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

(Revised 7/1/09 ML #3183)

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IM 5133

 

 

  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 and the penalty period is not finished (if the penalty period is finished and the applicant or recipient still owns the annuity, the annuity may be considered an available asset);
  2. The annuity has been annuitized and constitutes an employee benefit annuity that cannot be surrendered; 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 principal 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 $2739 effective January 2009 ($2610 for 2008) and, when combined with the annuitant’s other income at the time of application for Medicaid, does not exceed $4109 effective January 2009 ($3915 for 2008); 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;
  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 (or the applicant or recipient can show the outstanding principal amounts due, if that information can be attained).
  2. The date of the disqualifying transfer is the date the payment option was selected on the annuity, or if later, the date the annuity was changed so the annuity could no longer be surrendered.