Special Needs Trust: Protecting benefit eligibility

With so many Americans living with some type of disability — 27%, according to CDC statistics¹ — and nearly one in five Americans acting as a caregiver,² Voya felt an obligation to create the Voya Cares^® program to support those with special needs and their caregivers, acting as an extension of our mission to fight for everyone’s right for a better financial future.

Positioned at the intersection of our expertise and our values, Voya Cares is committed to making a positive difference in the lives of people with disabilities and special needs from birth through aging by providing advocacy, resources and solutions.

When an insured has coverage under a Supplemental Health Insurance, typically benefits are paid directly to the insured. In the event of the insured’s death, benefits are paid to survivors in the order presented in the certificate of coverage or to an assigned beneficiary. As a key component of our commitment, select Supplemental Health Insurance products — including Hospital Indemnity Insurance, Critical Illness Insurance, Specified Disease Insurance and Accident Insurance — are enabled to pay the insured’s survivor benefits directly to an established Special Needs Trust when indicated (instead of directly to the beneficiary) if the beneficiary has a disability or special needs. Why is this provision so noteworthy? It helps to understand what an SNT is and why one might be needed.

What is a Special Needs Trust (SNT) — and how can it help?

An SNT is a legal tool that helps an employee who has designated a survivor or beneficiary with special needs for their employee benefits (or even other assets). It helps ensure their loved one remains eligible for means-tested government benefits after they pass away, such as:

For example, if an employee with Critical Illness Insurance has a beneficiary with special needs, they may wish to consider creating an SNT to receive any proceeds from their insurance. Since the beneficiary does not own the assets in the trust, they can remain eligible for means-tested programs that have an asset limit. For instance, an individual receiving SSI (Social Security Income) benefits may not have more than $2,000 of countable resources.³ So, if a beneficiary receiving SSI goes over the income or asset limit, the benefits have the potential to stop. An SNT helps enable the beneficiary to continue to receive both the ongoing financial support and the vital services they need.

SNT in action: A beneficiary payout scenario

Mary is a proud single parent of Sam, an adult who has Down syndrome. Each month, Sam receives SSI payments to help with his food and housing costs, and Medicaid to cover medical, therapy, and other expenses. To help support Sam’s financial security, Mary worked with a legal advisor to create an SNT, which was named as Mary’s beneficiary instead of Sam.

In the event of Mary’s passing due to a covered illness, her Critical Illness Insurance will pay her survivor benefits directly to Sam’s SNT, which will help protect Sam’s eligibility for government benefits. This is provided as an example only. Actual results may vary.

Offering support for employees who support someone with special needs

Supplemental Insurance benefits can help employees lessen the financial impact that may come with covered accidents or illnesses. But with select Supplemental Insurance products and the resources available through the Voya Cares program, employers can boost their commitment to employee wellbeing to another level with the provision for a special needs trust. With this kind of support in place, employees who care for someone with special needs can be better equipped to plan for the future they envision.

To learn more about special needs trusts, Voya Cares and Supplemental Health Insurance, contact your Voya representative.

Share these resources with your employees:

• 4 financial steps to care for a child with special needs
• Beneficiaries with disabilities or special needs: What you need to know
• Types of Special Needs Trusts (SNTs)
• Questions to ask your Special Needs Trust (SNT) attorney
• How to talk to my family about our Special Needs Trust (SNT)

Text representation of article graphic (for screen reader accessibility):

Graphic 1: Means-tested government benefits

A Special Needs Trust helps ensure their loved one remains eligible for means-tested government benefits after they pass away, such as: Supplemental Security Income, Medicaid, Housing assistance and Supplemental Nutrition Assistance Program (SNAP).