DHS
***This version of the Health Care Programs Manual has been replaced and is no longer in effect. Please see the current Health Care Programs Manual for policy in effect as of December 1, 2006.***
The terminology used to describe people with disabilities has changed over time. The Minnesota Department of Human Services ("Department") supports the use of "People First" language. Although outmoded and offensive terms might be found within documents on the Department's website, the Department does not endorse these terms.
MDHS Health Care Programs Manual (Eligibility Policy through 11/30/06)
Chapter 0909 - Assets
All chapters are numbered beginning with 09. The first chapter is 0901 (Table of Contents).
| |
|Chapter 0909 |
|0909 |ASSETS |PDF(s) Oct 03 | Jul 02 |
|0909.03 |EXEMPTIONS FROM ASSET LIMITS |PDF(s) May 05 | Dec 02 | Jul 02 |
|0909.05 |ASSET LIMITS |PDF(s) Oct 03 | Jul 02 |
|0909.05.03 |VERIFICATION OF ASSETS |PDF(s) Jan 06 | Jan 04 | Oct 03 | Jul 02 | |
|0909.07 |JOINTLY OWNED ASSETS |PDF(s) Jul 04 | Oct 03 | Jul 02 |
|0909.09 |AVAILABILITY OF ASSETS |PDF(s) Jul 04 | Jul 02 |
|0909.11 |EXCLUDED ASSETS |PDF(s) Jan 05 | Oct 03 | Jul 02 |
|0909.11.01 |EXCLUDED ASSETS–PROGRAM PROVISIONS |PDF(s) Jan 05 | Oct 03 | Jul 02 |
|0909.11.03 |EXCLUDED ASSETS FOR SELF-SUPPORT |PDF(s) Oct 03 | Jul 03 | Jul 02 |
|0909.13 |REAL PROPERTY: HOMESTEAD |PDF(s) Oct 03 | Jul 02 |
|0909.13.03 |REAL PROPERTY: NON-HOMESTEAD |PDF(s) Jul 02 |
|0909.13.05 |CONTRACTS FOR DEED |PDF(s) Oct 03 | Jul 03 | Jul 02 |
|0909.13.07 |LIFE ESTATES |PDF(s) Jul 02 |
|0909.13.07.03 |LIFE ESTATE MORTALITY TABLE |PDF(s) Jul 98 | |
|0909.15 |VEHICLES |PDF(s) May 05 | Oct 03 | Dec 02 | Jul 02 |
|0909.17 |BURIAL FUNDS/LIFE INSURANCE: FUND TYPES |PDF(s) May 05 | Oct 03 | Jul 03 | Dec 02 | Oct 02 | Jul 02 |
|0909.17.03 |DETERMINING THE BURIAL FUND EXCLUSION |PDF(s) Jan 05 | Jul 02 |
|0909.17.05 |BURIAL SPACE ITEMS |PDF(s) Jul 02 |
|0909.19 |PENSION AND RETIREMENT FUNDS |PDF(s) Apr 04 | Oct 03 | Jul 02 |
|0909.21 |TRUSTS |PDF(s) Jul 02 |
|0909.21.03 |SUPPLEMENTAL NEEDS TRUSTS |PDF(s) Jul 02 |
|0909.21.05 |SPECIAL NEEDS TRUSTS |PDF(s) Nov 04 | Jul 02 | Jun 02 |
|0909.21.07 |TRUSTS ESTABLISHED BEFORE 8-11-93 |PDF(s) Jul 02 |
|0909.21.09 |TRUSTS ESTABLISHED ON OR AFTER 8-11-93 |PDF(s) Jul 02 |
|0909.23 |ANNUITIES |PDF(s) Oct 02 | Jul 02 |
|0909.23.03 |LIFE EXPECTANCY TABLE - ANNUITIES |PDF(s) Jul 06 | Jul 98 |
|0909.25 |SPOUSAL ASSET ASSESSMENTS |PDF(s) Jan 06 | Jan 05 | Jan 04 | Jan 03 | Oct 02 | |
|0909.25.03 |SPOUSAL ASSET ALLOWANCE |PDF(s) Oct 02 | Apr 02 |
|0909.25.05 |TRANSFER OF INCOME PRODUCING ASSET TO SPOUSE |PDF(s) Jan 02 |
|0909.25.07 |COMMUNITY SPOUSE CONTRIBUTION |PDF(s) Jul 98 |
|0909.27 |ASSET TRANSFERS |PDF(s) Oct 03 | Oct 02 |
|0909.27.01 |MA TRANSFERS -- CONT. |PDF(s) Dec 02 |
|0909.27.03 |SPOUSAL ASSETS TRANSFERS |PDF(s) Jul 98 |
|0909.27.05 |ASSET TRANSFERS EXCEPTIONS |PDF(s) Oct 03 | Oct 02 |
|0909.27.07 |TRANSFER LOOKBACK PERIOD |PDF(s) Oct 03 | Oct 02 |
|0909.27.09 |DETERMINING UNCOMPENSATED VALUE |PDF(s) Oct 03 | Oct 02 |
|0909.27.11 |IMPROPER TRANSFER INELIGIBILITY |PDF(s) Jul 06 | Jan 06 | Jul 05 | Jan 05 | Jul 04 | Oct 03 | Jul 03 | |
| | |Mar 03 | Jul 02 |
|0909.27.11.03 |TRANSFERS BEFORE 8-11-93 |PDF(s) Jul 06 | Jul 05 | Jul 04 | Jul 03 | Jul 02 |
|0909.27.11.05 |TRANSFERS 8-11-93 THROUGH 8-31-94 |PDF(s) Jul 06 | Jul 05 | Jul 04 | Jul 03 | Jul 02 |
|0909.27.11.07 |TRANSFERS 9-1-94 THROUGH 4-13-96 |PDF(s) Jul 06 | Jul 05 | Jul 04 | Jul 03 | Jul 02 |
|0909.27.11.09 |TRANSFERS AFTER 4-13-96 |PDF(s) Jul 06 | Jul 05 | Jul 04 | Jul 03 | Jan 03 | Jul 02 |
|0909.27.13 |IMPROPER TRANSFERS - ONSET OF INELIGIBILITY |PDF(s) Jul 04 | Oct 03 |
|0909.27.13.03 |MULTIPLE ASSET TRANSFERS |PDF(s) Jan 04 |
|0909.29 |EXCESS ASSETS -- APPLICANTS |PDF(s) Oct 03 | Jul 02 |
|0909.29.03 |EXCESS ASSETS -- ENROLLEES |PDF(s) Jul 02 |
|0909.31 |WAIVER OF ASSET RULES |PDF(s) Jul 98 |
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ASSETS 0909
Assets are things people own like bank accounts, stocks and bonds, cars, and real estate. Liquid assets include cash and property that can be easily converted to cash. Non-liquid assets are property that has a cash value only when sold.
MinnesotaCare limits the amount of assets adults can own to be eligible for coverage. Pregnant women and all children under age 21 are exempt from the asset limits. See §0909.03 (Exemptions From Asset Limits). Apply the MinnesotaCare asset provisions of this chapter to all other applicants and enrollees.
MA and GAMC limit the amount of assets people can own to be eligible for coverage. Some people are exempt from the asset limit. See §0909.03 (Exemptions From Asset Limits).
Apply the MA provisions of this chapter to people who are not exempt from the asset limits. The asset limits are the same for federally funded MA (program MM) and state-funded MA (program NM). Also apply the asset limits to people applying for or receiving EMA.
Apply the GAMC provisions of this chapter to GAMC Apply GHO provisions only to the GAMC hospital only (GHO) program. GHO follows MinnesotaCare asset policies. Full benefit GAMC has a separate asset limit but follows MA Method B policies to determine the value of countable assets.
All of the programs exclude some assets from consideration. See §0909.11 (Excluded Assets), §0909.11.01 (Additional Excluded Assets–Program Provisions), and §0909.11.03 (Excluded Assets for Self-Support). Also see the sections covering specific types of assets.
The countable value of most non-excluded assets is the equity value. The equity value is the asset’s market value less any encumbrances. There are special rules for determining the value of some types of assets. See the sections of this chapter covering specific types of assets.
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EXEMPTIONS FROM ASSET LIMITS 0909.03
MinnesotaCare:
Exclude the value of assets for all applicants and enrollees.
• All children under age 21, regardless of whether they are applying as part of a household with members age 21 and over or separately.
• All pregnant women, regardless of age, through the end of the 60-day post partum period. Begin considering assets for women age 21 and over at the end of the post partum period.
Apply the asset limits to all other people age 21 and over.
M. S. 256L.17
MA:
Exclude the value of assets for:
• People who are eligible for automatic MA with MSA, RCA, GRH or IV-E foster care payments. Apply the limits of the applicable cash program. Do not apply the MA limits unless people are ineligible for cash and request MA only, or their MA eligibility is determined separately from cash (such as MSA for personal needs in long term care facilities or EW eligibility for GRH enrollees).
• People receiving TMA or TYMA. See §0907.19.11.03 (TYMA: 2nd 6 Months).
• Children under age 21, regardless of their basis of eligibility.
• Pregnant women through the 60-day post partum period and women who are eligible for MA with the elimination of the post partum review. See §0907.19.05 (MA Basis: Pregnant Women).
• People with 1619(a) or 1619(b) status. See §0907.21.07.03 (MA Bases: 1619 A and B).
• Women eligible for MA-BC. See §0907.19.13 (MA for Breast/Cervical Cancer (MA-BC).
GAMC:
Do not apply the asset limits to people applying for or receiving GAMC automatically with GA.
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ASSET LIMITS 0909.05
MinnesotaCare and MA Method A:
The asset limits for adults age 21 and over who are not pregnant are:
• $10,000 for a household of one.
• $20,000 for a household of two or more.
To determine which limit applies, count everyone in the adult’s MA or MinnesotaCare household size, including children, pregnant women and people who are not requesting coverage.
EXAMPLE:
Gretchen, age 35, applies for MinnesotaCare. She is not pregnant so the asset limit applies. She lives with her 10-year-old daughter, who receives MA. Gretchen has a household size of one and an asset limit of $20,000.
Do not count children’s assets toward the total for adults in the household. Count half the value of assets owned jointly by a child and an adult.
MA Method B:
The asset limits are:
• $3,000 for a household of one.
• $6,000 for a household of two, regardless of the age of the household members.
EXAMPLE:
Nanette is disabled and receives RSDI. She applies for MA for herself and her 10-year-old daughter. Nanette’s asset limit is $6,000 if she uses Method B. The daughter has no asset limit.
• For households with more than two members, add $200 for each additional household member.
EXAMPLE:
Joyce is disabled and applies for MA for herself and her two children, ages 5 and 9. Joyce’s asset limit is $6,200 if she uses Method B. The children have no asset limit.
See §0908.05 (Determining MA/GAMC Household Size).
Apply the deeming rules in §0908.07 (Household Composition: Deeming) to determine whose assets to count for each Method B adult. Do not count children’s assets for parents. Count spouse’s assets unless the Method B client is considered a household of 1 due to receipt of waivered services.
The asset limits for QWD are:
• $4,000 for a household of one.
• $6,000 for a household of two or more.
The asset limits for QMB, SLMB, QI and the Prescription Drug Program (PDP) are:
• $10,000 for a household of one.
• $18,000 for a household of two or more.
Do not apply deeming waivers to these programs.
EXAMPLE:
Herman lives with his wife and receives CADI services. He is a household of one with a $3,000 asset limit for MA. His wife’s assets are excluded. He is a household of two with an $18,000 asset limit for QMB, SLMB, QI and/or PDP. His wife’s assets are counted.
See §0907.21.09 (MA Basis: Medicare Supplement Programs) for a description of these programs.
The asset limit for Medical Assistance for Employed Persons with Disabilities (MA-EPD) is $20,000 regardless of household size. Count only the assets of the MA-EPD applicant or enrollee. Do not count spousal assets. Exclude all Method B excluded assets plus the assets listed under MA-EPD in §0909.11.01 (Additional Excluded Assets for Method A/B).
GAMC:
For GAMC Hospital Only (GHO), follow MinnesotaCare/ Method A.
For all other GAMC applicants and enrollees, the asset limit is $1,000 per household regardless of the number of people in the household or the number requesting GAMC. Follow Method B asset exclusions. See §0908.05 (Determining MA/GAMC Household Size).
Apply the deeming rules in §0908.07 (Household Composition: Deeming), to determine whose assets to count for each household member. Do not count:
• Children's assets for parents.
• Siblings' assets for siblings.
EXAMPLE:
Household includes Rhonda, age 35, her husband Steve, age 36, and Rhonda’s children Stephanie, age 10, and Brandon, age 8. Rhonda has a MA Parent/Caretaker basis of eligibility. See §0907.19.07 (MA Families & Children: Parents/Caretakers). The children have a Child under 21 Basis. See §0907.19.03 (Families and Children Basis: Child Under 21). Steve does not have an MA basis. He has a GAMC basis as an adult without children. See §0907.25.05 (GAMC Basis: Adults Without Children).
Rhonda has an asset limit of $20,000 (MA Method A limit for households of 2 or more). Steve has an asset limit of $1,000. The children have no asset limit. Consider Rhonda’s and Steve’s non-excluded assets toward each of their asset limits.
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VERIFICATION OF ASSETS 0909.05.03
MinnesotaCare:
Do not require verification of any asset at any time. Take the following steps to determine if non-exempt adults are within the applicable asset limit at application and renewal.
1. If the value of all assets declared on the asset page is less than the applicable limit, the person meets the asset requirement. Do not request any further information.
If the asset information is incomplete, attempt to contact the applicant or enrollee by telephone. If you are unable to contact the person by telephone, mail a copy of the asset page and/or a copy of the self-employment asset question with a written request for the applicant/enrollee to complete the information. Do not approve eligibility under delayed verification if the asset information is incomplete. If the only missing item is a signature on the asset page, approve eligibility and allow the household 30 days to return the form as a courtesy. Do not terminate for failure to return the form.
2. If the value of all assets exceeds the applicable limit, deduct the value of excluded assets. See §0909.11 (Excluded Assets). If the result is less than the applicable asset limit, the person meets the asset requirement.
EXAMPLE:
Joan and Henry apply for MinnesotaCare for themselves and their two children. They are both over 21. Joan is not pregnant. On the asset page they list assets totaling $29,000, including one vehicle worth $5,000 and an IRA worth $6,000. Henry is employed, so both of these assets are excluded. Total countable assets are $18,000. Joan and Henry meet the asset requirement. Do not request any further information.
3. If the listed value of all non-excluded assets exceeds the applicable limit, contact the household to ensure assets were assessed correctly. Ask if there are encumbrances on any of the assets that were not deducted from the reported total. Subtract any encumbrances from the fair market value to determine the net value. Use the amount of encumbrances reported by the applicant/enrollee. Do not require verification. If the result is less than the applicable asset limit, the person meets the asset requirement.
If the applicant/enrollee requests a further examination of assets, allow them to submit additional information and/or complete the Detail of Assets Form (DHS 3499A).
EXAMPLE:
Rolf and Joyce apply for MinnesotaCare for themselves and their two children. The children have no asset limit. They list assets totaling $29,000 on the HCAPP, including three vehicles valued at $6,000, $7,000 and $8,000. The application shows that Joyce is employed. After excluding the vehicle valued at $8,000, assets remain over the limit. The worker contacts the household and learns that Rolf is not currently employed or seeking employment. The other wo vehicles cannot be excluded. However, the household reports they owe $5,000 on the first car and did not subtract this from the total value of their assets. Deducting the full value of the $8,000 car and counting only the $1,000 equity value of the $6,000 car reduces countable assets to $16,000. Rolf and Joyce are within the $20,000 asset limit.
4. If the net value of countable assets exceeds the applicable asset limit, deny or terminate the person’s MinnesotaCare.
EXAMPLE:
Susan, a 35-year-old single adult, applies for MinnesotaCare for herself. She is not pregnant. On the asset page she lists total assets of $28,000, including one vehicle worth $8,000. Susan is employed so the vehicle is excluded. The worker contacts Susan to see if any other assets can be excluded or if there are any encumbrances. Her remaining assets consist of a checking account with a balance of $500 and a money market account valued at $19,500. Countable assets of $20,000 exceed the $10,000 asset limit. Susan is not eligible for MinnesotaCare.
MA
Method A:
Verify all countable assets at application, 6-month income/asset renewal, and annual renewal.
EXAMPLE:
Cory and Kari apply for MA for themselves and their 2 children. All household members use Method A. Cory and Kari have an asset limit of $20,000. They claim total countable assets of $19,900 on the application. Verify all countable assets.
Types of verifications for clountable assets include:
• Bank statements.
• Bank verification forms.
• Copies of bonds. You may need to consult a savings bond value book to determine the current value.
• Stock ownership statements. If the statement does not show the current value, consult a newspaper or other current stock listing to determine the value.
• Copies of life insurance policies or statements from insurance companies showing current cash surrender value.
• Other documents verifying ownership and value.
Do not verify non-countable assets. Assist the applicant or enrollee in providing enough information to determine the equity value of a non-excluded asset.
EXAMPLE:
Mortimer and Matilda apply for MA for themselves and their children. They claim two vehicles. One is excluded because it is used for employment. The equity value of the second vehicle must be counted toward the asset limit. Request verification of the equity value of the second vehicle.
Method B:
Use the information reported on the HCAPP to determine countable assets. Both the HCAPP (DHS 3417) and HCAPP for People Who Have a Disability and Seniors age 65 and Older (DHS 3531) ask about all types of assets that may affect eligibility. The DHS 3531 asks more specific questions and requests verifications for asset types more likely to be held by the elderly and disabled population. Follow up with the household if the application does not contain sufficient information to determine countable asset value.
Verify the following assets for adults:
• Countable assets. See Method A for details on when and how to verify countable assets.
• The following items need to be verified in order to determine what items meet the exclusion criteria for the burial fund exclusion. See §0909.17.03 (Determining the Burial Fund Exclusion) and §0909.17.05 (Burial Space Items).
-Life insurance face value and cash surrender value
-The value of all revocable and irrevocable burial agreements.
-The value of insurance- and annuity-funded burial agreements.
• Trusts and annuities need to be assessed to determine if they meet an exclusion for MA.
• All assets included in an asset assessment. Also verify all assets for LTC clients with community spouses at the time of application and the first annual renewal. See §0904.13 (Verification), §0904.13.01 (Verification - MA/GAMC), §0905.05 (Annual Renewal--Eligibility), and §0909.25 (Spousal Asset Assessments).
GAMC Method A and B:
Verify liquid assets if within $300 of the asset limit. Do not verify assets at the 6-month renewal.
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JOINTLY OWNED ASSETS 0909.07
MinnesotaCare/MA Method A/GHO:
When two or more people own an asset, apply the following rules to determine each owner’s share:
• For bank accounts owned jointly by a child and an adult, count one-half the value toward the adult’s asset limit.
EXCEPTION:
Exclude the full value of accounts established under the Uniform Gift to Minors Act or the Uniform Transfer to Minors Act.
• For savings bonds, divide the value among all owners listed, excluding those listed as POD beneficiaries.
• For bank accounts held jointly by adults, consider the entire balance to belong to each owner.
EXAMPLE:
Pam applies for MA. She is separated from her husband. They have joint checking and savings accounts. Count the entire balance of both accounts toward Pam's asset limit.
EXAMPLE:
Jolene applies for MA for herself and her daughter Marissa. Jolene's husband Bart is Marissa's stepfather. Jolene and Bart have a joint checking account. Consider the entire balance of the account to belong to Jolene. Marissa has no asset limit because she is a child under 21.
• For all other assets, consider each owner to own an equal share unless the applicant or enrollee documents a greater or lesser share of ownership.
EXAMPLE:
Joan applies for MA. She is separated from her husband. They are joint owners of a lake cabin. Presume that Joan owns one-half the equity value unless she documents a greater or lesser share. See §0909.09 (Availability of Assets) to determine whether to count the value toward Joan's asset limit.
EXAMPLE:
Karen applies for GAMC. She inherited a parcel of land from her grandparents along with her parents and siblings. Her grandparents' will gives half ownership of the land to her parents with the remaining half divided equally among Karen and her three siblings. Consider Karen to own one-eighth of the equity value of the land. See §0909.09 (Availability of Assets) to determine whether to count the value toward Karen's asset limit.
MA METHOD B:/GAMC
When two or more people own an asset, apply the following rules to determine each owner's share.
• For jointly held checking accounts, savings accounts, certificates of deposit, savings certificate, or other time deposits, consider the entire balance to belong to each person, except when the other owner is an MA applicant or enrollee, or a responsible relative whose assets you deem available. In that situation, presume ownership of equal shares.
EXAMPLE:
Max and Louise are a married couple in long term care. They both apply for MA. They have a joint savings account. Consider one-half the balance to belong to each of them.
• For other assets, follow Method A.
In some cases, a jointly owned asset may remain fully owned by and available to the original owner even if a joint owner attempts to make the funds unavailable. See §0909.09 (Availability of Assets) for details.
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AVAILABILITY OF ASSETS 0909.09
Assets are available if the owner has both legal authority and actual ability to use them for self-support. Do not count assets that are legally unavailable.
Do not consider the terms of a premarital agreement in determining the availability of assets for a married couple.
When an applicant or enrollee owns an asset in whole or in part, presume that the value of the portion the client owns is available unless the client proves it is not. A client may prove unavailability by verifying a legal or actual barrier to disposal of the asset that cannot reasonably be overcome. If a client claims a legal barrier and its status is unclear, consult the Health Care Policy Center or refer the case to the county attorney for a legal opinion on availability.
EXAMPLE:
Jerry applies for GAMC. He is involved in a lawsuit, and a preliminary court ruling prevents him from selling or disposing of his assets pending further order of the court. Consider his assets unavailable. Consult the county attorney if the order is unclear. Review unavailability at each renewal and when you anticipate a change in availability
See §0909.07 (Jointly Owned Assets) to determine what portion of a jointly-owned asset is presumed to belong to each owner. Except for jointly owned bank accounts, consider an asset to be unavailable when:
• The permission of a joint owner is required to sell or dispose of the asset.
AND
• The joint owner is not a member of the household or a financially responsible relative whose assets are deemed to the MA/GAMC client.
AND
• The joint owner refuses to allow the sale or disposal of the asset.
EXAMPLE:
Marlene applies for MA for herself and her children. She is separated from her husband. They jointly own several acres of undeveloped land separate from their homestead. Marlene's husband will not agree to list the land for sale. Consider the land as unavailable to Marlene unless her husband agrees to sell the land or a court awards the land to Marlene. Review unavailability at each renewal.
EXAMPLE:
William and Myrna are a married couple who reside together in the community. They jointly own an apartment building with an equity value of $35,000. William applies for MA. Myrna does not apply and refuses permission to list the property for sale. Because Myrna is a spouse whose assets are deemed to William, her refusal to sell does not make the property unavailable. Count the full $35,000 equity toward William's asset limit.
In some cases, a jointly owned account is still available even when another owner refuses access. Determine whether the account was titled jointly with the intent of allowing both parties full access.
EXAMPLE:
Steve opened a brokerage account in his name 10 years ago. Two years ago, he had some health problems and put his son Tom’s name on the account so Tom could help manage the funds. Steve has continued to receive income from the account and has made deposits. Tom has not withdrawn or placed funds in the account. Steve applies for MA. The account balance exceeds the asset limits. Tom, as the joint owner, signs a statement that he will no longer allow Steve access to the account. Review the following factors:
< How the account is titled, and laws governing the type of account
< What agreements, if any, were signed when the account was opened or the second owner’s name was added
< What policies the financial institution has governing access by joint owners
< Who contributed to the account
< Who has had access to the account
< Who has received income and/or 1099 tax forms from the account
< Who gets the proceeds if the account is closed
< Whether the account has named death beneficiaries
Determine whether Steve still has access to the account. If he does not, evaluate whether placing Tom’s name on the account was an improper transfer. Submit a HealthQuest with all available information if access is unclear.
See §0909.25 (Spousal Asset Assessments) for treatment of assets when one spouse is applying for long term care services.
Consider real property not used as a home to be unavailable as long as the applicant or enrollee is making a good faith effort to sell the property. See §0909.13.03 (Real Property: Non-Homestead). Do not consider non-liquid personal property to be unavailable while for sale.
EXAMPLE:
Paul applies for GAMC. He owns a boat with equity value in excess of the GAMC asset limit. Paul must sell the boat and properly reduce the proceeds to be eligible for GAMC. See §0909.29 (Excess Assets--Applicants). Do not consider the boat unavailable while Paul has it listed for sale.
A community spouse's share of assets held by an LTCF resident are not available to the LTCF resident up to the date of the first recertification. See §0909.25.03 (Spousal Asset Allowance).
See §0909.21 (Trusts) and §0909.23 (Annuities) for information on determining the availability of these types of assets.
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EXCLUDED ASSETS 0909.11
MinnesotaCare:
Exclude the following assets for all health care programs:
• Household and personal goods, such as pets, furniture, clothing, jewelry, appliances, and other tools and equipment used in the home.
• Income during the month of receipt. See §0911.05 (Excluded Income) and §0911.05.03 (Excluded Income--Program Provisions) for information on which payments are excluded as income.
Count income retained into the next month as an asset with the specific exceptions listed below:
• Exclude payments made to people because of their status as victims of Nazi persecution. This includes reparation payments the Federal Republic of Germany makes to certain survivors of the Holocaust. They may be monthly payments or a lump sum payment. Exclude these payments as assets in the month received and thereafter.
• Exclude payments resulting from an appeal as assets for 3 months after the month of receipt.
• Exclude payments made under state or federal law for foster care and adoption assistance as assets in the month of receipt and thereafter.
• Exclude disaster relief funds paid by state and local governments and disaster relief organizations such as Red Cross and Salvation Army as assets in the month of receipt and thereafter.
• Exclude Netherlands' Act (WUV) payments as assets in the month of receipt and thereafter.
• Exclude state and federal tax rebates as assets in the month received and thereafter.
Exclude the following federal payments as assets. For Method A, applicants and enrollees must hold these funds in a separate account from non-excluded funds to maintain the exclusion. For Method B, applicants and enrollees may hold these funds in an account with non-excluded funds but must be able to identify them separately from non-excluded funds.
• Low Income Energy Assistance Program (LIHEAP) payments.
• Payments for tribal land claim settlements listed in §0911.09.21 (Tribal Land Settlements and Trusts).
• Benefits from the Women, Infant, and Children (WIC) nutrition program.
• Reimbursements from the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970.
• Payments received from youth incentive entitlement projects, youth community conservation and improvement projects.
• Reparation payments to Aleut people and people of Japanese ancestry under Public Law 100-383.
• Agent Orange payments to veterans and their dependents.
• Payments made under the Radiation Exposure Compensation Act (Public Law 101-426).
• Payments made by federal agencies under a presidential declaration of disaster including, but not limited to, individual and family grants from the Federal Emergency Management Agency (FEMA).
• Title VII, Nutrition Program for the Elderly funds.
• VISTA payments made to volunteers (not permanent staff salaries).
• Accrued interest on assets if any excess is properly reduced at the eligibility recertification.
• Payments from the Vietnamese Commandos Compensation Act.
• Blood Product Litigation settlement payments.
• Settlements to hemophiliacs under the Ricky Ray Hemophilia Relief Act of 1998.
See §0909.11.01 (Excluded Assets–Program Provisions) for additional excluded assets for MinnesotaCare/MA Method A/GHO and MA Method B/GAMC.
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EXCLUDED ASSETS PROGRAM PROVISIONS 0909.11.01
See §0909.11 (Excluded Assets) for additional assets excluded for ALL programs.
MinnesotaCare/MA Method A/GHO:
In addition to the items excluded for all health care programs, exclude the following as assets for MinnesotaCare, MA Method A and GHO:
• Assets owned by children. Follow §0909.07 (Jointly Owned Assets) when an adult subject to the asset limit owns an asset jointly with a child.
• Court-ordered settlements up to $10,000. Exclude the first $10,000 indefinitely. It does not have to be held in a separate account or identifiable from other assets. Count any amount over $10,000 if it is legally available to the applicant or enrollee. See §0909.09 (Availability of Assets).
• Individually owned pension and retirement funds, including but not limited to IRAs, 401(k) plans, 403(b) plans, and Keogh plans. See §0909.19 (Pensions and Retirements Funds).
• Up to $200,000 in capital or operating assets of a trade or business. See §0909.11.03 (Excluded Assets for Self-Support).
• Money held by a homeowner in a separate account which is used to pay real estate taxes or insurance, if these expenses are paid at least twice a year.
• Funds the client receives to repair or replace assets if the payments can be identified and are made by public agencies, insurance companies, court order, or solicited through a public appeal. Exclude the funds for 3 months after the month of receipt and only if they are held in escrow.
• Exclude the following sources of student financial aid indefinitely:
• Pell Grants.
• SEOG.
• Perkins Loans.
• Student Educational Loan Funds.
• Guaranteed Student Loans.
• Minnesota State Student Loans.
• State Student Incentive Grants.
• Minnesota State Scholarships and Grants.
• Federal College Work Study funds.
• Any other financial aid funded in whole or in part by Title IV.
See §0911.09.07 (Student Financial Aid Income) for more information.
Exclude all other school loans, grants, or scholarships as assets for the period they are intended to cover or until the month following the last month the student is enrolled in classes.
• Proceeds from the sale of a homestead for 6 months after the month of receipt. The client must keep the proceeds in a separate account and intend to use them to buy another home.
• Home Improvement loans from the Minnesota Housing Finance Agency for 9 months after the month of receipt.
• Exclude Earned Income Credit income as an asset in the month of receipt and the next month.
MA Method B/GAMC:
In addition to the items excluded for all health care programs, exclude the following as assets for Method B:
• Payments made to volunteers under the Domestic Volunteer Service Act of 1973 as stipends or reimbursements of out-of-pocket expenses.
• Benefits other than wages paid under the Older Americans Act.
• Exclude the specific types of financial aids listed under Method A as assets until the month following the last month the student is enrolled in classes, as long as they are identifiable from non-excluded funds.
• Exclude other educational funds as assets for the month of receipt only. After the month of receipt, exclude the funds if the aid is identifiable from non-excluded funds. Count any funds remaining as assets beginning the month following the month in which the student is no longer enrolled in classes.
• Exclude payments to replace lost, damaged, or destroyed assets for 9 full months after the date the client receives the payment. If the client tries to replace the assets during that time, but cannot do so for good cause, continue to exclude the payment for up to 9 more months.
• Exclude the accumulation of the clothing and personal needs allowance for people in long term care facilities if any excess is properly reduced at the eligibility recertification. See §0909.29.03 (Excess Assets--Enrollees).
• Exclude funds used to meet real estate tax, insurance, and upkeep expenses for real property when held in a separate account.
• Exclude retroactive lump sum payments of SSI as income and assets in the month received.
• Exclude as an asset for 9 months any retroactive SSI or RSDI lump sum payments received on or after 3/2/04. Exclude as an asset for 6 months any retroactive SSI or RSDI lump sum payments received before 3/2/04.
See §0911.09.15.05 (Lump Sum RSDI and SSI Payments) for information on treatment of
retroactive RSDI payments as income in the month of receipt.
• Exclude as an asset for 9 months any Earned Income Tax Credit (EITC) refunds or payments, received on or after 3/2/04, retained after the month of receipt. EITC refunds or payments received before 3/2/04 are excluded as an asset for one month following the month of receipt.
• Exclude as an asset for 9 months any Child Tax Credit (CTC) refunds or payments received on or after 3/2/04, retained after the month of receipt. CTC refunds or payments received before 3/2/04 are excluded as an asset for one month following the month of receipt.
• Exclude proceeds from the sale of a homestead for 3 months if the enrollee applies the funds to the purchase of another home during that period.
• Payments made to crime victims to compensate them for losses resulting from the crime for 9 months after the month of receipt.
• Austrian social insurance payments based, in whole or in part, on wage credits granted under Paragraphs 500-506 of the Austrian General Social Insurance Act.
• Payments to volunteers under Corporation for National and Community Service (CNCS) Programs. (The former ACTION programs.) Examples of such programs include:
-AmeriCorps (VISTA)
-University Year for ACTION (UYA)
-Special and Demonstration Volunteer Programs
-Retired Senior Volunteer Program (RSVP)
-Foster Grandparent Program
-Senior Companion Program
• Individual Development Accounts (IDAs)-TANF funded. An IDA is a special bank account that helps an individual save for education, the purchase of a first home, or to start a business. Contributions to the IDA are matched with money from TANF. Individuals must be working and receiving TANF to be eligible for a TANF IDA.
• Individual Development Accounts (IDAs)- Demonstruction Project. Same as for IDA-TANF Funded with the exception that contributions are matched with money from special funds called “Demonstration Project” money. Eligible individuals must be working and either receiving TANF or have low income/assets.
• Payments made by the Department of Defense (DOD) to certain individuals who were captured and interned by North Vietnam. Payments are made by DOD under section 657 of the National Defense Authorization Act. Payments may be received by surviving spouse or children.
• VA benefits paid to or on behalf of Vietnam or Korea service veterans’ natural children suffering disability due to spina bifida or other certain birth defects. Payments are made under Public Law 104-204, Public Law 106-419, or Public Law 109-183.
Some types of assets are excluded in whole or in part depending on their value and/or use. Examples of this type of asset include but are not limited to real property, vehicles, and burial funds. See the sections dealing with specific types of assets for more information.
In addition to the assets excluded for Method B in this section and the assets excluded in §0909.11 (Excluded Assets), exclude the following for the Medical Assistance for Employed Persons with Disabilities (MA-EPD) program:
• Retirement funds owned by the applicant or enrollee such as IRAs, 401(k) plans, 403(b) plans, Keogh plans, and other individually owned pension and retirement funds.
• Medical expense accounts set up through an employer, regardless of whether the account is funded by employee salary deduction, by the employer, or both. These accounts allow employees to set aside pre-tax dollars to be used to reimburse the employee for qualified medical expenses not covered by the employer’s health plan. They are also known as unreimbursed medical accounts and flexible spending accounts.
When an MA-EPD enrollee stops working for any reason, continue to exclude these assets when determining eligibility for regular MA for up to 12 months after the person loses MA-EPD status.
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EXCLUDED ASSETS FOR SELF-SUPPORT 0909.11.03
MinnesotaCare and MA Method A/GHO:
Exclude capital and operating assets of a trade or business needed for a client to earn income up to a maximum net value of $200,000. Examples of assets that can be excluded for use in a trade or business include but are not limited to:
• Real property, such as farmland that is not contiguous to the homestead. See §0909.13.03 (Real Property: Non-Homestead). Do not exclude rental property unless it is part of a trade or business.
EXAMPLE:
Darlene inherited her mother's house and rents it out. Although it produces an income, it is not part of a trade or business. Count the equity value toward the asset limit.
EXAMPLE:
Darrin farms 60 acres and rents 10 acres to a neighbor. Exclude the rented acres because they are part of Darrin's farming business.
• Vehicles.
• Tools, machinery, and farm implements.
• Unsold inventory.
• Business checking accounts, including those also used for personal expenses.
Accept the client’s statement of the value of business assets and the amount of encumbrances. Apply the net total value of all business assets to the $200,000 limit. If the net value of the combined business assets exceeds $200,000, count the excess toward the applicable asset limit.
Exclude capital and operating assets up to $200,000 of a self-employment enterprise that are temporarily not being used due to the self-employed person’s illness or disability for up to 1 year, if the person is expected to resume self-employment by the end of that time.
MA METHOD B/GAMC:
Exclude real or personal property, including liquid assets, currently used in a trade or business necessary for the client's ability to earn income.
Exclude personal property the client currently uses as an employee for work, whether or not the employer requires it.
EXAMPLE:
Tom is an auto mechanic. His employer provides tools on site, but Tom prefers to use his own. Exclude the value of any tools Tom uses on the job.
Exclude up to $6,000 equity value of real or personal property the client currently uses to produce goods or services needed for daily activities and used solely by the client's household. This includes property and equipment used to produce food or clothing for the household.
Allow the exclusions above for property not in current use for reasons beyond the client's control, if the client expects to resume use within one year. Extend the exclusion for one more year if the nonuse is due to a disabling condition. To qualify for this extension, the client must sign a statement stating all the following:
• The nature of the disabling condition.
• When the self-support activity ceased.
• When the self-support activity will resume.
Exclude up to $6,000 equity value of income-producing non-liquid personal property or real property, including rental property, not used in a trade or business if the property produces an annual net return equal to at least 6% of the equity value. Non-liquid personal property includes items such as household goods, machinery, vehicles, livestock, and non-cash business property.
EXAMPLE:
Darlene inherited her mother's home and rents it out. The home is valued at $40,000 with a mortgage balance of $30,000. Darlene receives net rental income of $300 per month, or $3,600 per year. See §0911.09.03.13 (Rental Income) for allowable expenses from rental income.
Because the property produces net income in excess of 6% of the equity value (6% of the equity value of $10,000 is $600 per year), exclude the first $6,000 of equity. Count the remaining $4,000 equity toward the asset limit.
Do not exclude liquid personal property such as bank accounts, stocks, bonds, mutual funds, or property agreements unless used as part of a trade or business. If the earnings drop below 6% for reasons beyond the client's control, allow up to 24 months for the property to resume producing a 6% return.
If a person owns more than one piece of income-producing property, each piece must meet the 6% return on equity requirement. However, apply the $6,000 equity value exclusion to the combined equity value of the properties.
Exclude assets covered in a Plan to Achieve Self-Support. See §0912.05.11 (Plan to Achieve Self-Support).
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REAL PROPERTY: HOMESTEAD 0909.13
MinnesotaCare/MA
Method A/GHO:
Exclude the homestead. The homestead is defined as the home which is owned by and is the usual residence of the applicant or enrollee along with all the surrounding land and any buildings on that land, provided the land is not separated from the home by any property owned by others. Public rights-of-way which separate property from the home do not affect the exclusion.
Continue to exclude the homestead if it is temporarily unoccupied due to employment, illness, or an employability plan approved by the county human service agency which includes education, training, or job search within the state, but outside the immediate geographic area. Also continue to exclude a homestead temporarily unoccupied because it is not habitable due to casualty or natural disaster. Exclude the homestead during periods it is unoccupied only if the applicant or enrollee intends to return.
MA Method B/GAMC:
Exclude the home owned and occupied by an applicant or enrollee, or by an applicant or enrollee's spouse or disabled or dependent child. The homestead includes all the surrounding land and any buildings on that land, provided the land is not separated from the home by any property owned by others. Public rights-of-way that separate property from the home do not affect the exclusion. The shelter can be real or personal property, fixed or mobile, and located on land or water.
For people not living in a long term care facility (LTCF), exclude the home:
• In which the applicant or enrollee or dependent relative resides and considers his or her principal home.
• AND
• In which the applicant or enrollee has an ownership interest.
• AND
• To which, if absent, the applicant or enrollee intends to return.
For people living in an LTCF, exclude the home for the longest of the following:
• For the first 6 calendar months of LTCF residence, starting with the first full calendar month after entry into an LTCF. Exclude any initial partial month. If the person entered the LTCF directly from a hospital, include the hospital stay when determining the months of exclusion.
EXAMPLE:
Ted was admitted to the hospital on June 15. On July 3 he was admitted to a nursing home. Exclude his homestead for 6 months beginning with July, the first full month of institutionalization.
OR
• For as long as the LTCF resident intends to return home and can reasonably be expected to return home.
Document the client's intent to return home and whether the client can reasonably expect to return home. If the client's intent contradicts the information about the anticipated length of stay on the Physician's Certification Statement (DHS 1503) or the client's health or condition, get a doctor's statement saying when the person can reasonably be expected to return to the home. Also document that MA or other sources will meet the cost of care upon the client's return home. This could include eligibility for MA home care, Elderly Waiver, Community Alternatives for Disabled Individuals, or Alternative Care.
Obtain oral verification from the Long Term Care Consultation team in the county where the client's homestead property is located of the availability of appropriate home care services and document in case notes.
EXAMPLE:
Betty entered an LTCF on October 16 after she broke her hip. Her home was excluded through the following April (the first 6 full months of institutionalization). The DHS 1503 indicates an anticipated discharge date of August 1. Betty has made arrangements with a niece to help with cleaning and yard work when she returns home. Continue to exclude the homestead. Review the exclusion in August.
OR
• For as long as it is the residence of one or more of the following relatives of the LTCF resident:
• Spouse.
• Child under 21.
• Disabled child of any age. Use the MA definition of disability. See §0907.21.07 (MA/Medicare Supplement Basis: Disability) and §0907.15 (Disability Determinations). For purposes of this exclusion, the child can become disabled at any age.
EXAMPLE:
Horace, age 80, resides in a LTCF. His daughter Louella had a heart attack and became unable to work at age 55. She receives RSDI disability payments and lives in Horace's home. Exclude the homestead as long as Louella lives there.
• Sibling, if the sibling lived in the home for at least one year immediately before the date of the client's admission to the LTCF and has an equity interest in the home.
EXAMPLE:
Emma and her sister Esther purchased a home together after they both were widowed. Emma contributed $40,000 toward the purchase and Esther contributed $10,000. Two years after they purchased the home, Esther entered an LTCF and applied for MA. Her stay is expected to be permanent. Because Emma has an equity interest in the home and lived there for more than 1 year before Esther entered the LTCF, exclude the homestead as long as Emma continues to live there.
• Adult child or grandchild, if the child or grandchild lived in the home for at least 2 years immediately before the date of the client's admission to the LTCF and provided verifiable care to the client to permit the client to live at home instead of in an LTCF. Require a physician's statement to verify that the adult child or grandchild provided such care.
EXAMPLE:
Georgette enters an LTCF from the home she shared with her adult daughter, Carol. Georgette is expected to remain in the LTCF permanently. Carol has lived in the home all her life but does not have an ownership interest. Carol states she took over most of the household responsibilities and expenses when her mother became unable to care for herself. Request a physician's statement. Exclude the homestead beyond the first 6 months of LTCF residence if the doctor verifies that Carol provided care that allowed Georgette to remain at home. Carol must continue to live in the home to maintain the exclusion.
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REAL PROPERTY: NON-HOMESTEAD 0909.13.03
Exclude real property meeting the criteria for self-support in §0909.11.03 (Excluded Assets for Self-Support).
For other non-homestead real property, determine the equity value of non-excluded, non-homestead real property by subtracting the balance owed on mortgages, contracts for deed, mechanics' liens, and other legal encumbrances from the property's estimated market value as shown on the property tax statement. If the applicant or enrollee disputes the estimated market value, request an estimate of value from a licensed real estate appraiser.
Count non-excluded, non-homestead real property toward the asset limit unless it is unavailable. Consider the property to be unavailable if it meets the conditions in §0909.09 (Availability of Assets), or as long as the applicant or enrollee is making a reasonable effort to sell the property. Reasonable efforts to sell the property must continue until the property is sold.
Do not require applicants who are requesting coverage for any month(s) before the month of application to verify reasonable efforts to sell non-homestead real property in the retroactive months. If the applicant documents reasonable efforts to sell non-homestead real property as part of the application process, consider the property to be unavailable during the retroactive eligibility period.
A reasonable effort to sell includes:
• Listing the property with a real estate broker.
OR
• Having a readable sign on the property with the owner's name and telephone number and advertising it in the official county newspaper, the newspaper with the largest circulation in the county, or the local shopper newspaper.
The asking price can be no more than the estimated market value on the tax statement, or an estimate from a licensed appraiser if the client disputes the estimated market value. The appraisal may be either higher or lower.
EXAMPLE:
Jerry and Esther apply for MA for themselves and their children. They own a lake cabin with an estimated market value of $20,000. They state that comparable property in the area has been selling for at least $30,000. Allow them to list the property for more than $20,000 if a licensed appraiser places a higher value on the property.
EXAMPLE:
Leroy has been in an LTCF for 6 months and expects to remain permanently. His home is valued at $55,000 on the tax statement and does not meet a condition for exclusion. His authorized representative wishes to list the property for $40,000 on the grounds that the real estate market in Leroy's town has been slow and the home needs some repairs. Request an appraisal. Allow the authorized representative to list the home for the amount of the appraisal if less than the estimated market value.
Do not require verification of reasonable efforts to sell for MinnesotaCare. For MA and GAMC, verify continuing reasonable efforts to sell at each annual renewal. Document in case notes whether there have been reasonable offers to buy the property since the last review. Document the amount of the offer and whether the owner accepted it. If the owner rejects the offer, document the reason for refusing the offer.
A reasonable offer is defined as no less than 2/3 of the estimated market value. However, require the owner to attempt to get offers closer to the market value.
EXAMPLE:
Gordon has resided in an LTCF for more than 6 months and does not intend to return to his home, which is valued at $75,000. His nephew wishes to buy the home for $50,000, which is 2/3 of the estimated market value. Gordon's authorized representative agrees with the $75,000 estimated value and does not wish to get an appraisal. Instruct the authorized representative that he must attempt to sell the property for $75,000 and must accept any bona fide offer higher than $50,000. If he receives no higher offers within a reasonable length of time based on the local market, he may accept the nephew's $50,000 offer.
There is no minimum length of time during which the owner must try to get offers close to the market value. The property must be offered for sale on the open market before the owner may accept a lower offer without penalty.
EXAMPLE:
Mary has been in an LTCF for 6 months. Her son applies for MA on her behalf. Mary owns a home valued at $65,000 with nothing owed. Her son offers to buy the property for $45,000, which is slightly more than 2/3 of the market value. Advise the son that if he buys the home for this price without attempting to sell it on the open market, the difference between the market value and the sale price will be considered an improper transfer.
If the son chooses to list the property with a realtor, require him to make a good faith effort to sell the property for the length of the real estate contract. If he chooses to list the property himself (through advertising in the newspaper and placing a sign on the property), require him to continue the efforts for the same length of time as a realtor's contract would run in the same area. If at the end of that time there have been no offers higher than $45,000, he may purchase the home at that price without penalty.
EXAMPLE:
Loretta resides in an LTCF. Her home has been listed for sale for one year with an asking price of $60,000, the estimated market value. Loretta's authorized representative documents the following offers:
• $55,000. The prospective buyer could not get financing and wanted to purchase on contract for deed. The family refused the offer because of the prospective buyer's limited income and poor credit history.
• $49,000 and $45,000. The family refused both offers because they were too far below the asking price.
Advise the authorized representative that the family must accept any future offers of $40,000 or more (2/3 of the market value), subject to the prospective buyer's ability to finance the purchase. The lack of offers closer to the estimated market value indicate that the property is unlikely to sell for that amount.
If you discover that the enrollee has not made reasonable efforts to sell the property at the time of the annual renewal, document whether good cause exists.
Good cause exists if the person cannot make reasonable efforts to sell the property on his/her own and cannot make arrangements for someone else to act on his/her behalf.
EXAMPLE:
Herbert resides in an LTCF. He has been in the LTCF for longer than 6 months, and his home does not meet any of the other conditions for exclusion. The equity value exceeds the asset limits. Herbert has no relatives willing to assist him in making reasonable efforts to sell the property. Consider Herbert to have good cause for not making reasonable efforts to sell. Refer Herbert to Social Services or another appropriate agency to attempt to have someone appointed to help manage his affairs.
If good cause does not exist, the non-homestead real property is no longer unavailable. Count the equity value toward the asset limit.
If the enrollee sells the property and the net proceeds combined with other non-excluded assets exceed the asset limit, require the enrollee to reduce to within limits. See §0909.29.03 (Excess Assets--Enrollees).
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CONTRACTS FOR DEED 0909.13.05
Count contracts for deed and other property agreements (deeds-of-trust, mortgages held by the seller, land contracts, etc.) as personal property of the seller. Consider the buyer's interest in property purchased under a contract for deed to be real property. See §0909.13.03 (Real Property: Non-Homestead) and §0909.13 (Real Property: Homestead).
EXAMPLE:
June resides in an LTCF. She sold her home on a contract for deed. Consider the value of the contract as personal property.
EXAMPLE:
Tim is purchasing June's home on a contract for deed. He resides in the home. Consider the home as homestead real property for Tim. The contract for deed has no value as an asset for Tim.
Evaluate the availability of property agreements jointly owned with someone outside the unit according to §0909.07 (Jointly Owned Assets).
If a property agreement is owned with others as tenants-in-common, rather than joint tenancy, each person’s share can be sold separately from, and without the permission of, the co-owners(s). Count the health care program applicant/enrollee’s share of the equity toward the asset limit regardless of whether the other owners are willing to sell their shares.
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MinnesotaCare/MA METHOD A/GHO:
For the seller of a contract for deed or other property agreement, count the outstanding principal balance less any encumbrances as an asset, unless documented that it is not legally available. See §0909.09 (Availability of Assets).
EXAMPLE:
George and Liz apply for health care for themselves and their three children. They are selling their cabin property, valued at $25,000, on a contract for deed. The balance owed to them on the contract is $15,000. They owe the bank $2,000 on the property. Count $13,000 toward the asset limit.
Count the principal portion of each payment as an asset. The outstanding principal will decrease with each payment.
EXAMPLE:
George and Liz receive a monthly payment of $500 from the buyer of the contract for deed. $300 of each payment is applied to the principal. The outstanding principal of the contract is $13,000. The principal portion of the payment is considered a conversion of assets from one form to another, and is not counted as income. The payment reduces the outstanding principal of the contract to $12,700.
Count the interest portion of each payment as income.
EXAMPLE:
George and Liz receive a monthly payment of $500 from the buyer of the contract for deed. $200 of each payment is interest. Count the $200 each month as income.
For the purchaser of property via a contract for deed or other property agreement, count the portion of the principal paid as an asset, unless it is an excluded asset.
EXAMPLE:
Peter and his pregnant wife, Charlotte, are purchasing property via a contract for deed. They have paid $10,000 on the principal portion of contract for deed. This portion is applied toward their asset limit. They make a payment of $500 each month on the contract for deed. $300 of the payment is applied to the principal balance and $200 toward interest. The total value applied to the asset limit increases $300 each month the payment is made.
MA METHOD B/GAMC:
Count the outstanding principal balance on a contract for deed or other property agreement as an asset to the seller. The value of a property agreement is the principal balance less any encumbrances.
EXAMPLE:
• Lee sold his home on a contract for deed. The principal balance on the contract is $30,000. Lee still owes $20,000 on a first mortgage on the home. The countable value of the contract is $10,000.
Add the value of the property agreement to other countable assets. If total assets exceed the asset limit, the client must reduce assets by liquidating or trying to liquidate the property agreement.
At the time of application or renewal, if a non-excluded property agreement creates excess assets, the client must:
• Contact at least two businesses or individuals who routinely engage in the business of buying property agreements to solicit reasonable offers to buy the property agreement.
AND
• Document that the client is continuing to make a reasonable effort to sell the property agreement.
In addition to soliciting offers from individuals and businesses, reasonable efforts to sell include advertising the agreement in the official county newspaper, the newspaper with the largest circulation in the county, or the local shopper newspaper.
The client must accept any offer to buy the property agreement that is at least 2/3 of its value as defined above. If the client gets no such offer, consider the property agreement unavailable as long as the client continues to make a reasonable effort to sell.
If there is a legal bar to the sale of a property agreement, consider the value of the agreement unavailable until the legal bar is removed. See §0909.09 (Availability of Assets).
EXAMPLE:
Alice applies for MA. She is the seller of a contract for deed with a principal balance of $72,320. There are no encumbrances. The county worker advises Alice that she must make reasonable efforts to sell the contract. Alice verifies that she placed an ad in the newspaper offering the contract for sale. She also contacted two parties who had advertised an interest in purchasing contracts for deed. The highest offer she received was at a 40% discount or $43,392. Because this is less than 2/3 of the principal balance, Alice is not required to accept the offer. She must continue to make reasonable efforts to sell.
EXAMPLE:
George was approved for MA after demonstrating a reasonable effort to sell his contract for deed. At the time of his annual renewal, he has not advertised the contract for 9 months. Advise George that he must initiate and document reasonable efforts to sell the contract within 10 days. If he fails to do so, count the outstanding balance less any encumbrances toward his asset limit.
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LIFE ESTATES 0909.13.07
Consider ownership of a life estate to be real property. Creation of a life estate is a legal procedure to limit the ownership of an interest in real property to the person's lifetime.
A person creates a life estate by conveying ownership in real property to one or more other people while retaining lifetime rights to the property. The owner of a life estate retains the right to live in the property for the rest of his or her life. The life estate owner is responsible for upkeep and repair of the property, including payment of mortgage, taxes, and insurance. The owner may rent the property without consent of the property (remainder) owners and is entitled to all income and profits from property rental.
The person to whom the property is transferred (property owner or remainderman) have an equity interest in the property but cannot possess the property until the life estate is terminated. Unless the life estate contract states otherwise, the life estate is terminated when the life estate owner dies.
If the life estate owner lives in the property, exclude the value of the life estate as the person's homestead. If the life estate owner does not live in the property, follow the steps below to determine the value of the life estate:
1. Determine the equity value of the real property by subtracting any encumbrances from the fair market value. Follow §0909.13.03 (Real Property: Non-Homestead) to determine the fair market value and encumbrances.
2. Consult the mortality table in §0909.13.07.03 (Life Estate Mortality Table) to find the figure that corresponds to the person's current age in years.
3. Multiply the property's equity value by the appropriate figure from the life estate mortality table based on the life estate owner's age. The result is the life estate value.
If the life estate is held jointly, divide the equity value by the number of owners. Multiply each individual's share by the figure from the mortality table that applies to each person's age to compute each person's share.
4. Subtract the life estate value from step 3 from the property's equity value. The result is the property owner, or remainder, interest.
EXAMPLE:
Gregory applies for MA. He owns a life estate. At the time of application, he is 64 years and 7 months old. The estimated market value of the property is $60,000. There is an $8,000 mortgage.
To determine the value of the life estate, find the figure for age 64 in the life estate table. Multiply this figure (.69352) by the property's equity value of $52,000. The result, $36,063.04, is the equity value of Gregory's life estate ownership.
EXAMPLE:
Austin, age 70 years and 2 months, and Alberta, age 67 and 10 months, are a married couple who transferred their home to their son, reserving a life estate. At the time they apply for MA, the home has a market value of $70,000 with nothing owed. Austin and Alberta own the life estate jointly.
To determine the value of the life estate, divide the equity value by 2. Multiply the resulting $35,000 by the appropriate mortality table figure for each person. For Austin, the figure for age 70 is .60522, which results in a life estate value of $21,183. For Alberta, the figure for age 67 is .65098, which results in a life estate value of $22,784.
When two people own a life estate jointly and one owner dies, compute the life estate value for the remaining owner by multiplying the figure for that person's age by the full equity value of the property.
EXAMPLE:
Austin and Alberta own a life estate jointly. Alberta dies at age 72. Austin is 75. The market value of the property at the time of Alberta's death is $72,000 with nothing owed. Determine Austin's life estate by multiplying the appropriate figure for age 75 (.52149) by the market value of $72,000. Austin's life estate value is $37,547.
Consider creation of a life estate as a transfer of property at the time the life estate is created. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.) Follow the procedures above to determine the uncompensated value of the transfer.
Consider the value of a life estate to be not saleable unless:
• The owner of the remainder interest intends to purchase the life estate interest.
OR
• The owner of the life estate and the owner of the remainder interest sell the entire property.
EXAMPLE:
Gladys lives in an LTCF. She owns a life estate valued at $12,000. Her son Jim owns the remainder interest. Jim does not wish to buy Gladys's life estate interest. Neither Gladys nor Jim wishes to sell the entire property. Consider Gladys's life estate interest to be an unavailable asset.
EXAMPLE:
Sheldon lives in an LTCF. He owns a life estate valued at $10,000. His daughter Terri owns the remainder interest. Sheldon and Terri put the property up for sale. Consider Sheldon's life estate interest to be an unavailable asset until the property is sold. When the property is sold, multiply the net proceeds by the mortality table figure that corresponds to Sheldon's age. Consider Sheldon's share of the net proceeds as an asset.
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LIFE ESTATES MORTALITY TABLE 0909.13.07.03
|For Use After 11-30-83 |
|Single Life, Unisex, 10% Showing the Present Worth |
|of a Life Interest and of a Remainder Interest |
|Age |Life Estate|Remainder |Age |Life Estate|Remainder |Age |Life Estate|Remainder |
|0 |.97188 |.02812 |37 |.93026 |.06974 |74 |.53862 |.46138 |
|1 |.98988 |.01012 |38 |.92567 |.07433 |75 |.52149 |.47851 |
|2 |.99017 |.00983 |39 |.92083 |.07917 |76 |.50441 |.49559 |
|3 |.99008 |.00992 |40 |.91571 |.08429 |77 |.48742 |.51258 |
|4 |.98981 |.01019 |41 |.91030 |.08970 |78 |.47049 |.52951 |
|5 |.98938 |.01062 |42 |.90457 |.09543 |79 |.45357 |.54643 |
|6 |.98884 |.01116 |43 |.89855 |.10145 |80 |.43659 |.56341 |
|7 |.98822 |.01178 |44 |.89221 |.10779 |81 |.41967 |.58033 |
|8 |.98748 |.01252 |45 |.88558 |.11442 |82 |.40295 |.59705 |
|9 |.98663 |.01337 |46 |.87863 |.12137 |83 |.38642 |.61358 |
|10 |.98565 |.01435 |47 |.87137 |.12863 |84 |.36998 |.63002 |
|11 |.98453 |.01547 |48 |.86374 |.13626 |85 |.35359 |.64641 |
|12 |.98329 |.01671 |49 |.85578 |.14422 |86 |.33764 |.66236 |
|13 |.98198 |.01802 |50 |.84743 |.15257 |87 |.32262 |.67738 |
|14 |.98066 |.01934 |51 |.83874 |.16126 |88 |.30859 |.69141 |
|15 |.97937 |.02063 |52 |.82969 |.17031 |89 |.29526 |.70474 |
|16 |.97815 |.02185 |53 |.82028 |.17972 |90 |.28221 |.71779 |
|17 |.97700 |.02300 |54 |.81054 |.18946 |91 |.26955 |.73045 |
|18 |.97590 |.02410 |55 |.80046 |.19954 |92 |.25771 |.74229 |
|19 |.97480 |.02520 |56 |.79006 |.20994 |93 |.24692 |.75308 |
|20 |.97365 |.02635 |57 |.77931 |.22069 |94 |.23728 |.76272 |
|21 |.97245 |.02755 |58 |.76822 |.23178 |95 |.22887 |.77113 |
|22 |.97120 |.02880 |59 |.75675 |.24325 |96 |.22181 |.77819 |
|23 |.96986 |.03014 |60 |.74491 |.25509 |97 |.21550 |.78450 |
|24 |.96841 |.03159 |61 |.73267 |.26733 |98 |.21000 |.79000 |
|25 |.96678 |.03322 |62 |.72002 |.27998 |99 |.20486 |.79514 |
|26 |.96495 |.03505 |63 |.70696 |.29304 |100 |.19975 |.80025 |
|27 |.96290 |.03710 |64 |.69352 |.30648 |101 |.19532 |.80468 |
|28 |.96060 |.03938 |65 |.67970 |.32030 |102 |.19054 |.80946 |
|29 |.95813 |.04187 |66 |.66551 |.33449 |103 |.18437 |.81563 |
|30 |.95543 |.04457 |67 |.65098 |.34902 |104 |.17856 |.82144 |
|31 |.95254 |.04746 |68 |.63610 |.36390 |105 |.16962 |.83038 |
|32 |.94942 |.05058 |69 |.62086 |.37914 |106 |.15488 |.84512 |
|33 |.94608 |.05392 |70 |.60522 |.39478 |107 |.13409 |.86591 |
|34 |.94250 |.05750 |71 |.58914 |.41086 |108 |.10068 |.89932 |
|35 |.93868 |.06132 |72 |.57261 |.42739 |109 |.04545 |.95455 |
|36 |.93460 |.06540 |73 |.55571 |.44429 | |
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VEHICLES 0909.15
MinnesotaCare/MA Method A/GHO:
Exclude one vehicle for each household member of legal driving age used for employment or seeking employment. This includes vehicles used for employment or job search by household members who are not requesting or are not eligible for coverage. Exclude the highest valued vehicle(s), regardless of which vehicles the employed household members actually drive to work.
EXAMPLE:
Jon and Marie apply for MinnesotaCare for themselves, their 19-year-old son Ben, and their 17-year-old daughter Jessica. Jon and Marie have an asset limit of $30,000. Ben and Jessica have no asset limit. Jon and Ben are employed full time. Marie was laid off from her previous job and is seeking employment. Jessica is a full-time student and is employed part time. The family owns 4 vehicles. Exclude the equity value of all vehicles. If only three household members are employed or seeking employment, exclude the equity value of the three highest valued vehicles.
Exclude vehicles used in a trade or business if the equity value combined with other assets of the trade or business does not exceed $200,000. See §0909.11.03 (Excluded Assets for Self-Support).
Count the equity value of non-excluded vehicles. Use the information reported by the client to determine the fair market value and encumbrances. If the client does not supply a value, use the NADA trade-in value. If the client disputes the NADA value, accept the client’s statement of the vehicle’s value.
A vehicle may be any conveyance used on air, land, or water. It need not be licensed.
MA Method B/GAMC:
If a vehicle is used as a place of residence or it is essential for self-support, exclude the vehicle under those provisions. See §0909.13 (Real Property: Homestead) and §0909.11.03 (Excluded Assets for Self-Support). If a vehicle can not be excluded under the provisions above follow the policy below.
Exclude one vehicle per household regardless of the value if it is used for transportation of the client or a member of the client’s household. Assume the vehicle is used for transportation, unless there is evidence to the contrary. A vehicle may be any conveyance used on air, land, or water. It need not be licensed.
Only one vehicle can be used for transportation. If the household owns more than one vehicle that is used for transportation, exclude the vehicle with the highest equity value. Use the NADA trade-in value to determine the fair market value (FMV) of all non-excluded vehicles. To determine the equity value, subtract the balance owed on secured loans from the FMV. A secured loan is any loan for which the vehicle is held as collateral and/or the lender holds title to the vehicle.
EXAMPLE
Yara and Thor are both disabled and applying for MA. They own two vehicles, both of which are used for transportation. One vehicle has a FMV of $3400. The other vehicle has a FMV of $12,000 with $9000 owed, leaving an equity value of $3000. Since both vehicles are used for transportation, exclude the vehicle with the highest equity value, which in this case is the first one with a FMV of $3400.
Do not exclude the equity value of the following vehicles:
• A vehicle that has been junked,
• A vehicle that is used only as a recreational vehicle (e.g. a boat used on weekends for pleasure).
Count the equity value of any vehicle that does not meet an exclusion reason towards the asset limit.
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BURIAL FUNDS/LIFE INSURANCE: FUND TYPES 0909.17
Exclude up to $1,500 in burial funds for each applicant or enrollee, his/her spouse and health care-eligible dependent children. Spouses (including community spouses of clients who reside in LTC or receive services through the Elderly Waiver (EW) do not have to be health care-eligible to receive the burial fund exclusion. Dependent children (including those living with the community spouse of an LTC or EW client) must be health care-eligible to receive the burial fund exclusion. Do not count the value of burial space items toward the exclusion. See §0909.17.05 (Burial Space Items).
There are several types of burial funds. Evaluate all types owned by a client according to the specific provisions for that type of fund. Common types of burial funds include:
Life insurance. The face value of life insurance is the policy's death benefit at the time of purchase. The amount payable at the time of death may exceed the face value because of dividends and increased cash surrender value.
EXAMPLE:
Opal purchased a $1,000 life insurance policy in 1974. In 1999, the amount payable on death including dividends and other additions is $1,400. The policy’s face value is $1,000.
The cash surrender value is the amount the policy owner would receive if the policy were cashed in. Term policies have a face value but do not have a cash surrender value. Therefore they are not counted as assets.
• Insurance and annuity funded burials. An insurance funded burial is a life insurance policy with an irrevocable designation of a funeral provider as the beneficiary. The face value, or death benefit, of the policy will be paid to the funeral provider in exchange for the provision of agreed-upon goods and services. The irrevocable designation must be attached to the life insurance policy. Because Minnesota law allows people to change funeral providers, the designation must state, Any funeral provider whose interest may appear, irrevocably. The statement of goods and services to be provided may be revocable or irrevocable. Because the policy's benefits have been irrevocably assigned to the funeral provider, the cash surrender value is no longer available to the policy owner.
• Annuity funded burials are similar arrangements with the goods and services funded by purchase of an annuity. By irrevocably designating a funeral provider as the beneficiary, the annuity owner gives up all rights to receive income from the annuity.
• Insurance and annuity funded burials may be for any amount, although the MA burial exclusion is limited to $1,500. They may include items such as flowers and obituary notices in addition to professional services and burial space items. Amounts in excess of the burial exclusion are an unavailable asset.
Determine if clients received adequate compensation for the value of an irrevocably designated life insurance policy or annuity. The client received adequate compensation if:
• The statement of goods and services is for an amount equal to or greater than the purchase price of the life insurance policy or annuity.
• AND
• The burial agreement does not fund items already covered by a previous burial agreement.
If these conditions are not met, determine whether the client has made an improper transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.)
EXAMPLE:
Jane purchases a $5,000 life insurance policy to fund a burial agreement. She has a statement of goods and services with a funeral home which includes $2,000 for professional services, $2,000 for a casket, and $1,000 for a burial plot and marker. Jane already owns a plot and marker. Consider the $1,000 as an improper transfer.
See the program-specific instructions at the end of this section for additional requirements for insurance- and annuity-funded burials for people who use MA Method B or GAMC .
• Burial agreements. Burial agreements require that a specified amount be deposited with a funeral director to be used for funeral expenses. The agreement may cover funeral and professional services, burial space items, or both. The money is usually held in trust by a bank or other financial institution unless the agreement is funded by an insurance policy or annuity.
Burial agreements may be revocable or irrevocable. The money is payable on death to the funeral director. If the agreement is irrevocable, it cannot be withdrawn before the depositor's death.
Irrevocable burial agreements can be written in any amount. However, under Minnesota law, irrevocable burial agreements set up by a Minnesota funeral director are only irrevocable up to $2,000. Depositors may legally withdraw amounts over $2,000 regardless of the terms of the agreement. Irrevocable burial agreements set up in another state are considered irrevocable up to the full amount allowed under that state's laws.
• Other assets. If a balance of the $1,500 burial fund exclusion remains after applying the face value of life insurance and irrevocable burial funds according to §0909.17.03 (Determining the Burial Fund Exclusion), the client can apply the assets listed below toward the balance of the burial fund exclusion. Do not apply the value of any other property toward the exclusion.
• CSV of life insurance policies.
• Dividends from life insurance policies.
• Revocable burial agreements.
• Revocable burial trusts.
• Other revocable burial agreements (including the value of certain installment sales contracts for burial spaces).
• Cash.
• Financial accounts (for example, savings or checking accounts).
• Other financial assets with a definite cash value (stocks, bonds, certificate of deposit (CD), trusts).
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MinnesotaCare/MA Method A/GHO:
Follow general provisions.
MA Method B/GAMC:
In addition to the requirements in the general provisions, insurance-and annuity-funded burials must irrevocably designate the person’s estate as the contingent beneficiary to the extent the proceeds are not used for payment of selected burial expenses.
DETERMINING THE BURIAL FUND EXCLUSION 0909.17.03
Apply the following assets to the $1,500 burial fund exclusion in the order listed.
1. Life insurance. If the client owns one or more life insurance policies with total face value of $1,500 or less, apply the face value to the burial fund exclusion and proceed to step 2. Exclude term life policies from this calculation. Include insurance policies with an irrevocable designation to any funeral home.
If the total face value of non-term life insurance is greater than $1,500, total the cash surrender value(s) (CSV) of all life insurance policies with available CSV and count it toward the asset limit. Do not include the CSV of any policy with an irrevocable designation towards the asset limit. If after completing step 2, a balance remains in the burial fund exclusion, any available CSV of the life insurance policies may be applied to the burial fund exclusion. See step 3.
2. Irrevocable burial agreements. Apply irrevocable burial accounts of up to $2,000 (or the amount allowed by state law if the agreement was set up in another state) as follows:
1. If no life insurance face value was applied in step 1, apply the total amount of the burial account, up to $1,500, to the burial fund exclusion. Consider any remaining amount up to $2,000 as an unavailable asset.
EXAMPLE:
Bob has no life insurance and an irrevocable burial agreement of $1,000. Apply the entire $1,000 toward the burial exclusion. Bob may apply up to $500 in other assets to the remaining burial exclusion. See step 3.
2. If life insurance face value of less than $1,500 was applied in step 1, subtract the face value applied from $1,500. Apply the difference to the burial exclusion. Consider any remaining amount in the burial account as an unavailable asset.
EXAMPLE:
Gladys has a life insurance policy with a face value of $800 and an irrevocable burial fund of $2,000. Apply the entire face value of the life insurance to the burial exclusion. Apply $700 of the burial fund to the burial exclusion for a total of $1,500. Consider the remaining $1,300 of the burial fund as an unavailable asset
3. If $1,500 of life insurance face value was applied in step 1, consider the entire $2,000 irrevocable burial account as an unavailable asset.
EXAMPLE:
George has a life insurance policy of $1,500 to which he attached an irrevocable designation. He also has a $2,000 irrevocable burial fund. The life insurance policy and the burial account fund different items. Apply the face value of the life insurance policy to the burial fund exclusion. Consider the $2,000 irrevocable burial fund as an unavailable asset.
Count any amount over $2,000 held in an irrevocable burial account set up in Minnesota as an available asset. Do not count itemized amounts for burial space items. See §0909.17.05 (Burial Space Items).
4. Other assets designated by the client. If a balance of the $1,500 burial fund exclusion remains after applying the face value(s) of life insurance and/or irrevocable burial agreement, the client can apply the assets listed in §0909.17 (Burial Funds/Life Insurance: Fund Types) toward the balance of the burial fund exclusion. Apply the difference between $1,500 and the amounts applied in steps 1 and 2.
EXAMPLE:
Helen owns 2 non-term life insurance policies with total face value of $2,500 and CSV of $1,200. She owns no burial funds and has not designated either policy to a funeral home. Because the life insurance face value exceeds $1,500, none of it can be applied toward the burial exclusion. Helen may designate the $1,200 CSV toward the burial exclusion. She may also designate up to $300 in other assets listed in §0909.17 (Burial Funds/Life Insurance: Fund Types) for a total of $1,500.
EXAMPLE:
Jackson owns a non-term life insurance policy with face value of $500, a revocable burial fund with face value of $750 and accrued interest of $150 for a total of $900, and a savings account with a balance of $2,500. After applying the face value of the life insurance, a balance of $1,000 remains to be applied to the burial fund exclusion. Jackson may designate $1,000 from the revocable burial fund plus interest and the savings account to make up the balance. Count the remaining $2,400 ($900 + $2,500 = $3,400, less $1,000 leaves $2,400) toward the asset limit.
Burial-related assets must be kept separate from other assets to be excluded. Burial-related assets are burial funds and burial spaces.
Do not require clients to separate burial funds from other assets if there is a circumstance beyond their control which makes the separation of funds impractical or requires the consent of non-household members who refuse to cooperate.
EXAMPLE:
Marlys has a life insurance policy with a face value of $4,000 and available CSV of $3,000. She previously designated $1,500 of the $3,000 CSV as a burial fund. It would be impractical to separate burial assets from other assets because she would have to borrow from the policy and pay interest to separate the burial fund from other assets. Document in the case record the specific reason why the burial assets cannot be separated.
Exclude any interest which accumulates on the burial fund if the interest remains in the fund after the initial valuation. For applicants, begin excluding interest the month of application or the month the burial fund is designated in a separate account, whichever is later.
Do not exclude dividend accumulations of a life insurance policy. Dividend accumulations must be counted as assets. Dividends may be designated as a burial fund. See step 3 above.
If there is a full calendar month break in MA eligibility, and the client later reapplies for MA, exclude up to $1,500 as a burial fund but do not exclude any interest which had accumulated in the fund unless the interest had previously been designated as irrevocable.
EXAMPLE:
John applies for MA and designates his savings account of $1,500 as a burial fund. While he receives MA, $300 in interest accumulates on the burial fund. John's MA is terminated. He reapplies several months later. John again designates his $1,500 savings account as a burial exclusion. Count the $300 in interest toward the asset limit because John was off MA for more than 1 calendar month.
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BURIAL SPACE ITEMS 0909.17.05
Exclude 1 burial space and appropriate burial space items held for the use of each eligible person and each member of that person's immediate family. The person's immediate family members are spouse, parents, adult or minor children or stepchildren, siblings, spouses of any of the preceding, and people related by adoption. Exclude these burial spaces even if the family member for whom they are held does not live in the same home as the MA or GAMC client.
Burial spaces include any repository for the remains of the deceased such as cemetery plots, urns, vaults, crypts, and caskets. Burial space items include such things as markers, opening and closing of the grave, and 1-time charges for preservation/care of the space (perpetual care).
Exclude accumulated interest on burial space contracts as long as it stays in the fund.
Contracts for burial spaces which are paid in installments, or contracts where burial space costs are indistinguishable from funeral service costs, are not burial spaces. Treat them as burial contracts. See §0909.17 (Burial Funds/Life Insurance: Fund Types).
Exclude itemized burial spaces and burial space items that are included in an irrevocable burial fund. Do not exclude amounts that are set aside for other unspecified expenses. Do not exclude amounts for non-burial space items, such as flowers, obituary notices and death certificates, unless the burial agreement is funded by a life insurance policy or annuity.
EXAMPLE:
Bertha has an irrevocable funeral agreement for $2,000. The agreement is not funded by a life insurance policy or annuity. The agreement includes amounts for a casket, vault, grave site, and opening and closing costs. It also includes $500 for, other services as needed. Do not exclude the $500 unless the contract is rewritten to specify which burial space expenses the $500 will cover.
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PENSION AND RETIREMENT FUNDS 0909.19
MinnesotaCare/MA Method A/GHO:
Exclude pension and retirement funds. This includes individually owned retirement instruments and employer-based plans, including funds left in the employer’s plan when the employee leaves employment. Examples of excluded funds include but are not limited to IRAs, 457 deferred compensation plans, and 401K plans. Other examples are employee retirement funds, such as PERA and other public and private employer plans. Exclude these plans for both current and former employees, if the funds remain in the plan. Do not exclude assets that are not held in a retirement instrument, even if the owner intends to use the funds for retirement.
EXAMPLE:
George has an IRA. He is also a former public employee. He chose to leave his contributions in his pension plan when he changed jobs. He has a 401K through is current employer. All three of these funds are excluded from his asset limit.
EXAMPLE:
Michele has a 401K plan from a former employer. She has a 457 deferred compensation plan through her current employer. She also has a savings certificate that she intends to use for retirement. Exclude the 401K and the deferred compensation plan from Michele’s asset limit. Count the savings certificate. See §0909.11 (Excluded Assets).
MA Method B/GAMC:
MA-EPD only: Follow MinnesotaCare/MA Method A/GHO.
All other Method B and GAMC: Count the full amount of pension and retirement funds if available, whether owned individually or through an employer or union.
Consider pension funds held by an employer or union unavailable if the employee cannot gain access to them.
EXAMPLE:
Joe is a substitute teacher. He has a pension fund with the Teacher’s Retirement Association. He cannot gain access to these funds. Exclude the balance from the asset limit. Do not require verification of the balance.
Count the full amount of pension and retirement funds held by an employer or union if they are available to a current employee. Circumstances under which funds are available will vary but may include disability, purchase of a home, or educational needs.
EXAMPLE:
Fern has a deferred compensation plan through her employer. She is currently on medical leave for several months. The deferred compensation plan is available in cases of disability. Determine whether Fern’s medical leave meets conditions for early withdrawal. Count the full amount that is currently available for withdrawal.
Count the full amount of pension and retirement funds held by an employer or union and available to a former employee.
EXAMPLE:
Mary is a former county employee. She has $3,000 in a PERA account. Mary must apply for the available funds. Count the money as income in the month it is received and as an asset if retained the following month.
For IRAs, Keogh plans, and other retirement funds held by individuals, subtract the early withdrawal penalty from the amount in the plan to determine the countable value.
EXAMPLE:
Bernard has an IRA with a balance of $3,500. If he cashes it in, he will have to pay $300 as an early withdrawal penalty. Count $3,200 toward the asset limit.
Minnesota Rules 9505.0065 subp. 3
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TRUSTS 0909.21
Determine whether funds held in trust are available to the applicant or enrollee. Exclude unavailable trust funds from the asset limit. Exclude children’s assets.
Payments made from a trust may be counted as income regardless of whether the trust principal, or corpus, is considered available.
You may need to determine if funds or other property placed in a trust result in an improper transfer of assets for MA and GAMC. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.) and the specific provisions of this section.
Several factors affect trust availability, including but not limited to:
• The type of trust. Some trusts, such as Special Needs Trusts and Supplemental Needs Trusts, have special provisions governing availability. See §0909.21.03 (Supplemental Needs Trusts) and §0909.21.05 (Special Needs Trusts).
• When the trust was established.
• Trusts established on or after 8-11-93 may be treated differently than trusts established before that date. See §0909.21.09 (Trusts Established on or After 8-11-93) and §0909.21.07 (Trusts Established Before 8-11-93).
• Some trusts have provisions that limit trust benefits to the beneficiary or divert trust benefits to someone else if the beneficiary applies for or becomes eligible for public assistance, including MA. Such provisions in most trusts created in Minnesota on or after 7-1-92 are unenforceable. This includes trusts set up in a will with the client as beneficiary. However, Supplemental Needs Trusts are exempt from these restrictions. See §0909.21.03 (Supplemental Needs Trusts).
To determine when the trust was created, use the execution date of the first instrument with such a provision, even if the provision is later amended or the trust is not funded until later.
EXAMPLE:
Mr. Williams executed his will on 1-2-91. The provisions of the will put his estate into trust for his wife, with the provision that the trust benefits be diverted to their son if his wife becomes eligible for public assistance. Mr. Williams died on 3-5-93. His wife entered a nursing home on 9-5-97, at age 70. Because the trust was created by a will executed before 7-1-92, the provision diverting benefits to the son is probably enforceable. Request a determination from the county attorney if the provisions are unclear.
EXAMPLE:
Mr. Stevens placed most of his assets in a trust naming himself as beneficiary on 6-5-94. The trust instrument contains a provision that the funds will become unavailable to Mr. Stevens unless approved by a trustee if he becomes eligible for public assistance. Mr. Stevens enters a nursing home on 2-15-98. He would be eligible for MA except for the trust. The trustee states that no funds will be made available for Mr. Stevens' medical care. Because the trust was created after 7-1-92, this provision is unenforceable. Request a determination from the county attorney if the provisions are unclear.
Supplemental Needs Trusts are exempt from these restrictions. See §0909.21.03 (Supplemental Needs Trusts).
Whose funds or property were used to establish the trust. See §0909.21.03 (Supplemental Needs Trusts) and §0909.21.05 (Special Needs Trusts).
Specific provisions of the court order or other document establishing the trust.
Minnesota Rules 9505.0065 subp. 3
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SUPPLEMENTAL NEEDS TRUSTS 0909.21.03
To be a Supplemental Needs Trust (SNT), a trust must meet all of the following conditions:
• The trust must have been established on or after 7-1-92.
• The trust must be set up to benefit a person who was certified as disabled BEFORE THE TRUST WAS CREATED and, except for a Zebley trust and the two permissible trusts described below, funded by someone other than:
• The beneficiary. The beneficiary is the person(s) designated in the trust as benefiting in some way from the trust, except for the trustee or other individual whose benefit consists only of reasonable fees or payments for managing or administering the trust. The beneficiary can be the grantor, another person or persons, or a combination.
OR
• The beneficiary's spouse.
OR
• Anyone required to pay a sum to or for the trust beneficiary under the terms of a settlement.
SNT's may be set up by others such as parents, grandparents, or legal guardians.
For this purpose, a person with a disability is someone certified as disabled before the creation of the trust by one of the following:
• The Social Security Administration (SSA). See §0906.15 (Disability Determinations).
OR
• The State Medical Review Team (SMRT). See §0906.15.03 (Disability Determinations/SMRT Referral).
OR
• A licensed professional qualified to diagnose the illness or condition. The licensed professional must determine that the person has a physical or mental illness that substantially impairs the person's ability to care for himself or herself. The condition must be expected to last for a continuous period of 12 months or more. A second licensed professional of the same qualification must confirm the diagnosis in writing.
If the person was certified disabled AFTER creation of the trust, the trust does not meet the criteria for a special needs trust.
• The general purpose of the trust must be to cover reasonable living expenses and other basic needs of a person with a disability when public assistance does not provide enough for those needs. The trust may allow distributions to cover all or part of the reasonable living expenses of the beneficiary.
• The trust may allow or require distributions only to supplement or complement benefits from public assistance programs. It must prohibit disbursements to replace or reduce public assistance otherwise available.
The following are exceptions to the limitations on whose funds may be used to set up the trust:
• Trusts set up with payments made to the client by SSA under the Sullivan v. Zebley decision. These are known as Zebley trusts.
• A trust created on or after 8-11-93 for the sole benefit of a disabled person with his or her own assets by a parent, grandparent, legal guardian, court, or administrative body if the trust provides that any remaining trust principal reverts to DHS after the disabled person's death to the extent MA was paid for the disabled person during life. See §0909.21.05 (Special Needs Trusts).
• A pooled trust for the sole benefit of disabled persons created on or after 8-11-93 managed by a non-profit association with the income or assets of disabled persons and established by the disabled persons, their parents, grandparents, legal guardians, or a court, which provides that any remaining principal reverts to DHS after the disabled persons' death to the extent MA was paid for the disabled person during life. See §0909.21.05 (Special Needs Trusts).
The trusts described in the last two bullets above meet the criteria for Special Needs Trusts. Exclude the trust corpus (principal) of these trusts as an asset. See §0909.21.05 (Special Needs Trusts).
SNTs that do not meet the criteria to be excluded as a Special Needs Trusts may be considered available assets. Trusts that do not meet SNT provisions include supplemental needs trusts set up on or after 7-1-93 to benefit a client who:
• Is over age 64.
AND
• Becomes a patient or resident in a state institution or nursing facility for 6 months or more. Do not consider a group residential housing (GRH) facility to be a state institution or nursing facility for this purpose.
AND
• Has no reasonable expectation of discharge from the institution because of medical need for institutional care. Accept a physician's statement that there is a reasonable expectation of discharge.
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SPECIAL NEEDS TRUSTS 0909.21.05
For trusts established ON or AFTER 8-11-93:
If a trust meets all of the general criteria AND the criteria listed for 1 of the 2 types of Special Needs Trusts described below, the corpus (principal) is considered an excluded asset for MA purposes.
To be considered a Special Needs Trust, the trust must meet all of the following general criteria:
• A Special Needs Trust must contain only the income and/or assets of the disabled client to be considered an excluded trust. If the trust contains the income or assets of the client and others, including the client's spouse, it can be treated as a Special Needs Trust if it is for the sole benefit of the disabled person.
Require the trustee to verify whether the trust allows for funding by other persons or allows the trustee the power to receive additions to the trust from any other source. The trustee must verify the source and amount of all additions to the trust at the time of the 6-month income or income and asset review. See §0905.09 (6-Month Reporting).
• A Special Needs Trust must specify that upon termination of the trust, DHS will receive all amounts remaining in the trust up to an amount equal to the total medical expenses paid through MA on the client's behalf.
If the trust is revocable, it must contain a clause that certifies DHS is the primary recipient of the funds remaining in the trust upon the death of the client. If the trust is revoked prior to the death of the client, the corpus of the trust is no longer excluded. Review assets to determine the client’s continued eligibility.
If the trust is irrevocable, it must contain a clause that certifies DHS is the primary beneficiary upon the death of the client.
The following do not meet the Special Needs Trust criteria:
• A trust that allows for payment of debts or expenses before disbursement of the funds in the trust to DHS. Expenses that are not allowed to be paid first include expenses for last illness and funeral, and outstanding debts or expenses.
• A trust that allows for payment of any other expenses before disbursement of the funds in the trust to DHS. Expenses that are not allowed to be paid first include expenses for last illness and funeral, outstanding debt, or any other types of payments.
• A trust that allows for payment of any and all administrative expenses or attorney's fees and trustee's fees. Allow payment of administrative expenses and fees IF the trust contains a provision stating that the expenses and fees must be reasonable.
Administrative expenses or attorney's and trustee's fees related to termination of the trust before disbursement of the funds to DHS are permissible only if the trust clearly states that it will allow reasonable and necessary administrative expenses:
• Approved by DHS.
OR
• Approved by the probate court with advance notice to DHS.
The trust must state that distributions from the trust are for the sole benefit of the client at the time the trust is established or any time in the future. Trusts that allow for payments to the spouse or dependents do NOT meet this criteria even if the client has no spouse or dependents. The trust may provide for payment of reasonable and necessary administrative expenses and fees as noted above.
To be considered an excluded Special Needs Trust, a trust must meet all the criteria of one of the following two types of trust in addition to the general criteria.
TRUST FOR DISABLED CLIENT UNDER AGE 65:
• The client must be under age 65 when the trust is established. A trust established while a person is under 65 remains excluded when the person reaches 65. However, consider any addition to the trust after the client reaches age 65 as an asset transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.)
• The client must be disabled according to Social Security or State Medical Review Team (SMRT) criteria. See §0906.15 (Disability Determinations). If the client was not receiving SSI or RSDI payments at the time the trust was established, SMRT must determine that the client was disabled at the time the trust was established.
• The trust must be established by the client's parent, grandparent, legal guardian, or a court using the client’s own funds or the funds of others, if it is for the sole benefit of the disabled person. It cannot be established by the client.
POOLED TRUST FOR DISABLED PEOPLE:
• The trust must be managed by a non-profit association and contain separate trust accounts of more than one person.
• A separate account within this pooled trust must be maintained for the client. However, the income or assets of all beneficiaries of the trust may be pooled for investment and management purposes.
• The client's separate trust account must contain the income and/or assets of only the client.
• The client must be disabled according to Social Security disability criteria at the time the trust is established. If the client was not receiving SSI or RSDI Disability benefits at the time the trust was established, SMRT must make a retroactive determination that the client was disabled at that time. See §0906.15 (Disability Determinations) and §0906.15.03 (Disability Determination/SMRT Referral).
• The trust account must be established by the client, the client's parent(s), grandparent(s), legal guardian, or a court using the client's funds.
A 3rd type of Special Needs Trust, established solely with the regular income of the disabled person, is NOT an exempt trust for purposes of MA in Minnesota. This is often called a Miller Trust.
A Special Needs Trust is a Supplemental Needs Trust. However, some Supplemental Needs Trust may not meet the criteria for a Special Needs Trusts. Base the determination on whose income and/or assets were used to set up the trust. A Special Needs Trust must be set up with the client’s own funds. It may also contain the assets of others, if it is for the sole benefit of the disabled person. Supplemental Needs Trusts may be set up by others. See §0909.21.03 (Supplemental Needs Trusts).
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TRUSTS ESTABLISHED BEFORE 8-11-93 0909.21.07
To analyze a trust established BEFORE 8-11-93, apply the policies below in the order listed:
1. REVOCABLE TRUSTS. Consider trust principal and any undisbursed income of a revocable trust as an available asset to a client because the client has the legal power to revoke the trust. Count any income from a revocable trust paid to the client as unearned income in the month the client receives it.
The undisbursed income is any amount that could be paid out under the terms in the trust but that remains in the trust.
2. CLIENT-CREATED TRUSTS (also called MEDICAID QUALIFYING TRUSTS). This is a trust or similar legal device a client or a client's spouse sets up naming the client as one of the beneficiaries and giving a trustee discretion to disburse from the trust. Consider this type of trust as either unearned income or an asset, based on whether the trustee disburses funds. This includes trusts set up to benefit a client at the direction of the client or the client's spouse by a client's guardian or legal representative or by a court.
• Count as assets the maximum amount of undisbursed funds that the trustee could disburse in a budget period if he or she used full discretion. This may include any trust principal and/or trust income that the trustee could, but does not, disburse.
Do NOT count the undisbursed funds if:
• The trust was set up before 4-7-86 solely to benefit a client with mental retardation living in an intermediate care facility for people with mental retardation.
OR
• The trust was created by will.
OR
• The trust was set up by the client with retroactive SSI benefits awarded by the Social Security Administration under SULLIVAN V. ZEBLEY. See §0909.21.03 (Supplemental Needs Trusts).
• Count as unearned income the amount the trustee actually disburses in the month received.
3. OTHER TRUSTS
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MINNESOTACARE AND MA/GAMC Method A:
If neither 1 or 2 applies, and the trust was established by a 3rd party NOT using the assets or income of the client, the client must contact the trustee to determine whether any trust funds are available. Applicants have 30 days from receipt of the notice, or to the end of the month of application, whichever is later, to begin this action. Enrollees have 30 days from the date of the notice to begin this action. Approve or continue eligibility while the client takes this action. Consider the trust funds unavailable until the client establishes access to the funds. Any amount the client actually receives is unearned income in the month received.
MA/GAMC Method B:
If neither 1 or 2 applies, and the trust was established by a 3rd party NOT using the assets or income of the client, consider trust principal to be unavailable if the client's access is restricted. Restricted access means only a trustee can withdraw funds from the trust principal. A client who is a beneficiary entitled to trust income must contact the trustee to determine if the trustee will disburse trust income to him or her. Approve or continue eligibility while the client takes appropriate action. Trust income is unavailable until it is disbursed. It is unearned income in the month of receipt. See §0911.07.05 (Unearned Income).
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TRUSTS ESTABLISHED ON OR AFTER 8-11-93 0909.21.09
This section applies to trusts established other than by a will on or after 8-11-93. For trusts established before 8-11-93, which have been changed or had additional resources added after 8-10-93 but have not been dissolved and re-established, see §0909.21.07 (Trusts Established Before 8-11-93).
The trust must be established by 1 or more of the following:
• The client.
• The client's spouse.
• The client's representative, including a court or administrative body with legal authority to act in place of or on behalf of the person or spouse. This includes proceeds from successful litigation when the court uses these to fund a trust.
• A person, court or administrative body acting at the direction of or on request of the client or spouse.
This section applies to a trust when the income and/or assets of the client or spouse are used to fund the trust. When the income or assets of other people are used to fund the trust, this section only applies to the client's and spouse's portion of the trust. Determine the client's/spouse's portion of the trust by dividing the total value of the trust corpus by the value of the income and/or assets owned by the client or his or her spouse before placing it into the trust.
Apply these policies regardless of any of the following stipulations that may be contained in the trust document:
• Purpose, whether limited or unlimited, for which the trust was established.
• Whether the trustee has discretion or discretion is actually exercised.
• Whether there are any restrictions on when or whether distributions may be made.
• Whether there are any restrictions on the use of distributions from the trust.
There are 3 steps to evaluate a trust established on or after 8-11-93:
1. Determine whether it meets all of the criteria for one of the two types of special needs trusts described in §0909.21.05 (Special Needs Trusts). If the trust qualifies as a Special Needs Trust, exclude the trust corpus as an asset.
2. If the trust does not meet all of the criteria for one of the special needs trusts, determine whether the trust is revocable or irrevocable. Determine if the trust is considered an available asset. Do not count children’s assets.
For revocable trusts that are not Special Needs Trusts:
• Count the entire trust corpus, or the portion of the trust corpus attributable to the client if it was jointly funded, as an available asset.
• Consider disbursements made from the trust to purchase items for the client or that are put into a different type of account as an asset conversion.
• Consider payments made from the trust that are not made to the client or are not for the benefit of the client as a transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.).
For irrevocable trusts that are not Special Needs Trusts:
• When a payment can be made from the trust corpus or income to or for the benefit of the client, consider the amount available for distribution as an available asset.
• Consider any disbursements from the trust that are not liquid as an asset conversion.
• Consider any payments made from the trust for any purpose other than to the client or for the benefit of the client as a transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.).
• When no distributions from the trust can be made under any circumstances, either from the corpus or income earned by the trust, the portion of the trust corpus and income earned by the corpus from which no payment could be made is considered an uncompensated transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.).
3. If the trust is considered an available asset as a revocable or irrevocable trust that is not excluded as a special needs trust, at the client's request, determine whether the value of the trust should be waived as an asset due to undue hardship to the client. See §0909.31 (Waiver of Asset Rules).
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ANNUITIES 0909.23
An annuity is a series of payments made at set intervals for a specific period under a contract purchased earlier. An immediate annuity starts payments within one year of purchase. A deferred annuity starts payments at some future age of the annuitant.
The owner is the person who may exercise the rights provided in the annuity contract during the life of the annuitant. The annuitant is the person who is entitled to payments under a settlement option. An owner can name himself/herself or another person as the annuitant. The beneficiary is the person who will receive benefits if the annuitant dies before the annuity starting date or will receive any remaining payments under a settlement option after the annuitant's death. There may be a recision (or right to cancel) period that immediately follows the purchase of an annuity, during which the owner can cancel the purchase.
Treat annuity payments as unearned income. See §0911.07.05 (Unearned Income).
For life expectancy table on annuities as uncompensated transfers, see §0909.23.03 (Life Expectancy Table - Annuities).
Evaluate assets held in an annuity naming the client as the annuitant as follows:
During the accumulation phase of annuity ownership, when funds are paid into the annuity, the owner can usually cash in, or surrender, the annuity for its cash value or surrender value. Cash value equals the total deposits made to the annuity, plus any earnings on those deposits not previously paid out, minus any earlier withdrawals and any surrender costs charged for withdrawal. Do NOT allow income tax withheld or tax penalties for early withdrawal as deductions from cash value.
Determine whether the client can withdraw the cash value. If yes, consider the cash value as an available asset regardless of whether it is actually withdrawn. If the client withdraws the cash value, consider the amount withdrawn as a conversion of assets.
The 2nd phase, called annuitization, occurs when the owner chooses a periodic payment option, also called a settlement option. Choosing a settlement option locks in the way the funds from the annuity will be paid out. It involves choosing the amount of each payment, how often payments will be made, and the length of time over which the payments will be made.
A client can purchase an immediate annuity with a lump sum and immediately annuitize it by choosing a settlement option. A beneficiary of any funds remaining after the death of the annuitant is also named at the point of annuitization.
Once annuitization occurs, the person cannot change the settlement option. There is usually no longer a cash value to count towards assets because the funds are no longer available as a lump sum. Annuities allow a free look period (at least 10 days under Minnesota law) during which the owner may request cancellation of the contract and a refund of payments without penalty. Also, some annuities have a commuted cash value which allows the owner to cash in the value of all future payments even after annuitization. Request verification if it is unclear whether the annuity is in the free look period or has an available cash value. Count any available cash value as an asset whether or not it is actually withdrawn.
At the time of the asset assessment, count the cash value of an annuity owned by either spouse toward the couple’s asset total if the annuity:
• Has not been annuitized,
OR
• Is in the free look period
OR
• Has a commuted cash value See §0909.25 (Spousal Asset Assessments).
Evaluate annuitization by a client or spouse as a transfer of assets. See §0909.27 (Asset Transfers), §0909.27.01 (MA Transfers--Cont.) and §0909.27.09 (Determining Uncompensated Value).
Require verification of the following items from the person or entity (usually an insurance company) that sold the client the annuity:
• Under what circumstances, if any, can the annuity be sold, cashed in, or assigned to someone else.
• Cash value of the annuity on the day of annuitization.
• Anyone other than the client named as annuitant.
• Anyone named as beneficiaries.
• The settlement option chosen, including how often payments are made, the value of each payment and how long payments will be made.
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LIFE EXPECTANCY TABLE - ANNUITIES 0909.23.03
|Age |Average # of Years of |Average # of Years of |Age |Average # of Years of |Average # of Years of Life|
| |Life Remaining - Male |Life Remaining - Female| |Life Remaining - Male |Remaining - Female |
|0-9 |73.26 |79.26 |73 |10.67 |13.40 |
|10-19 |64.03 |69.93 |74 |10.12 |12.74 |
|20-29 |54.41 |60.13 |75 |9.58 |12.00 |
|30-39 |45.14 |50.43 |76 |9.06 |11.46 |
|40-49 |35.94 |40.86 |77 |8.56 |10.85 |
|50-59 |27.13 |31.61 |78 |8.07 |10.25 |
|60 |19.07 |22.99 |79 |7.61 |9.67 |
|61 |18.33 |22.18 |80 |7.16 |9.11 |
|62 |17.60 |21.38 |81 |6.72 |8.57 |
|63 |16.89 |20.60 |82 |6.31 |8.04 |
|64 |16.19 |19.82 |83 |5.92 |7.54 |
|65 |15.52 |19.06 |84 |5.55 |7.05 |
|66 |14.86 |18.31 |85 |5.20 |6.59 |
|67 |14.23 |17.58 |86 |4.86 |6.15 |
|68 |13.61 |16.85 |87 |4.55 |5.74 |
|69 |13.00 |16.14 |88 |4.26 |5.34 |
|70 |12.41 |15.44 |89 |3.98 |4.97 |
|71 |11.82 |14.85 |90-94 |3.73 |4.63 |
|72 |11.24 |14.06 |95-99 |2.71 |3.26 |
| | | |100-109 |2.05 |2.39 |
| | | |110 |1.14 |1.22 |
| | | | |
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SPOUSAL ASSET ASSESSMENTS 0909.25
MinnesotaCare:
No provisions.
MA:
The following provisions apply to married people when one spouse:
• Begins a period of institutionalization, in any state, anticipated to last at least 30 consecutive days on or after 10-1-89.
OR
• Was screened by the Long Term Care Consultation (LTCC) team on or after 7-1-91 and was receiving or is anticipated to begin home care services within 90 days of the LTCC and will continue for at least 30 consecutive days. See CONTINUOUS PERIOD OF INSTITUTIONALIZATION in §0902.07 (Glossary: Client...) for instructions on determining 30 consecutive days. Verify the anticipated duration of home care services through the agency providing the services or the LTCC team.
An asset assessment is a snapshot of all non-excluded assets owned by either or both of the spouses at the time of the first continuous period of institutionalization in any state. People are not required to complete an asset assessment before applying for MA. However, because the asset assessment determines the amount of assets to be attributed to each spouse and does not change from the date of the first continuous period of institutionalization, it may be easier to complete at that time.
Do not require people to divide assets between the spouses at the time of the asset assessment. The asset assessment is an estimate of the amount of assets each spouse can retain when the LTC spouse applies for MA. Determine the amount of assets to attribute to each spouse at the time of application.
Complete an asset assessment at the request of either an LTC or community spouse on or after the date that one spouse:
• Begins residing in a long term care facility (LTCF).
OR
• Has had a LTCC and begins receiving home care services which would be covered by the Elderly Waiver (EW) program if the person was eligible for MA for a period expected to last at least 30 consecutive days. See CONTINUOUS PERIOD OF INSTITUTIONALIZATION in §0902.07 (Glossary: Client...) for instructions on determining 30 consecutive days.
EXAMPLE:
John enters an LTCF in 1998. His wife Greta continues to reside in the community. John and Greta do not expect to need MA for John's care for approximately two years. They request an asset assessment to help them plan for John's care. Complete the assessment as of the date John entered the LTCF.
Require an asset assessment at the time of application for MA if an assessment was not previously completed in any state, or if a previously completed assessment is not available.
Provide the Asset Assessment Form (DHS 3340) for the client to complete. Record the results of the assessment on the DHS 3340a. The effective date of the assessment is the earliest of the first day of the first continuous period of:
• Admission to a medical hospital.
OR
• Admission to a nursing facility (NF).
OR
• Receipt of home care services that would be covered by Elderly Waiver (EW) or Alternative Care (AC) program, or the LTCC date, whichever is later.
Use the same asset assessment at every application where you calculate a community spouse asset allowance.
EXAMPLE:
Norman is admitted to a medical hospital on June 2, 1996. On July 7, he enters an LTCF for convalescent care. He is discharged to his home on October 10, 1996. He does not apply for MA for any part of this period. On November 2, 1996, he is readmitted to the LTCF. His wife remains in the community. They apply for MA for Norman on September 15, 1997. Base the asset assessment on assets owned by Norman and his wife on June 2, 1996.
Count the equity value of all non-excluded assets in the assessment. Count annuities if they have not been annuitized, they are in the free look period, or they have a commuted cash value as defined in §0909.23 (Annuities). Also count the corpus of a trust set up for the sole benefit of the community spouse even if disbursements began before the date of the asset assessment.
Do not consider the availability of an asset when completing an assessment. Only consider availability at application when determining which assets count toward the applicant's asset limit. Verify all assets included in the assessment at the time of the assessment, initial application, and the first annual renewal. If you discover previously unreported assets at the time of application, revise the asset assessment to include those assets if they were owned at the beginning of the first continuous period of institutionalization.
Estimate the community spouse asset allowance as follows:
1. Total the equity value of all non-excluded assets owned by either spouse on the effective date of the assessment. Do not count:
• The homestead.
• Personal and household goods.
• One vehicle. For purposes of an asset assessment, exclude one vehicle regardless of use or value. Do not apply the criteria in §0909.15 (Vehicles).
• Capital assets necessary to operate a trade or business.
• The cash surrender value of life insurance policies with total face value of $1,500 or less per person, OR the first $1,500 of an irrevocable burial agreement for people who do not have life insurance with total face value of $1,500 or less. Do not designate other assets as burial funds as part of the asset assessment. See §0909.17.03 (Determining the Burial Fund Exclusion).
• Other excluded assets. See §0909.11 (Excluded Assets) and §0909.11.01 (Additional Excluded Assets for Method A/B).
2. Divide the total countable assets in half.
3. Compare the figure in step 2 to the minimum/maximum asset allowance in effect at the time you process the assessment. If the applicant applies at a later date, use the current minimums and maximums in effect on the date of application.
4. If half of the total countable assets are:
• Less than the minimum asset allowance, the estimated allowance is the minimum asset allowance.
• More than the minimum asset allowance but less than the maximum asset allowance, the estimated asset allowance is half of the total countable assets.
• More than the maximum asset allowance, the estimated asset allowance is the maximum asset allowance.
Minimum/maximum asset allowance figures for people who begin their first period of institutionalization or home care services anticipated to last at least 30 consecutive days are:
| |Minimum |Maximum |
|1-1-06 – 12-31-06 |$28,001 |$99,540 |
|1-1-05 – 12-31-05 |$26,898 |$95,100 |
|1-1-04 - 12-31-04 |$26,190 |$92,760 |
|1-1-03 - 12-31-03 |$25,601 |$90,660 |
|1-1-02 - 12-31-02 |$25,247 |$89,280 |
|1-1-01 - 12-31-01 |$24,607 |$87,000 |
|1-1-00 - 12-31-00 |$23,774 |$84,120 |
|1-1-99 - 12-31-99 |$23,171 |$81,960 |
|1-1-98 - 12-31-98 |$22,828 |$80,760 |
|1-1-97 - 12-31-97 |$22,336 |$79,020 |
|1-1-96 - 12-31-96 |$21,685 |$76,740 |
|1-1-95 - 12-31-95 |$21,156 |$74,820 |
|7-1-94 - 12-31-94 |$20,540 |$72,660 |
|1-1-94 - 06-30-94 |$14,532 |$72,660 |
|1-1-93 - 12-31-93 |$14,148 |$70,740 |
GAMC:
No provisions.
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SPOUSAL ASSET ALLOWANCE 0909.25.03
MinnesotaCare:
No provisions.
MA:
Use the information provided on the asset assessment to determine the amount of the spousal asset allowance at the time the LTC spouse applies for and is found eligible for MA. Determine the spousal asset allowance as of the first application for MA in Minnesota, based on the minimum and maximum amounts in §0909.25 (Spousal Asset Assessments). If the minimum and maximum asset amounts have increased since the date of the asset assessment, use the minimums and maximums in effect on the date of application.
EXAMPLE:
Ulysses entered an LTCF in 1996. His wife remains in the community. They did not request an asset assessment at the time of Ulysses’s entry into the LTCF. They apply for MA for Ulysses in March 1998. The worker completes an asset assessment based on assets owned on the day Ulysses entered the LTCF. (If Ulysses and his wife had requested an asset assessment before applying for MA, the worker would use the information from that assessment.) Total countable assets on the date of institutionalization were $40,000. Total countable assets on the date of application are $43,000. The worker completes the assessment in April 1998. Half of the assets owned on the effective date of the assessment ($20,000) are less than the minimum asset allowance in effect on the date of application ($22,828). The spousal asset allowance is $22,828.
If the assets had decreased between the assessment date and the date of application, Ulysses’ wife would still be entitled to the minimum asset allowance in effect on the date of application.
Note that if Ulysses and his wife had requested an asset assessment in 1996, you would have estimated the allowance using the minimum and maximum figures in effect at that time. However, base the actual allowance on the amounts in effect at the time of the first MA application in Minnesota. In either case, use the amount of assets owned on the first day of continuous institutionalization.
The LTC spouse may transfer assets to the community spouse in an amount equal to the difference between the community spouse asset allowance and the assets already owned by the community spouse.
The actual transfer of the assets must occur as soon as possible but no later than the date of the first annual eligibility renewal. All countable assets owned by the LTC spouse at the time of the first annual eligibility renewal must be considered available to the LTC spouse and properly reduced in order for eligibility to continue. See §0909.29.03 (Excess Assets--Enrollees).
At the time of approval of MA for the LTC spouse, notify the community spouse in writing that assets need to be transferred as soon as possible, but no later than the date of the first annual eligibility renewal or the assets will be considered available to the LTC spouse. Indicate the date of the first annual eligibility renewal on the notice.
EXAMPLE:
Ulysses applies for MA. His wife’s community asset allowance is $26,000. The couple’s total combined assets on the date of application are $28,800, most held jointly. Ulysses is within the asset limit of $3,000 after deducting the spousal asset allowance from the total assets. Advise Ulysses and his wife that all assets up to $26,000 must be transferred to her name alone before the first annual renewal.
Once you have approved the LTC spouse's initial MA application, do not consider the community spouse's assets available to the LTC spouse again unless there is a 30-day break in institutionalization or receipt of EW services. If MA is terminated and the LTC spouse later reapplies, do not consider the community spouse's assets in determining eligibility.
EXAMPLE:
Alissa enters an LTCF on August 10, 1996. Her husband Roland remains in the community. Roland applies for MA for Alissa on September 4, 1998. An asset assessment is completed based on assets owned on August 10, 1996. Alissa is determined to be eligible for MA effective September 1998. MA is terminated effective April 1, 1999, because Alissa receives an inheritance. Roland reapplies for her in August 1999 after the money has been reduced. Consider only Alissa's assets in determining her eligibility.
The LTC spouse may transfer assets or income to the community spouse OR to another for the sole benefit of the community spouse without a transfer penalty. However, the transferred amount will be counted in the asset assessment and at application in the division of assets. This includes annuities that have been converted to income following the date of the asset assessment and the corpus of sole benefit trusts regardless of when disbursements begin.
EXAMPLE:
Ed enters the LTCF on July 24. His wife, Mary, resides in the community. They have $100,000 in countable assets as of the date of the asset assessment. Mary’s asset allowance is $50,000. Between the date of the asset assessment and the MA application, Mary purchases an annuity using $40,000 of the marital assets. She immediately annuitizes and begins receiving payments from the annuity.
Ed applies for MA on August 15, requesting coverage effective August 1. To determine the countable assets that may be used toward Mary’s asset allowance, include all non-excluded assets including the annuity. Ed and Mary have total remaining assets of $92,000. Mary’s asset allowance remains $50,000. Consider $42,000 available to Ed.
EXCEPTION:
Do not include retirement annuities funded by a pension fund or retirement plan in the asset allowance unless the person can gain access to all or part of the funds. If the retirement fund contains a provision that allows the person to gain access to the funds in certain circumstances such as medical emergencies, include the maximum amount available as a countable asset in the asset assessment. Also include this amount in the division of assets if the community spouse has not annuitized the retirement plan before the MA application.
EXAMPLE:
Susan enters the LTCF on July 1. Her husband, Paul, resides in the community and is employed. He has a 401K plan through his employer. The plan allows him to withdraw $25,000 for medical emergencies. Include the $25,000 in the asset assessment. Exclude the balance of the 401K plan.
Paul retires on August 15 and begins receiving payments from his 401K plan. Susan applies for MA on September 1. Do not include the value of the 401K annuity as part of Paul’s asset allowance when assets are divided at the time of the MA application.
When assets are transferred to a 3rd party for the sole benefit of the community spouse, a document must verify that the assets transferred to the 3rd party are for the sole benefit of the community spouse now and forever in the future. This means that no one but the spouse can benefit now or in the future, unless it will revert to the state to repay MA paid. Sole benefit is established when the document shows that the asset will be used over the remaining estimated life expectancy of the community spouse.
See the following sections:
|§0909.27 |Asset Transfers |
|§0909.27.01 |MA Transfers--Cont. |
|§0909.27.03 |Spousal Asset Transfers |
|§0909.27.05 |Asset Transfer Exceptions |
At the time of MA approval, the community spouse is still only allowed to have assets that total the protected spousal allocation amount which was determined from the asset assessment. The community spouse is not allowed to exceed the protected spousal share for approval of MA for the LTC spouse even if assets have appreciated in value since the time of the asset assessment.
There may be no advantage to the couple for the LTC spouse to transfer additional assets to the community spouse before a determination of MA eligibility, because all assets owned singly or jointly by both spouses are considered in determining whether the LTC spouse is over the asset limit at the time of MA application.
If the LTC spouse acquires excess assets or new assets after MA eligibility has been approved (for example, the LTC spouse receives an inheritance), the LTC spouse may transfer the asset(s) to the community spouse or to another for the sole benefit of the community spouse. Once MA has been approved for the LTC spouse, there is no longer a limit on the amount of assets the community spouse can have unless there is a break in institutionalization or receipt of EW services of over 30 days.
At the time of MA application, consider all non-excluded assets owned by either or both spouses that are not included in the community spouse asset allowance available to the LTC spouse.
GAMC:
No provisions.
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TRANSFER OF INCOME PRODUCING ASSET TO SPOUSE 0909.25.05
MinnesotaCare:
No provisions.
MA:
The LTC spouse may transfer assets/income to his/her spouse OR to another for the sole benefit of his or her spouse at any time. However, transfers of income producing assets from one spouse to another before the determination of MA eligibility may not be of advantage to the couple, because all non-excluded assets owned singly or jointly by both spouses are considered in determining whether the LTC spouse is over the asset limit at the time of MA application. See §0909.25.03 (Spousal Asset Allowance).
For purposes of determining a community spouse asset allowance and income allocation, the transfer of income-producing assets to the community spouse is permitted under the following provision ONLY when:
• The institutionalized spouse entered the long term care facility (LTCF) on or after 10-1-89.
OR
• For people receiving elderly waiver (EW) services, the later of:
• The Long Term Care Consultation (LTCC) date, if the date is on or after 7-1-91.
OR
• The beginning date of home care services, anticipated to last for at least 30 consecutive days beyond the LTCC date.
If a community spouse has income below the maximum monthly income allowance, the LTC spouse may transfer income-producing assets exceeding the amount of the community spouse asset allowance. For this purpose, the LTC spouse may only transfer assets to the community spouse at the time of initial application.
Determine the amount of the LTC spouse's regular monthly income from RSDI, pensions, etc. Do not include income earned from income-producing assets. Allow deductions 1 through 4 in §0913.13 (Long Term Care Spenddown Calculation) or §0913.13.03 (LTC Spenddown--EW with Community Spouse) from regular income. If transferring all the LTC spouse's income that remains after these deductions is not enough to bring the community spouse's income up to the monthly income allowance, the LTC spouse may transfer additional income-producing assets to the community spouse. See §0909.25.03 (Spouse Asset Allowance) and §0912.05.25.03 (Allocations--Community Spouse) for instructions for calculating the maximum monthly income allowance and community spouse asset allowance.
The transfer of additional assets for this purpose is limited by the amount of additional income needed to bring the community spouse up to the maximum monthly income allowance.
To transfer assets under these provisions, the couple's assets must be arranged so that the community spouse's share includes as many income-producing assets as possible. At a minimum, an annual income payment must be available from the transferred asset. In addition, a transferred asset must return income at a rate considered at least average by the financial institution holding the asset. Require verification from the institution.
Once a client transfers assets under these provisions, consider the assets unavailable to the client throughout the period of continuous institutionalization except as specified in §0909.25.07 (Community Spouse Contribution).
GAMC:
No provisions.
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COMMUNITY SPOUSE CONTRIBUTION 0909.25.07
MinnesotaCare:
No provisions.
MA:
At the time of application, when a community spouse owns assets in excess of the community spouse asset allowance, the spouse must contribute the excess assets toward the cost of care of the LTC spouse. The contribution amount is the dollar value of the assets owned which exceed the community spouse asset allowance. See §0909.25.03 (Spousal Asset Allowance).
When the community spouse refuses to make assets available for the cost of care of the LTC spouse, eligibility is still possible if:
• The LTC spouse cannot use the funds without the consent of the community spouse.
AND
• The LTC spouse assigns rights to support from the community spouse to DHS.
OR
• The LTC spouse is unable to assign rights to support because of a physical or mental impairment.
OR
• The county agency determines that denying eligibility would cause an imminent threat to the health and well being of the LTC spouse.
When the county agency approves MA under the conditions above, a cause of action exists against the community spouse for the dollar value of assets over the community spouse asset allowance or the amount of MA expended, whichever is less.
GAMC:
No provisions.
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ASSET TRANSFERS 0909.27
MinnesotaCare:
No provisions.
MA:
The transfer of an asset without adequate compensation may result in a period of ineligibility for all or some services. Several factors affect this determination, including:
• Whether the transfer is exempt from consideration as an improper transfer. See §0909.27.03 (Spousal Asset Transfers) and §0909.27.05 (Asset Transfer Exceptions).
• When the transfer occurred. See §0909.27.07 (Transfer Lookback Period) and §0909.27.11 (Improper Transfer Ineligibility).
• The value of the transferred property for which adequate compensation was not received. See §0909.27.09 (Determining Uncompensated Value). This amount, along with when the transfer occurred, determines the length of the ineligibility period. See §0909.27.11 (Improper Transfer Ineligibility).
• Whether there are multiple transfers in the affected period. See §0909.27.13.03 (Multiple Asset Transfers).
The CAF and the HCAPP ask if anyone has transferred property in the last 60 months. 60 months is the maximum lookback period for MA transfers into certain trusts. For all other MA transfers, the lookback period is 36 months. Do not require information for a longer lookback period than applies. See §0909.27.07 (Transfer Lookback Period). Do not request information until evidence is presented which indicates transfers of assets have occurred or until the client or authorized representative reports the transfer of assets.
DO NOT assume, at the time of application, that any improper transfer of assets has occurred and DO NOT automatically request information such as bank statements or tax returns going back 36 or 60 months. There must be information reported or evidence presented before any such information is requested.
EXCEPT as specified in §0909.27.03 (Spousal Asset Transfers) and §0909.27.05 (Asset Transfer Exceptions), consider any transfer of assets improper if it is done to establish or maintain eligibility for MA as defined below. If a penalty for an improper transfer causes undue hardship, a waiver of the penalty may be appropriate. See §0909.31 (Waiver of Asset Rules).
If the total amount transferred for less than fair market value in any month by the client and spouse combined does not exceed $200 ($500 before 7-1-02) in total value for the month, including the month of application, disregard that amount and do not calculate a penalty period. This does not apply if the transfer occurs during a pre-existing penalty period. See §0909.27.11.09 (Transfers After 4-13-96).
Apply all transfers made by either spouse toward the $200 exclusion. Do not allow $200 for each spouse even if both resided in an LTCF.
A transfer occurs when any of the following gives away, sells, conveys ownership and/or reduces control, or disposes of any asset or an interest in an asset:
• The client.
• The spouse of the client.
• The client's representative, including a court or administrative body with legal authority to act in place of or on behalf of the person or spouse.
• A person, court or administrative body acting at the direction of or on request of the client or spouse.
A transfer may occur through a sale, trade or giving away of an asset or income, including transferring the remainder interest in a life estate to another person, or taking an action to reduce or eliminate the person or person's spouse's ownership or control of income or assets held in common with another person or persons.
When an asset is placed into joint ownership with another person or persons, the asset is considered to be transferred by the person when any action is taken either by the person or another, which reduces or eliminates the person's ownership or control of the asset. This includes placing another person's name on the account or asset which limits the person's right to sell or dispose of the asset.
GAMC:
There are no improper transfer provisions for GHO.
For others, the transfer of any asset is improper if:
• It occurred within 60 months before application, while the application is pending or during GAMC eligibility. Prior to 7-1-95, the lookback period was 30 months.
AND
• It was transferred at less than fair market value.
Presume the purpose of the transfer was to obtain or maintain eligibility unless the client gives convincing evidence it was exclusively for another purpose.
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MA TRANSFERS--CONT. 0909.27.01
MinnesotaCare:
No provisions.
MA:
In addition to the circumstances in §0909.27 (Asset Transfers), a transfer may occur by any action which causes an asset to which a person or a person's spouse is entitled not to be received by the person or the person's spouse. This includes:
• Waiving the right to or refusing to accept an inheritance (also known as refusing to elect against a will). However, if refusing to elect against a will allows greater income or assets for the client, it is not considered an improper transfer. Look at the total circumstances to allow the greater in income or assets for the client. The signing of a consent not to elect against a will is not considered a transfer at the time of signing, but may be considered an improper transfer at the time of death depending on the circumstances.
• Waiving pension income or diverting it to a trust or similar device for the benefit of another. See §0909.21.09 (Trusts Established on or After 8-11-93).
• Refusing to take affordable legal action to obtain court-ordered payment that is not being paid, such as child support or alimony.
• Not accepting or taking action to obtain personal injury settlements.
• Personal injury settlements diverted by a defendant into a trust or similar legal device to be held for the benefit of the plaintiff, unless the exception for a disabled person applies. See §0909.21 (Trusts).
The transfer of a homestead or any non-excluded asset BEFORE 8-11-93 is improper if:
• It occurred within 30 months before application, while the application is pending, or during MA eligibility.
AND
• It was transferred at less than fair market value.
The transfer of a homestead or any non-excluded asset ON OR AFTER 8-11-93 is improper if:
• For transfers into irrevocable trusts, all or part of which can never be distributed to or for the benefit of a person or the person's spouse, it occurred within 60 months before MA application for or receipt of long term care services. See §0909.27.07 (Transfer Lookback Period) and §0909.21.09 (Trusts Established On or After 8-11-93).
• For transfers into revocable trusts to someone other than the client or for the benefit of the client, it occurred within 60 months before MA application for or receipt of long term care services. See §0909.27.07 (Transfer Lookback Period) and §0909.21.09 (Trusts Established on or After 8-11-93).
OR
• For all other transfers, it occurred within 36 months before MA application for or receipt of long term care services, or during MA eligibility for long term care services.
Presume the purpose of the transfer was to obtain or maintain payment of long term care services. This includes transfers made by the community spouse after MA has been approved for the LTC spouse. Even though assets have been allocated to the community spouse, there is always a potential for the assets to become available to the LTC spouse in the future. If the community spouse of a person receiving LTC services makes a transfer, require the community spouse to demonstrate that the transfer was done for a valid purpose that does not affect the LTC spouse’s MA eligibility. Transfers made to preserve the estate for the heirs, avoid probate or reduce taxes are always improper. Calculate a penalty period for the LTC spouse unless it appears the transfer was done for another valid purpose. In that case, submit a policy interpretation to the Health Care Policy Center for a determination. See §0909.27.11 (Improper Transfer Ineligibility) to calculate the improper transfer penalty. You may waive the penalty for an improper transfer of assets based on undue hardship. See §0909.31 (Waiver of Asset Rules).
GAMC:
See §0909.27 (Asset Transfers).
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SPOUSAL ASSET TRANSFERS 0909.27.03
MinnesotaCare:
No provisions.
MA:
For people residing in long term care or receiving elderly waiver services on or after 10-1-89, see §0909.25 (Spousal Asset Assessments) and §0909.25.05 (Transfer of Income Producing Asset to Spouse).
An applicant residing in a long term care facility before 10-1-89, may make a 1-time only transfer of assets to his or her spouse if all the following conditions apply:
• The spouse is not an MA enrollee.
• The amount transferred, when added to the community spouse's verified non-excluded assets totals $10,000 or less at the time of transfer.
• The transfer occurs between the first of the month before the month of application and 15 days after the date the local agency notifies the applicant of the need to reduce assets or the date of the local agency's action on the application, whichever is later.
EXAMPLE:
Bertha has resided in an LTC as a private pay client since 1987. Her husband Frank remains in the community. Frank applies for MA for Bertha on 6-1-98, because they have exhausted most of their resources. Bertha has $1,000 in an account in her own name and they have $9,000 in joint accounts. On June 15, the worker notifies Frank that Bertha may transfer the $1,000 plus her share of the jointly held funds to Frank. The transfer must be completed by June 30.
GAMC:
No provisions.
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ASSET TRANSFER EXCEPTIONS 0909.27.05
MinnesotaCare:
No provisions.
MA:
The following transfers are EXCEPTIONS to the provisions in §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.), are not considered improper, and are exempt from penalty:
• Excluded assets other than a homestead.
• Non-excluded assets or a homestead if there is convincing evidence of intent to receive fair market value.
• Non-excluded assets or a homestead if there is convincing evidence to show the purpose of the transfer was not exclusively to obtain or maintain MA for the client.
• Allowable asset transfers to a spouse as specified in §0909.27.03 (Spousal Asset Transfers).
• Transfer of assets to a representative of the spouse, provided the transferred assets are to be used for the sole benefit of the client's spouse.
• Non-excluded assets or a homestead to a child of any age of the client or the client's spouse if the child is blind or permanently and totally disabled. Blindness and disability must be verified. See §0906.15 (Disability Determinations).
• Transfer of a homestead is exempt when made to:
• A spouse.
• A child under age 21 of the client or the client's spouse.
• A child (of any age) of the client or the client's spouse, when the child lived in the home for at least 2 years before the client entered the long term care facility and provided verifiable care (physician's statement of needed care) that allowed the client to remain at home rather than enter a facility.
• A sibling of the client or the client's spouse, when that sibling has equity interest in the home, and lived in the home at least one year immediately before the client entered the LTCF.
In addition, the following transfers are exempt from penalty ONLY if made on or after 8-11-93:
• Transfer of assets into a trust established solely for the child of a client or the client's spouse. The child may be of any age and must be blind or disabled according to SSI or SMRT criteria. See §0906.15 (Disability Determinations).
• Transfer of assets into a trust established solely for any disabled person under age 65, who is disabled according to SSI or SMRT criteria.
• Transfer of assets to client's spouse or to another for the sole benefit of the client's spouse. Although this type of transfer does not result in a penalty period, the transferred amount (including the corpus of a trust for the sole benefit of the spouse) is counted in the asset assessment and considered available at application in the division of assets. See §0909.25 (Spousal Asset Assessments) and §0909.25.05 (Transfer of Income Producing Asset to Spouse).
SOLE BENEFIT means that no one but the spouse or disabled person can benefit now or in the future, unless it will revert to the state to repay MA paid. The trust instrument must provide for the funds to be spent for the benefit of the spouse or disabled person based on that person's estimated life expectancy. The trust may provide for reasonable and necessary administrative costs associated with managing the trust.
When the transfer of a homestead is exempt from penalty, it may be transferred while occupied or while vacant. It does not have to be the primary residence of the person receiving the transferred homestead.
EXAMPLE:
Mordecai has resided in a LTCF for 6 months. He has no community spouse and his home is vacant. His daughter Lydia provides a physician's certification that she lived with Mordecai and provided care to enable him to remain at home for 3 years before he entered the LTCF. The homestead cannot be exempted under §0909.13 (Real Property: Homestead) because Lydia has since moved out. However, Mordecai may transfer the home to Lydia without penalty.
GAMC:
There are no improper transfer provisions for GHO.
For regular GAMC, all asset transfers without adequate compensation are considered improper.
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TRANSFER LOOKBACK PERIOD 0909.27.07
MinnesotaCare:
No provisions.
MA:
For transfers of assets or income made on or after 8-11-93, there are two time periods to look back from to determine if an improper transfer has occurred. The length of time you review depends on what has been transferred.
Look back 36 months for the following transfers:
• Transfers of a homestead or any non-excluded asset.
• Transfers into an irrevocable trust when all or part of that trust may be disbursed to the client, the client's spouse or the person, court or administrative body acting in place of or on behalf of the client or the client's spouse.
• Transfers into annuities. The date of the transfer is the date of annuitization. See §0909.23 (Annuities).
These transfers are improper if:
• The transfer(s) occurred within 36 months before application, while the application is pending, or during MA eligibility.
AND
• The transfer(s) were for less than fair market value.
The lookback period increased from 30 to 36 months for transfers made on or after 8-11-93 and was phased in as follows:
If Date Of LTC Services When Applying For/Receiving MA Is:
Lookback Period Is:
|If Date Of LTC Services When Applying For/Receiving MA Is: |Lookback Period Is: |
|1-1991 through 2-96 |30 months before |
|3-96 |31 months before |
|4-96 |32 months before |
|5-96 |33 months before |
|6-96 |34 months before |
|7-96 |35 months before |
|8-96 & thereafter |36 months before |
There is a longer lookback period for the following transfers:
• Transfers from a revocable trust that are NOT made to or for the benefit of the client or the client's spouse.
• Transfers into an irrevocable trust when all or part of the trust CANNOT be disbursed UNDER ANY CIRCUMSTANCES to the client, client's spouse or person, court or administrative body acting in place of or on behalf of the client or client's spouse.
• This type of transfer is improper if:
• The transfer occurred within the applicable number of months before application, as reflected on the chart that follows.
AND
• The transfer was for less than fair market value.
When the trust is revocable, the transfer is considered to take place on the date the payment is made to someone other than the grantor. If the trust is irrevocable, the transfer is considered to have been made as of the date the trust was established or, if later, the date upon which payment to the grantor was foreclosed.
The lookback period increases from 30 months to eventually reach 60 months for trust transfers made on or after 8-11-93, by a phase-in as follows:
|If Date Of LTC Services When |Lookback Period Is: |If Date Of LTC Services When |Lookback Period Is: |
|Applying For/ | |Applying For/ | |
|Receiving MA Is: | |Receiving MA Is: | |
|1-91 through |30 months before |6-97 |46 months before |
|2-96 | | | |
|3-96 |31 months before |7-97 |47 months before |
|4-96 |32 months before |8-97 |48 months before |
|5-96 |33 months before |9-97 |49 months before |
|6-96 |34 months before |10-97 |50 months before |
|7-96 |35 months before |11-97 |51 months before |
|8-96 |36 months before |12-97 |52 months before |
|9-96 |37 months before |1-98 |53 months before |
|10-96 |38 months before |2-98 |54 months before |
|11-96 |39 months before |3-98 |55 months before |
|12-96 |40 months before |4-98 |56 months before |
|1-97 |41 months before |5-98 |57 months before |
|2-97 |42 months before |6-98 |58 months before |
|3-97 |43 months before |7-98 |59 months before |
|4-97 |44 months before |8-98 and |60 months before |
| | |thereafter | |
|5-97 |45 months before | | |
GAMC:
The lookback period is 60 months before application for all transfers. See §0909.27 (Asset Transfers).
There are no improper transfer provisions for GHO.
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DETERMINING UNCOMPENSATED VALUE 0909.27.09
MinnesotaCare:
No provisions.
MA:
Determine the uncompensated value of a non-exempt transfer made during the lookback period. The uncompensated value of improperly transferred assets is the market value minus encumbrances and compensation received for it.
Consider compensation to the client in the form of services only if the care or services directly benefited the person and the amount was reasonable. The amount is reasonable if it is consistent with a charge for a similar service performed in the community.
If the care or services were provided by a relative, a notarized written agreement signed and dated by the involved parties on or before the date the services began is required. A notarized agreement is not required if payment for the care or services is made within 60 days after the care or service was provided, or if the care or services were provided by a person who is not a relative of the client.
Apply the following policies to determine the uncompensated value of transfers into annuities. See §0909.23 (Annuities). The client must provide the following verification from the person or entity that sold the client the annuity:
• Under what circumstances, if any, the annuity can be sold, cashed in, or assigned to someone else, including whether there is any commuted cash value.
• Cash value of the annuity on the day of annuitization.
• Information about the free look period.
• Anyone other than the client named as annuitant.
• Any beneficiaries named.
• The settlement option chosen, including how often payments are made, the amount of each payment and how long payments will be made.
Any annuity purchased on or after March 1, 2002, is an improper transfer unless it meets ALL of the following requirements:
• The annuity is a commercial annuity purchased from an insurance company or financial institution regulated or licensed by a government agency
AND
• Principal and interest payments are made in equal monthly installments
AND
• Principal and interest payments begin at the earliest possible date after the payment option is selected.
If any one of the requirements is not met, consider the purchase of the annuity to be an improper transfer. Calculate the uncompensated value as of the date of annuitization.
Apply the following steps to determine if there is an uncompensated transfer for:
• Annuities purchased before March 1, 2002, that are annuitized within 36 months before applying for or while receiving MA.
• Annuities purchased on or after March 1, 2002, that meet all of the requirements listed above and are annuitized within 36 months before applying or while receiving MA.
Determine whether the transfer was made for less than fair market value. This is based on whether the client or spouse is likely to receive a return of the value of the transfer during his or her lifetime, depending on which person made the transfer. Annuities purchased by 1 member of a couple, naming the other spouse or someone else as the annuitant, should be evaluated on the life expectancy of the person who purchased the annuity (the owner), not on the life expectancy of the annuitant.
Evaluate the settlement option to determine if the cash value as of the date of annuitization is likely to be returned to the client during his or her estimated lifetime. Calculate the value of the annuitization transfer as follows, except as noted below:
1. Multiply the amount of each annuity payment by the number of payments in a year to get the total annual payments.
2. Multiply the result from #1 above by the estimated life expectancy of the client (or spouse, if annuitized by spouse) from the table in §0909.23.03 (Life Expectancy Tables - Annuities), using the age of the client (or spouse) on the date of annuitization.
Use a period shorter than the estimated life expectancy found in the table if the client has a medical condition that would shorten the life expectancy and that was diagnosed before funds were placed in the annuity. If it appears the client has such a condition, request a physician’s statement documenting the medical condition, date of diagnosis, and life expectancy. Treat any amount not expected to be returned during the client’s lifetime as an improper transfer.
3. Subtract the result in #2 above from the cash value on the date of annuitization.
4. Use the result of #3 above to calculate a penalty for client's receipt of MA payment for long term care services.
Do not consider the transfer of funds into an annuity as an improper transfer if:
• The client or spouse is the owner and the annuity has not yet been annuitized. In this case, count the annuity toward the asset limit. See §0909.23 (Annuities).
• A long term care client names the community spouse as the SOLE annuitant or beneficiary. The cash value as of the date of annuitization must be expected to be returned to the community spouse during his/her lifetime. Annuities purchased on or after March 1, 2002, must meet the conditions listed earlier in this section. See §0909.25 (Spousal Asset Assessments) and §0909.27.05 (Asset Transfer Exceptions) for information on treatment of sole benefit transfers to annuities.
Apply the following policies to determine the uncompensated value of transfers into trusts.
The value of a transfer into an irrevocable trust is the amount that can never under any circumstances be returned to the person who established the trust, measured at the time the trust is established. If any part of the principal can be returned to the person who established the trust under any circumstances, consider the amount that could be returned as an available asset to the person. See §0909.21 (Trusts).
GAMC:
The uncompensated value of an improperly transferred asset is the fair market value at the time it was given away, sold, or disposed of minus encumbrances and compensation received. Consider compensation in the form of services only if the care or services directly benefited the person and the amount was reasonable. The amount is reasonable if it is consistent with a charge for a similar service performed in the community.
If the care or services were provided by a relative, a notarized agreement signed and dated by the involved parties on or before the date the services began is required. A notarized agreement is not required if payment for the care or services is made within 60 days after the care or service was provided, or if the care or services were provided by a person who is not a relative of the client.
There are no improper transfer provisions for GHO.
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IMPROPER TRANSFER INELIGIBILITY 0909.27.11
MinnesotaCare:
No provisions.
MA:
Do not deny or terminate eligibility for MA due to excess assets when an improper asset transfer occurs. Determine the ineligibility period for the services listed below. The client is eligible for all other MA covered services that are not included in this list.
If the transfer occurred before 7-1-88, the client is ineligible for all MA services during the penalty period.
If the transfer occurred on or after 7-1-88, a client is eligible for MA but is not eligible for MA payment of the following services during the ineligibility period:
• Skilled nursing facility care.
• Intermediate care facility services.
• Community Alternative for Disabled Individuals (CADI) waivers.
• Community Alternative Care (CAC).
• Home and Community Based Waiver Services for Persons with Mental Retardation or Related Conditions (MR/RC & ACS).
• Elderly Waiver Services.
• Traumatic Brain Injury Waiver (TBIW).
• Nursing facility care in an inpatient hospital.
The client remains eligible for all other MA covered services not listed above.
For more information, see the following:
|§0909.27.11.03 |Transfers Before 8-11-93. |
|§0909.27.11.05 |Transfers 8-11-93 Through 8-31-94. |
|§0909.27.11.07 |Transfers 9-1-94 Through 4-13-96. |
|§0909.27.11.09 |Transfers On or After 4-13-96. |
A person who reapplies during the ineligibility period will not be eligible for MA payment of long term care services until the period expires.
When either spouse of a married couple transfers assets improperly, apply the penalty period as follows:
• Both spouses apply for MA:
• When two spouses who are receiving LTC services have transferred jointly owned income or assets and apply for MA on the same day, divide the penalty between them equally even if they entered the LTCF on different dates.
• When only one spouse is receiving LTC services, apply the entire penalty period to that spouse regardless of who owned the transferred asset.
• One spouse applies for MA:
• When both spouses are receiving LTC services, apply the entire penalty period to the applicant regardless of who owned the transferred asset.
• One spouse currently receiving MA and subject to a penalty period at the time the other spouse applies for MA to receive LTC services:
• When a spouse makes a transfer that results in a penalty for his/her spouse who is on MA in LTC, and later begins receiving long term care services himself/herself, any remaining penalty must be split evenly between the spouses.
When a community spouse improperly transfers assets after the asset assessment is completed and MA is open for the LTC spouse, determine whether to apply a penalty to the LTC spouse. Although the community spouse’s assets are no longer considered available to the LTC spouse, an improper transfer will result in a penalty unless the community spouse can demonstrate that the transferred assets will never affect the LTC spouse’s ability to obtain or maintain eligibility. See §0909.27.01 (MA Transfers--Cont.).
If the penalty period is not exhausted when the spouse's LTC services ends, the remaining balance goes back to the remaining LTC spouse.
Transferred assets returned completely or partially to the client will reduce or eliminate the amount of the transfer and reduce or eliminate the corresponding period of ineligibility for LTC services.
If the applicant or the applicant's authorized representative failed to report the transfer of assets, a cause of action may exist against the person who received the transferred assets if you approved MA and MA paid LTC services during a period of ineligibility. See §0909.27.13 (Improper Transfers - Onset of Ineligibility).
GAMC:
There are no improper transfer provisions for GHO.
Other GAMC applicants or enrollees who make improper transfers during the look back period or while receiving GAMC are ineligible for all GAMC services during the ineligibility period.
If an applicant or enrollee has improperly transferred an asset, the period of ineligibility is the number of months resulting from the following calculation:
1. Determine the uncompensated value of an improperly transferred asset. See §0909.27.09 (Determining Uncompensated Value).
2. Divide the uncompensated value of the asset by the statewide average monthly per person payment for skilled nursing facility care (SAPSNF) for GAMC. This is not the same figure as the MA SAPSNF. Use the amount in effect on the date of the client's application that covers the current application processing period or period of GAMC eligibility. Effective 7-1-06, that amount is $3,524. From 7-1-05 through 6-30-06, the amount is $3,441.
Apply a partial month of ineligibility to both applicants and enrollees. If the transferred amount is less than $3,524, deny eligibility for payment of services equal to the amount transferred. If a fractional part of a month remains after calculating a period of ineligibility for a transfer of more than $3,524, multiply the remainder (rounded to hundredths) by $3,524. The result is the dollar amount of medical expenses the client is responsible for in the first month of possible eligibility.
There is no limit on the period of ineligibility.
If a client has excess assets, and transferred property, apply the transfer penalty first and then reduce assets.
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TRANSFERS BEFORE 8-11-93 0909.27.11.03
MinnesotaCare:
No provisions.
MA:
For uncompensated transfers occurring before 8-11-93, the period of ineligibility is the lesser of 30 months or the number of months resulting from the following calculation:
1. Determine the uncompensated value of improperly transferred assets. See §0909.27.09 (Determining Uncompensated Value).
2. Divide the uncompensated value of the asset by the statewide average monthly payment rate for skilled nursing facility care (SAPSNF). Use the SAPSNF in effect on the date of the client's application that covers the current application processing period or period of MA eligibility. If someone has been on MA since before 7-1-90, the SAPSNF to use is $2,177. Truncate partial months. If the amount improperly transferred is less than the SAPSNF, it does not affect eligibility.
Effective 7-1-06, the SAPSNF is $4,438. From 7-1-05 through 6-30-06, the SAPSNF is $4,198.
The 30-month maximum on penalty periods does not apply to transfers which were made on or after 8-11-93. See §0909.27.11 (Improper Transfer Ineligibility).
NOTE:
Because the maximum lookback period for transfers is 60 months, no transfers made on or after 8-11-98 will be subject to penalty.
GAMC:
See §0909.27.11 (Improper Transfer Ineligibility). For GAMC transfers, the SAPSNF is $3, 524 effective 7-1-06 ($3,441 from 7-1-05 through 6-30-06). This is not the same as MA.
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TRANSFERS 8-11-93 THROUGH 8-31-94 0909.27.11.05
MinnesotaCare:
No provisions.
MA:
Use the following steps to determine the ineligibility period for transfers occurring on 8-11-93 through 8-31-94:
1. Determine a penalty period for the total value of all uncompensated transfers made in each month in the lookback period separately by dividing the uncompensated amount by the monthly statewide average nursing home payment in effect on the date of the client's current application. Effective 7-1-06, the SAPSNF is $4,438. From 7-1-05 through 6-30-06, the SAPSNF is $4,198.
2. Chart out the months that each penalty period runs, beginning in the month each transfer(s) occurred. Look for any months that occur in more than 1 penalty period. These are considered OVERLAPPING penalty periods.
3. If none of the charted ineligibility periods overlap, begin each ineligibility period in the month each transfer (or transfers, if more than 1 transfer was made in a given month) transfer was made, and stop here. If any ineligibility periods overlap, go on to step 4.
4. If any of the penalty periods determined in step #2 overlap, including any calculated penalty period for uncompensated transfers in amounts less than the monthly statewide average nursing facility payment, add the values of all the uncompensated transfers made in the lookback period together, and re-calculate a single ineligibility period. Truncate a partial month when determining the actual ineligibility period.
5. Begin the ineligibility period in the month of the first uncompensated transfer during the lookback period. The ineligibility period runs for the period of time calculated in step 4.
GAMC:
See §0909.27.11 (Improper Transfer Ineligibility). For GAMC transfers, the SAPSNF is $3,524 effective 7-1-06 ($3,441 from 7-1-05 through 6-30-06). This is not the same as MA.
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TRANSFERS 9-1-94 THROUGH 4-13-96 0909.27.11.07
MinnesotaCare:
No provisions.
MA:
Use the following steps for transfers made on or after 9-1-94 through 4-13-96:
1. If the total amount transferred for less than fair market value in any month by the client and spouse combined does not exceed $1,000 in total value for the month, disregard that amount and do not calculate a penalty period. Disregard transfers of $1,000 or less made in any month after 9-1-94 even if the transfer occurred during a pre-existing penalty period.
2. If the amount transferred for less than fair market value is greater than $1,000, determine a penalty period based on the total value of all uncompensated transfers made during that month. Do not disregard the first $1,000 transferred.
3. If the total uncompensated value of assets transferred in a month by the client and spouse combined is greater than $1,000, divide the uncompensated value by the statewide average monthly payment rate for nursing facility care (SAPSNF) in effect on the date of the client's application.
Effective 7-1-06, the SAPSNF is $4,438. From 7-1-05 through 6-30-06, the SAPSNF is $4,198.
4. Do NOT truncate partial months. Apply a partial month of ineligibility for MA payment of long term care services to both applicants and recipients.
If the transferred amount is LESS than the applicable SAPSNF, deny eligibility for long term care services equal to the amount transferred. The result is the dollar amount of long term care services the client is responsible for before MA eligibility for long term care services can begin.
If the transferred amount is MORE than the applicable SAPSNF and a fractional part of a month remains after calculating a period of ineligibility, multiply the remainder (rounded to hundredths) by the applicable SAPSNF. Truncate that result. The result is the dollar amount of long term care services the client is responsible for in the last partial month of ineligibility.
5. Add the amount determined in step 4 to the client's long term care spenddown or medical spenddown, whichever applies, for the partial month of ineligibility. This is the client's total liability for the partial month.
Eligibility for payment of long term care services begins after that amount has been incurred by the client. If a client does not incur long term care services equal to or greater than his/her total liability, do NOT carry the penalty over to the next month.
GAMC:
See §0909.27.11 (Improper Transfer Ineligibility). For GAMC transfers, the SAPSNF is $3,524 effective 7-1-06 ($3,441 from 7-1-05 through 6-30-06). The GAMC SAPSNF is not the same as MA.
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TRANSFERS AFTER 4-13-96 0909.27.11.09
MinnesotaCare:
No provisions.
MA:
Use the following steps to determine the ineligibility period for transfers made on or after 4-13-96:
1. If the total amount transferred for less than fair market value in any month by the client and spouse combined does not exceed $200 for the month ($500 before 7-1-02), disregard that amount and do not calculate a penalty period.
EXCEPTION:
If $200 or less ($500 or less for transfers before 7-1-02) is transferred during a pre-existing penalty period, include the value of such transfers in the penalty period calculation.
2. If the amount transferred for less than fair market value is greater than $200, ($500 before 7-1-02), determine a penalty period based on the total value of all uncompensated transfers made during that month. Do not disregard the 1st $200 ($500 before 7-1-02) transferred.
3. If the total uncompensated value of assets transferred in a month by the client and spouse combined is greater than $200 ($500 before 7-1-02), divide the uncompensated value by the statewide average monthly payment rate for nursing facility care (SAPSNF) in effect on the date of the client's application.
Effective 7-1-06, the SAPSNF is $4,438. From 7-1-05 through 6-30-06, the SAPSNF is $4,198.
4. Do NOT truncate partial months. Apply a partial month of ineligibility for MA payment of long term care services to both applicants and recipients.
If the transferred amount is LESS than the applicable SAPSNF, deny eligibility for long term care services equal to the amount transferred. The result is the dollar amount of long term care services the client is responsible for before MA eligibility for long term care services can begin.
If the transferred amount is MORE than the applicable SAPSNF and a fractional part of a month remains after calculating a period of ineligibility, multiply the remainder (rounded to hundredths) by the applicable SAPSNF.
Truncate that result. The result is the dollar amount of long term care services the client is responsible for in the last partial month of ineligibility.
5. Add the amount determined in step 4 to the client's long term care spenddown or medical spenddown, whichever applies, for the partial month of ineligibility. This is the client's total liability for the partial month.
Eligibility for payment of long term care services begins after that amount has been incurred by the client. If a client does not incur long term care services equal to or greater than his/her total liability, do NOT carry the penalty over to the next month.
Open MA for all other services during a full or partial month penalty period.
GAMC:
See §0909.27.11 (Improper Transfer Ineligibility). For GAMC transfers, the SAPSNF is $3,524 effective 7-1-06 ($3,441 from 7-1-05 through 6-30-06). GAMC does not use the same SAPSNF as MA.
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IMPROPER TRANSFERS - ONSET OF INELIGIBILITY 0909.27.13
MinnesotaCare:
No provisions.
MA:
The ineligibility period begins with the month after the month of the transfer, except for certain multiple transfers. See §0909.27.13.03 (Multiple Asset Transfers). If the transfer occurs via a personal check, the ineligibility period begins the month after the date the recipient's check clears the bank.
The transfer of real property is completed when both execution and delivery have been completed. Execution is the signing of the deed by the person selling (seller) or transferring (donor) the property. Delivery is giving the deed to the buyer or donee or the buyer's or the donee's representative or recording the deed in the county recorder's office. The transfer date is the earliest verified delivery date.
Refer cases to the county attorney to determine whether to file a cause of action against the person who received the transferred assets if:
• The applicant or the applicant's authorized representative failed to report a transfer of assets at the time of application, or the enrollee or authorized representative failed to report a transfer within 10 days.
AND
• MA was approved and long term care services were paid by the MA program during a period of ineligibility
AND
• The person who received the transfer (the transferee) knew or should have known that the transfer was being made by a resident of a long term care facility or was receiving that level of care in the community at the time of the transfer.
OR
• The person who received the transfer knew of or should have known that the transfer was being made to assist the client to qualify for or retain MA eligibility.
OR
• The person who received the transfer actively solicited the transfer with the intent to assist the person to qualify for or retain eligibility for MA.
The maximum amount that can be collected under a cause of action is the cost of LTC services received during the period of ineligibility OR the value of the transferred asset, whichever is less. See §0909.27.09 (Determining Uncompensated Value).
When an enrollee transfers assets resulting in a penalty period, determine the penalty period beginning with the month after the month of the transfer. Begin ineligibility for LTC services with the 1st month of the penalty period for which you can give 10-day notice. The notice must state that the enrollee will be ineligible for LTC services but may remain eligible for other MA services. Do not apply the penalty period retroactively.
EXAMPLE:
Myrtle resides in an LTC. On April 10, her authorized representative reports an asset transfer in December that would result in 5 months of ineligibility (January-May). Give 10-day notice to apply the remainder of the penalty to LTC services for May. Because the transfer was not reported timely, refer the case to the county attorney for a possible cause of action.
GAMC:
Begin the ineligibility period for enrollees in the month the transfer was reported or, if not reported, in the month the county agency discovers the transfer. Close the case for the first month for which you can give 10-day notice.
Begin the ineligibility period for applicants in the first month in which the client could have been eligible for GAMC payment of incurred medical expenses. If there is partial month ineligibility, apply a penalty to services equal to the penalty amount.
The period of ineligibility may exceed 30 months.
There is no ineligibility period for GHO.
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MULTIPLE ASSET TRANSFERS 0909.27.13.03
MinnesotaCare:
No provisions.
MA:
FOR TRANSFERS MADE BEFORE 8-11-93:
When a person improperly transfers assets in different months, calculate ineligibility periods individually for each transfer. The ineligibility period begins in the month of transfer. The length of ineligibility for EACH transfer is the lesser of 30 months or the number of months resulting from the calculation in §0909.27.11 (Improper Transfer Ineligibility ). If separate periods of ineligibility overlap, continue to impose each penalty individually as calculated.
When multiple asset transfers are made in the same month, combine the value of the assets and apply the penalty calculation to the total.
See §0909.27.11.03 (Transfers Before 8-11-93).
FOR TRANSFERS MADE ON OR AFTER 8-11-93:
Add together the uncompensated values of transfers made in more than 1 month during or after the lookback period to determine the length of the penalty period when the transfers would result in overlapping penalty periods if calculated separately. The penalty period begins to run on the first day of the month after the month in which the first transfer occurred. Depending on when the transfers occurred, follow the steps in §0909.27.11.05 (Transfers 8-11-93 Through 8-31-94), §0909.27.11.07 (Transfers 9-1-94 Through 4-13-96) and §0909.27.11.09 (Transfers After 4-13-96).
GAMC:
Combine individual transfers made in the same month.
Determine separate ineligibility periods if transfers occur in different months. If those periods overlap, the ineligibility period is the sum of the periods.
There are no transfer provisions for GHO.
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EXCESS ASSETS -- APPLICANTS 0909.29
MinnesotaCare:
Deny MinnesotaCare for people with assets in excess of the applicable limit. If people denied for excess assets reapply and claim assets within the limits, ask how assets were reduced. If assets were reduced in ways that do not increase the value of other non-excluded assets, approve MinnesotaCare if countable assets are now within limits. Do not require verification of the reduction.
EXAMPLE:
Peter’s MinnesotaCare application was denied in July because his countable assets of $12,000 exceeded the $10,000 limit. In October, he calls the worker asking to reapply and states that his assets are now less than $10,000. He is not required to complete a new application or asset list. The worker asks how he reduced the excess $2,000. Peter reports that he paid off $3,000 in debts to credit card companies and friends. If Peter meets all other eligibility requirements, approve MinnesotaCare.
EXAMPLE:
Hermione’s MinnesotaCare application was denied in July because she reported assets of $3,000 in savings and a boat with equity value of $12,000 ($16,000 value with $4,000 owed). Her assets exceeded the $10,000 limit. She contacts the worker in September asking to reapply, stating she now has only $1,000 in savings, The worker asks how she reduced the excess $5,000. She reports she paid off the boat, which is still worth $16,000. She continues to have excess assets.
MA:
Applicants who have excess assets in the month of application or in any of the retroactive months in which they are requesting eligibility must reduce those assets by the end of the 45- or 60-day processing period to be eligible. You may request applicants to reduce the excess within 15 days or by the end of the month of application, whichever is earlier, as a means of expediting the eligibility determination. However, do not deny the application for excess assets before the end of the processing period. Pend the application beyond the processing period if applicants are unable to complete the reduction because of circumstances beyond their control.
EXAMPLE:
Steve applies for MA on December 10. The worker reviews the application on December 17 and discovers that Steve has excess assets. The worker sends Steve a notice to reduce his assets within 15 days. He has not completed the reduction as of January 2. The worker sends a reminder notice advising Steve that he must reduce the assets by January 25 or the application will be denied. The worker codes MAXIS to send 10-day notice of denial on January 15. Steve provides verification that he has properly reduced the assets on January 23. The worker processes the application.
Applicants requesting Medical Assistance to begin with the month of application may reduce excess assets in any way that does not result in an improper transfer. See §0909.27 (Asset Transfers) and §0909.27.01 (MA Transfers--Cont.)
Applicants requesting MA for any of the three months before the month of application who had excess assets in those months may reduce excess assets by:
• Retroactively designating burial funds up to $1,500 for each applicant, spouse (regardless of whether the spouse is MA-eligible) and MA-eligible dependent child. The applicant must sign and date a statement that indicates the date they intend the funds to be set aside for burial.
Applicants who reside in a LTCF or who receive services through the Elderly Waiver (EW) may retroactively designate burial funds up to $1500 for a community spouse. They may retroactively designate burial funds for dependent children living with the community spouse if the children are MA-eligible.
The applicant may purchase a burial fund of up to $1,500. Applicants may not reduce excess assets in the retroactive months by purchasing burial space items or irrevocable burial funds of $2,000. See §0909.17 (Burial Funds/ Life Insurance: Fund Types).
• Applying the excess on net medical bills incurred in the retro months. Start the reduction with the oldest net bill in the retroactive period. After excess assets are reduced, MA begins with the next dollar of medical bills incurred in the retroactive period.
EXAMPLE:
Thomas applied for MA on 1-1-94. He requests MA retroactive to 10-1-93. On October 1 he owned excess assets and continues to own the same assets. He was hospitalized on 10-5-93, and also has a $200 clinic bill for 10-2-93. To reduce assets, Thomas may:
• Establish a burial fund of $500 or more if he has not already used his $1,500 burial exclusion. His MA effective date (assuming he has no spenddown) would be 10-1-93.
OR
• Pay the $200 clinic bill and the first $300 of the hospital bill. He must verify that he has actually paid $500 toward the asset spenddown. His MA effective date (assuming he has no spenddown) would be 10-5-93.
Follow the appropriate instructions in §0913.03 (Spenddowns--MA/GAMC) if there is an asset and an income spenddown.
EXAMPLE:
Leslie applied for MA on April 1 requesting MA retroactive to March 1. She had excess assets of $4,000 on March 1, which she still owns. Her March medical bills total $1,000. She incurred no medical bills in January or February. She has already used up her $1,500 burial exclusion.
Since Leslie cannot properly reduce the excess, retroactive eligibility is not possible. Leslie may reduce the excess in any way other than an improper transfer for April eligibility. The worker informs her of the need to reduce on April 6. She must complete the reduction by April 30 (within 15 days of being notified of the need to reduce OR by the end of April, whichever is later). Leslie completes the reduction on April 25. Consider eligibility beginning April 1. Do not delay the effective date of eligibility until the day after the assets are reduced.
If applicants spend excess assets in any way other than the 2 methods allowed for retroactive coverage, retroactive coverage may be limited or unavailable. If applicants spend the excess during the retroactive period, they may:
• Become eligible on the day after the assets were reduced to within limits
OR
• Use other remaining assets to properly reduce the excess.
EXAMPLE:
Marvin applied for MA on April 1 requesting MA retroactive to January 1. On January 1 he had excess assets of $1,000. On January 8 he used $1,000 of his assets to purchase a stereo. He has not used any of his $1,500 burial exclusion. Marvin may either:
• Use $1,000 of his remaining assets to properly reduce assets by designating a burial fund.
OR
• Pay $1,000 of his remaining assets on the first $1,000 of medical bills incurred in January.
OR
• Request eligibility to begin on January 9, the day after assets were improperly reduced.
EXAMPLE:
Caroline applied for MA on June 1, requesting MA retroactive to April 1. On April 1 she had excess assets of $4,000. On April 5 she transferred $4,000 to her granddaughter. Caroline does not have sufficient remaining assets to properly reduce the excess. She may either:
• Request eligibility to begin April 6.
OR
• Have her granddaughter return all or part of the transferred money to allow Caroline to reduce properly. For example, if she has $3,000 remaining in assets, she could have her granddaughter return $1,000 and reduce the entire $4,000 by designating a $1,500 burial fund and applying the rest to the oldest medical bills in April.
GAMC:
Follow MA, EXCEPT there is no retroactive period.
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EXCESS ASSETS -- ENROLLEES 0909.29.03
MinnesotaCare:
Terminate MinnesotaCare coverage for people who report excess assets at renewal or when adding a household member. Do not terminate coverage for excess assets at any other time. Follow §0909.29 (Excess Assets--Applicants) if people terminated for excess assets reapply.
MA/GAMC:
Excess assets are a bar to ongoing eligibility. Give timely notice when terminating a case for excess assets. See §0916 (Notices). If enrollees properly reduce excess assets before the effective date of termination, eligibility continues. They may reduce assets in any manner not described as an improper transfer in §0909.27 (Asset Transfers). Acceptable ways to reduce assets include but are not limited to:
• Purchasing excluded household or personal items for any household member.
• Using the excess to purchase another type of excluded asset, such as a vehicle or burial funds if the household does not already have them.
• Paying bills or other obligations.
• Purchasing services for household members.
• Repaying MA or GAMC received. The county agency may not require enrollees to reduce in this manner. Inform people of other acceptable ways to reduce the excess.
Verify that assets have been reduced through bank statements or other means. Ask the enrollee to list expenditures made to reduce the excess if necessary to document that no improper transfer has occurred. Do not require receipts for the expenditures.
EXAMPLE:
Hilda, age 75, receives MA using Method B. She completes her annual renewal for March. The worker requests verification of liquid assets because Hilda indicates her total assets have increased beyond her asset limit. The worker receives the verifications on February 24. Total countable assets are $3,800. Because there is not time to allow 10 days to reduce before March 1, the worker advises Hilda in writing that she must reduce to within $3,000 by April 1 for eligibility to continue. On March 5, Hilda submits bank statements verifying that assets now total $2,950. She reports that she paid $500 on property taxes due on her home, $50 to have her carpet cleaned, and $300 on a new TV. Eligibility continues.
Terminate MA or GAMC when enrollees have excess assets and do not properly reduce before the effective date of termination unless the excess assets are due to:
• Interest retained beyond the month accrued.
OR
• For people using long term care budgeting, retaining the clothing and personal needs allowance beyond the month of receipt. See §0913.13 (Long Term Care Spenddown Calculation)
Allow these exceptions as long as the enrollee reduces the excess assets at the time of the next renewal. See §0911.09.19 (Interest and Dividends).
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WAIVER OF ASSET RULES 0909.31
MinnesotaCare:
No provisions.
MA:
Upon the request of the client or the client's representative, waive a penalty for the transfer of assets for less than fair market value if the denial of MA payment for long term care services would cause undue hardship for the person based on imminent threat to the person's health and well-being. DO NOT assume that all clients would automatically choose an undue hardship waiver. A written request MUST be made by the client or the client's representative.
Imminent threat to health and well-being means that the person's continued receipt of necessary long term care services is dependent upon a waiver of the transfer penalty because:
• There are no alternatives for payment for long term care services.
AND
• The person's health and well being would be in immediate danger if the person loses MA payment for long term care services.
Grant a waiver if:
• The person was the victim of financial exploitation or has made reasonable efforts to recover the transferred income or resource.
AND
• There is the likelihood of imminent, serious harm occurring.
Whenever a client is denied MA payment of long term care services because of a transfer for less than fair market value, send the client notice of the right to request a waiver of the penalty due to undue hardship. The notice must also inform the client that a cause of action could be brought against the person who received the transfer if the undue hardship waiver is granted.
Upon written request for a waiver of undue hardship from the client or the client's representative, review all facts and determine if a waiver should be granted. You CANNOT grant a waiver without a WRITTEN request.
If a waiver is granted, send the client a notice stating that the waiver is granted as of a specified date. The notice should also state that the person who received the transfer may be sued by the county. If a waiver for undue hardship is denied, send the client a notice containing the client's right to appeal the decision.
If the person who received the transferred assets does not return them, refer the case to the county attorney.
To recover the value of the assets transferred, the county attorney must file a cause of action against the person who received the assets.
Waive the value of assets controlled by the community spouse of an LTC resident if s/he refuses to make assets available to meet cost of care. See §0909.25.07 (Community Spouse Contribution).
For trusts established on or after 8-11-93, waive the value of a trust, or part of a trust, that is considered a countable asset due to undue hardship to the client. See §0909.21 (Trusts). Undue hardship means that a client may be forced to go without life-sustaining services because the trust funds could not be made available to pay for the needed services. It also exists when applying the trust provisions would deprive a client of medical care and endanger his/her health or life. Send the client a notice of the client's rights to request an undue hardship waiver.
If a waiver is granted, send the client a notice stating that the waiver is granted as of a specified date. If a waiver for undue hardship is denied, send the client a notice containing the client's right to appeal the decision.
GAMC:
No provisions.
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