Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-305

Resources

Notice of Proposed Rule

(Amendment)

DAR File No.: 32935
Filed: 09/01/2009 06:12:47 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to exclude certain types of income to determine Medicaid eligibility as required by the American Recovery and Reinvestment Act of 2009 (ARRA), to update incorporated materials, and to correct or update other rule language.

Summary of the rule or change:

This change excludes certain types of income, recovery payments, and Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance premium subsidies to determine Medicaid eligibility. In addition, it excludes certain properties that American Indians own from being counted as resources. It further updates incorporated materials and amends the text to clarify existing rule provisions.

State statutory or constitutional authorization for this rule:

• Section 26-18-3
• Section 26-1-5

This rule or change incorporates by reference the following material:

• Updates: 20 CFR 416.1201, 416.1202, 416.1205 and 416.1250, 10/01/2009
• Adds: 42 CFR 435.843, 10/01/2008
• Updates: 42 CFR 435.840 and 435.845, 10/01/2008
• Updates: Section 1917(d) and (e) of the Compilation of the Social Security Laws, 01/01/2009
• Removes: Sections 6012, 6014 and 6015(b) of Pub. L. No. 109-171, 01/01/2005
• Adds: 20 CFR 416.1224, 416.1229 through 416.1239, and 416.1247 through 416.1249, 10/01/2009
• Adds: Section 1917(f) and (g) of the Compilation of the Social Security Laws, 01/01/2009
• Updates: 45 CFR 233.20(a)(3)(i)(B)(1),(2),(3),(4), and (6), and 233.20(a)(3)(vi)(A), 10/01/2008
• Updates: Section 404(h)(4) and 1613(a)(13) of the Compilation of the Social Security Laws, 01/01/2009

Anticipated cost or savings to:

the state budget:

There is no budget impact because the payments that individuals receive and possibly retain are from sources of income they would not have had without the enactment of ARRA.

local governments:

This change does not impact local governments because they do not determine Medicaid eligibility or fund Medicaid services.

small businesses:

This change does not impact small businesses because they do not determine Medicaid eligibility for Medicaid clients.

persons other than small businesses, businesses, or local governmental entities:

There is no cost or savings to other persons because the payments they receive as a result of ARRA are not counted as resources and do not affect their Medicaid eligibility.

Compliance costs for affected persons:

There are no compliance costs because this change does not require a recipient to pay more for coverage and it does not affect individual eligibility.

Comments by the department head on the fiscal impact the rule may have on businesses:

These changes are necessary for compliance with federal requirements and should not have a negative fiscal impact on business. Payments under the ARRA stimulus package will not cause ineligibility. More persons who would otherwise be uninsured will have a source of payment to providers.

David N. Sundwall, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

• Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2009

This rule may become effective on:

10/22/2009

Authorized by:

David Sundwall, Executive Director

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-305. Resources.

R414-305-1. A, B and D Medicaid and A, B and D Institutional Medicaid Resource Provisions.

(1) This section establishes the standards for the treatment of resources to determine eligibility for aged, blind and disabled Medicaid and aged, blind and disabled institutional Medicaid.

(2) To determine eligibility of the aged, blind or disabled, the Department [adopts]incorporates by reference 42 CFR [435.725 and 435.726, ]435.840[through ] , 435.843, 435.845, 200[5]8 ed., and 20 CFR 416.1201 , [through ]416.1202 , [and ]416.120[4]5 through 416.1224, 416.1229 through 416.1239, and 416.1247 through 416.12[66]50, 200[5]9 ed.[, which are incorporated by reference.] The Department adopts Subsection 1902(k) of the Compilation of the Social Security Laws, 1993 ed., which is incorporated by reference. The Department [adopts]incorporates by reference Section 1917(d) , [and ](e) , (f) and (g)[,404(h)(4) and 1613(a)(13)] of the Compilation of the Social Security Laws in effect January 1, [1999]2009.[, which are incorporated by reference. The Department adopts sections 6012, 6014 and 6015(b) of Pub. L. 109-171 which are incorporated by reference.] The Department shall not count as an available resource any assets that are prohibited under other federal laws from being counted as a resource to determine eligibility for federally-funded medical assistance programs. Insofar as any provision of this rule is inconsistent with applicable federal law, the applicable federal law governs over the inconsistent rule provision.

(3) The definitions in R414-1 and R414-301 apply to this rule, in addition:

(a) "Burial plot" means a burial space and any item related to repositories customarily used for the remains of any deceased member of the household. This includes caskets, concrete vaults, urns, crypts, grave markers and the cost of opening and closing a grave site.

(b) "Sanction" means a period of time during which a person is not eligible for Medicaid services for institutional care or services provided under a Home and Community Based waiver due to a transfer of assets for less than fair market value.

(c) "Transfer" in regard to assets means a person has disposed of assets for less than fair market value.

(4) A resource is available when the client owns it or has the legal right to sell or dispose of the resource for the client's own benefit.

(5) Except for the Medicaid Work Incentive Program, the resource limit for aged, blind or disabled Medicaid is $2,000 for a one-person household and $3,000 for a two-[member]person household.

(6) For an individual who meets the criteria for the Medicaid Work Incentive Program, the resource limit is $15,000. This limit applies whether the household size is one or more than one.

(7) The Department bases non-institutional and institutional Medicaid eligibility on all available resources owned by the client, or deemed available to the client from a spouse or parent. Eligibility cannot be granted based upon the client's intent to or action of disposing of non-liquid resources as described in 20 CFR 416.1240, 200[5]9 ed. , unless Social Security is excluding the resources for an SSI recipient while the recipient takes steps to dispose of the excess resources.

(8) Any resource or the interest from a resource held within the rules of the Uniform Transfers to Minors Act is not countable. Any money from the resource that is given to the child as unearned income is a countable resource beginning the month after the child receives it.

(9) The resources of a ward that are controlled by a legal guardian are counted as the ward's resources.

(10) Lump sum payments received on a sales contract for the sale of an exempt home are not counted if the entire proceeds are used to purchase a new exempt home within three calendar months of when[committed to replacement of] the property is sold[within 30 days and the purchase is completed within 90 days]. The individual shall receive one three-month extension [of 90 days ]if more than [90 days]three months is needed to complete the actual purchase. Proceeds is defined as all payments made on the principal of the contract. Proceeds does not include interest earned on the principal.

(11) If a resource is potentially available, but a legal impediment to making it available exists, it is not a countable resource until it can be made available. The applicant or recipient must take appropriate steps to make the resource available unless one of the following conditions as determined by a person with established expertise relevant to the resources exists:

(a) Reasonable action would not be successful in making the resource available.

(b) The probable cost of making the resource available exceeds its value.

(12) Water rights attached to the home and the lot on which the home sits are exempt providing it is the client's principal place of residence.

(13) For an institutionalized individual, a home or life estate is not considered an exempt resource.

(14) To determine eligibility for nursing facility or other long-term care services, [T]the Department excludes [an institutionalized individual's]the value of the individual's principal home or life estate from countable resources if the individual's equity in the home or life estate does not exceed the equity limit of $500,000 as established in [Section]42 U.S.C. 1396p(f)(1)(A), or as increased according to the provisions of 42 U.S.C. 1396p(f)(1)(C) of the Compilation of the Social Security Laws,[6014 of Pub. L. 109-171,] and one of the following conditions is met:

(i) the individual intends to return to the home;

(ii) the individual's spouse resides in the home;

(iii) the individual's child who is under age 21, or who is blind or disabled resides in the home; or

(iv) a reliant relative of the individual resides in the home.

(15) If the equity value of the individual's home or life estate exceeds $500,000, or increased value according to the provisions of 42 U.S.C. 1396p(f)(1)(C), the individual is ineligible for nursing facility or other long-term care services unless the individual's spouse, or the individual's child who is under age 21 or is blind or permanently disabled lawfully resides in the home.

(1[5]6) For A, B and D Medicaid, the Department shall not count up to $6,000 of equity value of non-business property used to produce goods or services essential to home use daily activities.

(1[6]7) A previously unreported resource that meets the criteria for burial funds found in 20 CFR 416.1231, may be retroactively designated for burial and thereby exempted effective the first day of the month in which it was designated for burial or intended for burial. [However, it]The funds cannot be exempted retroactively [prior to November 1982 or earlier]more than 2 years prior to the date of application. Such resources shall be treated as funds set aside for burial and the amount exempted cannot exceed the limit established for the SSI program.

(1[7]8) One vehicle is exempt if it is used [at least four times per calendar year to obtain necessary medical treatment]for regular transportation needs of the individual or a household member.

(1[8]9) The Department excludes resources [allows]of an SSI recipient[s] who [have]has a plan for achieving self support approved by the Social Security Administration when the resources are set aside under the plan[to set aside resources that allow them] to purchase work-related equipment or meet self support goals.[These resources are excluded.]

([19]20) An irrevocable burial trust is not counted as a resource. However, if the owner is institutionalized or on home and community based waiver Medicaid, the value of the trust, which exceeds $7,000, is considered a transferred resource.

(2[0]1) Business resources required for employment or self-employment are not counted.

(2[1]2) For the Medicaid Work Incentive Program, the Department excludes the following additional resources of the eligible individual:

(a) Retirement funds held in an employer or union pension plan, retirement plan or account, including 401(k) plans, or an Individual Retirement Account, even if such funds are available to the individual.

(b) A second vehicle when it is used by a spouse or child of the eligible individual living in the household to get to work.

(2[2]3) After qualifying for the Medicaid Work Incentive Program, these resources described in R414-305-1(2[1]2) will continue to be excluded throughout the lifetime of the individual to qualify for A, B or D Medicaid programs other than the Medicaid Work Incentive, even if the individual ceases to have earned income or no longer meets the criteria for the Work Incentive Program.

(2[3]4) Assets shall be deemed from an alien's sponsor, and the sponsor's spouse, if any, when the sponsor has signed an Affidavit of Support pursuant to Section 213A of the Immigration and Nationality Act on or after December 19, 1997. Sponsor deeming will end when the alien becomes a naturalized U.S. citizen, or has worked 40 qualifying quarters as defined under Title II of the Social Security Act or can be credited with 40 qualifying work quarters. Beginning after December 31, 1996, a creditable qualifying work quarter is one during which the alien did not receive any federal means-tested public benefit.

(2[4]5) Sponsor deeming does not apply to applicants who are eligible for Medicaid for emergency services only.

(26) The Department excludes from countable resources the following resources:

(a) Amounts an individual receives as a result of the Making Work Pay credit defined in Section 1001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for two months after the month of receipt.

(b) Amounts an individual retains from the economic recovery payments defined in Section 2201 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for nine months after the month of receipt.

(c) Amounts an individual retains from the tax credit allowed to certain government employees as defined in Section 2202 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for two months after the month of receipt.

(d) The value of any reduction in Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums provided to an individual under Section 3001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115.

(e) Certain property and rights of American Indians including certain tribal lands, personal property which has unique religious, spiritual, traditional or cultural significance, and rights that support subsistence or traditional lifestyles, as defined in Section 5006(b)(1) of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115.

(2[5]7) Life estates.

(a) For non-institutional Medicaid, life estates shall be counted as resources only when a market exists for the sale of the life estate as established by knowledgeable sources.

(b) For Institutional Medicaid, life estates are countable resources even if no market exists for the sale of the life estate, unless the life estate can be excluded as defined in paragraph 14 of this section.

(c) The client may dispute the value of the life estate by verifying the property value to be less than the established value or by submitting proof based on the age and life expectancy of the life estate owner that the value of the life estate is lower. The value of a life estate shall be based upon the age of the client and the current market value of the property.

(d) The following table lists the life estate figure corresponding to the client's age. This figure is used to establish the value of a life estate:

TABLE

 Age   Life Estate Figure



 0      .97188

 1      .98988

 2      .99017

 3      .99008

 4      .98981

 5      .98938

 6      .98884

 7      .98822

 8      .98748

 9      .98663

 10     .98565

 11     .98453

 12     .98329

 13     .98198

 14     .98066

 15     .97937

 16     .97815

 17     .97700

 18     .97590

 19     .97480

 20     .97365

 21     .97245

 22     .97120

 23     .96986

 24     .96841

 25     .96678

 26     .96495

 27     .96290

 28     .96062

 29     .95813

 30     .95543

 31     .95254

 32     .94942

 33     .94608

 34     .94250

 35     .93868

 36     .93460

 37     .93026

 38     .92567

 39     .92083

 40     .91571

 41     .91030

 42     .90457

 43     .89855

 44     .89221

 45     .88558

 46     .87863

 47     .87137

 48     .86374

 49     .85578

 50     .84743

 51     .83674

 52     .82969

 53     .82028

 54     .81054

 55     .80046

 56     .79006

 57     .77931

 58     .76822

 59     .75675

 60     .74491

 61     .73267

 62     .72002

 63     .70696

 64     .69352

 65     .67970

 66     .66551

 67     .65098

 68     .63610

 69     .62086

 70     .60522

 71     .58914

 72     .57261

 73     .55571

 74     .53862

 75     .52149

 76     .50441

 77     .48742

 78     .47049

 79     .45357

 80     .43659

 81     .41967

 82     .40295

 83     .38642

 84     .36998

 85     .35359

 86     .33764

 87     .32262

 88     .30859

 89     .29526

 90     .28221

 91     .26955

 92     .25771

 93     .24692

 94     .23728

 95     .22887

 96     .22181

 97     .21550

 98     .21000

 99     .20486

 100    .19975

 101    .19532

 102    .19054

 103    .18437

 104    .17856

 105    .16962

 106    .15488

 107    .13409

 108    .10068

 109    .04545

R414-305-2. Family Medicaid and Family Institutional Medicaid Resource Provisions.

(1) This section establishes the standards for the treatment of resources to determine eligibility for Family Medicaid and Family Institutional Medicaid programs.

(2) The Department [adopts]incorporates by reference 45 CFR 233.20(a)(3)(i)(B)(1), (2), (3), (4) , and (6), and 233.20(a)(3)(vi)(A), 200[4]8 ed.[, which are incorporated by reference.] The Department adopts Subsection 1902(k) of the Compilation of the Social Security Laws, 1993 ed., which is incorporated by reference. The Department [adopts]incorporates by reference Section 1917(d) , [and](e) , (f) and (g), [Subs]Section 404(h) and 1613(a)(13) of the Compilation of the Social Security Laws in effect January 1, 200[3]9.[, which are incorporated by reference. The Department adopts sections 6012, 6014 and 6015(b) of Pub. L.109-171 which are incorporated by reference.] The Department does not count as an available resource retained funds from sources that federal laws specifically prohibit from being counted as a resource to determine eligibility for federally-funded medical assistance programs. Insofar as any provision of this rule is inconsistent with applicable federal law, the applicable federal law governs over the inconsistent rule provision.

(3) A resource is available when the client owns it or has the legal right to sell or dispose of the resource for the client's own benefit.

(4) Except for pregnant women who meet the criteria under Sections 1902(a)(10)(A)(i)(IV) and 1902(a)(10)(A)(ii)(IX) of the Social Security Act in effect January 1, 200[3]9, the resource limit is $2,000 for a one person household, $3,000 for a two person household and $25 for each additional household member. For pregnant women defined above, the resource limit is defined in Section R414-303-11.

(5) Except for the exclusion for a vehicle, the agency uses the same methodology for treatment of resources for all medically needy and categorically needy individuals.

(6) To determine countable resources for Medicaid eligibility, the agency considers all available resources owned by the client. The agency does not consider a resource unavailable based upon the client's intent to or action of disposing of non-liquid resources.

(7) The agency counts resources of a household member who has been disqualified from Medicaid for failure to cooperate with third party liability or duty of support requirements.

(8) If a legal guardian, conservator, authorized representative, or other responsible person controls any resources of an applicant or recipient, the agency counts the resources as the applicant's or recipient's. The arrangement may be formal or informal.

(9) If a resource is potentially available, but a legal impediment to making it available exists, the agency does not count the resource until it can be made available. Before an applicant can be made eligible, or to continue eligibility for a recipient, the applicant or recipient must take appropriate steps to make the resource available unless one of the following conditions exist:

(a) Reasonable action would not be successful in making the resource available.

(b) The probable cost of making the resource available exceeds its value.

(10) Except for determining countable resources for 1931 Family Medicaid, the agency excludes a maximum of $1,500 in equity value of one vehicle.

(11) The agency does not count as resources the value of household goods and personal belongings that are essential for day-to-day living. Any single household good or personal belonging with a value that exceeds $1000 must be counted toward the resource limit. The agency does not count as a resource the value of any item that a household member needs because of the household member's medical or physical condition.

(12) The agency does not count the value of one wedding ring and one engagement ring as a resource.

(13) For a non-institutionalized individual, the agency does not count the value of a life estate as an available resource if the life estate is the applicant's or recipient's principal residence. If the life estate is not the principal residence, the rule in Subsection R414-305-1(2[5]7) applies.

(14) The agency does not count the resources of a child who is not counted in the household size to determine eligibility of other household members.

(15) For a non-institutionalized individual, the agency does not count as a resource, the value of the lot on which the excluded home stands if the lot does not exceed the average size of residential lots for the community in which it is located. The agency counts as a resource the value of the property in excess of an average size lot. If the individual is institutionalized, the provisions of Subsections R414-305-1(13), (14) , (15), and (2[5]7) apply to the individual's home or life estate.[In addition, the provisions of section 6014 of Pub. L. 109-171 apply.]

(16) The agency does not count as a resource the value of water rights attached to an excluded home and lot.

(17) The agency does not count any resource, or interest from a resource held within the rules of the Uniform Transfers to Minors Act. The agency counts as a resource any money from such a resource that is given to the child as unearned income and retained beyond the month received.

(18) Lump sum payments received on a sales contract for the sale of an exempt home are not counted if the entire proceeds are used to purchase a new exempt home within three calendar months[committed to replacement] of when the property is sold[within 30 days and the purchase is completed within 90 days]. The individual shall receive one three-month extension[of 90 days], if more than [90 days]three months is needed to complete the actual purchase. Proceeds are defined as all payments made on the principal of the contract. Proceeds do not include interest earned on the principal.

(19) Retroactive benefits received from the Social Security Administration and the Railroad Retirement Board are not counted as a resource for the first 9 months after receipt.

(20) The agency excludes from resources, a burial and funeral fund or funeral arrangement up to $1500 for each household member who is counted in the household size. Burial and funeral agreements include burial trusts, funeral plans, and funds set aside expressly for the purposes of burial. All such funds must be separated from non-burial funds and clearly designated as burial funds. Interest earned on exempt burial funds and left to accumulate does not count as a resource. If exempt burial funds are used for some other purpose, remaining funds will be counted as an available resource as of the date funds are withdrawn.

(21) Assets shall be deemed from an alien's sponsor, and the sponsor's spouse, if any, when the sponsor has signed an Affidavit of Support pursuant to Section 213A of the Immigration and Nationality Act on or after December 19, 1997. Sponsor deeming will end when the alien becomes a naturalized U.S. citizen, or has worked 40 qualifying quarters as defined under Title II of the Social Security Act or can be credited with 40 qualifying work quarters. Beginning after December 31, 1996, a creditable qualifying work quarter is one during which the alien did not receive any federal means-tested public benefit.

(22) Sponsor deeming does not apply to applicants who are eligible for Medicaid for emergency services only.

(23) Business resources required for employment or self employment are not counted. The Department treats non-business, income-producing property in the same manner the SSI program treats it as defined in 42 CFR 416.1222.

(24) For 1931 Family Medicaid households, the agency will not count as a resource either the equity value of one vehicle that meets the definition of a "passenger vehicle" as defined in 26-18-2(6), or $1,500 of the equity of one vehicle, whichever provides the greatest disregard for the household.

(25) For eligibility under Family-related Medicaid programs, the agency will not count as a resource retirement funds held in an employer or union pension plan, retirement plan or account including 401(k) plans and Individual Retirement Accounts of a disabled parent or disabled spouse who is not included in the coverage.

(26) The agency will not count as a resource, funds received from the Child Tax credit or the Earned Income Tax credit for nine months following the month received. Any remaining funds will count as a resource in the 10th month after being received.

(27) The Department excludes from countable resources the following resources:

(a) Amounts an individual receives as a result of the Making Work Pay credit defined in Section 1001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for two months after the month of receipt.

(b) Amounts an individual retains from the economic recovery payments defined in Section 2201 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for nine months after the month of receipt.

(c) Amounts an individual retains from the tax credit allowed to certain government employees as defined in Section 2202 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115 for two months after the month of receipt.

(d) The value of any reduction in COBRA premiums provided to an individual under Section 3001 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115.

(e) Certain property and rights of American Indians including certain tribal lands, personal property which has unique religious, spiritual, traditional or cultural significance, and rights that support subsistence or traditional lifestyles, as defined in Section 5006(b)(1) of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111 5, 123 Stat. 115.

KEY: Medicaid, resources

Date of Enactment or Last Substantive Amendment: [April 1, 2008]2009

Notice of Continuation: January 31, 2008

Authorizing, and Implemented or Interpreted Law: 26-18