Annuities Purchased from August 1, 2005 Through February 7, 2006 510-05-70-45-25

(Revised 1/1/07 ML #3056)

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  1. Any payment received from an annuity is income, regardless whether the annuity itself is countable as an asset or is considered a disqualifying transfer.
  2. The annuity is counted as an available asset in the asset test unless:
  1. The annuity must be considered a disqualifying transfer;
  2. The annuity constitutes an employee benefit that is an individual retirement annuity or is an annuity that was purchased with the proceeds from an individual retirement account (IRA), a Roth IRA, a simplified employee pension, an employer or employee association retirement account, or an employer simple retirement account, as described in section 408 of the Internal Revenue Code of 1986 (These annuities are considered “qualified” annuities); or
  3. The annuity meets all of the following conditions:
  1. The annuity is irrevocable and cannot be assigned to another person;
  2. The issuing entity is an insurance company or other commercial company that sells annuities as part of the normal course of business;
  3. The annuity provides for level monthly payments;
  4. The annuity will return the full principle and has a guaranteed period that is equal to at least 85% of the annuitant’s life expectancy;
  5. The monthly payments from all annuities that meet the requirements of this subsection do not exceed $2541 effective January 2007 ($2488 for 2006) and, when combined with the annuitant’s other income at the time of application for Medicaid, does not exceed $3811 effective January 2007 ($3732 for 2006); and
  6. If the applicant for Medicaid is age 55 or older, the Department of Human Services is irrevocably named as the primary beneficiary of the annuity following the death of the applicant and the applicant’s spouse, not to exceed the amount of benefits paid by Medicaid.  If a minor child who resided and was supported financially by the applicant or spouse, or disabled child, survives the applicant and spouse, any payments from the annuity will be provided to those individuals.
  1. The annuity is considered a disqualifying transfer unless:
  1. The payment option was selected prior to the individual's, or the individual’s spouse’s look back date;
  2. The annuity is a qualified employee benefit annuity, as described in (2)(b);
  3. The annuity meets all of the requirements in (2)(c) above; or
  4. The annuity is a third party annuity.
  1. The uncompensated value of an annuity that is considered a disqualifying transfer is an amount equal to the remaining payments due from the annuity.