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MEDICAL SERVICES POLICY MANUAL, SECTION E

E-530 Treatment of Resource Changes

and the contract must be written on an approved Arkansas Insurance Department form. Irrevocable trusts that have been established by the applicant/client or representative which are payable only upon death to a specified funeral home for burial of the client shall not be considered an irrevocable contract under this section unless the funeral home designated under the arrangement is licensed by the Arkansas Insurance Department to sell prepaid burial contracts. All prepaid burial contracts, including those funded through annuities and life insurance policies, which are irrevocably assigned to a funeral home, 1. Must include an itemized list of specified services and merchandise to be provided by the funeral home at the death of the individual. 2. Each item on the list must show a value of the service or merchandise. 3. The total value of the itemized services and merchandise must equal the cash payment made to purchase the arrangement. If a partial payment has been applied to the prepaid burial plan by attaching insurance or cash payments, the prepaid plan may be worth more than the annuity. Any amounts itemized as “miscellaneous” or other unspecified services will not qualify for exclusion. Such amounts will be included with the amount paid for unspecified services and merchandise, and the total will be subject to a transfer of resources penalty (see 5d below). The total amount paid for the plan through insurance, annuities or cash payments must not be greater than the cost of the prepaid funeral plan. If the value of the annuity or the total amount paid is greater than the cost of the prepaid funeral plan, the difference is an uncompensated transfer.  NOTE: If there is an uncompensated transfer, check the date of the funeral plan and annuity. If the date is outside the look back period, disregard the transfer. The local funeral home may be able to advise the county if a contract is irrevocable, if the county cannot make this determination by reading the policy. Irrevocable contracts will be counted toward the $1500 burial exclusion. If face values of insurance policies in Item (1) are less than $1500, then the value(s) of irrevocable contracts in Item (2) will be applied toward the $1500