NAELA Foundation Awards Grant to MassNAELA for Supreme Judicial Court Case on Spousal Annuities


The Massachusetts Supreme Judicial Court case of the Executive Office v. Mondor, Dermody et. al addresses the question as to whether or not a SPIA (single premium immediate annuity) purchased by a community spouse to assist in the qualification of an ill spouse for MassHealth benefits needs to name the Commonwealth of Massachusetts as the primary beneficiary so that Masshealth can recover those benefits paid on the ill spouse's behalf.   MassNAELA supported the position put forth by Mondor and Dermody which stated that a spousal annuity which satisfies 42 U.S.C § 1396p(c)(2)(B)(i) (“the Sole Benefit Provision”) need not also satisfy 42 U.S.C § 1396p(c)(1)(F)(i) (“the Beneficiary Provision” or “(c)(1)(F)”).  In other words, the sole benefit rule as it pertains to annuities does not require the community spouse to name the Commonwealth in the first position and therefore the remaining funds can pass to whomever the community spouse designates.  MassHealth takes the position that the Beneficiary Provision section overrides all other annuity references including the Sole Benefit Provision and therefore the Commonwealth must be named as primary beneficiary allowing MassHealth to recover the costs associated with the ill spouse's care.    In addition to the confusion regarding the Sole Benefit Provision, MassNAELA outlined violations of contract as well as estate recovery limitations which has been occurring with MassHealth’s erratic and often inconsistent interpretation and enforcement of these regulations.  Primarily MassNAELA sought clarity so that we can appropriately advise our clients going forward.    

On February 2, 2022, the MA Supreme Judicial Court heard two consolidated cases (Dermody and Mondor v. Secretary of the Executive Office of Health and Human Services). Attorney Lisa Neeley on the appeal from her favorable decision in Dermody and Brian Barreira representing the family beneficiaries of two annuitants. To access the docket for “Executive Office of Health and Human Services v. Mondor”, click here. To access docket for “Dermody v. Executive Office of Health and Human Services”, click here. 

"Working with Faith Boettger, the NAELA Foundation, and the NAELA Litigation was a great experience. Faith was very helpful guiding our Chapter (MassNAELA) Leaders through all of the requirements to submit an application for funding. Meeting with the NAELA Litigation Committee allowed our Leaders to further develop the arguments in our brief and identifying potential weaknesses. The NAELA Foundation was very professional and supportive. If your chapter is engaged in litigation at all, I would highly encourage you to reach out to the NAELA Foundation to see how they can help!"  
Clarence Richardson, MassNAELA Executive Director.