Commonwealth of Massachusetts Executive Office of Health and Human Services Office of Medicaid 600 Washington Street Boston, MA 02111 www.mass.gov/masshealth MassHealth Eligibility Letter 179 May 1, 2008 TO: MassHealth Staff FROM: Tom Dehner, Medicaid Director RE: Revisions to Regulations about Look-Back Periods for Trusts MassHealth is clarifying the regulations about trust look-back periods by including two cross-references to applicable regulations in other sections. At 130 CMR 520.007(J), a cross-reference to 130 CMR 520.018 and 520.019 is added. At 130 CMR 520.018, a cross-reference to 130 CMR 520.007(J) is added. These regulations were originally filed as an emergency, effective February 10, 2006. These final changes are being made after public notice. These regulations are effective February 11, 2006. MANUAL UPKEEP Insert Remove Trans. By 520.008 (1 of 2) 520.008 (1 of 2) E.L. 174 520.018 520.018 E.L. 174 130 CMR: DIVISION OF MEDICAL ASSISTANCE Trans. by E.L. 179 Rev. 02/11/06 MASSHEALTH FINANCIAL ELIGIBILITY Chapter 520 Page 520.008 (1 of 2) (c) The purchase of an annuity is considered a disqualifying transfer of assets unless the annuity satisfies 130 CMR 520.007(J)(2)(b), or unless the annuity names the Commonwealth of Massachusetts as a beneficiary as required under 130 CMR 520.007(J)(2)(a) and the annuity is (i) described in Section 408(b) or (q) of the Internal Revenue Code of 1986; (ii) purchased with the proceeds from an account or trust described in Section 408(a), (c), or (p) of the Internal Revenue Code of 1986; (iii) purchased with the proceeds from a simplified employee pension described in Section 408(k) of the Internal Revenue Code of 1986; or (iv) purchased with the proceeds from a Roth IRA described in Section 408A of the Internal Revenue Code of 1986. (3) Promissory Notes, Loans, or Mortgages. The value of any outstanding balance due on a promissory note, loan, or mortgage is considered a disqualifying transfer of assets, unless all of the following conditions are met: (a) the repayment terms of the promissory note, loan, or mortgage are actuarially sound, based on actuarial tables as determined by the MassHealth agency; (b) the promissory note, loan, or mortgage provides for equal payment amounts during the life of the loan, with no deferral and no balloon payments; and (c) the promissory note, loan, or mortgage prohibits cancellation of the balance upon the death of the lender. (4) Transactions Involving Future Performance. Any transaction that involves a promise to provide future payments or services to an applicant, member, or spouse, including but not limited to transactions purporting to be annuities, promissory notes, contracts, loans, or mortgages, is considered to be a disqualifying transfer of assets to the extent that the transaction does not have an ascertainable fair-market value or if the transaction is not embodied in a valid contract that is legally and reasonably enforceable by the applicant, member, or spouse. This provision applies to all future performance whether or not some payments have been made or services performed. (5) Additional Regulations About Transfers of Assets. Transfers of assets are further governed by 130 CMR 520.018 and 520.019. 520.008: Noncountable Assets Noncountable assets are those assets exempt from consideration when determining the value of assets. In addition to the noncountable assets described in 130 CMR 520.006 and 520.007, the following assets are noncountable. 130 CMR: DIVISION OF MEDICAL ASSISTANCE Trans. by E.L. 179 Rev. 02/11/06 MASSHEALTH FINANCIAL ELIGIBILITY Chapter 520 Page 520.018 (c) The fair-hearing officer compares the revised MMMNA to the community spouse’s total income. If the community spouse’s total income is less than the amount of the revised MMMNA, the fair-hearing officer first deducts the personal-needs allowance from the institutionalized spouse’s countable-income amount and then a spousal-maintenance-needs deduction needed to reach the revised MMMNA. 520.018: Transfer of Resources Regardless of Date of Transfer (A) The provisions of 42 U.S.C. 1396p apply to all transfers of resources. In the event that any portion of 130 CMR 520.018 and 520.019 conflicts with federal law, the federal law supersedes. (B) The MassHealth agency denies payment for nursing-facility services to an otherwise eligible nursing-facility resident as defined in 130 CMR 515.001 who transfers or whose spouse transfers countable resources for less than fair- market value during or after the period of time referred to as the look-back period. (C) The denial of payment for nursing-facility services does not affect the individual’s eligibility for other MassHealth benefits. (D) Circumstances giving rise to disqualifying transfers of resources are also described at 130 CMR 520.007(J). 520.019: Transfer of Resources Occurring on or after August 11, 1993 (A) Payment of Nursing-Facility Services. The MassHealth agency applies the provisions of 130 CMR 520.018 and 520.019 to nursing-facility residents as defined at 130 CMR 515.001 requesting MassHealth payment for nursing-facility services provided in a nursing facility or in any institution for a level of care equivalent to that received in a nursing facility or for home- and community-based services provided in accordance with 130 CMR 519.007(B). (B) Look-Back Period. Transfers of resources are subject to a look-back period, beginning on the first date the individual is both a nursing-facility resident and has applied for or is receiving MassHealth Standard. (1) For transfers occurring before February 8, 2006, this period generally extends back in time for 36 months. (2) For transfers of resources occurring on or after February 8, 2006, the period generally extends back in time for 60 months. The 60-month look-back period will begin to be phased in on February 8, 2009. Beginning on March 8, 2009, applicants will be asked to provide verifications of their assets for the 37 months prior to the application. As each month passes, the look-back period will increase by one month until the full 60 months is reached on February 8, 2011. (3) For transfers of resources from or into trusts, the look-back period is described in 130 CMR 520.023(A).