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285 (07/2026) Chapter 2:Eligibility • Section 5: Financial eligibility

Š An annuity covered by section (5) of this rule may not be excluded unless the annuity meets all of the following requirements: » The annuity is irrevocable. » The annuity must be actuarially sound. » The annuity is issued by a business that is licensed and approved to issue a commercial annuity by the state in which the annuity is purchased. • This section lists the requirements for a commercial annuity purchased by the individual or the individual’s spouse on or after July 1, 2006, when an individual is in a nonstandard living arrangement, and the annuity names the individual or the community spouse as the annuitant. Annuities that meet all of the requirements of this section are counted as unearned income to the payee. The treatment of annuities that do not meet all requirements of this section is covered in sections (9) and (10).

Š The annuity must comply with one of the following paragraphs: » The first remainder beneficiary is the individual’s spouse; ODHS|OHA is named as the second remainder beneficiary for up to the total amount of medical assistance paid on behalf of the individual; and in the event that the spouse transfers any of the remainder of the annuity for less than fair market value, ODHS|OHA is the second remainder beneficiary for up to the total amount of medical assistance paid on behalf of the individual. » The first remainder beneficiary is the annuitant’s child; ODHS|OHA is named as the second remainder beneficiary for up to the total amount of medical assistance paid on behalf of the individual; and in the event that the child or a representative on behalf of the child transfers any of the remainder of the annuity for less than fair market value, ODHS|OHA is the second remainder beneficiary for up to the total amount of medical assistance paid on behalf of the individual. » The first remainder beneficiary is ODHS|OHA for up to the total amount of medical assistance paid on behalf of the individual.

Š The annuity must be irrevocable.

Š The annuity must be non-assignable.

Š The annuity must be actuarially sound.

Š The annuity is issued by a business that is licensed and approved to issue a commercial annuity by the state in which the annuity is purchased. • If the individual is the annuitant and a commercial annuity does not meet all of the requirements of subsections (8)(a), (8)(d), and (8)(e), or the spouse of the individual is the annuitant and a commercial annuity does not meet the requirements of subsections (8)(a), (8)(d), and (8)(e), there is a disqualifying transfer of assets. To the extent to which there is a disqualifying transfer of assets under this section, the annuity is not counted as a resource. • If the annuity does not meet all of the requirements of subsections (8)(b) or (8)(c), the annuity is counted as a resource. For HSD medical programs, taxable annuities are counted in both monthly and annual income. Exclude non- taxable annuities.