SF 2141 (LSB 5764XS (7) 87)

SENATE FILE 2141

BY  MATHIS, RAGAN, and JOCHUM

A BILL FOR

An Act relating to the recovery of Medicaid payments by the department of human services following the death of a designated beneficiary of an ABLE savings account, and providing for contingent implementation. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 12I.4, subsection 3, Code 2018, is amended to read as follows:
   3.  Moneys in the account of a designated beneficiary may shall not be claimed by the Iowa Medicaid program as provided authorized in section 529A(f) of the Internal Revenue Code and subject to limitations imposed by the treasurer of state unless such claim is required to maintain qualified ABLE program status under section 529A of the Internal Revenue Code.
    Sec. 2.  Section 249A.53, Code 2018, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  a.  Following the death of an individual who is a designated beneficiary of an account under a participation agreement pursuant to chapter 12I, all of the following shall apply to the extent permitted pursuant to chapter 12I and under federal law including section 529A of the Internal Revenue Code:
   (1)  The department shall not seek recovery of any account balance remaining in the designated beneficiary’s account for medical assistance paid to or on behalf of the designated beneficiary on or after the date a participation agreement is entered into and an account is established for the designated beneficiary. 
   (2)  The department shall not file a claim for payment under section 529A(f) of the Internal Revenue Code. 
   (3)  Any account balance remaining in the designated beneficiary’s account may be transferred to an account for another eligible individual specified by the designated beneficiary, or if another eligible beneficiary is not so designated, then the account balance shall be transferred or otherwise disposed of as determined by the estate of the designated beneficiary. 
   b.  For the purposes of this section, “designated beneficiary”, “Internal Revenue Code”, and “participation agreement” mean the same as defined in section 12I.1.
   c.  For the purposes of this section, “eligible individual” means the same as defined in section 529A of the Internal Revenue Code.
    Sec. 3.  DIRECTIVES TO DEPARTMENT OF HUMAN SERVICES.
   1.  Upon enactment of this Act, the department of human services shall request federal approval from the centers for Medicare and Medicaid services of the United States department of health and human services to implement this Act.
   2.  The director of human services shall report, monthly, to the chairpersons and ranking members of the joint appropriations subcommittee on health and human services, the legislative services agency, and the legislative caucus staffs on the progress of the request for federal approval.
    Sec. 4.  CONTINGENT IMPLEMENTATION.  Implementation of this Act is contingent upon receipt of federal approval as provided under this Act. The director of human services shall notify the Iowa Code editor upon receipt of such federal approval.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the recovery by the Iowa Medicaid program of the account balance of a designated beneficiary of an ABLE savings account.
   The bill provides that following the death of an individual who is a designated beneficiary of an account under a participation agreement pursuant to Code chapter 12I (disabilities expenses savings plan trust), to the extent permitted pursuant to Code chapter 12I and under federal law including section 529A of the Internal Revenue Code, the department of human services (DHS) shall not seek recovery of any account balance remaining in a designated beneficiary’s account for medical assistance paid to or on behalf of the designated beneficiary on or after the date a participation agreement is entered into and an account is established for the designated beneficiary; DHS shall not file a claim for payment under section 529A(f) of the Internal Revenue Code; and any account balance remaining in the designated beneficiary’s account may be transferred to an account for another eligible individual specified by the designated beneficiary, or if another eligible beneficiary is not so designated, then the account balance shall be transferred or otherwise disposed of as determined by the estate of the designated beneficiary.
   The bill provides definitions for terms used in the bill and makes conforming changes.
   The bill directs DHS, upon enactment of the bill, to request federal approval from the centers for Medicare and Medicaid services of the United States department of health and human services to implement the bill. The bill requires the director of human services to report, monthly, to the chairpersons and ranking members of the joint appropriations subcommittee on health and human services, the legislative services agency, and the legislative caucus staffs on the progress of the request for federal approval.
   Implementation of the bill is contingent upon receipt of federal approval as provided in the bill and the director of human services shall notify the Iowa Code editor upon receipt of such federal approval.
   The disabilities expenses savings plan trust is also known as the Iowa ABLE savings plan trust which was established as a qualified ABLE program under section 529A of the Internal Revenue Code. The purpose of ABLE savings accounts is to encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life and to provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program, the federal supplemental security income program, and other sources. ABLE savings accounts allow eligible individuals the opportunity to save and fund a variety of qualified disability expenses without endangering eligibility for certain benefits such as Medicaid and supplemental security income.