In a recent decision from the Appellate Division, J.L. v. Division of Medical Assistance and Health Services, Docket No. A-4515-09T3, plaintiffs appealed a final agency decision that suspended their eligibility for Medicaid as a result of the receipt of a $20,000.00 inheritance from J.L.’s grandfather.

Here, plaintiffs are a married couple who received Medicaid benefits for themselves and their children. In their application for the continuation of benefits, they disclosed that J.L. had received a $45,000.00 gift from his brother which was to be utilized for the purchase of a home. Then, in June of 2008, the plaintiffs received an inheritance from J.L.’s maternal grandfather which he also intended to use to purchase a home. The Ocean County Board of Social Services notified the plaintiffs that they were ineligible for Medicaid benefits because of the receipt of the inheritance and the gift. J.L. appealed.
An administrative law judge (ALJ) ruled that because the gift and the inheritance were earmarked for the purchase of a marital home, they were exempt assets for the purposes of Medicaid eligibility, a final decision after forty-five (45) days. After the 45-day statutory deadline passed, the state requested an extension of the final decision, arguing that “due to an inadvertent oversight” it had failed to request an extension on time. The Division of Medical Assistance and Health Services approved the extension request and found that the inheritance was not specifically earmarked for the purchase of the home, so it was not exempt. J.L. again appealed.

The Appellate Division panel reverses, finding that where an ALJ had concluded that the inheritance did not disqualify them for Medicaid because it was earmarked for purchase of a family home, and had been spent for that purpose, and defendant did not modify or reject that decision within the 45-day period specified in N.J.S.A. 52:14B-10(c), that decision became final. The State may ask for an extension only for an emergency or an unforeseeable circumstance, something more than an “inadvertent oversight.”