Background

The Omnibus Budget Reconciliation Act of 1993 (COBRA 93), 42 USC 1396(d)(4)(c), allows nonprofit corporations such as the Arc of Texas to establish and manage a pooled trust for the benefit of individuals with disabilities. Pooled trust provisions are found in 1917(d)(4)(c) of the Social Security Act. A pooled trust:

contains the assets of individuals with disabilities;

maintains for each beneficiary a separate subaccount established by the disabled individual, parent/grandparent/guardian, or a court from the disabled individual's funds;

is managed by a nonprofit association that pools the subaccounts for management/investment purposes; and

includes a provision that, to the extent that amounts remaining in the individual's account at the individual's death are not retained by the trust, the state is reimbursed in an amount equal to the total amount Medicaid paid on the individual's behalf.