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Chapter: 1600 Assets Program: MSSI, SFP 46

Note: If the spouse or minor/disabled child disposes of their primary remainder beneficiary interest for less than fair market value (for example, transferred their interest to someone who does not meet the criteria), AHCA must be named primary beneficiary or the individual will be subject to a transfer of asset penalty.

2. Is irrevocable and nonassignable.

3. Makes payments (that include both principal and interest) to the individual in equal amounts during the term of the annuity, with no balloon or deferred payments.

4. Is actuarially sound based on the actuarial tables used by the Social Security Administration, (refer to Appendix A-14).

If the annuity meets all of the above criteria, funds in the annuity are excluded as a resource and the periodic payments are counted as income in the eligibility determination and patient responsibility.

If all of the requirements above are not met, the total amount of funds transferred into the annuity is considered a transfer without fair compensation, except when the annuity is revocable or assignable. When the annuity is revocable, count as an asset the amount the purchaser would receive from the annuity issuer if the annuity is cancelled. When the annuity is assignable, count as an asset the amount the annuity can be sold for on the secondary market.

Certain transactions that occur on or after 11/01/2007 make an annuity (including an annuity purchased before 11/01/2007) subject to the transfer of assets provisions. The transactions include such actions as additions of principal to an existing annuity or electing to annuitize an existing annuity.

Exception: Certain Individual Retirement Accounts (IRAs) or annuities that were established by an employee or their employer are not considered under the transfer of assets provisions and do not have to meet the above criteria. These include such financial vehicles as an individual retirement annuity, a simplified employee pension or a Roth IRA.

Community Spouse’s Annuity

The purchase of an annuity on or after 11/01/2007 (and within the look-back period) by the community spouse of an applicant of ICP, institutionalized MEDS-AD, institutionalized Hospice, HCBS Programs and PACE will be considered a transfer of assets for less than fair compensation unless the annuity meets the criteria below:

1. Names AHCA as the primary beneficiary for the total amount of medical assistance paid on behalf of the applicant/recipient spouse, except for when the spouse has a minor or disabled child. In this case, AHCA shall be name as secondary after the minor or disabled child.

2. Is actuarially sound based on the spouse’s age on the actuarial table used by the Social Security Administration (Refer to Appendix A-14).

Community spouse annuities that are revocable or assignable shall count as an asset, in the same manner as an applicant’s/recipient’s annuity counts, as indicated above.

Annuities purchased by the community spouse after approval of long-term care Medicaid for the applicant spouse are not evaluated for transfer of assets provisions.

Evaluating Annuities