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Chapter: 1600 Assets Program: MSSI, SFP 44

1640.0607 How to Determine if a Transfer Penalty Applies (MSSI) If an individual, their spouse, a legally authorized representative or a joint owner of a jointly owned asset disposes of an asset or income without receiving fair compensation, the individual may be ineligible for Medicaid nursing home care services, Home and Community Based Services (HCBS), or Program for All-Inclusive Care for the Elderly (PACE) for a period of time. Refer to 1640.0613 Processing Transfer Cases (MSSI) and 1640.0618 Period of Ineligibility (MSSI) to develop the asset transfer.

1640.0608 Transfer Look-Back Period (MSSI) You must consider any transfer that occurred within the transfer look-back period prior to the date of application or anytime after applying. The look-back period begins with the month of application, counting backwards. Each transfer must be evaluated to determine if fair compensation was received and if not, to evaluate if a period of ineligibility must apply.

The look-back period for non-trust transfers is 60 months. 1640.0609.01 Identifying Potential Transfers of Assets or Income (MSSI) Applicants may declare transfers on the application and unreported transfers may be discovered during application processing or the annual review. At application for ICP, ICP-Hospice, HCBS or PACE, ask all applicants if they (or their spouses if applicable) have transferred any assets within the look-back period preceding the month of application. At review, explore transfers that may have occurred over the course of the year, such as a homestead that was excluded at application.

The following list indicates the most common clues to potential transfers of assets:

1. unidentified withdrawals from bank accounts; 2. tax assessor online pages showing change in ownership of property; 3. quit claim deed to property with recent signature date; 4. unidentified deposits on financial statements; 5. data exchange responses for sources not on record; 6. purchase of annuities; 7. promissory notes and mortgages received in exchange for cash or property; 8. formal and informal loans made to others; 9. purchase of personal services or care contract; 10. purchase life estate interest; 11. assets declared at application not included on the Interim Contact Letter; and 12. funds placed in a trust.

Evaluate all the above situations and all other transactions that change an asset from potentially countable to excluded, including transfer of ownership interest in a home that was previously excluded as an asset. A homestead is still subject to a transfer of asset penalty, even if it could be/have been excluded prior to the transfer. 1640.0609.02 Transfers to Annuities Prior to 11/1/07 (MSSI) Annuities are a type of retirement fund providing income after an individual retires. Most are set up in advance of retirement as part of the person's retirement plan. Others are set up shortly before an individual applies for Medicaid services and are a means to shelter the individual's assets to qualify for Medicaid assistance. To avoid penalizing annuities validly purchased as part of a retirement plan, but to capture those annuities sheltering assets, you must evaluate an annuity purchased within the look-back period to determine if the annuity is actuarially sound. Actuarially sound means the individual can expect to receive fair compensation from the fund within their lifetime. If the retirement fund is actuarially sound, no transfer of assets or income