Transfer of Assets When an A/R, A/R’s spouse or someone acting on his/her behalf makes a voluntary transfer of a countable asset for less than fair market value Right of Rebuttal • Agency presumption • Client rebuttal – Reasonable timeframe – Evidence
Assets Exempt From Transfer Penalty • Exempt Resources • Any countable resources up to the MA level • Resources transferred to a spouse Assets Exempt From Transfer Penalty, cont’d Resources transferred to a certified blind or certified disabled child of any age, or to a trust established solely for the benefit of such child
Assets Exempt From Transfer Penalty, cont’d • Resources, but not income, transferred by an applicant, for Medicaid Extended Coverage: – Total Asset Protection Policies: if A/R has reached their durational requirements, all resources are exempt – Dollar for Dollar Plans: Resources up to the amount paid out by the plan are exempt • Transferred assets may be offset by any remaining asset protection Assets Exempt From Transfer Penalty, cont’d Assets, other than a homestead, may be transferred into a trust for the sole benefit of a certified disabled individual under the age of 65 years
Homestead May be Transferred to: • Spouse • Child under age 21 • Certified blind or disabled child of any age Homestead May be Transferred to: cont’d • Sibling who lived in the home at least 1 year prior to institutionalization and has equity interest • Adult child who lived in the home for 2 years prior to the institutionalization and provided care
Annuities and Transfer • A/R or A/R’s spouse who annuitized an annuity prior to 2/8/06 and within the look- back period – Will be subject to a transfer penalty unless annuity is actuarially sound Annuities and Transfer, cont’d • Actuarially Sound Calculations – Determine total lifetime payments: • Determine annual payment • Multiply by life expectancy – Compare total lifetime payments to annuity principal
Annuities and Transfer, cont’d • Example – Actuarially Sound – Female Applicant owns $150,000 Annuity – Payments started @ age 73 12/2005 (pre- DRA) – Payments - $200 per month – $200 x 12 = $2400/year x 14.16 (life expectancy @73) = $33,984 – This is NOT actuarially sound. Annuity Transactions Any action by the individual that changes the course of payment from the annuity or that changes the treatment of the income or principal of the annuity
Annuity Transactions, cont’d • Includes: – Purchases – Additions of principal – Elective withdrawals – Requests to change the distribution of the annuity – Elections to annuitize the contract Transfer (Annuities purchased or transactions on or after 2/8/06) A/Rs and their community spouses have to disclose any interest they have in an annuity
Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d • Annuities owned by either the A/R or the CS, when the annuity is not a countable resource, will be treated as a transfer unless: – The State is named beneficiary in the first position OR; (cont’d) – Second position after a community spouse, minor child, or certified disabled child AND; – First position if such spouse or representative of child disposes of any interest for less than fair market value Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d A/R must receive a copy of the “Disclosure of Annuities” letter to inform A/R of the State’s right to be named remainder beneficiary on the annuity by virtue of the provision of MA
Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d A/R or C/S is not required to name the State as beneficiary if the annuity is a countable resource Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d • Example – CSRA for CS = $74,820 – Total Countable resources = $65,000 which includes an annuity not in periodic payment status valued at $50,000 (owned by CS) – Since total countable resources are below CSRA, we can not require them to name state as beneficiary
Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d • Annuities purchased by or on behalf of an A/R will be treated as a transfer unless the annuity is: – Retirement Annuity; or – Purchased with proceeds from: • Individual retirement account; or • Simplified employee pension plan; or • Roth individual retirement account; AND ….. Transfer (Annuities purchased or transactions on or after 2/8/06), cont’d • Cont’d: – Irrevocable and non-assignable; – Actuarially sound; AND – Provide for payments in equal amounts during the term of the annuity with no deferral and no balloon payments
Assets Used to Purchase Loans, Promissory Notes and Mortgages • Assets used by the A/R and/or their spouses as defined above, will be treated as a transfer unless the repayment agreement: – Is actuarially sound; – Provides for payments to be made in equal amounts (no deferrals or balloon payments); and – Prohibits the cancellation of the balance upon the death of the lender Look-back Period • The sixty-month period immediately preceding the date that an institutionalized individual is both institutionalized and has applied for Medicaid. • Must look at transactions of $2,000 or more – $2000 is a guideline, it does not mean that LDSS’s can’t look at amounts under $2,000
Look-back Period For Trusts and Annuities • The look-back period for trusts and annuities is 60 months • Possible transfer for trusts is the date the trust is funded Financial Eligibility, Single SSI-R Individual • Budget Type 04 / Case Count = 1 • Any excess resources and/or income are compared to medical bills • If medical bills exceed excess, A/R is otherwise eligible • If medical bills do not exceed excess, A/R is not otherwise eligible
Financial Eligibility, Spousal • Spousal impoverishment treatment of resources • Total Combined Countable Resources - CSRA - MA Level for 1 Net vs. Medical Bills Financial Eligibility, Spousal, cont’d • Example $100,000 Current Resources - 74,820 CSRA 25,180 - 14,850 Resource level for one $10,330 vs. Nursing Home bill $16,000 • Client is otherwise eligible
Financial Eligibility, Spousal, cont’d • If resource eligible, continue with income calculations – Budget type 04 / case count = 1 calculations with institutionalized individual’s income only Financial Eligibility • Applicant is considered otherwise eligible even if: – Third party insurance is paying, and there is no excess income to offset with medical bills – Excess/NAMI may be greater than the MA rate
Financial Eligibility, cont’d $3000 MA Rate $5000 NAMI $7000 Nursing Home Private Pay Rate • Client is otherwise eligible • Since the NAMI is greater than the MA Rate, Medicaid will pay $0 • Nursing Home can’t collect the difference between the NAMI and private rate as client is eligible for MA Look-back Period For SSI-R individuals who were covered for the initial days of Nursing Facility services under Community Coverage with LTC, or Community Coverage with no LTC, the lookback begins the month of institutionalization (10 OHIP/ADM-1)
Look-back Period Non-SSI-R Individuals, cont’d An unmarried S/CC or ADC related RECIPIENT who requires temporary placement in a nursing home is budgeted under community rules, and, therefore will have no resource test or look-back period Look-back Period Non-SSI-R Individuals, cont’d • Unmarried S/CC or ADC RECIPIENTS who are temporarily placed in a NH and subsequently become permanently absent will have no look-back until a disability determination is completed – Look-back begins the first day of the initial institutionalization
Look-back Period Non-SSI-R Individuals, cont’d • Example – Client (45) is an MA Recipient (S/CC) – Car accident April 2013 and needs Nursing Home Services – Submits medical evidence that they are temp placed – They will receive NH services under the S/CC category and are fully eligible Look-back Period Non-SSI-R Individuals, cont’d • In November, Permanent Absence is determined • Disability review is initiated • The look-back will begin April 2013 and go back 60 months to April 1 st , 2008 • If a transfer is found, a penalty will be imposed • No recovery is made from the period of time they were receiving services under S/CC
Look-back Period Non-SSI-R Individuals, cont’d Unmarried S/CC or ADC APPLICANTS who are in need of permanent nursing home care will have no coverage for this service until the individual is certified disabled Calculation of Penalty Period • Determine Uncompensated Value: Fair Market Value - Compensation Received “Gross” Uncompensated Value
Calculation of Penalty Period, cont’d • Example $150,000 FMV house (no mortgage) - 60,000 Nephew Paid $90,000 Gross uncompensated value Calculation of Penalty Period, cont’d Gross Uncompensated Value - MA Resource deficit - Burial Fund (if none exists) Uncompensated Value (UV)
Calculation of Penalty Period, cont’d $14,850 MA level - 2,200 Countable resources 12,650 Additional allowable countable resources $90,000 Gross Uncompensated value - 12,650 Resource they can still have $77,350 Calculation of Penalty Period, cont’d • If no burial fund, allow another $1500 ($3000 couple) $77,350 - 1,500 Burial Fund $78,850 Net uncompensated value
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