Commonwealth of Massachusetts Executive Office of Health and Human Services Office of Medicaid 600 Washington Street Boston, MA 02111 www.mass.gov/masshealth Eligibility Operations Memo 07-14B June 15, 2008 TO: MassHealth Eligibility Operations Staff FROM: Russ Kulp, Director, MassHealth Operations RE: Change to Eligibility Operations Memo 07-14A: Clarifications about Transfers into or from Trusts, Personal Care Contracts, Annuities, or Promissory Notes and New Process for Tracking Annuities Change to EOM 07-14A Changes are being made in the title of this operations memo and in the third and fifth paragraphs in the “New Process for Filing and Tracking Annuities” section on page two of Eligibility Operations Memo 07-14A. The word “private” is being deleted when referring to annuities. Introduction Due to clarifications made by the Centers for Medicare & Medicaid Services (CMS), revisions are being made to MassHealth regulations about trust look-back periods. These changes include the length of the look-back period and the process that will be used to review and verify the trusts. Changes to the MassHealth Regulations Due to provisions in the federal Deficit Reduction Act of 2005, the 36-month look-back period described at 130 CMR 520.023 is eliminated. The look-back period for all trusts is now 60 months. This revision to the look-back period will be phased in beginning on February 8, 2009. Changes to the regulations include language that describes how the 60-month look-back period will be phased in for transfers into certain trusts and all other transfers for less than fair-market value. Beginning on March 8, 2009, applicants for MassHealth will be asked to provide verifications of their assets for the 37 months before the application date. As each month passes, the look- back period will increase by one month, until the full 60 months is reached on February 8, 2011. (continued on next page) Changes to the MassHealth Regulations (cont.) Language has been added to clarify rules about future payments or services. Any transaction that involves future payments or services will be considered a disqualifying transfer of assets to the extent that the transaction does not have an ascertainable fair-market value. In addition, a clarification of the Deficit Reduction Act of 2005 requires a change in the language at 130 CMR 520.007(J)(2)(a)(i) from “annuitant” to “institutionalized individual.” New Process for Filing and Tracking Annuities When processing a long-term-care application or review that includes an annuity established on or after February 8, 2006, please follow the steps below. Review the annuity to see if it * is actuarially sound, according the Social Security Administration (SSA) tables at ssa.gov/OACT/STATS/table4c6.html; * has equal payments; * is irrevocable; * is non-assignable; and * has no deferral or balloon payments. If the annuity meets all of the requirements described above, complete the Notice of Preferred Remainder Beneficiary (ANN-2) form, and list either the issuing company or the annuity owner. Also list any preferred beneficiaries, such as a spouse, disabled child, or minor child. Send the form to the Policy Implementation Unit at MassHealth Operations, ATTN: Annuity Tracking, 600 Washington Street, Boston, MA 02111. Staff at MassHealth Operations will log in the annuity and send the completed ANN-2 to either the issuing company or the annuity owner. If there is a preferred beneficiary, the Commonwealth of Massachusetts will be named in the second position. If there is not a preferred beneficiary, the Commonwealth of Massachusetts will be named in the first position. MassHealth Operations staff will complete the Annuity Tracking Form (ANN-1) and send it to the Lifetime Lien Unit in Worcester. If MassHealth Enrollment Center staff has questions about any commercial annuity, they should send the annuity to Legal for review. (continued on next page) Annuities, Promissory Notes, and Personal Care Contracts All annuities, promissory notes, and personal lifetime-care contracts must be sent to Legal for review before determining eligibility for long-term-care benefits. Attachment Attached to this memo is the revised Notice of Preferred Remainder Beneficiary (ANN-2). Questions If you have any questions about this memo, please have your MEC designee contact the Policy Hotline. Notice of Preferred Remainder Beneficiary Applicant name Social security number Name of issuing company Address City/Town/Zip The Commonwealth of Massachusetts Executive Office of Health and Human Services has determined that, pursuant to regulations at 130 CMR 520.007( J) and federal law at 42 USC §1396p(e), the Commonwealth of Massachusetts must be named a remainder beneficiary upon the death of the MassHealth applicant or MassHealth member, or spouse of the applicant or member, named below. If the Commonwealth of Massachusetts is not named as a beneficiary as explained below, the applicant’s or member’s eligibility for MassHealth benefits will be delayed or denied. Name of purchaser Account number Issuer name/Telephone number The Commonwealth of Massachusetts must be named a remainder beneficiary for the total amount of medical assistance paid on behalf of the institutionalized individual in the first position (if there is no community spouse or minor or disabled child), or second position (following the community spouse or minor or disabled child) that will change to the first position if the community spouse or the representative of any minor or disabled child disposes of any remainder for less than fair-market value. The issuer of the annuity described here must also notify the MassHealth Enrollment Center named above if there is a change in the amount of income or principal being withdrawn. Upon adding the Commonwealth of Massachusetts as a remainder beneficiary, the issuer must furnish documentation to the MassHealth Enrollment Center named above and to the Lifetime Lien Unit. Lifetime Lien Unit P.O. Box 15205 Worcester, MA 01615-0205 1-800-754-1864 Eligibility worker Telephone number Signature of Applicant or Authorized Representative Signature of Applicant Date Signature of Authorized representative Date ANN-2 (Rev. 09/07)