Revises procedures for processing incomplete Medicaid applications; exempts asset transfers of up to $500 per month during look back period for determining eligibility for long-term care services.

S3768

SENATE, No. 3768

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 5, 2026

Sponsored by:

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

SYNOPSIS

���� Revises procedures for processing incomplete Medicaid
applications; exempts asset transfers of up to $500 per month during look back
period for determining eligibility for long-term care services.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning Medicaid and amending and
supplementing P.L.1968, c.413.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 3 of P.L.1968,
c.413 (C.30:4D-3) is amended to read as follows:

���� 3.��� Definitions. As used in
P.L.1968, c.413 (C.30:4D-1 et seq.), and unless the context otherwise requires:

���� a.���� "Applicant"
means any person who has made application for purposes of becoming a
"qualified applicant."

���� b.��� "Commissioner"
means the Commissioner of Human Services.

���� c.���� "Department"
means the Department of Human Services, which is herein designated as the
single State agency to administer the provisions of this act.

���� d.��� "Director"
means the Director of the Division of Medical Assistance and Health Services.

���� e.���� "Division"
means the Division of Medical Assistance and Health Services.

���� f.���� "Medicaid"
means the New Jersey Medical Assistance and Health Services Program.

���� g.��� "Medical
assistance" means payments on behalf of recipients to providers for
medical care and services authorized under P.L.1968, c.413.

���� h.��� "Provider"
means any person, public or private institution, agency, or business concern
approved by the division lawfully providing medical care, services, goods, and
supplies authorized under P.L.1968, c.413, holding, where applicable, a current
valid license to provide such services or to dispense such goods or supplies.

���� i.���� "Qualified
applicant" means a person who is a resident of this State, and either a
citizen of the United States or an eligible alien, and is determined to need
medical care and services as provided under P.L.1968, c.413, with respect to
whom the period for which eligibility to be a recipient is determined shall be
the maximum period permitted under federal law, and who:

���� (1)�� Is a dependent child or
parent or caretaker relative of a dependent child who would be, except for
resources, eligible for the aid to families with dependent children program
under the State Plan for Title IV-A of the federal Social Security Act as of July
16, 1996;

���� (2)�� Is a recipient of
Supplemental Security Income for the Aged, Blind and Disabled under Title XVI
of the Social Security Act;

���� (3)�� Is an "ineligible
spouse" of a recipient of Supplemental Security Income for the Aged, Blind
and Disabled under Title XVI of the Social Security Act, as defined by the
federal Social Security Administration;

���� (4)�� Would be eligible to
receive Supplemental Security Income under Title XVI of the federal Social
Security Act or, without regard to resources, would be eligible for the aid to
families with dependent children program under the State Plan for Title IV-A of
the federal Social Security Act as of July 16, 1996, except for failure to meet
an eligibility condition or requirement imposed under such State program which
is prohibited under Title XIX of the federal Social Security Act such as a
durational residency requirement, relative responsibility, consent to
imposition of a lien;

���� (5)�� (Deleted by amendment,
P.L.2000, c.71).

���� (6)�� Is an individual under
21 years of age who, without regard to resources, would be, except for
dependent child requirements, eligible for the aid to families with dependent
children program under the State Plan for Title IV-A of the federal Social
Security Act as of July 16, 1996, or groups of such individuals, including but
not limited to, children in resource family placement under supervision of the
Division of Child Protection and Permanency in the Department of Children and
Families whose maintenance is being paid in whole or in part from public funds,
children placed in a resource family home or institution by a private adoption
agency in New Jersey or children in intermediate care facilities, including
developmental centers for the developmentally disabled, or in psychiatric
hospitals;

���� (7)�� Would be eligible for
the Supplemental Security Income program, but is not receiving such assistance
and applies for medical assistance only;

���� (8)�� Is determined to be
medically needy and meets all the eligibility requirements described below:

���� (a)�� The following
individuals are eligible for services, if they are determined to be medically
needy:

���� (i)��� Pregnant women;

���� (ii)�� Dependent children
under the age of 21;

���� (iii)� Individuals who are 65
years of age and older; and

���� (iv)� Individuals who are
blind or disabled pursuant to either 42 C.F.R.435.530 et seq. or 42
C.F.R.435.540 et seq., respectively.

���� (b)�� The following income
standard shall be used to determine medically needy eligibility:

���� (i)��� For one person and two
person households, the income standard shall be the maximum allowable under
federal law, but shall not exceed 133 1/3% of the State's payment level to two
person households under the aid to families with dependent children program under
the State Plan for Title IV-A of the federal Social Security Act in effect as
of July 16, 1996; and

���� (ii)�� For households of three
or more persons, the income standard shall be set at 133 1/3% of the State's
payment level to similar size households under the aid to families with
dependent children program under the State Plan for Title IV-A of the federal
Social Security Act in effect as of July 16, 1996.

���� (c)�� The following resource
standard shall be used to determine medically needy eligibility:

���� (i)��� For one person
households, the resource standard shall be 200% of the resource standard for
recipients of Supplemental Security Income pursuant to 42 U.S.C. s.1382(1)(B);

���� (ii)�� For two person
households, the resource standard shall be 200% of the resource standard for
recipients of Supplemental Security Income pursuant to 42 U.S.C. s.1382(2)(B);

���� (iii)� For households of three
or more persons, the resource standard in subparagraph (c)(ii) above shall be
increased by $100.00 for each additional person; and

���� (iv)� The resource standards
established in (i), (ii), and (iii) are subject to federal approval and the
resource standard may be lower if required by the federal Department of Health
and Human Services.

���� (d)�� Individuals whose income
exceeds those established in subparagraph (b) of paragraph (8) of this
subsection may become medically needy by incurring medical expenses as defined
in 42 C.F.R.435.831(c) which will reduce their income to the applicable medically
needy income established in subparagraph (b) of paragraph (8) of this
subsection.

���� (e)�� A six-month period shall
be used to determine whether an individual is medically needy.

���� (f)�� Eligibility
determinations for the medically needy program shall be administered as
follows:

���� (i)��� County welfare agencies
and other entities designated by the commissioner are responsible for
determining and certifying the eligibility of pregnant women and dependent
children.� The division shall reimburse county welfare agencies for 100% of the
reasonable costs of administration which are not reimbursed by the federal
government for the first 12 months of this program's operation. Thereafter, 75%
of the administrative costs incurred by county welfare agencies which are not
reimbursed by the federal government shall be reimbursed by the division;

���� (ii)�� The division is
responsible for certifying the eligibility of individuals who are 65 years of
age and older and individuals who are blind or disabled.� The division may
enter into contracts with county welfare agencies to determine certain aspects
of eligibility. In such instances the division shall provide county welfare
agencies with all information the division may have available on the
individual.

���� The division shall notify all
eligible recipients of the Pharmaceutical Assistance to the Aged and Disabled
program, P.L.1975, c.194 (C.30:4D-20 et seq.) on an annual basis of the
medically needy program and the program's general requirements.� The division
shall take all reasonable administrative actions to ensure that Pharmaceutical
Assistance to the Aged and Disabled recipients, who notify the division that
they may be eligible for the program, have their applications processed
expeditiously, at times and locations convenient to the recipients; and

���� (iii)� The division is
responsible for certifying incurred medical expenses for all eligible persons
who attempt to qualify for the program pursuant to subparagraph (d) of
paragraph (8) of this subsection;

���� (9)�� (a)� Is a child who is
at least one year of age and under 19 years of age and, if older than six years
of age but under 19 years of age, is uninsured; and

���� (b)�� Is a member of a family
whose income does not exceed 133% of the poverty level and who meets the
federal Medicaid eligibility requirements set forth in section 9401 of
Pub.L.99-509 (42 U.S.C. s.1396a);

���� (10)��� Is a pregnant woman
who is determined by a provider to be presumptively eligible for medical
assistance based on criteria established by the commissioner, pursuant to
section 9407 of Pub.L.99-509 (42 U.S.C. s.1396a(a));

���� (11)��� Is an individual 65
years of age and older, or an individual who is blind or disabled pursuant to
section 301 of Pub.L.92-603 (42 U.S.C. s.1382c), whose income does not exceed
100% of the poverty level, adjusted for family size, and whose resources do not
exceed 100% of the resource standard used to determine medically needy
eligibility pursuant to paragraph (8) of this subsection;

���� (12)��� Is a qualified
disabled and working individual pursuant to section 6408 of Pub.L.101-239 (42
U.S.C. s.1396d) whose income does not exceed 200% of the poverty level and
whose resources do not exceed 200% of the resource standard used to determine
eligibility under the Supplemental Security Income Program, P.L.1973, c.256
(C.44:7-85 et seq.);

���� (13)��� Is a pregnant woman or
is a child who is under one year of age and is a member of a family whose
income does not exceed 185% of the poverty level and who meets the federal
Medicaid eligibility requirements set forth in section 9401 of Pub.L.99-509 (42
U.S.C. s.1396a), except that a pregnant woman who is determined to be a
qualified applicant shall, notwithstanding any change in the income of the
family of which she is a member, continue to be deemed a qualified applicant
until the end of the 60-day period beginning on the last day of her pregnancy;

���� (14)��� (Deleted by amendment,
P.L.1997, c.272).

���� (15)��� (a) Is a specified
low-income Medicare beneficiary pursuant to 42 U.S.C. s.1396a(a)10(E)iii whose
resources beginning January 1, 1993 do not exceed 200% of the resource standard
used to determine eligibility under the Supplemental Security Income program,
P.L.1973, c.256 (C.44:7-85 et seq.) and whose income beginning January 1, 1993
does not exceed 110% of the poverty level, and beginning January 1, 1995 does
not exceed 120% of the poverty level.

���� (b)�� An individual who has,
[
within 36
months, or
]

within 60 months
[
in
the case of funds transferred into a trust,
]

of applying to be a qualified applicant for Medicaid services in a nursing
facility or a medical institution, or for home or community-based services
under section 1915(c) of the federal Social Security Act (42 U.S.C.
s.1396n(c)), disposed of resources or income for less than fair market value
shall be ineligible for assistance for nursing facility services, an equivalent
level of services in a medical institution, or home or community-based services
under section 1915(c) of the federal Social Security Act (42 U.S.C.
s.1396n(c)). The period of the ineligibility shall be the number of months
resulting from dividing the uncompensated value of the transferred resources or
income by the average monthly private payment rate for nursing facility
services in the State as determined annually by the commissioner. In the case
of multiple resource or income transfers, the resulting penalty periods shall
be imposed sequentially.� Application of this requirement shall be governed by
42 U.S.C. s.1396p(c). In accordance with federal law, this provision is
effective for all transfers of resources or income made on or after August 11,
1993.� Notwithstanding the provisions of this subsection to the contrary, the
State eligibility requirements concerning resource or income transfers shall
not be more restrictive than those enacted pursuant to 42 U.S.C. s.1396p(c).�
An
individual shall not be subject to a period of ineligibility as a result of
transfers that total $500 or less in a calendar month.

���� (c)�� An individual seeking
nursing facility services or home or community-based services and who has a
community spouse shall be required to expend those resources which are not
protected for the needs of the community spouse in accordance with section
1924(c) of the federal Social Security Act (42 U.S.C. s.1396r-5(c)) on the
costs of long-term care, burial arrangements, and any other expense deemed
appropriate and authorized by the commissioner.� An individual shall be
ineligible for Medicaid services in a nursing facility or for home or
community-based services under section 1915(c) of the federal Social Security
Act (42 U.S.C. s.1396n(c)) if the individual expends funds in violation of this
subparagraph.� The period of ineligibility shall be the number of months
resulting from dividing the uncompensated value of transferred resources and
income by the average monthly private payment rate for nursing facility
services in the State as determined by the commissioner.� The period of
ineligibility shall begin with the month that the individual would otherwise be
eligible for Medicaid coverage for nursing facility services or home or
community-based services.

���� This subparagraph shall be
operative only if all necessary approvals are received from the federal
government including, but not limited to, approval of necessary State plan
amendments and approval of any waivers;

���� (16)��� Subject to federal
approval under Title XIX of the federal Social Security Act, is a dependent
child, parent or specified caretaker relative of a child who is a qualified
applicant, who would be eligible, without regard to resources, for the aid to
families with dependent children program under the State Plan for Title IV-A of
the federal Social Security Act as of July 16, 1996, except for the income
eligibility requirements of that program, and whose family earned income,

���� (a)�� if a dependent child,
does not exceed 133% of the poverty level; and

���� (b)�� if a parent or specified
caretaker relative, beginning September 1, 2005 does not exceed 100% of the
poverty level, beginning September 1, 2006 does not exceed 115% of the poverty
level and beginning September 1, 2007 does not exceed 133% of the poverty level,
plus such earned income disregards as shall be determined according to a
methodology to be established by regulation of the commissioner;

���� The commissioner may increase
the income eligibility limits for children and parents and specified caretaker
relatives, as funding permits;

���� (17)��� Is an individual from
18 through 20 years of age who is not a dependent child and would be eligible
for medical assistance pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), without
regard to income or resources, who, on the individual's 18th birthday was in
resource family care under the care and custody of the Division of Child
Protection and Permanency in the Department of Children and Families and whose
maintenance was being paid in whole or in part from public funds;

���� (18)��� Is a person between
the ages of 16 and 65 who is permanently disabled and working, and:

���� (a)�� whose income is at or
below 250% of the poverty level, plus other established disregards;

���� (b)�� who pays the premium
contribution and other cost sharing as established by the commissioner, subject
to the limits and conditions of federal law; and

���� (c)�� whose assets, resources
and unearned income do not exceed limitations as established by the
commissioner;

���� (19)��� Is an uninsured
individual under 65 years of age who:

���� (a)�� has been screened for
breast or cervical cancer under the federal Centers for Disease Control and
Prevention breast and cervical cancer early detection program;

���� (b)�� requires treatment for
breast or cervical cancer based upon criteria established by the commissioner;

���� (c)�� has an income that does
not exceed the income standard established by the commissioner pursuant to
federal guidelines;

���� (d)�� meets all other Medicaid
eligibility requirements; and

���� (e)�� in accordance with
Pub.L.106-354, is determined by a qualified entity to be presumptively eligible
for medical assistance pursuant to 42 U.S.C. s.1396a(aa), based upon criteria
established by the commissioner pursuant to section 1920B of the federal Social
Security Act (42 U.S.C. s.1396r-1b);

���� (20)��� Subject to federal
approval under Title XIX of the federal Social Security Act, is a single adult
or couple, without dependent children, whose income in 2006 does not exceed 50%
of the poverty level, in 2007 does not exceed 75% of the poverty level and in
2008 and each year thereafter does not exceed 100% of the poverty level; except
that a person who is a recipient of Work First New Jersey general public
assistance, pursuant to P.L.1947, c.156
(C.44:8-107 et seq.), shall not be a qualified applicant; or

���� (21)��� is an individual who:

���� (a)�� has an income that does
not exceed the highest income eligibility level for pregnant women established
under the State plan under Title XIX or Title XXI of the federal Social
Security Act;

���� (b)�� is not pregnant; and

���� (c)�� is eligible to receive
family planning services provided under the Medicaid program pursuant to
subsection k. of section 6 of P.L.1968, c.413 (C.30:4D-6) and in accordance
with 42 U.S.C. s.1396a(ii).

���� j.���� "Recipient"
means any qualified applicant receiving benefits under this act.

���� k.��� "Resident"
means a person who is living in the State voluntarily with the intention of
making his home here and not for a temporary purpose.� Temporary absences from
the State, with subsequent returns to the State or intent to return when the purposes
of the absences have been accomplished, do not interrupt continuity of
residence.

���� l.���� "State Medicaid
Commission" means the Governor, the Commissioner of Human Services, the
President of the Senate and the Speaker of the General Assembly, hereby
constituted a commission to approve and direct the means and method for the
payment of claims pursuant to P.L.1968, c.413.

���� m.�� "Third party"
means any person, institution, corporation, insurance company, group health
plan as defined in section 607(1) of the federal "Employee Retirement and
Income Security Act of 1974," 29 U.S.C. s.1167(1), service benefit plan,
health maintenance organization, or other prepaid health plan, or public,
private or governmental entity who is or may be liable in contract, tort, or
otherwise by law or equity to pay all or part of the medical cost of injury,
disease or disability of an applicant for or recipient of medical assistance
payable under P.L.1968, c.413.

���� n.��� "Governmental peer
grouping system" means a separate class of skilled nursing and
intermediate care facilities administered by the State or county governments,
established for the purpose of screening their reported costs and setting
reimbursement rates under the Medicaid program that are reasonable and adequate
to meet the costs that must be incurred by efficiently and economically
operated State or county skilled nursing and intermediate care facilities.

���� o.��� "Comprehensive
maternity or pediatric care provider" means any person or public or
private health care facility that is a provider and that is approved by the
commissioner to provide comprehensive maternity care or comprehensive pediatric
care as defined in subsection b. (18) and (19) of section 6 of P.L.1968, c.413
(C.30:4D-6).

���� p.��� "Poverty
level" means the official poverty level based on family size established
and adjusted under Section 673(2) of Subtitle B, the "Community Services
Block Grant Act," of Pub.L.97-35 (42 U.S.C. s.9902(2)).

���� q.��� "Eligible
alien" means one of the following:

���� (1)�� an alien present in the
United States prior to August 22, 1996, who is:

���� (a)�� a lawful permanent
resident;

���� (b)�� a refugee pursuant to
section 207 of the federal "Immigration and Nationality Act" (8
U.S.C. s.1157);

���� (c)�� an asylee pursuant to
section 208 of the federal "Immigration and Nationality Act" (8
U.S.C. s.1158);

���� (d)�� an alien who has had
deportation withheld pursuant to section 243(h) of the federal
"Immigration and Nationality Act" (8 U.S.C. s.1253 (h));

���� (e)�� an alien who has been
granted parole for less than one year by the U.S. Citizenship and Immigration
Services pursuant to section 212(d)(5) of the federal "Immigration and
Nationality Act" (8 U.S.C. s.1182(d)(5));

���� (f)�� an alien granted
conditional entry pursuant to section 203(a)(7) of the federal
"Immigration and Nationality Act" (8 U.S.C. s.1153(a)(7)) in effect
prior to April 1, 1980; or

���� (g)�� an alien who is
honorably discharged from or on active duty in the United States armed forces
and the alien's spouse and unmarried dependent child.

���� (2)�� An alien who entered the
United States on or after August 22, 1996, who is:

���� (a)�� an alien as described in
paragraph (1)(b), (c), (d) or (g) of this subsection; or

���� (b)�� an alien as described in
paragraph (1)(a), (e) or (f) of this subsection who entered the United States
at least five years ago.

���� (3)�� A legal alien who is a
victim of domestic violence in accordance with criteria specified for
eligibility for public benefits as provided in Title V of the federal
"Illegal Immigration Reform

and Immigrant Responsibility Act of 1996" (8 U.S.C. s.1641).

(cf: P.L.2021, c.344, s.1)

���� 2.��� (New section)� a.� If an
application to be a qualified applicant for Medicaid services is deemed to be
incomplete based on incomplete or missing information, the county welfare
agency processing the application shall:

���� (1)�� notify the applicant
that the application has been deemed incomplete;

���� (2)�� identify the specific
information that is incomplete or missing;

���� (3)�� inform the applicant
that the incomplete or missing information may be provided at any time; and

���� (4)�� inform the applicant
that the application will be reviewed upon receipt of all incomplete or missing
information identified in paragraph (3) of this subsection.

���� b.��� A county welfare agency
that has deemed an application incomplete pursuant to subsection a. of this
section shall review the application upon receipt of all information the agency
identified as incomplete or missing pursuant to paragraph (3) of subsection a.
of this section.

���� 3.��� The Commissioner of
Human Services shall apply for such State plan amendments as may be necessary
to implement the provisions of this act and to secure federal financial
participation for State expenditures under the federal Medicaid program.

���� 4.��� The Commissioner of
Human Services shall adopt rules and regulations pursuant to the
"Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.)
to effectuate the purposes of this act.

���� 5.��� This act shall take
effect on the first day of the fourth month next following the date of
enactment, but the Commissioner of Human Services may take such anticipatory
administrative action in advance thereof as shall be necessary for the
implementation of this act.

STATEMENT

���� This bill permits individuals
to transfer up to $500 in assets per calendar month during the 60 month look
back period prior to receiving Medicaid coverage for long-term care services
without being subject to a period of ineligibility.

���� State and federal law requires
a look-back period of 60 months from the date of an individual�s application
for Medicaid long-term care benefits to determine whether the individual has
transferred financial resources to other individuals.� (The bill also revises
the State statute to conform with federal law extending the 60 month look-back
period to all asset transfers.)� Unauthorized resources transfers may result in
a penalty period during which the individual may not receive Medicaid coverage
of long-term care services.�

���� Federal law permits states to
exclude certain transfers made for less than fair consideration, which are
called �
de minimis
gifts,� on the assumption that gifts or transfers
under a certain amount of money would not be presumed to be made in
contemplation of future Medicaid eligibility.� New Jersey does not currently
have a clear standard regarding such transfers, effectively leaving decisions
about whether certain gifts will result in a penalty to the county welfare
agencies.� The lack of a clear standard also results in applicants resorting to
the fair hearing process to resolve disputes, which may be costly for both the
applicant and the State.

���� The bill also provides that,
if a county welfare agency deems a Medicaid application incomplete on the basis
of incomplete or missing information, the agency will be required to provide
the applicant with notice that the application was deemed incomplete, identify
the information that is incomplete or missing, and inform the applicant that
this information can be provided at any time and that the application will be
reviewed when the incomplete or missing information is provided.� The bill
expressly requires the agency to review an application deemed incomplete upon
receipt of all information identified as incomplete or missing.