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evaluated based on the type of account in which the funds are held. For example, if funds being saved for retirement are held in a regular savings account, the funds are evaluated as a savings account. 16.11.2 Retirement Funds as Assets Employer-sponsored and individually owned retirement plans must be evaluated for availability as assets. Retirement Funds of a Medicaid Applicant or Member In general, individually owned retirement plans (IRAs and Keoghs) are counted as available assets. The available amount is calculated as the principal, less any penalties for withdrawal. Tax withholdings are not deducted from the available asset value. Exception: IRA annuities that are currently paying out are treated as annuities rather than retirement funds when evaluating their availability as assets (see SECTION 16.12 ANNUITIES). Note For long-term care cases, annuity disclosure and remainder beneficiary designation requirements apply to IRA annuities regardless of whether the annuity is evaluated as a retirement fund or as an annuity (see SECTION 16.12.3 LONG-TERM CARE ANNUITY DISCLOSURE AND REMAINDER BENEFICIARY DESIGNATION REQUIREMENTS). Employer-sponsored retirement plans are not counted as available assets if any of the following are true: • The individual is currently receiving periodic payments from the plan. • The individual is still employed and would have to quit their job to obtain the funds. • The individual does not have access to the account’s principal. If none of the above are true and the individual has the ability to cash out their employer-sponsored retirement plan, the cash value of the plan (after any penalties but before any tax withholding) is counted as an available asset. Retirement Funds of an Ineligible Spouse An ineligible spouse is defined as a Medicaid applicant or member's spouse who is not requesting full- benefit health care. Both employer-sponsored and individually owned retirement plans owned by an ineligible spouse are disregarded as assets for Medicaid eligibility and spousal impoverishment asset assessments. IRA annuities owned by an ineligible spouse are subject to both annuity disclosure and remainder beneficiary designation requirements (see SECTION 16.12.3 LONG-TERM CARE ANNUITY DISCLOSURE AND REMAINDER BENEFICIARY DESIGNATION REQUIREMENTS). Note Inherited IRAs are not considered retirement funds for purposes of this exemption. Example 1 Diane has been admitted to a nursing home, and her stay is expected to be over 30 days. Her husband, Tom, is an ineligible community spouse who owns an IRA annuity. Tom’s IRA annuity is not counted for the couple’s asset assessment or for Diane’s eligibility determination for institutional Medicaid. It is an exempt retirement asset because it is owned by Tom, as an ineligible spouse. Conversion of Retirement Funds Retirement funds that are cashed out or rolled over are treated as a conversion from one asset type to another.