MA-EPD Can Spell Trouble
by Ashley
The topic this month
is MA-EPD (Medical Assistance for Employed Persons with Disabilities).
The program encourages those who have been certified disabled to
be gainfully employed without losing their Medical Assistance coverage
for their medical bills. It allows a person with disabilities to
pay a premium (based upon one’s
monthly income) toward the cost of his or her medical care. It saves
the taxpayers some money. Disabled persons are able to work and to
feel good about being productive.
This is a wonderful program, but here are some catches: Let’s
say that you have been “saving for your retirement.” What
happens when you reach the $20,000 MA-EPD asset limit (as opposed
to the regular $3,000 asset limit for straight Medical Assistance)?
The answer is that you must spend down below the $20,000 asset
limit unless the money is absolutely not available to you before
you retire. You end up paying a penalty and taxes on the money
you CAN withdraw, and all you the sympathy you get for doing this
is, “too bad, so sad.” It does make sense from the
taxpayer’s standpoint that there be a cut-off for asset accumulation,
but on the other hand, it becomes a crisis for each affected individual.
MA-EPD also tightened up on their income eligibility guidelines
last summer. In order to avoid make-work projects from becoming
the norm for MA-EPD, the program requires that each employer establish
work hours and an hourly rate (at least at the minimum wage rate—thus
ruling out many people working in sheltered workshops). The hourly
rate and the work hours must result in a gross paycheck (before
taxes) of $65 per month. The employer must also withhold federal
income tax, state income tax, Medicare and Social Security (FICA)
from the paycheck.
In that way, the “Uncle Charley” jobs
(such as mowing the lawn for your parents or making your own bed)
are excluded from the MA-EPD program. To that end, how would MA-EPD
treat an artist who infrequently sells pieces of art or a writer
who sells an occasional article? Unless it is a fairly regular
sale and the taxes are withheld, such income would not likely make
one eligible for MA-EPD.
Another great aspect of MA-EPD is that you can be off work due
to medical reasons for three months and still retain your MA-EPD
eligibility. Once those three months have elapsed, however, you
must return to work or you will have to spend your assets down
to the $3,000 MA asset limit. Otherwise, you are out of luck.
Think fast if that happens
because you have ten days to spend it down. Better yet, plan ahead
and have a list of things that you need and can purchase quickly.
Whatever you do, don’t give it away
or buy gifts for others, MA-EDP does not allow that.
