Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-305

Resources

Notice of Proposed Rule

(Amendment)

DAR File No.: 34683
Filed: 04/13/2011 11:17:10 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to implement resource exclusions under the Medicaid program in accordance with federal law.

Summary of the rule or change:

This change implements resource exclusions under the Medicaid program that include federal tax refunds and refundable credits that a Medicaid client receives between 01/01/2010, and 12/31/2012, pursuant to the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010, Pub. L. No. 111-312. It also implements the exclusion that an individual receives for payments through the Individual Indian Money Account Litigation Settlement under the Claims Resolution Act of 2010, Pub. L. No. 111-291. Further, this amendment implements a similar exclusion for state tax refunds to keep the treatment of tax refunds consistent with the federal requirement. This amendment also clarifies policy and makes other technical changes throughout the rule text.

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:

• Removes Subsection 1902(k) of the Compilation of the Social Security Laws, published by Social Security Administration, 01/01/1993
• Updates 42 CFR 435.840, 435.845, published by Government Printing Office, 10/01/2010
• Updates 20 CFR 416.1201, 416.1202, 416.1205 through 416.1224, 416.1229 through 416.1239, and 416.1247 through 416.1250, published by Government Printing Office, 04/01/2010
• Updates Section 1917(d), (e), (f) and (g) of the Compilation of the Social Security Laws, published by Social Security Administration, 01/01/2011
• Updates 45 CFR 233.20(a)(3)(i)(B)(1), (2), (3), (4), and (6), and 233.20(a)(3)(vi)(A), published by Government Printing Office, 10/01/2010
• Updates Section 404(h) and 1613(a)(13) of the Compilation of the Social Security Laws, published by Social Security Administration, 01/01/2011

Anticipated cost or savings to:

the state budget:

The Department does not anticipate a substantial cost to the state budget. Some Medicaid recipients may avoid a loss of eligibility during a month that a tax refund pushes their income above the allowable level. Nevertheless, the Department estimates that the refunds should affect only a small number of recipients and that eligibility costs are negligible.

local governments:

There is no impact to local governments because they do not determine Medicaid eligibility and do not fund or provide Medicaid services to Medicaid recipients.

small businesses:

The Department does not anticipate a substantial impact to small businesses. Some Medicaid recipients may avoid a loss of eligibility during a month that a tax refund pushes their income above the allowable level. Nevertheless, the Department estimates that the refunds should affect only a small number of recipients and that any potential increase in revenue for businesses is negligible. In addition, this change does not impose any new requirements or costs on businesses.

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

The Department does not anticipate a substantial impact to Medicaid recipients and to Medicaid providers. Some Medicaid recipients may avoid a loss of eligibility during a month that a tax refund pushes their income above the allowable level. Nevertheless, the Department estimates that any savings to Medicaid recipients are negligible as is any increase in revenue for Medicaid providers.

Compliance costs for affected persons:

There are no compliance costs to a single Medicaid recipient or to a Medicaid provider. A Medicaid recipient who receives a tax refund above the allowable income level will continue to be eligible for Medicaid services. In addition, a single Medicaid provider may see a potential increase in revenue as a result of this change.

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

The policy changes in this rule reflect federal mandates. The fiscal impact on business, if any, is expected to be positive.

W. David Patton, PhD, 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:

05/31/2011

This rule may become effective on:

06/07/2011

Authorized by:

W. David Patton, Executive Director

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

R414-305. Resources.

R414-305-1. Purpose and Authority.

This rule is established under the authority of Section 26-18-3 and establishes the resource provisions for Medicaid eligibility.

 

R414-305-2. Definitions.

(1) The definitions in R414-1 and R414-301 apply to this rule.

(2) The following definitions apply in this rule:

(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) "Department" means the Utah Department of Health.

(c) "Eligibility agency" means the Department of Workforce Services that determines eligibility for Medicaid under contract with the Department.

(d) "Penalty period" 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.

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

 

R414-305-3. [ A, B and D Medicaid and A, B and D ] Aged, Blind and Disabled Non-Institutional and 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]1) To determine eligibility of the aged, blind or disabled, the Department incorporates by reference 42 CFR 435.840, 435.845, 20[09]10 ed., and 20 CFR 416.1201, 416.1202, 416.1205 through 416.1224, 416.1229 through 416.1239, and 416.1247 through 416.1250, 20[09]10 ed. [The Department adopts Subsection 1902(k) of the Compilation of the Social Security Laws, 1993 ed., which is incorporated by reference.] The Department incorporates by reference Section 1917(d), (e), (f) and (g) of the Compilation of the Social Security Laws in effect January 1, 20[09]11. The [Department shall]eligibility agency may 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]2) A resource is available when the [client]individual owns it or has the legal right to sell or dispose of the resource for the [client's]individual's own benefit.

([5]3) 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-person household.

([6]4) 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]5) The [Department]eligibility agency shall base[s] non-institutional and institutional Medicaid eligibility on all available resources owned by the [client]individual, or [deemed]considered available to the [client]individual from a spouse or parent. The eligibility agency may not grant eligibility [Eligibility cannot be granted] based upon the [client's]individual's intent to or action of disposing of non-liquid resources as described in 20 CFR 416.1240, 20[09]10 ed., unless Social Security is excluding the resources for an SSI recipient while the recipient takes steps to dispose of the excess resources.

([8]6) The eligibility agency may not count any [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]that begins the month after the child receives it.

([9]7) The eligibility agency shall count the[The] resources of a ward that are controlled by a legal guardian [are counted] as the ward's resources.

([10]8) The eligibility agency may not count lump[Lump] sum payments that an individual receive[d]s 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 the property is sold. The eligibility agency shall grant the individual [shall receive] one three-month extension if more than three months is needed to complete the actual purchase. Proceeds [is]are defined as all payments made on the principal of the contract. Proceeds do[es] not include interest earned on the principal.

([11]9) If a resource is [potentially] available, but a legal impediment [to making it available] exists, the eligibility agency may not count the [it is not a countable] resource until [it can be made]it becomes available. The [applicant or recipient]individual 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 resource[s] exists:

(a) Reasonable action [would not be successful in making]does not allow the resource to become available[.]; and

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

([12]10) Water rights attached to the home and the lot on which the home sits are exempt [providing]as long as [it]the home is the [client's]individual's principal place of residence.

([13]11) For an institutionalized individual, the eligibility agency may not consider a home or life estate [is not considered]to be an exempt resource.

([14]12) To determine eligibility for nursing facility or other long-term care services, the [Department]eligibility agency shall exclude[s] the value of the individual's principal home or life estate from countable resources if 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 the age of 21, or who is blind or disabled resides in the home; or

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

([15]13) Even if the conditions in Subsection R414-305-[1]3([14]12) are met, an [applicant or client]individual is ineligible to receive nursing facility services or other long-term care services if the full 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) unless the individual's spouse, or the individual's child who is under the age of 21 or is blind or permanently disabled lawfully resides in the home. The individual may only qualify for Medicaid to cover ancillary services[ only].

([16]14) For A, B and D Medicaid, the [Department shall] eligibility agency may 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.

([17]15) The eligibility agency may retroactively designate for burial a [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 exempt[ed] the resource effective the first day of the month in which it was designated for burial or intended for burial. The eligibility agency may not exempt the funds [cannot be exempted retroactively] more than [2]two years retroactively[prior to] before the date of application. The eligibility agency shall treat the resources[Such resources shall be treated] as funds set aside for burial and the amount exempted cannot exceed the limit established for the SSI program.

([18]16) One vehicle is exempt if it is used for regular transportation needs of the individual or a household member.

([19]17) The [Department]eligibility agency may not count [excludes] resources of an SSI recipient who has a plan for achieving self -[ ]support approved by the Social Security Administration when the resources are set aside under the plan to purchase work-related equipment or meet self -[ ]support goals.

([20]18) The eligibility agency may not count an [An] irrevocable burial trust [is not counted] as a resource. [However]Nevertheless, 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.

([21]19) The eligibility agency may not count [B]business resources that are required for employment or self-employment[are not counted].

([22]20) For the Medicaid Work Incentive Program, the [Department]eligibility agency may not count [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]the 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.

([23]21) After qualifying for the Medicaid Work Incentive Program, the eligibility agency may not count the [these] resources described in Subsection R414-305-[1]3([22]20) [will continue to be excluded throughout the lifetime of]to allow the individual to qualify for other [A, B or D] Medicaid programs for the aged, blind or disabled[other than], and not solely the Medicaid Work Incentive, even if the individual ceases to have earned income or no longer meets the criteria for the Work Incentive Program.

([24]22) Assets [shall be deemed from]of 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 1[9]8, 1997 , are considered available to the alien. [Sponsor deeming will end]The eligibility agency shall stop counting assets from a sponsor when the alien becomes a naturalized United States (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 a]After December 31, 1996, a creditable qualifying work quarter is one during which the alien did not receive any federal means-tested public benefit.

([25]23) [Sponsor deeming does not apply]The eligibility agency shall not consider a sponsor's assets as being available to applicants who are eligible for Medicaid for emergency services only.

([26]24) The eligibility agency may not count as income any federal tax refund and refundable credit that an individual receives between January 1, 2010, and December 31, 2012, pursuant to the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010, Pub. L. No. 111 312, 124, Stat 3296. During that time period, the eligibility agency may not count state tax refunds for 12 months after the month of receipt.

(25) The [Department excludes from countable resources]eligibility agency may not count the following resources that an individual receives after December 31, 2012:

(a) Amounts that 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 that 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) Tax credits described in 20 CFR 416.1235 that relate to child tax credits and earned income tax credits for nine months after the month of receipt;

([c]d) Amounts that 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.

(26) The eligibility agency may not count as income, for one year after the date of receipt, any payments that an individual receives under the Individual Indian Money Account Litigation Settlement under the Claims Resolution Act of 2010, Pub. L. No. 111 291, 124 Stat. 3064.

(27) The eligibility agency may not count as income the following resources:

([d]a) 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]b) Certain property and rights of federally-recognized American Indians including certain tribal lands held in trust which are located on or near a reservation, or allotted lands located on a previous reservation, ownership interests in rents, leases, royalties or usage rights related to natural resources (including extraction of natural resources), and ownership interests and usage rights in 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.

(28) The eligibility agency shall count only the portion of an asset such as a retirement plan that is legally available to an individual when that asset has been divided between two divorced spouses pursuant to a qualified domestic relations order.

([27]29) Life estates.

(a) For non-institutional Medicaid, the eligibility agency shall count 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, the eligibility agency shall count 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]Subsection R414-305-3(12).

(c) The [client]individual 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]individual and the current market value of the property.

(d) The following table lists the life estate figure corresponding to the [client's]individual'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]4. Family [Medicaid and Family]Non-Institutional and 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]1) The Department incorporates by reference 45 CFR 233.20(a)(3)(i)(B)(1), (2), (3), (4), and (6), and 233.20(a)(3)(vi)(A), 20[08]10 ed. [The Department adopts Subsection 1902(k) of the Compilation of the Social Security Laws, 1993 ed., which is incorporated by reference.] The Department incorporates by reference Section 1917(d), (e), (f) and (g), Section 404(h) and 1613(a)(13) of the Compilation of the Social Security Laws in effect January 1, 20[09]11. The [Department]eligibility agency [does]may 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]2) A resource is available when the [client]individual owns it or has the legal right to sell or dispose of the resource for the [client's]individual's own benefit.

([4]3) 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, 20[09]11, 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]4) Except for the exclusion for a vehicle, the eligibility agency shall use[s] the same methodology for treatment of resources for all medically needy and categorically needy individuals.

([6]5) To determine countable resources for Medicaid eligibility, the eligibility agency shall consider[s] all available resources owned by the [client]individual. The agency [does]may not consider a resource unavailable based upon the [client's]individual's intent [to] or action of disposing of non-liquid resources.

([7]6) The eligibility agency shall count[s] 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]7) If a legal guardian, conservator, authorized representative, or other responsible person controls any resources of an [applicant or recipient]individual, the eligibility agency shall count[s] the resources as the [applicant's or recipient's]individual's. The arrangement may be formal or informal.

([9]8) If a resource is [potentially] available, but a legal impediment [to making it available] exists, the agency [does]may not count the resource until it [can be made]becomes available. [Before an applicant can be made eligible, or to continue eligibility for a recipient, t]The [applicant or recipient]individual 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] does not allow the resource to become available[.]; and

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

([10]9) Except for determining countable resources for [1931] Family Medicaid under Section 1931 of the Act, the agency shall exclude[s] a maximum of $1,500 in equity value of one vehicle.

(1[1]0) The eligibility agency [does]may not count as resources the value of household goods and personal belongings that are essential for day-to-day living. The agency shall count [A]any single household good or personal belonging with a value that exceeds $1 ,000 [must be counted] toward the resource limit. The agency [does]may 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.

(1[2]1) The eligibility agency [does]may not count the value of one wedding ring and one engagement ring as a resource.

(1[3]2) For a non-institutionalized individual, the eligibility agency [does]may not count the value of a life estate as an available resource if the life estate is the [applicant's or recipient's]individual's principal residence. If the life estate is not the principal residence, the [rule]provision in Subsection R414-305-[1]3(2[7]9) shall appl[ies]y.

(1[4]3) The eligibility agency [does]may not count the resources of a child who is not counted in the household size to determine eligibility of other household members.

(1[5]4) For a non-institutionalized individual, the eligibility agency [does]may 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 shall count[s] 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]3(1[3]2), (1[4]3), (1[5]4), and (2[7]9) shall apply to the individual's home or life estate.

(1[6]5) The agency [does]may not count as a resource the value of water rights attached to an excluded home and lot.

(1[7]6) The eligibility agency [does]may not count any resource[,] or interest from a resource held within the rules of the Uniform Transfers to Minors Act. The agency shall count[s] as a resource any money [from such a resource that is given to the]that a child receives as unearned income [and retained],which the child retains beyond the month [received]of receipt.

(1[8]7) The eligibility agency may not count [L]lump sum payments that an individual receive[d]s 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 the property is sold. The eligibility agency shall grant the individual [shall receive] one three-month extension, if more than 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.

(1[9]8) The eligibility agency shall count as a resource [R]retroactive benefits received from the Social Security Administration and the Railroad Retirement Board[ are not counted as a resource] for the first [9]nine months after receipt.

([20]19) The eligibility agency shall exclude[s] from resources[,] a burial and funeral fund or funeral arrangement up to $1 ,500 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. The agency shall separate and clearly designate the burial funds from the non-burial funds.[All such funds must be separated from non-burial funds and clearly designated as burial funds.] The agency may not count as a resource [I]interest earned on exempt burial funds [and] that is left to accumulate[ does not count as a resource]. If an individual uses exempt burial funds [are used] for some other purpose, the agency shall count the remaining funds[ will be counted] as an available resource [as of] beginning on the date that the funds are withdrawn.

(2[1]0) Assets [shall be deemed from]of 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]18, 1997 , are considered available to the alien. [Sponsor deeming will end] The eligibility agency shall stop counting a sponsor's assets 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 a]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[2]1) [Sponsor deeming does not apply]The eligibility agency may not consider a sponsor's assets as being available to applicants who are eligible for Medicaid for emergency services only.

(2[3]2) The eligibility agency shall count [B]business resources that are required for employment or self -[]employment[ are not counted]. The [Department] agency shall treat[s] non-business, income-producing property in the same manner as the SSI program [treats it] as defined in 42 CFR 416.1222.

(2[4]3) For [1931] Family Medicaid households who are eligible under Section 1931 of the Act, the eligibility agency [will] may only [not] count as a resource either the equity value of one vehicle that meets the definition of a ["]passenger vehicle["] as defined in Subsection 26-18-2(6)[,] or $1,500 of the equity of one vehicle, whichever provides the greatest disregard for the household.

(2[5]4) For eligibility under Family-related Medicaid programs, the eligibility agency [will]may not count as a resource retirement funds held in an employer or union pension plan, a 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]25) The eligibility agency may not count as income any federal tax refund and refundable credit that an individual receives between January 1, 2010, and December 31, 2012, pursuant to the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010, Pub. L. No. 111 312, 124, Stat 3296. During that time period, the eligibility agency may not count state tax refunds for 12 months after the month of receipt.

(26) The [Department excludes from countable resources]eligibility agency may not count the following resources that an individual receives after December 31, 2012:

(a) Funds that an individual receives from the Child Tax credit or the Earned Income Tax credit for nine months after the month of receipt. The agency may not count any remaining funds as a resource in the tenth month after receipt;

([a]b) Amounts that 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]c) Amounts that 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]d) Amounts that 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.

(27) The eligibility agency may not count as income, for one year after the date of receipt, any payments that an individual receives under the Individual Indian Money Account Litigation Settlement under the Claims Resolution Act of 2010, Pub. L. No. 111 291, 124 Stat. 3064.

(28) The eligibility agency may not count as income the following resources:

([d]a) 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]b) 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.

(29) The eligibility agency shall count only the portion of an asset such as a retirement plan that is legally available to an individual when that asset has been divided between two divorced spouses pursuant to a qualified domestic relations order.

 

R414-305-[3]5. Spousal Impoverishment Resource Rules for Married Institutionalized Individuals.

[ (1) This section establishes the standards for the treatment of resources for married couples when one spouse is institutionalized and the other spouse is not institutionalized.

] ([2]1) The eligibility agency shall apply the provisions of 42 U.S.C. 1396r-5 [T]to determine the value of the total joint resources of an institutionalized individual and a community spouse, and the spousal assessed share .[, the provisions of 42 U.S.C. 1396r-5, which are commonly known as the spousal impoverishment rules, shall apply. Insofar as any provision of this rule is inconsistent with applicable federal law, the applicable federal law governs over the inconsistent rule provision.]

([3]2) The resource limit for an institutionalized individual is $2,000.

([4]3) At the request of either the institutionalized individual or the individual's spouse and upon receipt of relevant documentation of resources, the [Medicaid] eligibility agency shall assess and document the total value of resources using the methodology described in Subsection R414-305-[3]5(5) as of the first continuous period of institutionalization or application for Medicaid home and community-based waiver services. The [Medicaid] eligibility agency shall notify the requester of the results of the assessment. The agency may not require the individual [does not have] to apply for Medicaid or pay a fee for the assessment.

([5]4) The assessment is a computation of the total value of resources in which the institutionalized individual or the community spouse has an ownership interest. The spousal share is equal to one-half of the total value computed. The eligibility agency shall count the resources [counted] for the assessment [are]that include those the couple has on the date that one spouse becomes institutionalized or applies for Medicaid for home and community-based waiver services, and the other spouse remains in the community and is not eligible for Medicaid for home and community-based waiver services.

(a) The community spouse's assessed share of resources is one-half of the total resources. [However]Nevertheless, the protected resource allowance for the community spouse may be less than the assessed share.

(b) Upon application for Medicaid, the [Medicaid] eligibility agency shall set[s] the protected share of resources for the community spouse when countable resources equal no more than the community spouse's protected share as determined under 42 U.S.C. 1396r-5(f) plus the resource limit for the institutionalized spouse.

(c) The [Medicaid] eligibility agency shall set[s] the community spouse's protected share of resources at the community spouse's assessed share of the resources with the following exceptions[.]:

(i) If the spouse's assessed share of resources is less than the minimum resource standard, the protected share of resources is the minimum resource standard[.];

(ii) If the spouse's assessed share of resources is more than the maximum resource standard, the protected share of resources is the maximum resource standard[.];

(iii) The [Department] eligibility agency shall use[s] the minimum and maximum resource standards permitted under 42 U.S.C. 1396r-5(f) to determine the community spouse's protected share.

(d) In making a decision to modify the community spouse's protected share of resources, the [Department] eligibility agency shall [follows]apply the ["]income first[" rule]provisions [found at]of 42 U.S.C. 1396r-5(d)(6).

([6]5) The [Department] eligibility agency shall count[s] any resource owned by the community spouse in excess of the community spouse's protected share of resources to determine the institutionalized individual's initial Medicaid eligibility.

([7]6) After the [Medicaid] eligibility agency establishes eligibility for the institutionalized spouse, the [Department] agency shall allow[s] a protected period for the couple to either use excess resources, or change the ownership of resources held jointly or held only in the name of the institutionalized spouse.

(a) The protected period continues[lasting] until the resources held in the institutionalized spouse's name do not exceed $2,000, or until the time of the next regularly scheduled eligibility redetermination , whichever occurs first.[ for an]

(b) The institutionalized individual may do the following:

(i) use resources held in his name for his benefit or for the benefit of his spouse;[to]

(ii) transfer resources to the community spouse to bring the resources held only in the name of the community spouse up to the amount of the community spouse's protected share of resources and to bring the resources held only in the name of the institutionalized spouse down to the Medicaid resource limit ; or

(iii) a combination of both.

([8]7) The [Department] eligibility agency [does]may not count resources held in the name of the community spouse as available to the institutionalized spouse beginning the month after the month in which the [Medicaid eligibility] agency establishes eligibility.

([9]8) If an individual is otherwise eligible for institutional Medicaid, the [Department] eligibility agency [does]may not count the community spouse's resources as available to the institutionalized individual [because of]due to an uncooperative spouse or because the spouse cannot be located if all of the following criteria are met:

(a) The individual assigns support rights to the [State]agency;[.]

(b) The individual [will not be able to get the]cannot get medical care [needed] without Medicaid ;[.]

(c) The individual is at risk of death or permanent disability without institutional care.

 

R414-305-[4]6. Treatment of Trusts.

[ This section defines requirements for the treatment of assets held in a trust to determine eligibility for Medicaid. The Department applies all provisions of 42 U.S.C. 1396p(d) dealing with trust assets in determining Medicaid eligibility. This section provides additional provisions for particular types of trusts.

] (1) [Medicaid Qualifying Trusts established before August 11, 1993.] The [Department] eligibility agency shall appl[ies]y the criteria in Section 1902(k) of the Compilation of the Social Security Laws, 1993 ed., [in determining] to determine the availability of trusts established before August 11, 1993.[ This section of the Social Security Act was repealed in 1993, but the provisions still apply to trusts created before the date it was repealed. The requirements of that section are as follows; however, if there is a conflict between the 1993 provisions of Section 1902(k) and the provisions of Subsections R414-305-4(1)(a), (b), and (c), the 1993 provisions of Section 1902(k) control.]

(a) A Medicaid qualifying trust is a trust, or similar legal device, established (other than by will) by an individual (or an individual's spouse) under which the individual may be the beneficiary of all or part of the payments from the trust. The distribution of [such] payments is determined by one or more trustees who are permitted to exercise some amount of discretion with respect to the distribution to the individual.

(b) The amount of the trust property that is counted as an available resource to the [applicant or recipient]individual who established the trust (or whose spouse established the trust) is the maximum amount that the trustee is permitted to distribute under the terms of the trust for [such]the individual's benefit. This amount of property is counted as available whether or not it is actually disbursed by the trustee or received by the beneficiary. It does not matter whether the trust is irrevocable nor whether it is established for a purpose other than to qualify for Medicaid.

(c) Payments made from the available portion of the trust do not count as income because the available portion of the trust is counted as a resource. If payments are made from any portion of the trust that is not counted as a resource, the payments are counted as income in the month received.

(2) Trust for a Disabled Person under Age 65 established in compliance with 42 U.S.C. 1396p(d)(4)(A). These trusts are commonly known as a special needs trust for a disabled person. Assets held in a trust [complying] that comply with the provisions in Subsection R414-305-[4]6(2) and (4) do not count as available resources.

(a) The individual trust beneficiary must meet the disability criteria found in 42 U.S.C. 1382c(a)(3). The trust must be established and assets transferred to the trust before the disabled individual reaches age 65.

(b) The trust must be established solely for the benefit of the disabled individual by a parent, grandparent, legal guardian of the individual, or the court.

(c) The trust may only contain the assets of the disabled individual. The [Department] eligibility agency shall treat[s] any additions to the trust corpus with assets not belonging to the disabled trust beneficiary as a gift to the trust beneficiary. [Such]The additions irrevocably become part of the trust corpus and are subject to all provisions of Medicaid restrictions that govern special needs trusts.

(d) The trust must be irrevocable. No one may have any right or power to alter, amend, revoke, or terminate the trust or any of its terms, except that the trust may include language that provides that the trust may be amended but only if necessary to conform with subsequent changes to the requirements of 42 U.S.C. 1396p(d)(4)(A) or synonymous state law.

(e) The trust cannot be altered or converted from an individual trust to a "pooled trust" under 42 U.S.C. 1396p(d)(4)(C).

(f) The trust must terminate upon the death of the disabled individual or exhaustion of trust corpus and must include language that specifically provides that upon the death of the beneficiary or early termination of the trust, whichever occurs first, the trustees will notify Medicaid and will pay all amounts remaining in the trust to the State up to the total amount of medical assistance the State has paid on behalf of the individual. The trust shall comply fully with this obligation to first repay the State without requiring the State to take any action except to establish the amount to be repaid.

(g) The sole lifetime beneficiary of the trust must be the disabled individual, and the Medicaid agency must be the preferred remainder beneficiary. Distributions from the trust during the beneficiary's lifetime may be made only to or for the benefit of the disabled individual.

(h) The [Department] eligibility agency shall continue[s] to exclude assets held in the trust from countable resources after the disabled individual reaches age 65. Subsequent additions to the trust other than interest on the corpus after the person turns 65 are not assets of an individual under age 65 and the [Department] agency shall treat[s] the transfer as a transfer of resources for less than fair market value , which may create a period of ineligibility for certain Medicaid services.

(i) A trust that provides benefits to other persons is not an individual special needs trust and does not the meet the criteria to be excluded from resources.

(j) A corporate trustee may charge a reasonable fee for services.

(k) The trust may compensate a guardian only as provided by law. The trust may not compensate the parent of a minor child from the trust as the child's guardian.

(l) Additional trusts cannot be created within the special needs trust.

(3) Pooled Trust for Disabled Individuals. A pooled trust is a specific trust for disabled individuals established pursuant to 42 U.S.C. 1396p(d)(4)(C) that meets all of the following conditions[.]:

(a) The trust contains the assets of disabled individuals[.];

(b) The trust must be established and managed by an entity that has been granted non-profit status by the Internal Revenue Service. The non-profit entity must submit to the State a letter documenting the non-profit status with the trust documents[.];

(c) The trustees must maintain a separate account for each disabled beneficiary whose assets are placed in the pooled trust; however, for the purposes of investment and management of the funds, the trust may pool the funds from the individual accounts. If someone other than the beneficiary transfers assets to the pooled trust administrator to be used on behalf of that beneficiary of the pooled trust, the [Deparment]eligibility agency shall treat[s such] the assets as a gift to that beneficiary, which the administrator must add to and manage as part of the balance of the beneficiary's account and which are subject to all provisions of Medicaid restrictions that govern pooled trusts.

(d) Accounts in the trust must be established solely for the benefit of individuals who are disabled as defined in 42 U.S.C. 1382c(a)(3).

(e) The trust must be irrevocable; accounts set up in the trust must be irrevocable.

(f) Individual accounts may be established only by the parent, grandparent or legal guardian of the individual, by the individual, or by a court.

(g) An initial transfer of funds or any additions or augmentations to a pooled trust account by an individual 65 years of age or older is a transfer of assets for less than fair market value and may create a period of ineligibility for certain Medicaid services.

(h) The disabled individual cannot control any spending by the trust.

(i) Individual trust accounts may not be liquidated [prior to]before the death of the beneficiary without first making payment to the State for medical assistance paid on behalf of the individual.

(j) The trust must include language that specifically provides that upon the death of the trust account beneficiary, the trustees will notify the Medicaid agency and will pay all amounts remaining in the beneficiary's account to the State up to the total medical assistance paid on behalf of the beneficiary. The trust may retain a maximum of 50[percent]% of the amount remaining in the beneficiary's account at death to be used for other disabled individuals if the trust has established provisions by which it will assure that [such]the retained funds are used only for individuals meeting the disability criteria found in 42 U.S.C. 1382c(a)(3).

(k) A pooled trust that retains some portion of a deceased beneficiary's trust funds must describe how retained funds are used for other disabled persons. Any funds that are placed in an individual beneficiary's account or that are used to set up an account for an individual beneficiary who does not otherwise have funds to place in the pooled trust are subject to all of the provisions of Medicaid restrictions that govern pooled trusts. The pooled trust may include a plan for using retained funds only for incidental, one-time services to qualified disabled individuals who do not have accounts in the pooled trust.

(4) The following provisions apply to both individual trusts and pooled trusts described in Subsection R414-305-[4]6(2) and (3)[.]:

(a) No expenditures may be made after the death of the beneficiary [prior to]before repayment to the State, except for federal and state taxes and necessary and reasonable administrative costs of the trust incurred in closing the trust[.];

(b) The trust must provide that if the beneficiary has received Medicaid benefits in more than one state, each state that provided Medicaid benefits shall be repaid. If the remaining balance is insufficient to repay all benefits paid, then each state will be paid its proportionate share[.];

(c) The trust or an attached schedule must identify the amount and source of the initial trust property. The disabled individual must report subsequent additions to the trust corpus to the [Medicaid] eligibility agency[.];

(d) If the trust is funded, in whole or in part, with an annuity or other periodic payment arrangement, the State must be named in controlling documents as the preferred remainder beneficiary in the first position up to the total amount of medical assistance paid on behalf of the individual[.];

(i) Any funds remaining after full repayment of the medical assistance can be paid to a secondary remainder beneficiary[.];

(ii) The [Department] eligibility agency shall treat[s] any provision or action that does or will divert payments or principal from [such]the annuity or payment arrangement to someone other than the excluded trust or the Medicaid agency as a transfer of assets for less than fair market value with the exception that any remainder after the Medicaid agency has been fully repaid may be paid to a secondary beneficiary[.];

(e) The [Department] eligibility agency shall count[s] cash distributions from the trust as income in the month received[.];

(f) The [Department] eligibility agency shall count[s] retained distributed amounts as resources beginning the month [following] which follows the month [such] that the amounts are distributed. The [Department] agency shall appl[ies]y the applicable resource rules to assets purchased with trust funds and given to the beneficiary as his or her personal possessions. The disabled individual must report the receipt of payments or assets from the trust within [10]ten days of receipt. The [Department]agency shall exclude[s] assets purchased with trust funds if the trust retains ownership[.];

(g) The [Department] eligibility agency shall count[s] distributions from the trust covering the individual's expenses for food or shelter as in-kind income to determine Medicaid eligibility in the month paid[.];

(h) If expenditures made from the trust also incidentally provide an ongoing and continuing benefit to other persons, those other persons who also benefit must contribute a pro-rata share to the trust for the expenses associated with their use of the acquisition[.];

(i) Contracts to provide personal services to the disabled individual must be in writing, describe the services to be provided, pay fair market rate consistent with rates charged in the community for the type and quality of services to be provided, and be executed in advance of any services being provided and paid. The [Medicaid] eligibility agency may require a statement of medical need for [such]the services from the individual's medical practitioner. If the person who is to provide the services is a family member or friend, the [Medicaid] eligibility agency may require verification of the person's ability to carry out the needed services[.];

(j) Distributions from the trust made to or for the benefit of a third party that are not for the benefit of the disabled individual are treated as a transfer of assets for less than fair market value and may create a period of ineligibility for certain Medicaid services. This includes such things as payments of the expenses or travel costs of persons other than a medically[-] necessary attendant[.];

(k) The beneficiary must submit an annual accounting of trust income and expenditures and a statement of trust assets to the [Medicaid] eligibility agency upon request or upon any change of trustee.

(5) The eligibility agency may not count [A]assets held in a pooled trust [complying] that comply with the provisions in Subsection R414-305-[4]6(3) and (4) [are not counted] as available resources.

(6) 42 U.S.C. 1396p(d)(4)(B), provides for an exemption from the trust provisions for qualified income trusts (also known as Miller Trusts). Special provisions for this form of trust apply, under federal law, only in those states that do not provide medically needy coverage for nursing facility services. Because Utah covers services in nursing facilities under the medically needy coverage group of the Medicaid program, the establishment of a qualified income trust shall be treated as an asset transfer for the purposes of qualifying for Medicaid. This presumption shall apply whether the individual is seeking nursing facility services or home and community -[]based services under one of the waiver programs.

 

R414-305-[5]7. Transfer of Resources for A, B and D or Family Non-InstitutionalMedicaid[ and Family Medicaid].

[There is no sanction]The eligibility agency may not impose a penalty period for the transfer of resources.

 

R414-305-[6]8. Transfer of Resources for Institutional Medicaid.

[ (1) This section establishes the standards for the treatment of transfers of assets for less than fair market value to determine eligibility for nursing home or other long-term care services under a home and community based services waiver.

] ([2]1) The [Department] eligibility agency shall appl[ies]y the provisions of 42 U.S.C. 1396p(c) and (e) to determine if a [sanction]penalty period applies for a transfer of assets for less than fair market value.[ In so far as any provision of this rule is inconsistent with applicable federal law, the applicable federal law governs over the inconsistent rule provision.]

([3]2) If an individual or the individual's spouse transfers the home or life estate or any other asset on or after the look-back date based on an application for long-term care Medicaid services, the transfer requirements of 42 U.S.C. 1396p(c) and (e) apply.

([4]3) If an individual or the individual's spouse transfers assets in more than one month [on or] after February [8]7, 2006, the uncompensated value of all transfers including fractional transfers are combined to determine the [sanction]penalty period. The [Department] eligibility agency shall appl[ies]y partial month [sanctions] penalty periods for transferred amounts that are less than the monthly average private pay rate for nursing home services.

([5]4) In accordance with 42 U.S.C. 1396p(c), the [sanction] penalty period for a transfer of assets that occurs [on or] after February [8]7, 2006, begins the first day of the month during or after which assets [were]are transferred , or the date on which the individual is eligible for Medicaid coverage and would otherwise [be receiving]receive institutional level care based on an approved application for Medicaid , but for the application of the [sanction]penalty period, whichever is later.

(a) If a previous [sanction]penalty period is [already] in effect on the date that the new [sanction]penalty period [would] begin s, the new [sanction]penalty period begins immediately after the previous one ends.

(b) [Sanction]The eligibility agency shall apply penalty periods [are applied] consecutively so that they do not overlap.

[ (6) If an individual or spouse transfers assets in more than one month before February 8, 2006, the uncompensated value of all transfers that occurred in each month are combined to determine the sanction period. The Department repeats this calculation for each month during which transfers occurred.

(a) For assets transferred before February 8, 2006, the sanction begins on the first day of the month in which the resource was transferred unless a previous sanction is in effect, in which case the sanction begins on the first day of the month immediately following the month the previous sanction period ends.

(b) If the total value of assets transferred in one month does not exceed the average private pay rate and the transfer occurred before February 8, 2006, the Department does not apply partial month sanctions.

] ([7]5) If assets are transferred during any [sanction]penalty period, the [sanction]penalty period for those transfers [will]does not begin until the previous [sanction]penalty period [has expired]expires.

([8]6) If a transfer occurs, or the [Medicaid] eligibility agency discovers an unreported transfer[,] after the agency approves an individual [has been approved] for Medicaid for nursing home or home and community -[]based services, the [sanction]penalty period shall begin[s] on the first day of the month after the month that the individual transfers the asset[ is transferred].

([9]7) The statewide average private-pay rate for nursing home care in Utah that the eligibility agency shall use[d] to calculate the [sanction]penalty period for transfers is $4,526 per month.

([10]8) To determine if a resource is transferred for the sole benefit of a spouse, disabled or blind child, or disabled individual, a binding written agreement must be in place which establishes that the resource transferred [can]may only be used to benefit the spouse, disabled child, or disabled individual, and [is] must be actuarially sound. The written agreement must specify the payment amounts and schedule. Any provisions in [such]the agreement that [would] benefit another person at any time nullif[ies]y the sole benefit provision. An excluded trust established under 42 U.S.C. 1396p(d)(4)[,] that meets the criteria in Section R414-305-[4]6 does not have to meet the actuarially sound test.

([11]9) The [Department shall] eligibility agency may not impose a [sanction] penalty period if the total value of a whole life insurance policy is:

(a) irrevocably assigned to the [s]State;[ and]

(b) the recipient is the owner of and the insured in the policy; and

(c) no further premium payments are necessary for the policy to remain in effect.

(d) [At the time of the client's death]When the individual dies, the [s]State shall distribute the benefits of the policy as follows:

(i) The State may distribute [U]up to $7,000 [can be distributed] to cover burial and funeral expenses. The total value of this distribution plus the value of any irrevocable burial trusts and the burial and funeral funds for the [client]individual cannot exceed $7,000[.];

(ii) The State may distribute [A]an amount [to the state] that [is not more than] does not exceed the total amount of previously unreimbursed medical assistance correctly paid on behalf of the [client.]individual;

(iii) The State may distribute to a remainder beneficiary named by the individual [A]any amount that remain[ing]s after payments are made as defined in Subsection R414-305-[6]8([11]9)(d)(i) and Subsection R414-305-[6]8([11]9)(d)(ii)[will be made to a remainder beneficiary named by the client].

([12]10) If the [Medicaid] eligibility agency determines that a [sanction]penalty period applies for an otherwise eligible institutionalized person, the [Medicaid eligibility] agency shall notify the individual that the Department [will]may not pay the costs for nursing home or other long-term care services [because of the sanction]during the penalty period. The notice shall include when the [sanction]penalty period begins and ends.

(a) The individual may request a waiver of the [sanction]penalty period based on undue hardship.

(b) The individual must send a written request for a waiver of the [sanction]penalty period due to undue hardship to the [Medicaid] eligibility agency within 30 days of the date printed on the [sanction] penalty period notice.

(c) The request must include an explanation of why the individual believes undue hardship exists.

(d) The [State will] eligibility agency shall make a decision on the undue hardship request within 30 days of receipt of the request.

([13]11) An individual who claims an undue hardship as a result of a [sanction]penalty period for a transfer of resources must meet both of the following conditions:

(a) The individual or the person who transferred the resources [cannot] may not access the asset immediately; however, the [Department] eligibility agency shall require[s] the individual to exhaust all reasonable means including legal remedies to regain possession of the transferred resource[.];

(i) The [State]agency may determine that it is unreasonable to require the [client] individual to take action if a knowledgeable source confirms [based on facts showing that it is doubtful]that [those] the individuals's efforts [will]cannot succeed[.];

(ii) The [State]agency may determine that it is unreasonable to require the [client]individual to take action based on evidence that [it would be more]the individual's action is more costly than the value of the resource[,]; and

(b) Application of the [sanction]penalty period for a transfer of resources [would] deprive s the individual of medical care , [such that]endangers the individual's life or health[ would be endangered], or [would] deprive s the individual of food, clothing, shelter , or other necessities of life.

([14]12) If the [State] eligibility agency waives the [sanction]penalty period based on undue hardship, the [Medicaid eligibility] agency [will]shall notify the individual. The Department shall provide Medicaid coverage on the condition that the individual take s all reasonable steps to regain the transferred assets. The [Medicaid] eligibility agency [will]shall notify the individual of the date that the individual must provide verifications of the steps taken. The individual must, within the time frames set by the [Medicaid eligibility] agency, verify to the [Medicaid eligibility] agency [that individual has taken] all reasonable actions. The [State]agency shall review the undue hardship waiver and the actions of the individual [has taken] to try to regain the transferred assets. The time period for the review [shall]may not exceed six months. Upon [such] review, the [State will]agency shall decide [if]whether:

(a) The individual must take additional steps and whether undue hardship still exists, in which case the [Medicaid eligibility] agency [will]shall notify the individual of the continuation of undue hardship and the need to take additional steps to recover the assets;

(b) The individual has taken all reasonable steps without success,[ they have proven unsuccessful and additional steps will likely be unsuccessful,] in which case the [Medicaid eligibility] agency [will]shall notify the individual that it requires no further action .[s are required and i]If the individual continues to meet eligibility criteria, the [Department will] eligibility agency may not apply the [sanction] penalty period; or

(c) The individual has not taken all reasonable steps, in which case the [Department will] eligibility agency shall discontinue the undue hardship waiver[,]. The eligibility agency shall then apply the penalty period [ the sanction period will then be applied] and the individual [will be]is responsible to repay Medicaid for services and benefits that the individual received during the months that the undue hardship waiver was in place.

(1[5]3) Based on a review of the facts about what happened to the assets, whether the individual has taken reasonable steps to recover or regain the assets, the results of those steps, and the likelihood that additional steps will prove unsuccessful or too costly, the [State]eligibility agency may determine that the individual cannot recover or regain the transferred resource. If the [State]agency decides that the assets cannot be recovered and that applying the [sanction] penalty period [will]may result in undue hardship, the [Department will]agency may not apply a [sanction]penalty period or [will]shall end a [sanction]penalty period that has already begun.

(1[6]4) The [State] eligibility agency shall base[s] its decision that undue hardship exists upon the medical condition and the financial situation of the individual. The [State]agency may not compare[s] the income and resources of the individual, individual's spouse, and parents of an unemancipated individual to the cost of providing medical care and daily living expenses to decide [if]whether the financial situation creates an undue hardship. The [Medicaid eligibility] agency shall send [a] written notice of its decision on the undue hardship request. The individual has 90 days from the date printed on the notice of decision [that is mailed to the individual] to file a request for a fair hearing.

(1[7]5) The eligibility agency shall consider [T]the portion of an irrevocable burial trust that exceeds $7,000 [is considered] a transfer of resources. The [Department] agency shall deduct[s] the value of any fully paid burial plot[, as defined in R414-305-1(3)(a),] from [such]the burial trust first before determining the transferred amount[ transferred].

 

R414-305-[7]9. Home and Community-Based Services Waiver Resource Provisions.

(1) The resource limit for home and community-based waiver programs is $2,000.

(2) [Following]After the [initial]first month of eligibility, the eligibility agency shall [continued eligibility is determined]determine eligibility by counting only the resources that belong to the [client]individual.

(3) For married [clients]individuals, the eligibility agency shall apply the provisions for spousal impoverishment resource s [rules apply] as defined in Section R414-305-[3]5.

 

R414-305-[8]10. Qualified Medicare Beneficiary, Specified Low-Income Medicare Beneficiary, and Qualifying Individual Resource Provisions.

(1) To determine eligibility for Qualified Medicare Beneficiaries, Specified Low-Income Medicare Beneficiaries, and Qualifying Individuals, the [Department] eligibility agency shall appl[ies]y the resource limit defined in 42 U.S.C. Sec.1396d(p)(1)(C).

(2) The [Department]eligibility agency shall determine[s] countable resources in accordance with the provisions of Section R414-305-[1]3.

 

R414-305-[9]11. Treatment of Annuities.

[This section defines how annuities are treated in the determination of eligibility for Medicaid.

] (1) An individual must report any annuities in which either the individual or the individual's spouse has any interest at application for Medicaid, at each review, and as part of the change reporting requirements. Parents of a minor individual must report any annuities in which the child or either of the parents has an interest.

(2) For annuities purchased [on or] after February [8]7, 2006, in which the individual or spouse has an interest, the provisions in 42 U.S.C. 1396p(c) appl[ies]y. The [Department] eligibility agency shall treat[s] annuities purchased [on or] after February [8]7, 2006 , [that]which do not meet the requirements of 42 U.S.C. 1396p(c) , as a transfer of assets for less than fair market value.

(3) With the exception of annuities that meet the criteria in Subsection R414-305-[9]11(4), the eligibility agency shall count annuities in which the individual, the individual's spouse or a minor individual's parent has an interest [are counted] as an available resource to determine Medicaid eligibility, whether they are irrevocable or non-assignable. The [Department] agency shall presume[s] that a market exists [that will] to purchase annuities or the stream of income from annuities,[ and therefore, they are] which make them available resources. The individual [can]may rebut the presumption that the annuity [can]may be sold by providing evidence that the individual has been rejected by several entities in the business of purchasing [annunites]annuities or the revenue stream from annuities, in which case, the [Department]agency [will]may not consider the annuity as an available resource.

(4) For individuals eligible under the aged, blind, or disabled category of Medicaid, the [Department]eligibility agency shall exclude[s] an annuity from countable resources in the form of the periodic payment if it meets the requirements of [this subsection (4)]Subsection R414-305-11(4). For Family-Related Medicaid programs, the agency shall count all annuities [are countable]as resources if the individual can access the funds, even if the annuities qualify as retirement funds or plans.

(a) The annuity is either an individual retirement annuity according to Section 408(b) of the Internal Revenue Code (IRC) of 1986 or a deemed Individual Retirement Account under a qualified employer plan according to Section 408(q) of the IRC; or

(b) The annuity is purchased with the proceeds from one of the following:

(i) As described in Sections 408(a), (c), or (p) of the IRC, a traditional IRA, accounts or trusts which are treated as a traditional IRA, or a simplified retirement account;

(ii) A simplified employee pension (Section 408(p) of the IRC); or

(iii) A Roth IRA (Section 408A of the IRC); and

(c) The annuity is irrevocable and non-assignable, the individual who was the owner of the retirement account or plan is receiving equal periodic payments at least quarterly with no deferral or balloon payments, and the scheduled payout period is actuarially sound based on the individual's life expectancy.

(d) If the individual purchases or annuitizes [such]the annuities [on or] after February [8]7, 2006, [then] the annuities must name the State as the preferred remainder beneficiary in the first position upon the individual's death, or as secondary remainder beneficiary after a surviving spouse or minor or disabled child.

(5) Annuities purchased after February 8, 2006, in which the individual or the spouse has an interest are a transfer of assets for less than fair market value unless the annuity names the State as the preferred remainder beneficiary in the first position, or in the second position after a surviving spouse, or a surviving minor or disabled child, up to the amount of medical assistance paid on behalf of the institutionalized individual.

(a) The State shall give individuals who have purchased annuities before applying for long-term care Medicaid, 30 days to request the issuing company to name the State as the preferred remainder beneficiary and to verify that fact to Medicaid.

(b) The individual must verify to the [Medicaid] eligibility agency that the change in beneficiary has been made by the date requested by the [Medicaid eligibility] agency.

(c) If the change of beneficiary is not completed and verified, the annuities are a transfer of resources and the [Department] eligibility agency shall appl[ies] y the [applicable sanction]penalty period. If the [Medicaid] eligibility agency has approved institutional Medicaid coverage pending verification, Medicaid coverage for long-term care ends and the [sanction]penalty period [will] begin s [effective] the day after the closure date.

(6) The [Department]eligibility agency shall treat[s] an annuity purchased before February 8, 2006, as an annuity purchased on or after February 8, 2006, if the individual or spouse take any actions that change the course of payments to be made or the treatment of the income or principal of the annuity. [Such]These actions include additions of principal, elective withdrawals, requests to change the distribution of the annuity, elections to annuitize the contract, or other similar actions. Routine changes and automatic events that do not involve an action or decision from the individual or spouse do not cause an annuity purchased before February 8, 2006, to be treated as one purchased on or after February 8, 2006.

(7) If a [sanction] penalty period for a transfer of assets begins because the individual or the individual's spouse has not changed an annuity to name the State as the preferred remainder beneficiary of the annuity, the [sanction] penalty period for a transfer [will]does not end until the individual completes and verifies the change of beneficiary [the date such change of beneficiary has been completed and verified] to the [Medicaid] eligibility agency. The eligibility agency may not rescind the [sanction]penalty period[ will not be rescinded].

(8) If the individual or spouse does not provide all information about annuities for which they have an interest by the requested due date[If all information about annuities the individual or spouse has an interest in is not provided by the requested due date], the [Medicaid] eligibility agency [will]shall deny the application. The individual may reapply, but may not protect the original application date[ will not be protected].

(9) The issuer of the annuity [must]shall inform the [Medicaid ]eligibility agency of any change in the amount of income or principal being withdrawn from the annuities, any change of beneficiaries, or any sale or transfer of the annuity. The issuer of the annuity [must]shall also inform the [State]agency if a surviving spouse or a surviving minor or disabled child attempts to transfer the annuity or any portion of the annuity to someone other than the [Medicaid ] agency.

 

KEY: Medicaid, resources

Date of Enactment or Last Substantive Amendment: [July 1, 2010]2011

Notice of Continuation: January 31, 2008

Authorizing, and Implemented or Interpreted Law: 26-18-3; 26-1-5