EPISODE 18 – Rehab, Rehabilitation Services and Special Needs Trusts – November 1, 2022
What kinds of rehab are you familiar with? Did you know special needs trusts can help pay for rehab? Details are explained in the latest episode of the Vista Points podcast, Choose Your Path. Listen as Bart, the podcast host, uses specific examples and walks through explanations. Make your special needs trust work for you as you work through rehab!
EPISODE 18 SCRIPT:
Greetings from our Middle Tennessee studio. Welcome to today’s Vista Points podcast, “Choose Your Path,” where the Vista Points staff are committed to improving the quality of life for people, of any age, living with a physical, mental, or intellectual disability.
I’m Bart, your podcast host. My role is to walk with you on this journey of discovering and using special needs trusts. If you’re listening to this podcast online, make the most of your experience by using closed captioning. Click on the C-C in the shadowed box on the video screen.
We address a variety of topics related to special needs trusts in our podcasts. Today’s topic is health and rehabilitation services. This is an incredibly vast topic that plays a part in many people’s lives, at one time or another. In today’s podcast episode, we address big and small questions related to health and rehabilitation services, as they relate to special needs trusts.
Today’s topic is “rehabilitative services.” What is exactly does that mean, you may be thinking. Truthfully, rehabilitative services – commonly referred to as “rehab” have many different components. I’ll be explaining various rehab services to you during this podcast, and show you how a special need trust can be used to pay for these services.
When you think REHAB, what is the first type of rehabilitation that comes to mind? For many, it’s rehab after a car accident. A person may have spent quite a long time in the hospital recuperating from injuries. Now it’s time for the hospital to discharge, but the person is not able to take care of him or herself without assistance. This is where rehabilitation services can be used to help the person continue recovery. If a person is living with a disability, physical, mental, or intellectual, he or she may have a special needs trust. There’s times when a person’s insurance may not cover the healthcare services needed. If this happens to a person who has a special needs trust, the trust can be used to pay for the additional healthcare expenses.
In the special need trust world, we call the person living with a disability (that is a physical, mental, or intellectual disability) the “beneficiary.” I’ll start with a scenario that’s all too common among people with or without special needs trusts.
There are times when beneficiaries become addicted to medications, especially pain medication. They want to break this addiction but do not have the financial means on their own. A beneficiary can speak with his or her trustee and ask if the special needs trust can pay for rehabilitative services so the addiction can be remedied. Will these services be an allowable expense in a special needs trust?
The answer is, “it depends.” If the beneficiary has sufficient funds in his or her special needs trust, then the trustee can agree to pay for the rehab services from the trust. The rehab service must provide the trustee with an itemized invoice, for the beneficiary’s services used. Bills are usually paid within 7 – 10 days.
Why would a trustee reject the beneficiary’s request to pay for rehab services? I’m glad you asked that! There’s multiple reasons. The first and most apparent reason is that the beneficiary does not have the financial means, in his special needs trust, to pay for the services. There’s times when an organization wants to provide rehab services for a beneficiary, but the organization’s not a legal entity. The business may not have a Tax ID number or will not provide the Tax ID number to the trustee. The Tax ID number is required if an organization is not incorporated. Other companies may refuse to provide an itemized statement for the beneficiary’s services used. Without these two items, the trustee cannot pay for the rehab services.
Another scenario that occasionally occurs is the addiction to illegal drugs. Jeff, a special needs trust beneficiary, had $50,000 in his trust. Jeff was addicted to illegal drugs. Jeff told the trustee that over a period of time he’d made some friends who got him involved with illegal drugs. It started with marijuana, just for fun, then it progressed to cocaine. Jeff said he was now doing meth! He wanted to clean up his act, break away from his current friends, and live a productive life. Jeff asked if his special needs trust could pay for his in-patient rehabilitative service. He said he’d be in the program for 90 days. It would cost $2,000 a week for a grand total of $24,000. Wow! Rehab’s not cheap!
The trustee has to consider many factors before approving Jeff’s rehab request. The first item to consider is how much money Jeff has available. Does Jeff have ongoing or recurring expenses coming out of the trust that will need to be paid? Are there other outstanding medical bills to pay for Jeff? How will his current housing be paid for if he’s not there? Just to let you know, if someone resides in a facility, at times, the facility requires the person to be there each night or the facility may ask for a nightly fee to hold the bed or space for the person. Other times, the facility may evict the person if the bed’s not being used. Will the trust pay to hold the bed for the beneficiary while Jeff is in rehab? Usually, a trust cannot pay for housing. So, what is the beneficiary to do?
There’s no 100% right or wrong, cut-and-dry answer. The trustee will review the beneficiary’s request to help pay for the beneficiary with his desire so he can live a good quality of life. Yet, there’s times when the trustee must say “no” to a beneficiary’s request.
Many people living with a disability can improve their quality of life with outpatient rehabilitation, such as physical therapy, speech therapy, or occupational therapy. These types of services are usually covered under the beneficiary’s insurance or government benefits. Other times, there’s co-pays for each visit that must be paid, after the insurance or benefits pay the major part of the bill. The beneficiary can ask the trustee, of his special needs trust, to pay these co-pays. Medical bills, not covered by insurance and government benefits, can be paid from a beneficiary’s special needs trust. The company can, with the request from the beneficiary, send the itemized statements to the trust company for consideration of payment. Many times, the beneficiary will receive the bill and send it to the trust office for payment. Whatever way the trustee receives the bill is not important, as long as the trustee does receive the bill.
What happens when someone has a stroke or heart attack and needs rehabilitation? Will the person’s special needs trust pay for the cost of the rehab? Again, it depends. The trustee must always wait for the beneficiary’s insurance or government benefits to cover the related expense. If there’s any outstanding expense to be paid after all the other insurance and government benefits have made payment on the bill, the trustee will pay the remaining rehab expenses.
What can you do if your trustee, of your special needs trust, tells you the rehab services you desire cannot be paid from the trust? The best thing to do is ask questions. The trustee may have some alternative opportunities for you that will provide outcome you desire. The trustee is trained to think “outside the box” and consider alternatives in order to help you achieve your goal. Afterall, it is the trustee who has fiduciary responsibility to help you live a good quality of life.
The best advice I can give you is, if you’re a beneficiary on a special needs trust and you are considering going into rehab or having rehabilitative services, please contact your trustee before you embark on your rehabilitative journey. You can discuss what you are wanting to do and learn how your special needs trust may be able to financially assist you with your rehab. After all, what’s important to you is that you have a good quality of life.
Thank you to our listeners for tuning in to today’s episode of Choose Your Path, the Vista Points podcast. I hope some of today’s information allows your loved one, living with a disability, to consider getting help through rehabilitative services so he or she can live a better quality of life.
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If you don’t already know this, the episode topics are in response to listeners’ questions! If you haven’t asked your question yet, I encourage you to ask or share your concerns or questions online or feel like calling our office.
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I’m glad to connect with you today! I hope you enjoy your day with your loved one. Come back for more episodes of Choose Your Path. Regardless of where or when you find us, we walk beside you on your path. I look forward to our next steps together and to speaking to you again soon.