Chapter 1600. Assets.
1640.0205. Asset Limits. For ICP, PACE all HSBC Waivers and Hospice: asset limit is $2,000 for an individual and $3,000 for eligible couples) or $5,000 if the individual’s income is within the MEDS-AD limit ($6,000 for eligible couples).
The community spouse resource allowance policy applies to ICP, institutional hospice, cystic fibrosis waiver, SMMC-LTC and PACE. Applicants who have spouses residing in the community (who are not in a HCBS waiver) have a Community Spouse Resource Allowance (CSRA) subtracted from the couple’s total countable assets before comparing the institutionalized spouse’s countable assets to the $2,000 asset limit. The CSRA is an established amount that increases annually.
1640.0206. Verification of Assets. A signed financial information release form (CF-ES 2613) to allow DCF to investigate asset directly with various banks and other institutions.
No need to verify the first vehicle and any vehicle over seven years old.
1640.0300. Asset Ownership and Availability. Any individual who has the legal ability to dispose of an asset is considered the owner of the asset. The type of ownership (single or joint) of an asset determines to whom the asset is available and the value that is counted to the individual.
1640.0302.01. Joint Ownership of Bank Accounts. When an individual is a joint account holder with unrestricted access to the funds, presume all the funds are owned by the individual. This presumption is made regardless of the source of funds.
If the individual alleges funds in an account (checking, savings, CD, and other jointly owned financial accounts) belong to someone else, you must allow the individual to submit evidence to challenge the above presumption.
1640.0302.04. Proof Needed to Rebut Ownership.
FIRST: Need written statement and corroborating evidence from the financial institution (and other sources) to substantiate:
· Any claims about ownership of the funds or interest from the funds;
· Reasons for establishing the joint account;
· Whose funds were deposited into the account;
· Who made withdrawals from the account; and
· Information on how withdrawals were spent.
SECOND: Need written statement from joint owner explaining their understanding of the ownership of the accounts (claims of ownership, why the account was set up, who deposited funds, and who withdrew funds and used the account). Statement can be made from a reliable third party of joint owner is a minor or incompetent.
1640.0302.05. Evaluating Evidence for Rebuttal of Joint Account Ownership. If the rebuttal evidence proves that the account funds were deposited, withdrawn and used by the other joint owner only, then the burden of proof will have been met.
At this point, the individual’s name must be removed from the account so he no longer has access to the funds in the account (and will not be deemed a “transfer of assets”).
Read rest of section discussing when rebuttal evidence only shows that the applicant can disclaim a portion of the assets in the joint account.
1640.0303.03. Trust Ownership.
1640.0305.01. Ownership of Real Property by Title.
1640.0305.02. Shared Ownership of Real Property. If the Medicaid applicant cannot sell his share of the property without the consent of the other owner and if another owner refuses, the property is not considered a countable asset.
1640.0305.03. Life Estate Ownership. Discusses life estates and lady bird deeds. Confirms that enhanced life estate deeds (lady bird deed) are the same as complete ownership (counted the same as other real property an individual may own and may be excluded if it qualifies as the individual’s homestead, including intent to return).
1640.0305.04. Ownership Interest in Unprobated Estate. If will or court record or law indicates that Medicaid applicant has rights to property of another deceased person who’s estate just has not yet been probated, then count that property toward the applicant’s asset limit.
1640.0307.01. Home Ownership. To be excluded, a home must be the person’s principal place of residence (if not, include as an asset) and under home equity interest standard unless they meet an exception to same (see APPENDIX A-9).
1640.0307.02. Establishment of Home Ownership. Presume that home ownership exists if their name is shown as owner on an assessment notice, recent tax bill, current mortgage statement, deed, or report from title search.
An individual can acquire ownership interest in a home through various actions such as: paying mortgage, construction of home additions/improvements, even if another person holds sole title. Individual Medicaid applicant may allege ownership if he has contributed to the equity or value of the home (must demonstrate this through relevant documents, including written agreement between the individual and the homeowner on title indicating this mutual understanding).
1640.0307.03. Shared Home Ownership. If an individual shares ownership interest in a home with other persons, the home is excluded.
1640.0307.04. Home Equity. Individuals with a home equity interest greater than the standard set forth in Appendix A-9 are ineligible for nursing facility or other LTC services, unless one of the following relatives of the institutionalized individual is residing in the home:
· Child under age 21; or
· Blind or disabled child, regardless of age or marital status.
The equity in a home is the current market value minus any indebtedness. If equity value is $450,000 or more, individual must provide verification of current market value and indebtedness. Verification can be obtained from a real estate broker, mortgage broker, property appraiser or builder. Statement must include:
· Current market value,
· Name of person providing the estimate, and
· Contact info of business or agency for whom the person providing estimate works.
The home equity provision may be waived when denial of LTC services would result in demonstrated hardship to the institutionalized individual.
1640.0307.05. Undue Hardship for Excess Home Equity Interest. Must demonstrate Medicaid applicant would be deprived of medical care to such an extent that their life or health would be endangered or that the individual would be deprived of food, clothing, shelter or other necessities of life if determined ineligible for Medicaid LTC services.
Endangerment exists when the deprivation of LTC medical care will cause acute symptoms of such severity that will result in the serious jeopardy to the health of the individual or serious impairment of bodily functions or dysfunction to a body organ or part. This must be documented by a medical doctor.
A nursing facility may request an undue hardship waiver on an individual’s behalf with their, or designated representative’s, consent.
1640.0307.06. Processing Undue Hardship Requests for Excess Home Equity. See questionnaire on CF-ES 2345A. Must be completed within 10 calendar days following the interview date.
1640.0312.02. Trust Availability to Trustee. Trust is not an asset to trustee if trustee cannot use any of the funds in the trust for his own benefit.
The trust is an asset to trustee if individual is the trustee and has legal ability to revoke trust and use the money for his own benefit.
The trust is an asset to the individual if the individual’s spouse created the trust and has the right to dissolve it and to use the funds for his own benefit.
1640.0312.03. Trust Availability to Beneficiary. Trust is an asset available to a beneficiary IF beneficiary can access the trust principal.
1640.0314.01. Assets Available to Spouse. Assets of both spouses (even if separated) are considered when determining one individual’s eligibility. The portion deemed “available” is the amount remaining after the community spouse’s asset allowance is subtracted from the couple’s total included assets.
If, after declaring and verifying his/her assets, the community spouse refuses to make them available to the individual applying for Medicaid ICP, the individual applying for Medicaid/ICP may assign his rights of support to the state and obtain ICP benefits (see 1640.0314.03 and 1640.0314.04).
If the community spouse refuses to make their assets available to the institutionalized spouse, they are not entitled to a community spouse income allowance.
If spouses have been separated and community spouse cannot be found, treat applicant like an individual.
If either spouse can verify that the community spouse asset allowance determined by DCF is insufficient to generate income to raise the community spouse income to the MMMNA, the asset allowance may be revised through the fair hearing process.
1640.0314.02. Prenuptial Agreements. Not recognized by DCF (all/combined assets are still counted regardless of any prenuptial agreement).
1640.0314.03. Assignment of Support Rights. If the community spouse is refusing to make their assets available to the Medicaid applicant, the institutionalized spouse must complete CF-ES Form 2504 (Assignment of Support Rights), which will allow state to pursue recovery from the community spouse.
When all conditions is section 1640.0314.04 are met, the allocated assets being withheld by the community spouse will no longer be considered available to the institutionalized spouse.
1640.0314.04. Undue Hardship. The institutionalized spouse will not be deemed ineligible based on community spouse’s assets if all of the following conditions are met:
· The IS is not eligible due to CS’s assets and CS refuses to use assets for IS; and
· The Assignment of Support Rights (CF-ES Form 2504) is signed; and
· The IS would be eligible if only those assets to which he has access were counted; and
· The IS has no other means to pay for nursing home care.
1640.0315. Assets Available to Spouse after Approval. After the institutionalized spouse is approved, none of the assets solely owned by the community spouse are included as available to the IS. The amount of assets allocated to the CS which belong to the IS and are available to the IS must be transferred to the CS.
Any assets received by the IS after approval, which cause total assets to exceed the asset standard, will not affect the IS’s eligibility if they are transferred to an allowable person (see section 1640.0600) within the same month received. If the assets are still available to the IS the month after receipt, it is considered a countable asset in that following month.
1640.0319. Comatose Individual.
1640.0321. Assets Unavailable – Circumstances Beyond Control. Assets unavailable due to circumstances beyond the individual’s control are not considered in the determination of eligibility.
The individual must present convincing evidence to prove asset is unavailable to him due to circumstances beyond his control.
1640.0405. When Asset Value Affects Eligibility. Individuals who are eligible on any day of the month are eligible the whole month.
1640.0406. Determining Asset Value. Amount included is actual value minus indebtedness. Indebtedness is amount needed to satisfy contract terms that must be met to establish ownership of the asset.
1640.0408. Determining Asset Value. Countable value is equity individual or couple has in the asset. In some cases, the asset value is reduced by allowable excluded amount (e.g. mortgages, liens, loans, purchase contracts or security interests).
1640.0500. ASSETS: DEFINITIONS AND VALUE DETERMINATIONS.
1640.0501. Bank Accounts (savings, S&L, credit unions). Interest earned is excluded as unearned income in eligibility determinations but is counted when calculating patient responsibility.
1640.0504. Time Deposits. CDs are included as assets unless cannot be withdrawn prior to maturity. If can be withdrawn with penalty, deduct penalty from countable amount.
1640.0505.04. Retirement Funds. IRA, 401(k), Keogh, pensions etc…are treated as asset or as income unless considered unavailable.
· If individual is eligible to receive regular payments from a retirement fund, the payments are considered unearned income and the fund is not considered a countable asset (if individual is eligible to receive payments but elects not to, he is ineligible for failure to file for other benefits to which he is entitled).
· If individual is not eligible to receive regular payments from the retirement fund, the value of funds currently available is considered a countable asset. Any penalty imposed due to early withdrawal can be deducted from the value (but taxes due are not deductible).
1640.0505.05. Retirement Funds of Community Spouse. At the time of Medicaid application:
· If community spouse receives payments from a retirement fund, the funds are not considered an asset when computing total countable assets. The payment is considered unearned income to the community spouse when computing the community spouse income allowance.
· If CS does not receive payments, but has option of withdrawing a lump sum, the total value of the funds is considered an asset when computing total assets. Early withdrawal penalties are excluded from the value of the funds, but taxes are not withdrawn.
1640.0505.06. Consumer Directed Care Waiver.
1640.0505.07. Individual Development Accounts.
1640.0509 – 1640.0517. Burial Contracts. Not included as an asset if:
· contract cannot be liquidated without significant hardship;
· contract seller refuses to revoke or liquidate; or
· contract is irrevocable.
If contract can be liquidated, amount individual would receive upon revoking or liquidating is included as an asset.
Any Medicaid applicant may make an irrevocable contract and exclude this asset.
1640.0516. Burial Spaces (includes conventional grave sites, crypts, mausoleums, urns, caskets, headstones, and opening and closing costs of the grave). Burial spaces owned by individual are not counted if they are intended for use of individual, spouse, any member of the individual’s immediate family, defined as and including: minor and adult children, step children, adopted children, brothers, sisters, parents, adoptive parents, and spouses of immediate family members.
1640.0517. Verification of Burial Spaces. Documents such as deeds to cemetery lots or sales contracts.
1640.0534. Home. Any shelter used as principal place of residence. Home may be real or personal property, fixed or mobile and located on land or water. The home includes all land and buildings locaed on such land.
1640.0537. Good Faith Effort to Sell. Property may be temporarily excluded if the individual is making good faith efforts to sell at FMV. Verification may be through collateral contacts or documentation such as listing in a newspaper or with a real-estate broker.
If property is alleged to be unmarketable, the individual must obtain statements from two different types of knowledgeable sources in the geographic area verifying that property is not saleable due to a specific condition.
1640.0543.01. Home as Principal Place of Residence. Temporary absences from home will not affect exclusion of home as asset regardless of length of absence. Statements of “intent to return home” will be deemed sufficient.
1640.0543.02. Homes in Another State.
1640.0543.03. Home Replacement Exclusion. Proceeds from sale of house (and any other excluded property sold with home) can be excluded from assets for up to three months while the home is being replaced.
If home is being replaced due to loss or damage resulting from a disaster or accident, the in-kind replacement (temporary housing or support) is excluded for nine months from date received.
If individual applies for Medicaid after selling a home that would have been excluded as an asset, the three month exclusion period begins the day the individual applies for benefits.
1640.0544. Income Producing Property. An individual can exclude FMV of any income producing property he owns that is essential to self-support.
1640.0548. Income Producing Property. Any income producing property (including equipment) may be excluded from assets if it annually produces income consistent with its FMV. The individual’s statement that the property produces a reasonable return may be accepted. If the rate of return is questionable, eligibility specialist must require verification from a knowledgeable source. The following types of income producing property may be excluded:
· Property that annually produces income consistent with its FMV, even if used only on a seasonable basis. Such property shall include rental and vacation homes.
· Farmland or other property essential to the applicant’s employment.
· Nonliquid assets against which a lien has been placed as a result of a business loan. The security or lien agreement must prohibit applicant from selling the asset (this exclusion is limited to land, crops, buidings, timber, farm equipment or machinery).
1640.0549. Rate of Return Less Than Reasonable. If less than reasonable ROR, fully count the asset, with several exceptions discussed in this section.
1640.0551. Life Estate Interest. Any life estate held by an individual, their spouse, a child or specified relative is excluded as an asset to the individual. Transfers of life estates need not be examined for potential penalties.
But life estates received as a result of transfer within 60 months of application must be evaluated under transfer-of-asset policies.
1640.0554. Life Insurance. A life insurance policy is considered only to the extent of its cash surrender value. However, if the face value of all life insurance policies on any one individual is $2,500 or less, no part of the cash surrender value is counted.
Life insurance having no surrender value (e.g. burial insurance or term life insurance) is excluded.
1640.0555. Verification of Life Insurance. Individual must provide following information on life insurance policies:
· Owner of policy;
· Individual insured by the policy;
· Amount of policy’s cash surrender value, if any; and
· Amount of any dividends or interest earned on the policy.
Can get this from the policy itself or from the insurance company or local agent.
1640.1561.03. Promissory Notes Signed After 3-1-2005. Notes/Mortgages/Loans are included as assets for an individual lender who has the legal right to sell the loan or owns an interest in the loan that can be converted to cash. The asset value = equity value of the loan (outstanding balance minus indebtedness).
When promissory note payments consist of both principal and interest:
· The interest portion is excluded as unearned income in eligibility determination, but counted as unearned income in patient responsibility calculations.
· The principal portion is conversion of an asset, not income.
If the promissory note is not bona fide or not negotiable, the instrument cannot be converted to cash (i.e. sold) and is not an asset. If determined not to be an asset, the total payments received (principal or interest) is considered unearned income.
1640.0561.04. Home Equity Loans | Home Equity Line of Credit.
1640.0563. Personal Property. Generally (clothing, jewelry, tools of a trade, pets, household furniture and appliances, wedding ring, engagement ring, items required due to medical/physical condition, etc…) are excluded as assets.
1640.0565.02. Household Goods/Personal Effects. “Items of unusual value” such as expensive china, silver/glassware, art, oriental carpets, antiques, heirlooms, musical instruments, hobby collections, jewelry made with precious stones, expensive furs….are included as assets per their FMV if worth more than $500.00.
1640.0565.03. Value of Household Goods/Personal Effects. Statement on Medicaid application that individual/spouse does not own any unusual items worth more than $500 is accepted without further review unless there is evidence to the contrary.
1640.0566. Stock & Bonds. Current market quotation is the asset value
1640.0568. Stock in Closed Corporation.
1640.0576.02. How to Analyze Trusts. How to count funds held in trust (as assets or income) depends on who created the trust, when it was created, whether the trust is revocable or irrevocable, and the conditions and terms of the trust.
1640.0576.03. Trusts Set Up by Others. For trusts established by someone other than the individual/spouse, trust must be evaluated per the following SSI policies:
· If individual does not have authority to revoke or direct use of the trust, it is not considered an asset to him. Conversely, if the individual has authority to revoke or direct use of the trust, the corpus of the trust is considered an asset to him.
· Cash paid directly from the trust to the individual is unearned income.
· Disbursements made by the trustee directly to a third party are not considered income to the individual.
o These policies also apply to trusts established by a will.
1640.0576.07 Trusts Established On or After 10-1-1993. An individual is considered to have established the trust if assets of the individual were used to form all or part of the corpus of the trust and if any of the following individuals established the trust (other than by will):
· The individual;
· Individual’s spouse;
· Person, including court, with legal authority to act in place or on behalf of the individual or their spouse; or
If trust was not established by one of the above individuals, refer to section 1640.0576.03 above.
If the trust is revocable:
· entire principal is available asset;
· payments are counted as income;
· consider any other payments from the trust as assets disposed of by the individual without fair compensation.
If the trust is irrevocable and no payment could me made from the trust under any circumstances:
· Apply transfer of assets policy (See Section 1640.0606) to individual’s assets and income used to establish the trust.
· The trust is not counted as an available asset.
1640.0576.08. Exceptions for Trusts. The policies in Section 1640.0576.07, above, do not apply to the following trusts:
· Trusts established by will (see Section 1640.0576.03)
· Trusts for disabled under age 65.
· Pooled trusts for disabled.
· Qualified Income Trusts (see Section 1840.0110).
All special trusts must be forwarded to Regional / Circuit Legal Counsel for review and written approval.
The following special trusts may be created for disabled individuals if the trust meets the specific criteria described below:
Trusts for disabled under age 65:
· Established on or after 10-1-1993;
· Established for benefit of individual by parent, grandparent, legal guardian or court (cannot be established by disabled individual himself); and
· Trust must provide that state will receive balance of trust upon death of the individual up to an amount equal to total medical assistance paid by Medicaid.
Pooled trusts for disabled:
· Established after 10-1-1993;
· Trust is managed by NPO;
· Repayment to state provision
· (no age restriction and can be set up by individual him or herself)
Disability must be determined for both of the above special trusts.
1640.0576.09. Treatment of Qualified Disabled Trusts
· Do not consider funding of a qualified disabled or pooled trust as a transfer of assets or income subject to the imposition of a penalty period (provided the trust purchases items and services at FMV for the sole benefit of the disabled individual (see also Section 1640.0609.06).
· Do not consider income deposited into the trust as income to the individual for eligibility determination purposes.
· Do not consider disbursements from the trust to 3rd parties as income to the individual.
· Do not consider any income earned by the trust, which remains in the trust, as income to the individual;
· Count all income placed into the trust (along with countable income outside the trust) when computing patient responsibility. Standard spousal impoverishment policies apply.
If income is deposited into the trust, trustee must provide quarterly statements identifying the deposits and disbursements made to the trust for each month. Disbursements to the individual must be counted as income to the individual. Fax or mail a copy of the approved trust to:
ACS Recovery Services | PO Box 12188 | Tallahassee, Florida 32317-2188 | FAX: 866.443.5559.
1640.0576.10. Undue Hardships for Trusts. If undue hardship exists, only amount of the trust that is actually made available as income or assets is counted.
1640.0578. Real Estate.
1640.0581. Value of Real Property. County tax assessment of the property (minus and debts) may be used to determine the ownership and value of real estate.
But the ESS manual recognizes that tax assessment can be lower than actual FMV, so the Medicaid office may request an estimate of value from a third-party knowledgeable source. See Section 1640.0582.02, below.
1640.0582.01. Verification of Real Property Value. The tax assessment cannot be used when the following conditions exist:
· An estimate of FMV can be easily obtained from a knowledgeable source at no cost to DCF.
· Assessed value of home, by tax assessor, exceeds $450,000.00.
1640.0582.02. Knowledgeable Sources.
· Real estate brokers
· Banks, S&L associations, mortgage companies (and similar institututions).
· MLS publications
1640.0591. Automobile. One automobile (car, truck, motorcycle, including those that are unregistered, inoperable and in need of repair), regardless of value is excluded as an asset.
Unless otherwise excluded, other automobiles are treated as non-liquid assets and counted to the extent of their equity value (average trade-in-value minus any indebtedness).
If more than one vehicle, apply the automobile exclusion in the manner most advantageous to the individual (highest equity value).
Any automobile over seven (7) years old is excluded as an asset except for the following circumstances:
· Luxury cars (e.g. Jaguar, Mercedes Cadillac, Lincoln, Corvette, etc…)
· Vehicle that are over 25 years old (that may have enhanced value as an antique or classic car)
· Customized or modified automobiles (except those modified for use by a handicapped person).
1640.0592. Verification of Vehicle Value. Information verifying owners, make/model/year (from title, tag registration, DMV records, purchase contract, or from a lien holder) is required. Value can be determined by trade-in value listed in National Automobile Dealers’ Association (NADA) (FMV minus indebtedness).
1640.0594. Long-Term Care (LTC) Insurance Partnership Payments. If the individual is a beneficiary of a LTC Insurance Partnership Policy – a portion of their total countable resources disregarded when evaluating Medicaid eligibility (for ICP, HCBS, Hospice or PACE).
The disregarded portion is equal to the actual amount of LTC insurance partnership benefits paid out. The resources disregard will continue to apply for the duration of the individual’s Medicaid coverage. The resource disregard is protected from Medicaid estate recovery. Send CF-ES 2356 to notify the Agency for Health Care Administration’s Third Party Liability vender of the amount to be disregarded for estate recovery purposes.
For example: individual has countable resources of $61,000 and LTC paid out 60K toward nursing home bill. The individual’s countable resources are reduced by 60K and remaining 1K is considered countable in the eligibility determination.
1640.0595. Continuing Care Entrance Fee. An entrance fee paid by an individual upon admission to a CCRC – continuing care retirement community or life care community is considered an asset when all the following conditions are met:
· Individual can use entrance fee when their income/assets are insufficient to pay for their care.
· The entrance fee (or any portion) is refundable when the individual dies or terminates the contract with the CCRC.
· The entrance fee does not convey an ownership interest in the CCRC (i.e. not applied towards purchase of apartment/condo within the CCRC).
1640.0600. TRANSFER OF ASSETS. Discusses when asset or income is disposed of or transferred for less than FMV within the lookback period.
A transfer is presumed to be made for the purposes of obtaining Medicaid eligibility and a period of ineligibility will be imposed unless the individual presents convincing evidence of one of the following:
· Individual intended to dispose of the asset for FMV (or in exchange for other valuable compensation, such as: support and/or maintenance); or
· The asset was transferred solely for reasons other than to become Medicaid eligible; or
· Transfer allowable under polices in Sections 1640.0609.03, 1640.0609.04, 1640.0610, 1640.0611, or 1640.0612; or
· All assets transferred for less than FMV have been returned to the individual (see section 1640.0620, below).
· Undue hardship, see 1640.0613, below.
1640.0608. Transfer Look-Back Period. 60 months. Look back period begins with the month of application, counting backwards.
1640.0609.03. Transfers to Annuities on or After 11-1-2007. Annuity purchase is considered a transfer of assets for less than FMV unless all the following requirements are met:
· Must name State of Florida, Agency for Health Care Administration (AHCA) as the primary beneficiary, for the total amount Medicaid paid (except for when the individual has a spouse or or minor or disabled adult child, in which case, the state shall be named as secondary beneficiary after the spouse and/or minor or disabled child).
· Must be irrevocable and nonassignable.
· Annuity must make payments (including both principal and interest) to the individual in equal amounts during the term of the annuity, with no balloon or deferred payments.
· Must be actuarially sound based on actuarial tables used by the Social Security Administration (see Appendix A-14).
If above criteria is met, funds in annuity are excluded as a resource and periodic payments are counted as income in the eligibility determination and patient responsibility.
If all of the above criteria are not met, consider all funds in the annuity a transfer without fair compensation, except when annuity is revocable or assignable:
· When revocable: count as an asset the amount a purchaser would receive from the annuity issuer of the annuity was cancelled.
· When assignable: count as an asset the amount of the annuity that could be sold on the secondary market.
EXCEPTION: IRAs, SEP, Roth IRA or other annuities established by employee are not considered under transfer of assets provisions and do not have to meet above criteria.
Community Spouse’s Annuity: Purchase of annuity by community spouse of ICP applicant will be considered a transfer of assets for less than FMV unless annuity meets below criteria:
· Names AHCA as primary beneficiary (or secondary after any minor or disabled children)
· Actuarially sound based on spouse’s age on the actuarial table used by SSA in Appendix A-14.
Community spouse annuities that are revocable or assignable will count as an asset, in the same manner as the applicant’s annuity would count as described above.
Annuities purchased by community spouse after approval of LTC Medicaid for applicant spouse are not evaluated for transfer of asset provisions.
1640.0609.04. Allowable Transfers – Homestead Property. The transfer of homestead is considered allowable if individual Medicaid applicant transfers the home to the spouse or any of the following relatives:
· Legal spouse
· Child under age 21
· Blind or disabled adult child (per SSI guidelines)
· Sibling of individual who has equity interest in home and was residing in the home for at least one year immediately before the individual became institutionalized (eligibility specialist should accept the sibling’s statement, unless there is reason to question)
· Adult son or daughter of individual who resided in the home for at least two years immediately before individual was institutionalized and provided care that delayed institutionalization (specialist must accept son/daughter’s statement unless there is reason to question).
1640.0609.05 Allowable Transfers. Assets which are excluded because not marketable; life estates in property previously owned by the individual; paying valid debt; burial arrangements; transfers to blind/disabled children to trust described in 1640.0576.08 (established solely FBO disabled adult child); transfers to qualified income trust / miller trust (see 1840.0110 and 1840.0111); interspousal transfers (transfer between spouses are exempt); and transfers of excluded assets other than homestead or real property excluded from countable assets due to a bona fide effort to sell (transfers of homestead if meets criteria set forth in 1640.0609.03).
1640.0609.08. Promissory Notes (after 11-1-2007). Will be considered transfer of assets for <FMV unless following conditions are met:
· Repayment term is actuarially sound (Appendix A-14 SSA tables);
· Payments must be made in equal amounts during term of loan with no deferral and no balloon payments being possible; and
· Debt forgiveness is not allowed.
1640.0610. Interspousal Transfers after Approval. After approval of Medicaid nursing home services, assets attributed to community spouse but remaining in IS’s name are not considered available to the IS if the assets are transferred to the CS before the next redetermination.
1640.0612. Assets Transferred Due to Court Ordered Support. Will be respected by Medicaid and no penalty imposed.
1640.0613.01. Property Transferred and Life Estate Retained. Uncompensated value depends on the life estate retained by the individual Medicaid applicant.
· For regular life estate, multiple FMV of property at time of transfer by remainder interest factor in the life estate/remainder interest table (see Appendix A-17). Deduct value of life estate from the amount the individual paid for it. The remainder is the amount of the transfer.
· Lady Bird Life Estate / Lady Bird Deed. Gives them full rights to the property, including the right to sell.
1640.0614.04. Compensation in Support or Services.
Compensation in form of support and maintenance or services is based on:
· Support or services at time of the asset transfer, and
· Frequency/duration of the support or service.
Documentation must be obtained to establish FMV provided if:
· Services are to be performed on an “as needed basis,” the statement must include the individual’s expectation as to the frequency of services and the basis for that expectation; and
· Support or services are to be provided for the life of the individual, using the life expectancy tables in Appendix A-14
To establish value of support and maintenance for the individual’s life, use the following formula:
· [Yearly FMV of support/maintenance] x [Life Expectancy corresponding to the individual’s age (as of the last birthday) at the time the asset was transferred]
Should state how the value was determined and the agreement showing the type, frequency and duration of the support or services (e.g. a personal service contract or family caregiver agreement).
1640.0616. Rebutting Presumption that Transfers < FMV Were For The Purpose of Becoming Medicaid Eligible (e.g. exploitation).
1640.0617. Undue Hardship.
1640.0618. Period of Ineligibility.
1640.0620. Adjustments to Penalty Period. If all transferred assets or income are returned to the individual, penalty period is eliminated.
Partial Cures for Gifts. If the transferred asset or income is returned in part, the eligibility specialist must:
· Reduce uncompensated value accordingly,
· Refigure the period of ineligibility,
· Evaluate the returned asset according to normal asset rules, and
· Count the returned asset as if it has been available in retroactive months.
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