55 Pa. Code § 178.104a. Clarification of fair consideration provisions for disposition of assets made on or after February 8, 2006

55 Pa. Code § 178.104a. Clarification of fair consideration provisions for disposition of assets made on or after February 8, 2006—statement of policy.

§ 178.104a. Clarification of fair consideration provisions for disposition of assets made on or after February 8, 2006—statement of policy.

(a)  Consistent with section 1917(c)(1)(B)(i) of the Social Security Act (42 U.S.C.A. §  1396p(c)(1)(B)(i)), regarding liens, adjustments and recoveries, and transfers of assets, effective for an application made on or after March 3, 2007, the look-back period for assets transferred on or after February 8, 2006, shall be 60 months.
(b)  Consistent with section 1917(c)(1)(D) of the Social Security Act, effective for an application made on or after March 3, 2007, in the case of a transfer of assets for less than Fair Market Value (FMV) made on or after February 8, 2006, by an applicant or spouse of an applicant, the penalty period shall commence on the date the applicant would otherwise be eligible for Medicaid based on an approved application for these services.
(c)  Consistent with section 1917(c)(1)(D) of the Social Security Act, effective with transfers of assets for less than FMV made on or after March 3, 2007, by a recipient, the beginning date of a period of ineligibility for payment of long-term care services shall commence on the first day of the month following the date specified in the Appeal and Fair Hearing section of the Advance Notice provided to the recipient.
(d)  Consistent with section 1917(c)(1)(E)(iv) and (H) of the Social Security Act, effective for an application made on or after March 3, 2007, a period of ineligibility for payment of long-term care services will result when an applicant or spouse of an applicant disposes of assets for less than FMV on or after February 8, 2006. The period of ineligibility shall be determined by dividing the total cumulative uncompensated value of all assets disposed of by the applicant or the applicant’s spouse on or after the look-back date, by the average daily private pay rate in effect at the time the application is processed.
(e)  Consistent with section 1917(c)(1)(E)(iv) and (H) of the Social Security Act, effective March 3, 2007, a period of ineligibility for payment of long-term care services will result when a recipient disposes of assets for less than FMV on or after March 3, 2007. The period of ineligibility shall be determined by dividing the total cumulative uncompensated value of all assets disposed of by the recipient on or after the look back date, by the average daily private pay rate in effect at the time the period of ineligibility is determined.
(f)  Consistent with section 1917(c)(1)(I) of the Social Security Act, effective for an application made on or after March 3, 2007, the outstanding balance due on a promissory note, loan or mortgage purchased on or after February 8, 2006, that does not meet all of the following requirements will be treated as a transfer of assets for less than FMV:
   (1)  The repayment terms must be actuarially sound.
   (2)  The terms must provide for payments in equal amounts throughout the term, with no deferral of payments and no balloon payments.
   (3)  The terms must prohibit cancellation of the balance upon death of the lender.
(g)  Consistent with section 1917(c)(1)(J) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of a life estate interest in another individual’s home made on or after February 8, 2006, shall be considered a transfer of assets for less than FMV unless the purchaser resided in the home for at least 1 year after the purchase date.
(h)  Consistent with section 1917(c)(1)(F) and (G) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of an annuity by an applicant or applicant’s spouse on or after February 8, 2006, that does not meet all of the following requirements, will be treated as a transfer of assets for less than FMV:
   (1)  The annuity must be irrevocable and nonassignable.
   (2)  The annuity must be actuarially sound.
   (3)  The annuity must provide for payments in equal amounts, with no deferral and no balloon payments made.
   (4)  The annuity must name the Department as the remainder beneficiary in the first position for at least the total amount of medical assistance paid by the Department on behalf of the recipient. The annuity must name the Department as beneficiary in the second position when there is a community spouse (CS), minor child, or blind or permanently and totally disabled child for at least the total amount of Medical Assistance paid by the Department on behalf of the recipient and must name the Department in the first position if the CS or a representative of a minor child, or a representative of a permanently and totally disabled child disposes of any remainder for less than FMV.
(i)  Consistent with section 1917(c)(1)(F) and (G) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of a nonqualified annuity on or after February 8, 2006, by the spouse of an applicant, that does not name the Department as beneficiary in the first position will be treated as a transfer of assets for less than FMV.
(j)  The provisions in this statement of policy do not prevent the Department from treating an annuity owned by an applicant or recipient or the spouse of an applicant or recipient that satisfies the requirements in subsection (h) or the requirement in subsection (i), as either income or a resource in the eligibility determination for long-term care services under the Medicaid Program.
(k)  The provisions in this statement of policy do not prevent the Department from treating an outstanding balance due on a promissory note, loan or mortgage satisfying the requirements in subsection (f), as either income or a resource in the eligibility determination for long-term care services under the Medicaid Program.

Source

   The provisions of this §  178.104a adopted March 2, 2007, effective March 3, 2007, 37 Pa.B. 1043.

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