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MEDICAL SERVICES POLICY MANUAL, SECTION E

E 530 Treatment of Resource Changes

Transfer of Funds to a Trust, Certificate of Deposit or Other Instrument Designated for Burial If an individual has a revocable trust, certificate of deposit or other instrument and the fund is designated only for burial, any amount over the $1500 burial fund limit is a countable resource. If the fund is irrevocable, the amount over $1500 is also a countable resource. (Re. MS H-304) If the trust, CD, etc., is irrevocably assigned to a funeral home, a penalty for transfer of resources will be applied unless there is an agreement with the funeral home (whichmust be licensed by the Arkansas Insurance Department to sell prepaid burial contracts) to provide specified services and merchandise equal in value to the fund. 6. Any SSI or SSA retroactive payments that were due for one (1) or more prior months will be excluded from countable resources for nine (9) months. This rule is applicable to an eligible individual, an ineligible spouse, and/or any other persons whose resources are subject to deeming. (Interest accruing to the lump sum funds is not excludable). Once the money is spent, the exclusion does not apply to countable resources that were purchased with the money, even if the 9 months have not expired. 7. Section 4735 of the Balanced Budget Act of 1997 (Public Law 105-33) states that payments made from any fund established as a result of a class settlement in the case of Susan Walker vs. Bayer Corporation are excluded from countable resources. This case involved hemophiliacs who contracted the HIV virus from contaminated blood products. Also excluded from countable resources are payments made pursuant to a release of all claims in a case that is entered into in lieu of the Walker vs. Bayer class settlement and that is signed by all affected parties on or before the later of December 31, 1997, or 270 days after the date on which the release is first sent to the persons to whom the payment is to be made. 8. Federal tax refunds and advance payments will be excluded for a period of 12 months after receipt.

NOTE: Interest earned by these lump sum funds and allowed to accrue is not excluded from countable resources.

9. Independence Accounts: When determining eligibility and cost sharing requirements for AABD categories (including Long Term Services and Supports (LTSS) categories), assets accumulated in an individual’s Independence Account during or after an individual’s enrollment in Workers with Disabilities (WWD) category will be excluded. Accounts that may be designated as Independence Accounts may be funded by any earned income or assets from retirement benefits earned or accumulated from employment income or employer contributions (including