[Senate Report 114-99]
[From the U.S. Government Publishing Office]


                                                      Calendar No. 178
114th Congress    }                                     {       Report
                                 SENATE
 1st Session      }                                     {       114-99

======================================================================



 
                SPECIAL NEEDS TRUST FAIRNESS ACT OF 2015

                                _______
                                

                 July 30, 2015.--Ordered to be printed

                                _______
                                

   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).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                            --------------------------------------------------------------------------------------------
                                                              2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               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
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2015   2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2015-2020  2015-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.......................      0      1      1      1      1      1      1      1      1      1      1         3          8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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).

                                  [all]