FLORIDA INCREASES PENALTY DIVISOR EFFECTIVE SEPTEMBER 1, 2015

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The Florida Department of Children & Families (DCF) has recognized an increase in the average private pay nursing home rate, and has increased the monthly transfer penalty divisor amount to $8,346.00, effective September 1, 2015. The transfer divisor amount is used to calculate a transfer of asset penalty period on applications for assistance under Florida Medicaid’s Institutional Care Program (institutional skilled nursing home care, institutional hospice care, and MEDS-AD), Home & Community Based Waiver Programs, and the PACE Program. This means that non-exempt transfers made within 60 months of a new Florida Medicaid application, which cannot be readily cured as part of the Medicaid eligibility planning process, will disqualify the Medicaid applicant for a shorter period of time than would have been the case under the previous lower divisor amount. After a complete cure of the non-exempt transfer, or the expiration of the calculated penalty period, or a combination thereof, the Medicaid applicant may reapply for assistance. Transfer penalty calculations and cures are very complex, may have significant legal ramifications on you and your family, and should only be undertaken with the aid of a Florida Elder Law Attorney.

The increase in the transfer penalty divisor also officially recognizes and confirms the continued rise in the cost of institutional care services in Florida for semi-private room charges, emphasizing the need for Elder Law and Medicaid eligibility preplanning with a Florida Elder Law Attorney to address the possibility of long term care needs as a part of every Elder Law and estate plan. Notably, the transfer penalty divisor was previously set by DCF at $5,000.00 effective June 1, 2006; $6,880.00 effective April 15, 2012; $7,362 effective September 1, 2012; $7,638 effective September 19, 2013; and $7,995.00 effective June 1, 2014. The new transfer penalty divisor of $8,346.00 recognizes a 67% increase in the average cost of a private pay institutional care semi-private room bed in the State of Florida since June, 2006, based on DCF’s calculations.

It is very important that the divisor be approximately equal to what a nursing home actually costs. Medicaid imposes penalties on certain asset transfers, because in Medicaid’s opinion, if you give away assets so that you can become “poor,” Medicaid may penalize a certain number of months of eligibility. So it matters that the penalty they apply is based on real world costs.

Some people are confused between what the IRS permits for gifts, and what Medicaid permits and so it is helpful to have a qualified Florida Elder Law Attorney discuss the impact of gifting.

Special kudos to Co-Chairs and Florida Elder Law Attorneys Ellen Morris and Sam Boone, and all of the members of The Florida Joint Public Policy Task Force for the Elderly and Disabled, a combined effort of the Academy of Florida Elder Law Attorneys (AFELA) and The Florida Bar’s Elder Law Section. The Task Force works on behalf of Florida’s most vulnerable citizens and their families, as well as for the practice of Elder Law. The increases in the Florida transfer penalty divisor amount which have occurred from and including 2006 to present would not have occurred without the diligent and zealous advocacy of the Task Force and its attorney members.

Authored by Grady Williams
Reviewed by Ailish O’Connor