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1148 Chapter 7:Worker guides • Section 7: OSIPM worker guides (07/2026) annuity as a resource, determine whether a disqualification for a transfer of assets must be applied. Example 1 A single male individual who is 63 years old applies for services and Medicaid in October 2006. He purchased a $45,000 irrevocable and non-assignable annuity from an insurance company on July 15, 2006. The annuity will pay out $392 per month for 10 years. The individual’s non-disabled adult child is the first remainder beneficiary. The individual does not have a child under age 21 or a child any age with a disability. How would this annuity be treated? Answer: First determine whether the annuity meets all of the criteria of 461-145-0022(10). The annuity is irrevocable and non-assignable and was purchased from a business. The individual’s life expectancy is 18.11 years and the annuity will pay out in equal installments over 10 years, so the annuity meets these criteria. However, the annuity does not meet the final criterion because a child under age 21 or child any age with a disability or ODHS|OHA is not named as the first remainder beneficiary. If the individual agrees to change the first remainder beneficiary to ODHS|OHA (up to the amount of medical benefits provided), count the $392 per month income only; the $45,000 annuity is not a disqualifying transfer of assets and it is not a countable resource. If the individual does not agree to change the first remainder beneficiary, the annuity is both a disqualifying transfer of resources and counts as a resource. The individual cannot serve a disqualification until he is otherwise eligible for Medicaid, so first count the annuity as a resource. The fair market value most likely exceeds the $2000 limit for Medicaid eligibility and the individual is ineligible. When the individual reapplies at a later date when he is resource-eligible, impose a disqualifying transfer of assets disqualification if the individual still has the annuity. Per 461-140-0300, there is no disqualification if the annuity that would have caused a disqualification is rescinded. Example 2 A female community spouse who is 74 years old purchased a $74,000 irrevocable and non-assignable annuity from an insurance company on August 1, 2006. The annuity will pay out $535 per month for 12 years. The individual is named as the first remainder beneficiary. The community spouse does not have a child under age 21 or a child any age with a disability. The individual applies for services and Medicaid for November 2006. How would this annuity be treated? Answer: First determine whether the annuity meets all of the criteria of 461-145-0022(10). The annuity is irrevocable and non-assignable and was purchased from a business. The spouse’s life expectancy is 12.95 years and the annuity will pay out in equal installments over 12 years, so the annuity meets these criteria. However, the annuity does not meet the remainder beneficiary criterion because the spouse cannot name the individual (The individual could name the spouse, however). If the community spouse agrees to change the first remainder beneficiary to ODHS|OHA (up to the amount of medical benefits provided), count the $535 per month as the community spouse’s income only; the $74,000 is not a disqualifying transfer of resources and is not a countable resource. If the spouse does not agree to change the first remainder beneficiary, the annuity is a disqualifying transfer of resources and counts as a resource. Count the annuity as a resource and include it in the couple’s resource assessment. Deny the case if the individual is over resources. If the resource limit is met, approve the case. This is because the annuity must be part of the community spouse’s resource allowance (CSRA), if it doesn’t cause the individual to be over resources. Section