49–010 

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 specialneeds 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 beneVerDate Sep 11 2014 00:54 Aug 04, 2015 Jkt 049010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR099.XXX SR099

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ficiary 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. 


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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. AsVerDate Sep 11 2014 00:54 Aug 04, 2015 Jkt 049010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR099.XXX SR099

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sets 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: 


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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). 

Æ 


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