CARES Act - Time's Up!

Catherine E. Sears
Associate Attorney

Believe it or not, we have been living in a COVID-19 world for more than a year. For some, this is simply a depressing thought, as they prepare to celebrate a second round of birthdays and holidays amid the pandemic. For others, though, this anniversary could have very significant impact on their income and health insurance.

Pursuant to the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), recipients of means-tested government benefits, including Supplemental Security Income (SSI) and Medicaid, have one (1) year to spend the money they received as “economic impact payments,” or “stimulus checks.” After a year has elapsed, any money remaining from the stimulus payment will be treated as a countable resource, which could result in the recipient having too many resources to continue qualifying for government benefits. To learn more about this issue, please click here..

The first installment of payments began being issued in April 2020, which means that this one-year deadline is quickly approaching. SSI and Medicaid recipients should, therefore, be preparing to provide proof to their caseworkers that the money which they received last spring is no longer in their accounts. 

I suspect this will be easier said than done. Bear in mind, the federal government is now on its third round of distributing stimulus payments. Seemingly, the one-year deadline applies to each round of payments (so, if you received a payment in April 2020, the deadline for spending that payment is April 2021; if you received a second payment in January 2021, the deadline for spending that payment is January 2022, etc.). 

Let’s say, for example, that a Medicaid recipient has an excess of the allowable $2,000 in her bank account in May 2021. Rather than simply saying that she is now over-resourced and, consequently, ineligible to continue receiving Medicaid benefits, it would seem that further analysis should be done to determine whether any of these excess funds can be dated back to April 2020, or whether they are due to the second or third round of stimulus payments. If there are still funds remaining from the April 2020 payment, then, theoretically, it would seem that she would be able to re-qualify for Medicaid upon spending down just those funds, even if her bank account remains in excess of the $2,000 limit due to the more recent stimulus payments. Presumably, she would need to spend the excess funds on allowable, non-penalizing expenditures in accordance with the regular Medicaid rules, despite the fact that these stimulus payments are not contemplated anywhere in the Medicaid Manual. 

With so much uncertainty, it is crucial that those receiving means-tested government benefits do everything they can to maximize their likelihood of receiving a favorable outcome when their caseworker reviews their file. This is a moving target, and we truly do not know what the caseworkers will do. However, seeking professional assistance in spending the economic impact payments (and in documenting how you spent them) before any of the one-year deadlines occur can increase the likelihood that your Medicaid or SSI redetermination will go smoothly despite all these unprecedented factors. 

Please contact our office to schedule a long-term care consultation if we can be of any assistance as you navigate this complex area of the law.