II beneficiaries and to disabled (Supplemental Security Income or SSI) recipients, but this article only addresses its impact on Title II beneficiaries.
The purpose of the Ticket to Work program is to help disabled individuals achieve their employment goals by working with an authorized vocational program. The program may include vocational training, job referrals and other employment support. Social Security has a list of vocational providers in every state. The providers include private employment networks and government vocational agencies. Authorized programs also include public or private school programs for students between the ages of 18 and 21 who have a vocational program as part of their Individual Education Program (IEP).
Every person between the ages of 18 and 64 who is receiving cash disability benefits and has not medically improved has a “ticket.” These individuals can assign their ticket to an authorized vocational provider to provide job training, job referrals and related employment support.
What are the benefits of enrolling in the Ticket to Work program, aside from the vocational assistance in finding and keeping a job? First, Social Security will not conduct any continuing disability reviews during the term of the enrollment in Ticket to Work. Otherwise, when Social Security first determines that a person meets the agency’s definition of disabled or blindness, the individual is given a medical review date to determine whether the disabling medical condition has improved. The review date can be anywhere between six months and seven years depending upon the medical condition and expected improvement over time. The medical review can be a source of anxiety to a recipient of disability benefits.
Another benefit from participation in the Ticket to Work program is continuation of cash disability benefits even if the medically disabling condition ends, provided the person is currently enrolled in a Ticket to Work program. Social Security will still pay the cash disability benefits until the vocational program has ended or as long as Social Security determines that the vocational program will help the individual to stay off of the disability rolls in the future.
Extending Medicare Benefits
Recipients of Title II disability benefits will qualify for Medicare health insurance in the 25th month after their cash benefit begins. If a recipient begins receiving Medicare, then completes a Trial Work Period (discussed in the prior article in this series), and then has disability cash benefits terminated because of substantial gainful activity (SGA) , Medicare benefits will be extended for up to 93 months following the last month of the Trial Work Period. After the 93 months, these former Title II recipients can purchase Part A and Part B Medicare coverage if they wish. This can be a significant benefit for individuals with disabling medical conditions because of the relatively low cost of Medicare premiums and the ability to avoid pre-existing condition exclusions that may be imposed by a privately-purchased health insurance policy. In some states, benefits known as Medicare savings plans may even pay these premiums if the individual meets the applicable income and asset limits for the plan.
The extension of Medicare for 93 months and the option to purchase Medicare after 93 months only applies to Title II recipients whose cash benefit ended because they had SGA. If the cash benefits were terminated because the individual’s medical condition improved, the Medicare extension provisions would not apply.
Extending Medicaid Benefits
Some recipients of Title II disability benefits receive both Medicare and Medicaid health coverage. These individuals are often referred to as concurrent beneficiaries or dual eligibles. Forty-two states have Medicaid programs for disabled individuals who are working, even if they have lost all their Title II cash benefits due to SGA. Most of these Medicaid programs have no asset limits in order to qualify; where asset limits apply, they may be more generous than the limits for ordinary Medicaid benefits. Most programs will require that income is below a specified limit adopted by the state, but this limit may be generous to take into account work-related expenses. Most states have a premium for the Medicaid coverage based on a small percentage of countable income, and so these programs are sometimes called Medicaid buy-in programs. Benefits covered by the Medicaid program vary with each state program. Some states’ Medicaid programs cover attendant care for severely disabled individuals, so that they can get to and from their job site or reside in a community setting. This type of care would not be covered by Medicare.
Social Security requires that individuals who are working and also receiving cash disability benefits must report their earnings by the 10th day of the following month. Because the Title II disability programs count wages in the month the wages were earned, not the month of payment, it is important that reported earnings make it clear when the wages were earned. This can make a difference when determining whether wages exceed SGA in any given month.
As discussed in the last Voice article, beneficiaries need to know if they are still in a Trial Work Period (TWP) and when the TWP ends. When their TWP ends, they need to know whether their countable wages exceed SGA, and what work-related expenses can be used to reduce their countable wages. For many individuals trying to work, wages may fluctuate on a monthly basis. Earnings may be above SGA in some months and below SGA in other months because of changes in health, changes in impairment-related work expenses or subsidies that reduce countable earnings for SGA, or changes in availability of hours of work from the employer.
Even when individuals report their earnings promptly, there may be overpayments assessed for months when countable earnings exceed SGA. Workers with disabilities and their families or other advocates need to track wages carefully and to understand how SGA affects the ability to qualify for the Title II disability benefit in any given month. To help track a working individual’s continued eligibility for Title II benefits, the Social Security Administration provides a useful form, the “Benefits Planning Query” (SSA-2459). This document will show the individual’s Social Security benefit amount and the specific program(s) paying the benefits (SSI, SSDI, CDB, DWB). The form shows the disability onset date, whether or not any overpayments have been assessed, whether or not the individual is receiving Medicare and/or Medicaid, and whether or not the individual has completed a TWP. The form will also show prior reported earnings and whether the earnings are verified or only estimated. This form also indicates when the next medical review is scheduled with Social Security.
Reporting earnings is a requirement, not an option—but there is an additional benefit when individuals with disabilities report their wages to Social Security. Most workers pay into the Social Security system with each paycheck through withheld payroll taxes; self-employed individuals who report earnings pay into the Social Security system through self-employment tax. These individuals are gradually building up their own work history of Social Security contributions, which will be used to calculate the amount of their disability benefits and their eventual retirement benefits.
The Social Security disability programs are not designed to punish individuals who want to try to work despite their medical conditions. There are incentives to help transition individuals from disability benefits to full employment with Ticket to Work and Medicare and Medicaid extended benefits. There are also ways for many individuals to keep both their full Title II disability benefits and their wages, depending upon the amount of their countable earnings. The work rules for Title II disability benefits are complicated, but with good advocacy and a good understanding of trial work periods, substantial gainful activity, impairment-related work expenses and subsidies, the Ticket to Work program, and continuing coverage from the Medicare and Medicaid programs, individuals with disabilities can gain employment that will enhance, not jeopardize, their financial security.
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