Page 21

TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE 21 If a Medicaid applicant is the owner of a promissory note, loan, or property agreement (mortgage), DMMA will assume that the value of the agreement is its outstanding principal balance. If the outstanding principal balance plus other countable resources exceeds the resource limit, we will inform the individual that DMMA will use the outstanding principal balance to determine the value of resources unless the individual successfully rebuts the value. See 20330.3.1. DMMA will consider the value of a promissory note, loan, or mortgage as a transfer for less than fair market value unless: ·The repayment term is actuarially sound; ·Payments are made in equal amounts during the term of the loan with no deferral of payments and no balloon payments; and ·The promissory note, loan or mortgage prohibits the cancellation of the balance upon the death of the lender. In determining the amount of the asset transferred, DMMA looks at the value of the outstanding balance of the note, loan or mortgage at the date of the individual's application for Medicaid coverage of services listed in section 1917(c)(1)(C)of the Act. Payments received against the principal balance are not income. They are conversion of a resource. The portion of the payment which represents interest is unearned income. The SSA Life Expectancy Table can be found at www.ssa.gov/OACT/STATS/table4c6.html. 10 DE Reg. 1596 (04/01/07) 11 DE Reg. 314 (09/01/07) 20330.3.1 Rebutting the Value DMMA will give the applicant an opportunity to rebut the value placed on the promissory note, loan or mortgage. The rebuttal must include a written estimate from a disinterested, knowledgeable source (such as a broker or appraiser) showing that the value is less than our determined value. An applicant may also assert that there is a legal bar to the sale of the instrument by offering documentary or other evidence of a bar or impediment to the sale of the instrument. 10 DE Reg. 1596 (04/01/07) 11 DE Reg. 314 (09/01/07) 20330.4 Retirement Funds Retirement funds are annuities or work-related plans for providing income when employment ends, such as pensions, individual retirement accounts (IRA), disability, Keogh plans and some profit sharing plans. The value of a retirement fund is the amount of money that an individual can currently withdraw. Pension plans that allow withdrawals are known as Defined Contribution Plans. If there is a penalty for early withdrawal, the fund's value is the amount available after the penalty deduction. Any taxes due are not deductible in determining the fund's value. A retirement fund is not a resource if an individual must terminate employment in order to obtain any payment. If an individual is eligible for periodic retirement benefits, the individual must apply and accept the periodic benefit. If the individual has a choice between periodic benefits and a lump sum, the individual must choose the periodic benefits. Defined Benefit Plans are retirement funds that are not accessible until the recipient meets eligibility criteria outlined in the retirement plan contract (e.g. actual retirement and reaching a predetermined age). These plans are not considered a countable resource until the individual is eligible to begin receiving benefits as outlined in the retirement plan. Defined Contribution Plans and Defined Benefit Plans are not considered countable resources when owned by an ineligible spouse. An ineligible spouse is a legally married husband or wife who is not eligible for Medicaid benefits. 10 DE Reg. 1436 (03/01/07) 20330.5 Stocks Shares of stock represent ownership in a business corporation. Their value shifts with demand and may fluctuate widely. If the stock has co-owners, assume that each owner owns an equal share of the value of the stock and that the owner can sell them at current value. Broker fees do not reduce the value that stocks have as resources. Obtain a copy of the stock certificate or most recent statement of account from the firm that issued or is holding the stock. The value of a stock as a resource is its current market value. The current market value of a stock is its closing price on any given day and can usually be found in a regular or financial newspaper. A closing price of 22 3/4 equals $22.75. The values of over-the-counter stocks are shown on a "bid" and "asked" basis. For example, "18, bid, 19 asked." Use the bid price as the current market value. The "par value" or "stated value" shown on some stock certificates is not the market value.