[Senate Report 114-99]
[From the U.S. Government Publishing Office]
Calendar No. 178
114th Congress } { Report
SENATE
1st Session } { 114-99
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SPECIAL NEEDS TRUST FAIRNESS ACT OF 2015
_______
July 30, 2015.--Ordered to be printed
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Mr. Hatch, from the Committee on Finance, submitted the following
R E P O R T
[To accompany S. 349]
The Committee on Finance, to which was referred the bill
(S. 349) to amend title XIX of the Social Security Act to
empower individuals with disabilities to establish their own
supplemental needs trusts, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
I. LEGISLATIVE BACKGROUND
The Committee on Finance, to which was referred the bill
(S. 349), to amend title XIX of the Social Security Act to
empower individuals with disabilities to establish their own
supplemental needs trust, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
Background and need for legislative action
Under federal Medicaid law, most trusts are counted as an
asset in determining Medicaid eligibility for aged and disabled
individuals and are subject to asset transfer rules. However,
there are certain exceptions in current law to the general rule
of counting trusts as an asset. Specifically, Medicaid does not
count certain special-needs trusts and pooled trusts as assets
and does not apply asset transfer rules to these trust types.
This exception is commonly referred to as the ``special needs
trust exception.'' Special needs trusts must contain assets of
the disabled individual and the trust must be used to provide
funding for certain expenditures that supplement Medicaid
benefits, subject to certain limitations. Special needs trusts
allow non-elderly individuals with disabilities to maintain
their assets and their eligibility for Medicaid. When the
beneficiary dies, the state receives the remaining proceeds of
the trust equal to any amounts paid for medical assistance
provided under the state Medicaid program. Special needs trusts
can be established for individuals under the age of 65 who meet
the statutory definition of disability (Section 1614(a)(3) of
the Social Security Act). However, current law (Section
1917(d)(4)(A) of the Social Security Act) permits only parents,
grandparents, legal guardians, or a court to establish a
special needs trust on behalf of a non-elderly disabled
individual. Individuals wanting to set up a special needs trust
for themselves would have to file a petition with a court,
which can take months. The committee recognizes the importance
of empowering non-elderly individuals with a disability to act
on their own behalf to establish a special needs trust rather
than relying on others to establish a special needs trust for
them, or filing a petition with a court.
II. EXPLANATION OF THE BILL
PRESENT LAW
Section 1917(d)(4)(A) of the Social Security Act, requires
that special needs trusts for non-elderly individuals with
disabilities can be established by parents, grandparents, legal
guardians, or a court.
EXPLANATION OF PROVISION
The bill makes a technical correction to Section
1917(d)(4)(A) of the Social Security Act regarding special
needs and pooled trusts under Medicaid, which are exempt from
asset counting and transfer rules, to allow non-elderly
individuals with disabilities to establish a special needs
trust on their own behalf.
EFFECTIVE DATE
The provision is effective on the date of enactment.
III. BUDGET EFFECTS OF THE BILL
A. COMMITTEE ESTIMATES
In compliance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate, the following statement is made
concerning the estimated budget effects of the revenue
provisions of the of the ``Special Needs Trust Fairness Act of
2015'' as reported.
S. 349 would reduce the amount of time it would take to
establish special needs trusts since individuals would no
longer have to file a petition with a court to do so. In turn,
individuals who establish trusts independently would receive
several more months of Medicaid and SSI benefits. Accordingly,
this bill would increase direct spending by $8 million over the
2015-2015 period. That amount includes $5 million for
additional months of Medicaid coverage and $3 million for
additional months of SSI benefits. Because enacting the bill
would affect direct spending pay-as-you-go procedures apply.
Enacting the bill would not affect revenues.
B. BUDGET AUTHORITY
Budget authority
In compliance with section 308(a)(1) of the Congressional
Budget and Impoundment Control Act of 1974, the Committee
states that no provisions of the bill as reported involve new
or increased budget authority.
Tax expenditures
In compliance with section 308(a)(1) of the Budget Act, the
Committee states that the bill does not involve increased tax
expenditures.
C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE
In accordance with section 403 of the Budget Act, the
Committee advises that the Congressional Budget Office has
submitted a statement on the bill.
S. 349--Special Needs Trust Fairness Act of 2015
Summary: S. 349 would permit non-elderly individuals with
disabilities to establish their own special needs trusts
without having to file a petition with a court, which CBO
expects would reduce the amount of time before such a trust is
established. Because assets held in such trusts are not counted
toward Medicaid or Supplemental Security Income (SSI) asset
tests, effectively lowering the eligibility threshold for those
programs, enacting the bill would allow some Medicaid and SSI
benefits to be drawn sooner.
CBO estimates that the bill would increase direct spending
by $8 million over the 2016-2025 period. Because enacting the
legislation would affect direct spending; pay-as-you-go
procedures apply. Enacting the bill would not affect revenues.
S. 349 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 349 is shown in the following table. The
costs of this legislation fall within budget function 550
(health).
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By fiscal year, in millions of dollars--
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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CHANGES IN DIRECT SPENDING
Medicaid
Budget Authority....................................... * * * * 1 1 1 1 1 1 2 5
Estimated Outlays...................................... * * * * 1 1 1 1 1 1 2 5
Supplemental Security Income
Budget Authority....................................... * * * * * * * * * * 1 3
Estimated Outlays...................................... * * * * * * * * * * 1 3
Total Changes
Budget Authority................................... 1 1 1 1 1 1 1 1 1 1 3 8
Estimated Outlays.................................. 1 1 1 1 1 1 1 1 1 1 3 8
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Note: * = Less than $500,000.
Basis of estimate: S. 349 would permit non-elderly
individuals with disabilities to establish their own special
needs trusts without having to file a petition with a court. A
special needs trust is a specific type of trust defined in
Medicaid statute that can only be established on behalf of non-
elderly individuals with disabilities. Assets held in a special
needs trust are not counted toward Medicaid or Supplemental
Security Income (SSI) asset tests.
Under current law, a special needs trust can only be
established by parents, grandparents, legal guardians, or a
court. Individuals wanting to set up special needs trusts for
themselves would have to file a petition with a court, which
can take many months. CBO expects this bill would reduce the
amount of time it would take to establish special needs trusts
since individuals would no longer have to file a petition with
a court to do so. In turn, individuals who establish trusts
independently would receive several more months of Medicaid and
SSI benefits. CBO does not expect the bill to increase the
number of special needs trusts established.
Based on information from the Department of Health and
Human Services, the Social Security Administration, and other
stakeholders, CBO estimates that permitting qualified
individuals to establish their own special needs trusts would
cost about $8 million over the 2015-2025 period. That amount
includes $5 million for additional months of Medicaid coverage
and $3 million for additional months of SSI benefits.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
CBO Estimate of Pay-As-You-Go Effects for S. 349, as ordered reported by the Senate Committee on Finance on June 24, 2015
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By fiscal year, in millions of dollars--
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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-2020 2015-2025
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 1 1 1 1 1 1 1 1 1 1 3 8
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Intergovernmental and private-sector impact: S. 349
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would result in increased spending
for Medicaid. Since a portion of Medicaid is paid for by state
governments, CBO estimates that state spending on the program
would increase by about $3.8 million over the 2016-2025 period.
Because states have broad flexibility to alter optional
benefits and eligibility to offset such costs, the increased
spending would not result from an intergovernmental mandate as
defined in UMRA.
Estimate prepared by: Federal Costs: Andrea Noda and Daniel
Hoople; Impact on State, Local, and Tribal Governments: J'nell
Blanco Suchy; Impact on the Private Sector: Amy Petz.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
IV. VOTES OF THE COMMITTEE
In compliance with paragraph 7(b) of rule XXVI of the
Standing Rules of the Senate, the Committee states that, with a
majority present, the ``Special Needs Trust Fairness Act of
2015'' as modified, was ordered favorably reported on June 24,
2015 as follows:
Final Passage of the ``Special Needs Trust Fairness Act of
2015''--as modified, approved by voice vote.
V. REGULATORY IMPACT AND OTHER MATTERS
A. REGULATORY IMPACT
Pursuant to paragraph 11(b) of rule XXVI of the Standing
Rules of the Senate, the Committee makes the following
statement concerning the regulatory impact that might be
incurred in carrying out the provisions of the bill.
Impact on individuals and businesses, personal privacy and paperwork
The bill is not expected to impose additional
administrative requirements or regulatory burdens on
individuals. The bill is expected to reduce administrative
requirements and regulatory burdens on some businesses.
The provisions of the bill do not impact personal privacy.
B. UNFUNDED MANDATES STATEMENT
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
any private sector mandates. The Committee has determined that
the bill contains no intergovernmental mandate.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In the opinion of the Committee, it is necessary in order
to expedite the business of the Senate, to dispense with the
requirements of paragraph 12 of rule XXVI of the Standing Rules
of the Senate (relating to the showing of changes in existing
law made by the bill as reported by the Committee).
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