OBRA '93 Statutory Authority

'93 STATUTORY AUTHORITY

1. Pursuant to Illinois Probate Act, 755 ILCS 5/11a-18(a-5(11) a guardian is required to investigate and pursue a ward's eligibility for government benefits.

2. Legislative History of the OBRA'93 Payback Trusts: On August 10, 1993, OBRA '93 became effective and, allowed for the creation of three types of disability trusts. 42 UCS section 1396p(b). On July 26, 1994, Illinois enabling legislation became effective mandating the Illinois Dept. of Public Aid (IDPA) to comply fully with federal law. Illinois Public Aid Code, 305 ILCS 5/5-2.1a. On February 27, 1995, IPDA promulgated regulations providing for the state's implementation of (d)(4)(A) and (d)(4)(C). 89 Illinois Administrative Code sections 120.347(d)(1) and (2) (1995). Effective January 1, 1996, the Illinois Trust and Trustees Act was amended to provide for disability trusts (760 ILCS 5/15.1). Effective January 1, 2020, the Illinois Trust and Trustees Act was repealed and replaced with the Illinois Trust Code, which also provides for disability trusts (760 ILCS 3/509).

3. To be a beneficiary of an OBRA '93 Payback Trust, an individual must be disabled as defined from the Social Security Administration at: 42 U.S.C. 1382c(a)(3)(A) which provides in relevant part:

"A person shall be considered disabled if he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or last for a continuous period of not less than twelve months."

4. The Omnibus Budget Reconciliation Act of August 10, 1993 (OBRA '93) provides for the creation of a "payback" trust (OBRA '93 (d)(4)(A) as follows:

A trust containing the assets of an individual under age 65 who is disabled (as defined in section 1382c(a)(3) of this title) and which is established for the benefit of such individual by a parent, grandparent, legal guardian of the individual, or a court if the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this subchapter.

5. The Omnibus Budget Reconciliation Act of August 10, 1993 provides for the creation of a "payback" trust (OBRA '93 d)(4)(c) as follows:

C) A trust containing the assets of an individual who is disabled (as defined in section 1382c (a)(3) of this title) that meets the following conditions:

(i) The trust is established and managed by a non-profit association.

(ii) A separate account is maintained for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.

(iii) Accounts in the trust are established solely for the benefit of individuals who are disabled (as defined in section 1382c (a)(3) of this title) by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.

(iv) To the extent that amounts remaining in the beneficiary's account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan under this subchapter.

6. The Illinois Dept. of Public Aid Policy Manual, 07-02-15b exempts trusts created under OBRA '93.