Title: Par
Author: Michele Gee
Last saved by: raddington
Company: DHS

Bismarck, North Dakota	MANUAL LETTER #3005	January 1, 2006

Par.1.  Material Transmitted and Purpose – Transmitted with this Manual Letter are changes to Service Chapter 510-05 – Medicaid Eligibility Factors

510-05-65-20.  Community Spouse Asset Allowance

Subsection 2 has been UPDATED with the new asset levels for the Community Spouse Asset Allowance.
2.	The community spouse asset allowance is determined by first establishing a spousal share.  The spousal share is an amount equal to one half of the total value of all countable assets owned (individually or jointly) by the institutionalized, HCBS, or community spouse.

Example:
If the couple's countable assets are: | The community spouse share is:
$25,000 | $12,500
$90,000 | $45,000
$200,000 | $100,000
From the spousal share, the community spouse asset allowance is established, and is an amount that is equal to the community spouse share, but not less than $~~19,020~~, $19,908, and not more than ~~$95,100~~ $99,540, effective January ~~2005~~ 2006 (~~$18,552~~ $19,020 and ~~$92,760~~ $95,100 effective January ~~2004~~ 2005).

Example:
If_the_spousal share is: | The community spouse asset allowance is:

$12,500

~~$19,020~~ (at least the minimum)
$19,908

$45,000 | $45,000
$100,000 | ~~$95,100~~ $99,540 (one-half is more than the maximum allowed, so the community spouse gets the maximum)

The community spouse asset allowance may be adjusted by any additional amount transferred under a court order or established through a fair hearing.  Adjustments in the minimum and maximum allowed for a community spouse may also adjust the community spouse asset allowance.
3.	After the institutionalized or HCBS spouse has been determined eligible, the community spouse is no longer subjected to the community spouse asset allowance.

510-05-70-45. Annuities

The following four changes were made to this section:

Subsections 6 and 7 have been UPDATED with new income levels for Community Spouse annuities.

Language that only excluded annuities in Spousal Impoverishment cases was removed from subsections 6 and 7 to allow “Community Spouse Annuities” to continue to be excluded when the spouse is no longer a Community Spouse.  This is a policy change that is effective immediately.

A new paragraph was added to the end of subsection 6 to clarify that annuities purchased before August 1, 2005, but for which a payment option is not selected until on or after August 1, 2005, are not excluded.

Language was removed from subsection 10, as it will no longer be necessary to submit medical information when sending an annuity in for review.

6.	An annuity purchased for a community spouse in which a payment option was selected before August 1, 2005 is not countable as an available asset for purposes of making an assessment or determining eligibility ~~in a spousal impoverishment case,~~ but any payment derived from that annuity is income, if:
a.	The annuity is irrevocable and cannot be assigned to another person;

b.	The issuing entity is an insurance company or other commercial company that sells annuities as part of the normal course of business; 

c.	The annuity provides for level monthly payments; 

d.	The annuity will return the full purchase price and interest within the purchaser's life expectancy; and

e.	Unless specifically ordered otherwise by a court of competent jurisdiction acting to increase the amount of spousal support paid on behalf of a community spouse by an institutionalized spouse or a home and community based services (HCBS) spouse:

i.	For eligibility periods before August 1, 2005, the monthly payments from the annuity do not exceed $2267; and 

ii.	For eligibility periods on or after August 1, 2005, the monthly payments from the annuity do not exceed ~~$2378~~ $2488.

An annuity purchased for a community spouse before August 1, 2005, but for which the payment option is selected on or after August 1 2005, is not excluded under this provision.  To meet the requirements under this subsection, the annuity cannot be assignable, however, an annuity in which a payment option is selected on or after August 1, 2005 is considered assignable (subsection 3, sub-division b) unless it meets all of the requirements under subsection 7.  Annuities excluded under subsection 7 must be purchased on or after August 1, 2005.

7.	An annuity for a community spouse, purchased on or after August 1, 2005, is not countable as an available asset for purposes of making an assessment or determining eligibility ~~in a spousal impoverishment case,~~ but any payment derived from that annuity is income, if:
a.	The annuity is irrevocable and cannot be assigned to another person; 
b.	The issuing entity is an insurance company or other commercial company that sells annuities as part of the normal course of business; 
c.	The annuity provides for level monthly payments; 
d.	The annuity will return the full principle and has a guaranteed period that is equal to at least 85% of the community spouse’s life expectancy; 
e.	The monthly payments from all annuities that meet the requirements of this subsection do not exceed ~~$2378~~ $2488 and, when combined with the community spouse’s other income at the time of application for Medicaid, does not exceed ~~$3567~~ $3732; and 
f.	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 or disabled child survives the applicant and spouse, any payments from the annuity will be provided to those individuals.
10.	Annuities ~~shall~~ must be submitted to the Medicaid Eligibility unit for assistance in determining whether the annuity is countable as an asset or whether a disqualifying transfer occurred.  A copy of the entire annuity policy, the date of birth of the annuitant, and verification of the annuity purchase price and, if applicable, date of annuitization , ~~and, when appropriate, the annuitant's actual life expectancy as established by a reliable medical statement that estimates the remaining duration of life~~ must be secured and submitted with the inquiry.

Par. 2.  Effective Date – This manual letter is effective January 1, 2006, unless otherwise indicated.

Carol K. Olson, Executive Director	Manual Letter #3005
North Dakota Department of Human Services	Page  of  Pages