Code of Vermont Rules
Agency 13 - AGENCY OF HUMAN SERVICES
Sub-Agency 170 - DEPARTMENT FOR CHILDREN AND FAMILIES (DCF)
Chapter 420 - MEDICAID, AGED, BLIND, AND DISABLED (4200)
Section 13 170 420 - MEDICAID, AGED, BLIND, AND DISABLED (4200)
Current through February, 2024
Section 4200 Medicaid, Aged, Blind, and Disabled
Individuals who are aged, blind, or disabled (M211) are eligible for Medicaid if they meet the financial and nonfinancial requirements for participation in the Medicaid program. Financial requirements (M220-M223) relate to the availability of resources (M230-M239) and income (M240-M249). Nonfinancial requirements include general requirements for Medicaid participation (M100-M199), the criteria for one of the coverage groups identified in M200. 2-M200. 4, citizenship (M170, M212), Vermont residency (M213), and living arrangement (M214). The coverage groups include the categorically needy groups described beginning with rule M200.2, the medically needy group described at rule M200.3, and the Medicare cost-sharing groups described beginning with rule M200.4.
Section 4201 Definitions
This section defines terms used throughout M200-M299.
It includes certain services administered by the Department of Disabilities, Aging and Independent Living (DAIL):
. home-based and enhanced residential care services for the aged and disabled (known as "Choices for Care"),
. traumatic brain injury services (TBI waiver), and
. home-and-community-based waiver services for the developmentally disabled (DS waiver).
It also includes services administered by the Vermont Department of Health's Division of Mental Health (VDH):
. children's mental health waiver services.
DCF determines financial and nonfinancial eligibility, other than disability, for these services. DCF, through the disability determination services unit determines whether individuals are blind or disabled according to the criteria in rule M211. 2-M211.4, except as stated below.
Section 4202 Categorically Needy Coverage Groups
To be eligible for SSI-related Medicaid as categorically needy, individuals must meet the criteria in one or more of the following coverage groups, in addition to other nonfinancial and financial requirements. When an individual becomes ineligible for one coverage group, the department tests for other categorical and then medically needy eligibility. Medicaid remains open until an individual no longer passes any of the eligibility tests, per rule M133.
Individuals granted SSI/AABD by the Social Security Administration are eligible for SSI-related Medicaid. In addition to SSI/AABD recipients, this group includes individuals determined presumptively disabled and those who do not receive an SSI/AABD payment because of recoupment.
The following individuals are eligible for SSI-related Medicaid as categorically needy.
. have not applied for SSI/AABD, or --
. do not meet SSI/AABD requirements not applicable to Medicaid, such as participation in vocational rehabilitation or a substance abuse treatment program.
Individuals in this categorically needy coverage group must have income and resources at or below SSI/AABD maximums and meet the nonfinancial criteria for SSI-related Medicaid.
. do not have sufficient earnings to provide the reasonable equivalent of publicly funded attendant care services that would be available if they did not have such earnings; and
. are seriously inhibited by the lack of Medicaid coverage in their ability to continue to work or obtain employment.
The following individuals are eligible for SSI-related Medicaid as categorically needy.
. would be eligible for Medicaid if they were living in a medical institution;
. have gross income between the protected income level and the institutional income standard; and
. can receive appropriate long-term medical care in the community, as determined by the Department of Disabilities, Aging and Independent Living.
. would be eligible for Medicaid if they were living in a medical institution;
. can receive appropriate medical care in the community, the cost of which is no greater than the estimated cost of medical care in an appropriate institution; and
. receive hospice care as described in section M401.2 and defined in section 1905(o) of the Social Security Act.
. require the level of care provided in a medical institution;
. would be eligible for Medicaid if they were living in a medical institution; can receive appropriate medical care in the community, the cost of which is
. no greater than the estimated cost of medical care in an appropriate institution; are age 18 or younger;
. have income, excluding
. their parents' income, no greater than the institutional income standard; and have resources
. Medicaid group of one.
The following individuals are eligible for SSI-related Medicaid as categorically needy.
. are under age 65;
. uninsured; and
. otherwise not eligible for SSI-related or ANFC-related Medicaid.
Coverage under this category begins following the screening and diagnosis and continues as long as a treating health professional verifies the woman is in need of cancer treatment services.
. resources at the time of enrollment in the group do not exceed $ 5,000 for an individual and $ 6,000.00 for a couple (see M232.88 for resource exclusion after enrollment);
. income is below 250 percent of the federal poverty level (FPL) associated with the applicable family size;
. income does not exceed either the Medicaid protected income level for one or the SSI/AABD payment level for two, whichever is higher, after disregarding the earnings, social security disability insurance benefits (SSDI), and any veteran's disability benefits of the individual working with disabilities; and
. earnings are documented by evidence of Federal Insurance Contributions Act tax payments, Self-employment Contributions Act tax payments, or a written business plan approved and supported by a third-party investor or funding source;
Earnings, SSDI, and veteran's disability benefits are not disregarded for applicants with spend-down requirements who do not meet all of the above requirements and seek coverage under the medically needy coverage group (M200.3).
The following individuals remain eligible for SSI-related Medicaid as categorically needy.
. applied for SSI-related Medicaid no later than July 1, 1988;
. were receiving SSI/AABD in December, 1983 and lost SSI/AABD in January 1984 due to a statutory elimination of an additional benefit reduction factor for surviving spouses before attainment of age 60 who have been continuously entitled to surviving spouse insurance based on disability since January 1984; and
. would continue to be eligible for SSI/AABD if they had not received the increase in social security disability or retirement benefits.
. lost SSI/AABD benefits due to a mandatory application for and receipt of social security disability, retirement or survivor benefits;
. are not yet eligible for Medicare Part A;
. are at least age 50, but have not yet attained age 65; and
. would continue to be eligible for SSI/AABD if they were not receiving social security disability or retirement benefits.
. are over age 18;
. have blindness or a disability that began before age 22;
. are entitled to social security benefits on their parent's record due to retirement, death or disability benefits and lost SSI/AABD due to receipt of this benefit or an increase in this benefit; and
. would remain eligible for SSI/AABD in the absence of the social security retirement, death or disability benefit or increases in that benefit.
. are receiving social security retirement or disability benefits;
. became eligible for and received SSI or SSI/AABD for at least one month after April 1977; and
. lost SSI/AABD benefits but would be eligible for them if all increases in their Medicaid group's social security benefits due to annual cost-of-living adjustments (COLAs) were deducted as income.
. an institutionalized individual who has been eligible for Medicaid each consecutive month after December 1973;
. a blind or disabled individual who meets all current requirements for Medicaid eligibility except blindness or disability and has been eligible for Medicaid each consecutive month after December 1973; or
. an essential spouse whose needs have been included in computing the SSI or SSI/AABD payment to an aged, blind, or disabled individual living with the essential spouse since December 1973 and both have continuously received AABD.
. were entitled to social security retirement or disability and eligible for AABD in August 1972 or would have been eligible if they had applied or were not in a medical institution or intermediate care facility; and
. would be eligible for SSI or SSI/AABD now, except that the 20 percent cost-of-living increase in social security benefits effective September 1972 raised their income over the AABD limit.
Section 4203 Medically Needy Coverage Group
Individuals who would be members of a categorically needy coverage group may qualify for Medicaid as medically needy even if their income or resources exceed coverage group limits. These individuals may become eligible if they incur enough non-covered medical expenses to reduce their income to the applicable standard. For community Medicaid, individuals must reduce their income to the protected income level (PIL). For long-term care, including waiver and hospice services, individuals also must spend down their income to the PIL. In addition, all individuals must have resources below the categorically needy program resource limit. The rules in M411-M423 specify how individuals may use non-covered medical expenses to "spend down" their income or resources to the applicable limits.
Section 4204 Medicare Cost-Sharing Coverage Groups
Limited Medicaid benefits are available to pay for out-of-pocket Medicare cost-sharing expenses for certain Medicare beneficiaries. Such beneficiaries are eligible for Medicaid payment of certain Medicare costs if they meet the additional criteria specified for one of the groups in M200.41-M200.44.
Individuals eligible for one of the following Medicare cost-sharing coverage groups may also be eligible for the full range of Medicaid covered services if they also meet the requirements for one of the categorical (M200.2) or medically needy coverage groups (M200.3).
Applicants may not spend down income to meet the financial eligibility tests for these coverage groups. The department disregards annual cost-of-living (COLA) increases in social security benefits in determining eligibility for these groups until the month after the annual publication of the official poverty line revisions.
Individuals are eligible for Medicaid payment of their Medicare Part A and Part B premiums, deductibles, and coinsurance if their Medicaid group has countable income at or below 100 percent of the federal poverty level.
Benefits under this provision become effective on the first day of the calendar month immediately following the month in which the individual is determined to be eligible.
Individuals who have lost their Medicare benefits based on disability because they returned to work, are eligible for Medicaid payment of their Medicare Part A premiums if they:
. are disabled;
. belong to a Medicaid group with countable income at or below 200 percent of the federal poverty level applicable to the Medicaid group's size;
. are members of a Medicaid group with resources at or below twice the SSI-related Medicaid limit applicable to the group's size; and
. are not otherwise eligible for Medicaid.
Benefits under this provision become effective on either the date of application or the date on which all eligibility criteria are met, whichever is later. The department may grant benefits for a retroactive period of up to three months prior to that effective date, provided that the individual meets all eligibility criteria.
Individuals are eligible for Medicaid payment of their Medicare Part B premiums if:
. they receive Medicare Part A; and
. their Medicaid group has countable income greater than 100 percent but no greater than 120 percent of the federal poverty level.
Benefits under this provision become effective on either the date of application or the date on which all eligibility criteria are met, whichever is later. The department may grant benefits for a retroactive period of up to three months prior to that effective date, provided that the individual meets all eligibility criteria.
Individuals who receive Medicare Part A and do not receive other federally funded medical assistance, except for coverage for excluded drug classes under Part D when the individual is enrolled in Part D, are eligible for Medicaid payment of their Medicare Part B premium.
The QI-1 coverage group includes individuals in a Medicaid group with income that is at least 120 percent but less than 135 percent of the federal poverty level that are eligible for Medicaid payment of their Medicare Part B premium.
Benefits under this provision become effective on the first day of the calendar month immediately following the month in which the individual is determined to be eligible. The department may grant benefits for a retroactive period of up to three months from the date of application, provided that all eligibility criteria are met. The benefit period ends in December of each calendar year. People requesting this coverage must reapply each calendar year.
Section 4210 Nonfinancial Eligibility Tests
The following sections specify the nonfinancial eligibility tests that individuals not receiving SSI/AABD benefits must pass in order to receive SSI-related Medicaid.
Section 4211 Relationship to SSI
Applicants for SSI-related Medicaid must establish their categorical relationship to SSI by qualifying as one or more of the following:
Section 4212 Definition of Age
Individuals qualifying on the basis of age must be at least 65 years of age in or before the month in which eligibility begins.
Blind or disabled children are individuals who are single or not the head of a household and are:
. under age 18
. under the age of 22 and a student regularly attending school, college or university, or a course of vocational or technical training to prepare him or her for gainful employment.
Section 4213 Definition of Disability
Individuals age 18 or older are considered disabled if they are unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment, or combination of impairments, that can be expected to result in death, or has lasted or can be expected to last for a continuous period of not fewer than 12 months. To meet this definition, individuals must have a severe impairment, which makes them unable to do their previous work or any other substantial gainful activity which exists in the national economy. To determine whether individuals are able to do any other work, the disability determination unit considers their residual functional capacity, age, education, and work experience.
Children under age 18 are considered disabled if they have a medically determinable physical or mental impairment, or combination of impairments, resulting in marked and severe functional limitations, that can be expected to result in death or that have lasted or can be expected to last for at least 12 consecutive months. Children engaging in substantial gainful activity may not be considered disabled.
Substantial gainful activity is work activity that is both substantial and gainful.
Substantial work activity involves doing significant physical or mental activities. Work may be substantial even if it is done on a part-time basis or if individuals do less, get paid less or have less responsibility than when they worked before.
Gainful work activity is the kind of work done for pay or profit whether or not a profit is realized.
Individuals who are working with disabilities shall be exempt from the substantial gainful activity (SGA) step of the sequential evaluation of the disability determination if they otherwise meet the requirements set forth in M200.24 (b) for the categorically needy working disabled.
Section 4214 Definition of Blindness
Blindness means having central visual acuity of 20/200 or less, even with glasses, or a limited visual field of 20 degrees or less in the better eye with the use of a correcting lens.
Section 4215 Determining Disability or Blindness
Disability and blindness determinations are made by the disability determination services unit in accordance with the applicable requirements of the social security administration (SSA) based on information supplied by the applicant and by reports obtained from the physicians and other health care professionals who have treated the applicant.
The department explains the disability determination process to applicants, helps them complete the required forms and forwards this information to the disability determination unit.
The disability determination unit may determine individuals are disabled in any of the circumstances described below.
. their condition has changed or deteriorated since the most recent SSA determination of "not disabled,"
. a new period of disability meets the durational requirements of the Act,
. the SSA determination was more than 12 months ago, and
. they have not applied to SSA for a determination with respect to these allegations.
. their condition has changed or deteriorated since the most recent SSA determination of "not disabled",
. the SSA determination was fewer than 12 months ago,
. a new period of disability meets the durational requirements of the Act, and
. they have applied to SSA for reconsideration or reopening of its disability decision and SSA refused to consider the new allegations, or they no longer meet the nondisability requirements for SSI but may meet the state's nondisability requirements for Medicaid.
The department has primary responsibility, through its disability determination services unit, for assuring that adequate information is obtained upon which to base the determination. If additional information is needed to determine whether individuals are disabled or blind according to the Social Security Act, consulting examinations may be required. The reasonable charge for any medical examinations required to render a decision on disability or blindness shall be paid by the department.
Section 4216 Citizenship and Identity
The rules for citizenship and identity are in section M170.
The rule for emergency medical services is in section M170.8.
Section 4217 Residence
An individual must be a resident of Vermont to meet the residence requirement. The state of residence of an individual is determined according to the following:
Exception: Individuals involved in work of a transient nature or who have moved to Vermont to seek employment, may claim Vermont as their state of residence and be granted Medicaid in Vermont if they meet all other eligibility criteria. These individuals may be granted Vermont Medicaid even though they continue to receive a state supplemental payment from another state.
Temporary absences from Vermont for any of the following purposes do not interrupt or end Vermont residence:
When an agent of another state arranges for an individual's placement in a Vermont institution, the individual remains a resident of the state which made the placement, irrespective of the individual's intent.
Individuals are incapable of stating intent regarding residence if:
An individual must be a resident of Vermont at the time a medical service is rendered in order for Vermont Medicaid to pay for that service. The service does not, however, have to be rendered in Vermont.
Medicaid eligibility may not be denied to an applicant for any of the following reasons:
Section 4218 Living Arrangements
Individuals or couples living in their own home, in the household of another or living in certain institutions listed in M214.1-M214.2 meet the living arrangement requirement. An institution is an establishment that furnishes food, shelter and some treatment or services to four or more persons unrelated to the proprietor. The financial responsibility of relatives varies depending upon the type of living arrangement. Homeless individuals are considered to be living in their own home. See the Section Income and Resources: Introduction for definitions and treatment of relative responsibility.
A public institution is defined as any institution meeting all of the following conditions:
Only the following individuals meet the living arrangement requirements if they are living in a public institution:
Residence in an institution is determined by the dates of admission and discharge. A person at home in the community on a visiting pass is still a resident of the institution.
A private facility is defined as any home privately owned and operated; or any home or institution supported by private or charitable funds, over which neither the State nor any of its subdivisions has supervision or control even though individuals may be boarded or cared for therein at public expense. Vermont private institutions include boarding homes, fraternal homes, religious homes, community care homes, residential care facilities, medical facilities (i.e. general hospitals) and nursing facilities licensed by the State of Vermont.
An individual living in a private facility meets the living arrangement requirement if:
Individuals under the age of 21 or age 65 or older meet the living arrangement requirement if they live at the Brattleboro Retreat. In addition, individuals who are patients at the facility upon reaching their 21st birthday, have eligibility continued to the date of discharge (or end of ten day notice period, if later) or their 22nd birthday, whichever comes first, as long as continue to meet all other eligibility requirements.
Individuals living in a correctional facility, including a juvenile facility are not eligible for Medicaid. Residence in a correctional facility begins on the date of admission and ends when the individual moves out of the correctional facility. An individual transferred from a correctional facility to a medical facility is considered to be still living in the correctional facility.
Individuals who are Medicaid recipients immediately prior to confinement have their Medicaid enrollment terminated as soon as administratively possible, including the provision for advance notice of termination.
Section 4220 Financial Eligibility
Individuals requesting SSI-related Medicaid must meet the nonfinancial requirements of citizenship, residence, living arrangement, and relationship to SSI/AABD specified in sections M210-M219. The department then determines whether the person requesting Medicaid meets the financial requirements specified in sections M220-M299 and M400-M499. This includes financial eligibility determinations for Medicaid waiver programs operated by the Vermont Department of Health's Division of Mental Health (VDH) and the Department of Disabilities, Aging and Independent Living (DAIL), except that VDH determines patient share costs for children eligible under its waiver program and DAIL determines patient share costs for individuals enrolled in the home-and-community-based waiver for the developmentally disabled.
To determine an individual's eligibility for SSI-related Medicaid, the department compares countable income and resources of the individual's financial responsibility group to maximums based on the size of the individual's Medicaid group. The first step in determining financial eligibility is to identify which individuals are members of the financial responsibility group and which are members of the Medicaid group. Aged, blind, or disabled persons requesting SSI-related Medicaid are always members of both groups.
The rules for forming the SSI-related Medicaid group and financial responsibility group are specified in M221 and M222.
These definitions apply throughout the SSI-related Medicaid financial eligibility sections.
. under age 18; or
. a disabled student age 18 up to age 21.
A child is not considered living with the parent when:
. the parent has relinquished control to a school or vocational facility;
. the child is confined to a public institution or in the custody of a public agency;
. the child is a member of the armed forces;
. the child lives in a private nonmedical facility; or
. the child has been admitted to long-term care.
A child away at school who returns to a parent's home for vacations, holidays, or some weekends is considered living with the parent.
A child who qualifies for the Katie Beckett coverage group is not considered a dependent child for the purposes of determining financial eligibility for SSI-related Medicaid.
Individuals are no longer considered dependent children on the first day of the month following the calendar month in which they no longer meet the definition of dependent child.
. the applicant's natural child or adopted child, or
. the natural or adopted child of the applicant's spouse, or
. the natural or adopted child of the applicant's parent or of the applicant parent's spouse, who lives in the same household with the applicant, and is a dependent child.
. a natural or adoptive parent, or
. the spouse of a natural or adoptive parent, who is not eligible for SSI-related Medicaid and who lives with a child applying for SSI-related Medicaid. The income of parents who do not meet the nonfinancial eligibility criteria only affects the eligibility of an applicant who is a dependent child.
Section 4221 Formation of Financial Responsibility Group
The SSI-related financial responsibility group consists of the individuals whose income and resources are considered available to the Medicaid group in the eligibility determination. With some exceptions, spouses are considered financially responsible for each other, and parents are considered financially responsible for their dependent children. The following subsections set forth the rules for determining membership in the financial responsibility group and the portion of the group's income considered available to the Medicaid group.
The financial responsibility group for an adult requesting SSI-related Medicaid, including long-term care, is the same as the adult's Medicaid group.
The financial responsibility group for a dependent child requesting SSI-related Medicaid includes the child and any parents living with the child, until the child reaches the age of 18.
The financial responsibility group for a noncitizen admitted to the United States on or after August 22, 1996 based on a sponsorship under section 204 of the Immigration and Nationalization Act (INA) includes the income and resources of the sponsor and the sponsor's spouse, if living with the sponsor, when all four of the following conditions are met:
The above financial responsibility of a sponsor continues until the noncitizen is naturalized or credited with 40 qualifying quarters of coverage by the Social Security Administration (see section M222.31 on Qualifying Quarters of Coverage).
Section 4222 Formation of the Medicaid Group
The SSI-related Medicaid group consists of individuals whose needs are included in the financial eligibility determination for SSI-related Medicaid. The following subsections set forth the rules for determining membership in the Medicaid group. The department compares countable income and resources of the financial responsibility group to maximums based on the size of the Medicaid group.
The department treats a single adult requesting SSI-related Medicaid, including long-term care, as a Medicaid group of one.
When two spouses are living together, the department considers both the individual requesting Medicaid and the individual's spouse members of the individual's SSI-related Medicaid group, a Medicaid group of two, unless one of the exceptions specified in M222.21 applies. This is true whether or not the spouse is also requesting Medicaid.
A couple is also considered living together in any of the following circumstances:
Adult applicants with spouses are treated as a Medicaid group of one in the following circumstances.
This rule also applies if the couple lives in their home or a residential care home in the community, both were granted waiver services during the same month, and both have received waiver services for at least six months.
The department treats a blind or disabled child requesting SSI-related Medicaid as a Medicaid group of one.
When a parent and dependent child living together are both requesting SSI-related Medicaid, the department treats them as two Medicaid groups of one, if the parent is not living with a spouse. If the parent is living with a spouse, the department treats the parents as a Medicaid group of two and the child as a Medicaid group of one.
Section 4223 Deeming
SSI-related Medicaid financial eligibility is based on the financial eligibility rules for the Social Security Administration's Supplemental Security Income program (SSI). Like SSI, the department uses the term deeming to identify countable resources and income from other people belonging to applicants. When the deeming rules apply, it does not matter whether the resources or income of the other person are actually available to applicants.
Resources and income from two categories of individuals may be counted for SSI-related Medicaid applicants. These people are members of the financial responsibility group. The department considers:
. spousal resources and income to decide whether it must deem some of it to the Medicaid group; and
. parental resources and income for dependent children to decide whether it must deem some of it to the Medicaid group.
Section M234 specifies the resources counted by the department when determining SSI-related Medicaid financial eligibility.
Section M243 specifies the income counted by the department when determining SSI-related Medicaid financial eligibility.
During a temporary absence, the department considers the absent person a member of the household.
A temporary absence occurs when applicants or their ineligible spouses, parents, or ineligible children leave the household but intend to and do return in the same month or the next month.
The department considers applicants who are eligible children temporarily absent from their parents' household if they are away at school but come home on some weekends or lengthy holidays and are subject to the control of their parents.
If the applicant's ineligible spouse or parent is absent from the household due solely to a duty assignment as a member of the armed forces on active duty, the department considers that person to be living in the same household as the applicant, unless evidence indicates that the applicant's spouse or parent should no longer be considered to be living in the same household. When such evidence exists, the department stops deeming their resources and income beginning with the month after the spouse or parent no longer lived in the same household.
Section 4230 Resources
This section gives an overview of resource requirements. Resources are available cash or other property owned by individuals and available for their support and maintenance. Resources are treated in different ways depending on the rules of the coverage group involved (M200.2-M200.4) and the type and liquidity of the resource (M231). All resources of the members of the financial responsibility group must be counted except those specifically excluded (M232). Resources are counted only if group members have the right, authority, or power to liquidate a resource or their share of the resource.
Resources are counted based upon their availability and the ease with which an item can be converted into cash. Availability is often affected when more than one person has an ownership interest in the same resource.
The department considers equity value as well as availability when determining the amount of a resource that counts (M233). Equity value means the price an item can be reasonably expected to sell for on the local open market minus any encumbrances.
Resource limits vary depending on the type of category and services and size of the Medicaid group. Resource eligibility for each coverage group is determined by comparing the resources of the financial responsibility group to the resource limit based on the size of the Medicaid group. Resource maximums are specified at P-2420 in the Medicaid procedures manual.
Section 4231 Types of Resources
This section describes some of the kinds of resources whose availability the department considers in determining Medicaid eligibility. It cross-references sections in M232 which define additional resources whose availability is considered by the department in determining Medicaid eligibility. Section M232 also specifies when these resources are excluded from the department's Medicaid eligibility determination.
Section 4232 Nonliquid Resources
A nonliquid resource means property that is not cash, including real and personal property that cannot be converted to cash within 20 working days. Real property, life estates, burial funds, and life insurance, described below, are some of the more common kinds of nonliquid resources.
Certain noncash resources, though they may occasionally be liquid, are nearly always nonliquid. These include, but are not limited to, household goods and personal effects, vehicles, livestock, and machinery.
Real property means land and generally whatever is erected, growing on, or affixed to land.
Section 4233 Liquid Resources
Liquid resources mean cash or other personal property that can be converted to cash within 20 days. Liquid resources ordinarily include, but are not limited to, accounts in financial institutions; retirement funds; stocks, bonds, mutual funds, and money market funds; annuities; mortgages and promissory notes; and home equity conversion plans.
Accounts in depository financial institutions such as banks and credit unions include, but are not limited to, savings accounts, checking accounts, joint fiduciary accounts, and certificates of deposit. Depository institutions may also manage mutual fund and money market fund accounts for depositors.
Nondepository financial institutions such as brokerage firms, investment firms, and finance companies also offer certificates of deposits as well as accounts and services related to the purchase and sale of stocks, bonds, mutual funds, money market funds, and other investments.
Legal instruments authenticating an investment, such as stocks, bonds, mutual funds, and money market funds pay interest at specified intervals, sometimes pay dividends, and are convertible into cash either on demand or at maturity.
For Medicaid purposes, an annuity is a contract reflecting payment to an insurance company, bank, charitable organization, or other registered or licensed entity. It may also be a private contract between two parties. There are two phases to an annuity: an accumulation phase and a payout phase. Annuities vary in how they accumulate and payout money. Annuities may accumulate money by payment of a single lump sum or by payments on a schedule, which accumulate interest over time. Once an annuity has matured, money is paid to the beneficiary according to the terms of the annuity contract.
There are always two parties to an annuity: the writer of the annuity, usually an insurance carrier or charitable organization, and the purchaser who owns the annuity (sometimes referred to as the annuitant).
In addition to the formal parties to an annuity, annuities also name a beneficiary: the person who will be paid a regular stream of income from the annuity in equal payments. Anyone can be a beneficiary, including but not limited to, the owner of the annuity, a spouse, dependent, trust, estate, commercial entity, proprietorship, or charitable organization.
Beneficiaries may be revocable or irrevocable. A revocable beneficiary can be changed by the owner of the annuity at any time. An irrevocable beneficiary can be changed only by the written permission of that beneficiary.
In addition to the primary beneficiary, annuities can provide for a contingent beneficiary or residual beneficiary. A contingent or residual beneficiary will receive annuity payments upon the occurrence of a specified condition
There are many types of annuities. For Medicaid purposes, the department considers whether annuities of any type are available as a liquid resource. Since annuities are trust-like instruments, the department uses terminology similar to trusts when it describes the availability of cash from annuities.
Annuities that name revocable beneficiaries are available because the owner can change the beneficiary, surrender, cash in, assign, or transfer the annuity. The department presumes revocability when an annuity contract is silent regarding revocability.
Annuities are unavailable when the owner of an annuity is not the individual requesting Medicaid or the individual's spouse or the individual or spouse has abandoned all rights of ownership.
Annuity contracts provide for payments over a certain period. For the purposes of Medicaid eligibility, the payout period of an annuity must be within the life expectancy of the person on whose life the annuity is based or else it will be counted as a resource or considered a transfer of assets at less than fair market value. The department determines life expectancy as specified in M440.21.
A mortgage is the pledging of real estate or conveyance of an interest in land to a creditor as security for repayment of a debt. A promissory note is a written promise to pay a certain sum of money to a certain person, the bearer, upon demand or on a specified date.
Section 4234 Resources Managed by a Third Party
Resources managed by third parties include, but are not limited to, trusts, guardianship accounts, and retirement funds. Resources of a member of the financial responsibility group managed by a third party (e.g., trustee, guardian, conservator, or power of attorney) are considered available to the member as long as the member can direct the third party to dispose of the resource or the third party has the legal authority to dispose of the resource on the member's behalf without the member's direction.
Power of attorney means a written document signed by a person giving another person authority to make decisions on behalf of the person signing it, according to the terms of the document. Vermont law requires a power of attorney to be executed according to certain formalities, such as being signed, witnessed, and acknowledged. Funds managed by agents under a power of attorney are not property of the agent and cannot be counted as resources of the agent.
Guardian means a person or institution appointed by a court in any state to act as a legal representative for another individual, such as a minor or a person with disabilities. Guardianship accounts are presumed to be available for the support and maintenance of the protected individual. Individuals may rebut the presumption of the availability of guardianship funds by presenting evidence to the contrary, including, but not limited to, restrictive language in the court order establishing the account or in a subsequent court order regarding withdrawal of funds.
Representative payee means an individual, agency, or institution selected by a court or the Social Security Administration to receive and manage benefits on behalf of another person. A representative payee has responsibilities to use these payments only for the use and benefit of the beneficiary, notify the payor of any event that will affect the amount of benefits the beneficiary receives or circumstances that would affect the performance of the payee responsibilities, and account periodically for the benefits received. Funds managed by a representative payee are not property of the representative payee and cannot be counted as resources of the representative payee.
Section 4240 Excluded Resources
This section specifies the resources whose value the department excludes in determining SSI-related Medicaid eligibility.
Section 4241 Real Property
The department excludes the following real property as resources when determining Medicaid eligibility.
The department excludes a person's home as a resource, regardless of its value. For long-term care applicants, however, the department considers the home a resource when the applicant has equity greater than $ 500,000 in it (M233.26). The department also may consider it as a resource when determining whether the applicant has transferred it and should be subject to a penalty period (M440).
Home means the property in which an individual resides and has an ownership interest and which serves as the individual's principal place of residence. This property includes the shelter in which an individual resides, the land on which the shelter is located, related outbuildings, and surrounding property not separated from the home by intervening property owned by others. Public rights of way, such as roads that run through the surrounding property and separate it from the home, will not affect the exemption of the property. The home includes contiguous land and any other buildings located on the land.
The home exclusion applies even if the owner is making an effort to sell the home.
The home exclusion also applies if the owner is absent from the home due to institutionalization, provided that the owner has not placed the home in a revocable trust and:
. intends to return to the home even if the likelihood of return is apparently nil;
. has a spouse or dependent residing in the home; or
. has a medical condition that prevented the owner from living there before institutionalization.
Dependent means: child, stepchild, or grandchild; parent, stepparent, or grandparent; aunt, uncle, niece, or nephew; brother or sister, stepbrother or stepsister, half brother or half sister; cousin; or in-law.
Unless one of the exceptions listed above applies, the home becomes a countable resource when the owner moves out of the home without the intent to return, because it is no longer the owner's principal place of residence.
Temporary absences, such as for hospitalization or convalescence with a relative, do not affect the determination of an individual's principal place of residence.
The department excludes proceeds from the sale of a home to the extent that the owner intends to use them and, in fact, uses or obligates them to purchase or construct another home within three months of the date the proceeds are received. Use of proceeds from the sale of a home to pay costs of another home will be excluded only if the other costs are paid within three months of the sale of the home. Such costs are limited to the down payment, settlement costs, loan processing fees and points, moving expenses, necessary repairs to or replacements of the new home's structure or fixtures (e.g., roof, furnace, plumbing, built-in appliances) identified and documented prior to occupancy, and mortgage payments for the new home.
The value of a promissory note or similar installment sales contract constitutes a "proceed." Other proceeds consist of the down payment and the portion of any installment amount constituting payment against the principal. These are also excluded if used within 3 months to make payment on the replacement home.
When all of the proceeds are not timely reinvested as specified above, the portion of the proceeds retained by the individual are combined with the value of the note or installment sales contract and counted as a resource beginning with the month following the month the note is executed. If the entire proceeds are fully reinvested in a replacement home at a later date, the value of the note and reinvested proceeds are excluded beginning with the month after the month in which they are reinvested, but any proceeds not reinvested as specified above remain a countable resource until fully reinvested.
The department excludes real property from countable resources as long as owners verify that they are making reasonable efforts to sell it. Reasonable efforts to sell property means taking all necessary steps to sell it for fair market value in the geographic area covered by the media serving the area in which property is located, unless owners are prevented by circumstances beyond their control from taking these steps.
The steps considered necessary to sell the property depend on the method of sale. Owners may choose to list the real property with a real estate agent or undertake to sell it themselves. If owners choose to list it with a real estate agency, they must take the necessary step of listing it and cooperating with the real estate agent's efforts to sell it. If owners choose to sell it without an agent, they must take all of the following necessary steps:
. advertise it in at least one of the appropriate local media continuously;
. place a "For Sale" sign on the property continuously, unless prohibited by zoning regulations;
. conduct open houses or otherwise show the property to prospective buyers; and
. attempt any other appropriate methods of sale.
If any prospective buyer makes a reasonable offer for the property, owners must accept it or demonstrate why it was not a reasonable offer. Any offer at least two-thirds of the most recent estimate of the property's fair market value is considered a reasonable offer.
Fair market value means a certified appraisal or an amount equal to the price of the property on the open market in the locality at the time of the transfer or contract for sale, if earlier.
Home equity conversion plans are financial instruments used to secure loans with real property as collateral. Home equity conversion plans include reverse mortgages, reverse annuity mortgages, sale-leaseback arrangements, time-sale agreements, and deferred payment loans.
The department excludes as a resource, in the month of receipt, funds from any home equity conversion arrangements on real estate.
The department will exclude jointly owned real property from countable resources as long as the joint owner refuses to sell, if the joint ownership was created:
The department considers that the addition of new joint owners creates a new joint interest and will be evaluated as a countable resource under M233.23.
Jointly owned real property will be excluded from resources if sale of the property by an individual would cause the other owner undue hardship due to loss of housing. Undue hardship would result when:
Life estate means a legal arrangement entitling the owners to possess, rent, and otherwise profit from real or personal property during their lifetime. The owner of a life estate sometimes may have the right to sell the life estate but does not normally have future rights to the property. Ownership of a life estate may be conditioned upon other circumstances, such as a new spouse. The document granting the life estate includes the conditions for the life estate and the right of the owner to sell or bequeath it, if these property rights were retained.
The department excludes life estates in real property when the owner does not retain the power to sell or mortgage the real property.
When owners retain the power to sell or mortgage the entire real property, including any remainder interest, the department excludes the value of the life estate in the real property only if the life estate is an interest in the individual's home (M232.11). For this purpose, the value of the life estate includes the value of the remainder interest.
When owners retain the power to sell the entire real property, including any remainder interest, the department excludes the value of the life estate in the real property only if the life estate is excludable on another basis, such as because it is real property producing significant income (M232.17).
The department excludes life estates in real property when the owner does not retain the power to sell the real property.
Real property producing significant income is exempt from consideration as a resource. Real property is considered to produce "significant income" if it generates at least 6 percent of its fair market value in net annual income after allowable expenses related to producing the income are deducted.
Until July 1, 2003, determinations and redeterminations of eligibility for individuals who have received SSI-related or ANFC-related Medicaid at any time between July 1, 2001 and June 30, 2002, and have property producing significant income, shall have property producing significant income evaluated based on the rules in effect on June 30, 2002.
Real property used to produce goods for only home consumption (e.g., a garden plot used to raise vegetables to be eaten at home or a wood lot used to provide fuel to heat the home) is exempt from consideration as a resource. When real property is used to produce goods for both home consumption and income production, the department excludes only the part used to produce goods for home consumption. The part of the property used for income production is evaluated for exclusion under rule M232.17.
Section 4242 Insurance
Life insurance is a contract that provides for its purchaser to pay premiums to the insurer, who agrees to pay a specific sum to a designated beneficiary upon the death of the insured. Life insurance is usually sold by an insurance company but may also be sold by other financial institutions, such as brokerage firms.
The face value of a life insurance policy is the amount it pays the beneficiary upon the death of the insured. Term life insurance is life insurance that does not accumulate any cash value through time as premiums are paid. Whole life insurance (sometimes called ordinary life, limited payment, or endowment insurance) accumulates value as premiums are paid. It may also pay periodic dividends on this value when all premiums have been paid. These dividends may be paid to the owner, or they may be added to the cash surrender value of the policy.
The cash surrender value (CSV) of a whole life policy represents the amount the owner would receive upon terminating the policy before the insured dies. It is a form of equity that accumulates over time as life insurance premiums are paid. The policy owner may borrow against the CSV according to the terms of the policy. A loan against a policy reduces its CSV.
A life insurance policy can be either a group or individual policy. Group policies are usually issued through a company or organization insuring the participating employees or members and perhaps their families. The group policy may be paid partially by the employer. Group insurance policies generally have no CSV.
The value of a life insurance policy is excluded as a resource according to the following rules:
The term "Qualified State Long-Term Care Insurance Partnership" means a State plan amendment that provides for the disregard of any assets or resources in an amount equal to the insurance benefits payments that are made under a long-term care insurance policy (including a certificate issued under a group insurance contract), but only if--
. the policy covers an insured who, at the time coverage under the policy first becomes effective, is a resident of such State or of a State that maintains a Qualified Long-Term Care Insurance Partnership;
. the policy is a qualified long-term care insurance contract within the meaning of section 7702B(b) of the Internal Revenue Code of 1986;
. the policy provides some level of inflation protection as set forth in regulations promulgated by the Vermont Department of Banking, Insurance, Securities and Health Care Administration;
. the policy satisfies any requirements of State or other applicable law that apply to a long-term care insurance policy as certified by the Vermont Department of Banking, Insurance, Securities and Health Care Administration; and
. the issuer of the policy reports--
- to the Secretary of the federal agency of Health and Human Services (HHS), such information or data as the Secretary may require; and
- to the State, the information or data reported to the Secretary of HHS (if any), the information or data required under the minimum reporting requirements developed under section 2(c)(1) of the State Long-Term Care Partnership Act of 2005, and such additional information or data as the State may require.
Subject to approval by the federal Center for Medicare and Medicaid Services, the department will exclude assets or resources in an amount equal to the insurance benefit payments that are made to or on behalf of an individual who is a beneficiary under a qualified State long-term care insurance partnership policy. This section is further contingent on the passage of changes to 33 V.S.A. 1908a necessary to bring the Vermont statute on Long-Term Care Partnership Insurance into conformance with the requirements of section 6021 of the federal Deficit Reduction Act of 2005.
Section 4243 Burial Funds
A burial fund is any separately identifiable fund clearly designated as for burial expenses through the title to the fund or by a sworn statement provided to the department. Burial funds include contracts, trusts, or other agreements, accounts, or instruments with a cash value. Some burial funds include accumulated interest, and the value of some burial funds may change through time (e.g., when the fund consists of bonds). Burial expenses include burial spaces, items related to burial spaces, and services related to burial spaces.
The cash value of life insurance policies may also be treated as burial funds for the purposes of determining Medicaid eligibility if owned by an individual whose income and resources are considered in determining Medicaid eligibility and designated as specified above.
For the purposes of determining Medicaid eligibility, burial spaces, if not fully paid, are considered burial funds and include burial plots, gravesites, crypts, mausoleums, caskets, urns, and other repositories customarily and traditionally used for the deceased bodily remains. Items related to burial spaces include, but are not limited to, vaults, headstones, markers, plaques, and burial containers for caskets. Services related to burial include, but are not limited to, embalming, opening and closing of the gravesite, and care and maintenance of the gravesite, sometimes called an endowment or perpetual care.
For any individual whose income and resources are considered in determining SSI-related Medicaid eligibility, the department excludes up to $ 10,000 of burial funds, as long as the member shows that the funds are designated for burial expenses through the title to the fund or by a sworn statement provided to the department. They must be separately identifiable and not commingled with other funds.
A burial fund may be excluded as of the first day of the month in which the individual whose income and resources are considered in determining Medicaid eligibility established it. Interest and appreciation accrued on burial funds is excluded if the funds have been left to accumulate.
The value of certain burial spaces may also be excluded under the allowable limit of $ 10,000 for each individual whose income and resources are considered in determining Medicaid eligibility. Such spaces must be held for the burial of a member of the applicant's immediate family. For this purpose, the immediate family includes the member's spouse, children, brothers, sisters, and parents.
Irrevocable burial trusts established prior to July 1, 2002 and funded in excess of $ 10,000 shall be excluded up to the value of the trust as of June 30, 2002.
Section 4244 Other Income-Producing Resources
The department does not count as a resource annuities that meet the criteria in (i) (A) through (E) below. Annuities in their accumulation phase may be liquidated or sold and are a countable resource under M233.21. Annuities that do not meet the criteria below or are not countable under M233.21 are evaluated for whether they are subject to a transfer penalty, under M440.34.
The department does not count as a resource promissory notes and similar resources that produce income if:
All other promissory notes and similar resources that produce income are evaluated for whether they are a countable resource as specified in M233.25 or subject to a transfer penalty as specified in M440.36. Notes and similar income-producing resources that do not meet the criteria at M232.4 and are determined to have fair market value shall be considered either as an available resource, or subject to a transfer penalty, in the discretion of the department.
Section 4245 Resources Managed by a Third Party
A trust is a legal document setting forth the terms of any arrangement in which a person (the grantor) transfers liquid or nonliquid property (the trust principal) to another person or entity (the trustee) with the intention that it be held, managed, or administered by the trustee for the benefit of one or more individuals (the grantees). In some cases, the grantor is named as a grantee. The grantor may also be called the settlor or the trustor. The grantee may also be called the beneficiary.
Trust income refers to monies earned by the trust property. It may take various forms, such as interest, dividends, or rent payments. Trust income may also be called trust earnings. The trust principal plus the trust income make up the trust property.
A person shall be considered the grantor of a trust if both of these two conditions are met:
. the person;
. another person, court, or administrative body, with legal authority to act in place of or on behalf of the person; or
. another person, court, or administrative body, acting at the direction of or upon the request of the person.
The trustee may be an individual or an entity, such as a bank or insurance company. In most cases, trustees do not have the legal right to use the trust property for their own benefit. Some, but not all, trusts grant discretion to the trustee to use judgment as to when or how to handle trust principal or trust income. A trust may provide reasonable compensation to the trustee for managing the trust as well as reimbursement for reasonable costs associated with managing the trust property.
A trust may name a person or entity, called the residual beneficiary, as the recipient of the trust property upon the death of the grantee.
In general, the department excludes trusts as a resource to individuals who cannot revoke the trust or receive trust property, whether or not the trustee exercises his or her full discretion. Trust property is also excluded as a resource when the grantor is a member of the financial responsibility group and established a testamentary trust, also known as establishing a trust by will.
The following trust property is excluded as a resource when either the grantor or the grantee is a member of the financial responsibility group:
In the case of a trust with more than one grantor, these exclusions apply only to that portion of the trust attributable to the income or resources of a member of the financial responsibility group. In the case of a trust with more than one grantee, the exclusions apply only to that portion of the trust available for the benefit of a member of the financial responsibility group.
The department may exclude trust property that has not been distributed if counting it as a resource would cause undue hardship to a grantor or grantee who is a member of the financial responsibility group.
Undue hardship includes situations in which a member of the financial responsibility group or someone in the member's immediate family would be forced to go without life-sustaining services because the trust property could not be made available to pay for the services. For this purpose, the immediate family includes the member's spouse, children, brothers, sisters, and parents.
The following situations also would cause undue hardship:
Undue hardship does not exist when application of the trust regulations does not cause individuals risk of serious deprivation.
Individuals claiming undue hardship must submit a written request and any supporting documentation. Claims of undue hardship are forwarded to the commissioner's designee for evaluation. Required documentation from the individual can include but is not limited to the following:
. a statement from the attorney, if one was involved;
. verification of medical insurance coverage and statements from medical providers relative to usage not covered by the insurance; or
. a statement from the trustee.
When application of trust provisions are waived because they would cause the individual undue hardship, only amounts actually distributed from the trust and held for more than a month are counted as a resource. Request for consideration of undue hardship does not limit an individual's right to appeal denial of eligibility for any reason, including the determination of undue hardship.
Section 4246 Early Withdrawal and Surrender Penalties
The department excludes early withdrawal penalties and surrender fees assessed by the financial institution to the extent that they reduce the value of the liquidated proceeds. Examples of these resources are retirement funds, annuities, bonds, and certificates of deposit.
Income tax withholding and tax penalties for early withdrawal are not excluded.
Section 4247 Jointly Held Accounts
The department will exclude a jointly held account only if the owner rebuts the presumption of availability by:
. correcting the account title to show that the member of the financial responsibility group is no longer a co-owner, if the member owns none of the funds; or
. if the member owns only a portion of the funds, separating the funds owned by other account holders from the member's funds and correcting the account title on the member's funds to show they are solely owned by the member.
A joint fiduciary account is a deposit in a financial institution in the name of an owner naming one or more fiduciaries. The owner makes a clear statement about how the money can be used, and the fiduciary is required to follow those instructions and keep track of how the money is spent.
When an individual owns such an account, it is counted as a resource. When an individual is designated a fiduciary, the joint fiduciary account is an excluded resource for the fiduciary.
Section 4248 Other Excluded Resources
The department also excludes the following resources.
The department excludes home furnishings, apparel, personal effects, and household goods. This includes tools, equipment, uniforms and other nonliquid property required by an individual's employer or essential to self-support.
The department excludes all automobiles. It also excludes other vehicles, such as trucks, boats, and snowmobiles, only if they are used to provide necessary transportation (i.e., an automobile is unavailable or cannot be used to transport the aged, blind or disabled individual).
Contracts for medical care, assistive technology devices, and home modifications means any written agreement, contract, or accord (including modifications) for reasonable and necessary medical care, assistive technology devices, or home modifications not covered by Medicare, private insurance, or Medicaid and determined by the Department of Disabilities, Aging, and Independent Living (DAIL) to be needed to keep an individual at home and out of a skilled nursing facility.
Medical care means care not covered by the Choices for Care waiver, including but not limited to, general supervision when required by the cognitive impairment of the individual and/or unstable medical condition that requires monitoring of the individual.
Assistive technology devices means any item, piece of equipment or product system whether acquired commercially off the shelf, modified, or customized, to increase, maintain, or improve the individual's functional capabilities.
Home modifications means physical adaptations to the individual's home that ensure the health and welfare of the individual, or that improve the individual's ability to perform activities of daily living or instrumental activities of daily living.
Resources set aside for a contract or contracts for medical care, assistive technology devices, or home modifications (contract) shall be considered to be an available resource unless all of the following criteria are met:
The department excludes income as a resource in the month of receipt, such as automatic deposit of a social security check into a checking account. The department excludes cash necessary to operate a business, using a month's average expenditures as determined by tax returns, or business receipts and expenses for the past 12 months. No more than three times the average monthly cash expenditures can be excluded.
Retirement funds include any resources set aside by a member of the financial responsibility group to be used for self-support upon the withdrawal from active life, service, or business. Retirement funds include but are not limited to IRAs, Keogh plans, 401K plans, pensions, mutual funds, stocks, bonds, securities, money market accounts, whole life insurance, and annuities.
The department excludes retirement funds owned by a member of the financial responsibility group requesting Medicaid when:
If the individual is eligible for lump sum or periodic benefits, the individual must choose the periodic benefits. If the individual receives a denial on a claim for periodic retirement benefits but can withdraw the funds in a lump sum, the department counts the lump sum value in the resources determination for the month following that in which the individual receives the denial notice.
When a member of the financial responsibility group who is seeking long-term care Medicaid services holds pension funds held in an individual retirement account (IRA) or in work-related pension plans (including Keogh plans) as defined by the Internal Revenue Code, no change in title of ownership to these funds is required in order for them to be treated as an excluded resource for the benefit of the community spouse.
The department excludes tax refunds on real property, income, and food.
The department excludes any portion of any grant, scholarship, or fellowship used to pay fees, tuition, or other expenses necessary to securing an education. Portions used to defray costs of food, clothing, or shelter must be counted.
The department excludes savings from excluded income and resources. This includes but is not limited to the following:
The following are excluded by federal law from both income and resources:
Section 4249 Exclusions for Limited Periods
The department excludes the following resources for specific periods, beginning with the date on which a member of the financial responsibility group received the resource.
The department excludes retroactive payments of federal SSI, the AABD supplement to SSI, or social security benefits for nine months beginning with the month after the month of receipt. These payments are also excluded as resources during the month of receipt.
The department excludes cash and interest earned on that cash received from any source, including casualty insurance, for the purpose of repairing or replacing an excluded resource that is lost, stolen, or damaged, if used to replace or repair that resource. The exclusion is allowed for nine months from the month of receipt. An extension of an additional nine months can be granted for good cause.
The department excludes state and federal earned income tax credit refunds and advance payments from consideration as resources.
The department excludes cash received for medical or social services for the calendar month following the month of receipt. The month following the month of receipt, the department counts it as a resource if it has been retained.
The department excludes state-administered victims' compensation payments for nine months after the month of receipt.
The department excludes state and local government relocation payments for nine months after the month of receipt.
The department excludes payments, gifts, and inheritances occasioned by the death of another person provided that they are spent on costs resulting from the last illness and burial of the deceased by the end of the calendar month following the month of receipt.
Legal instruments authenticating an investment, such as stocks, bonds, mutual funds, and money market funds pay interest at specified intervals, sometimes pay dividends, and are convertible into cash either on demand or at maturity.
Savings bonds are excluded during their minimum retention period if individuals have requested a hardship waiver based on financial need due to medical expenses and received a denial from the United States Department of the Treasury, Bureau of Public Debt, Accrual Services Division in Parkersburg, P.O. Box 1328, Parkersburg, West Virginia 26106-1328.
Upon verification of a denial of a hardship waiver, as described above, the department considers United States savings bonds owned by one or more individuals an available resource following the expiration of the minimum retention period. Once the minimum retention period expires, the denial of a hardship waiver is not a basis for exclusion of new bond purchases or other excluded assets purchased with the proceeds.
Savings bonds purchased before June 15, 2004 that have their minimum retention period expire after that date, continue to be an excluded resource if they are not redeemed, exchanged, surrendered, reissued, used to purchase or fund other excluded assets, or otherwise become available.
Single individuals who qualify for SSI-related Medicaid are permitted to retain the standard $ 2,000 resource allowance. An additional resource disregard of $ 3,000 is allowed for aged and disabled individuals without a spouse who reside in and have an ownership interest in their principal place of residence and choose home-based long-term care services (M200.1(k), M232.11), provided all other eligibility criteria are met.
The resource disregard remains available until the recipient is admitted to a nursing facility or receives enhanced residential care services. Thereafter, those who meet the requirements of the home upkeep deduction (M432.2) are eligible to continue the resource disregard for up to 6 months.
Section 4250 Value of Resources
Unless an exception in one of the subsections below applies, the department values ownership interests of financial responsibility group members according to these general rules.
Equity value is the fair market value minus the total amount owed on it in mortgages, liens, or other encumbrances. The department will use the original estimate of the equity value of a resource unless the owner submits evidence from a disinterested, knowledgeable source that, in the department's judgment, establishes a reasonable lower value.
Section 4251 Jointly Owned Resources
This section defines each type of joint ownership and the amount of the resource counted.
When two or more parties share rights to sell, transfer, or dispose of part or all of personal or real property, the department counts the ownership share held by members of the financial responsibility group as prescribed by state law. Shared ownership or control occurs in different forms, including tenancy in common, joint tenancy, and tenancy by the entirety. The department determines the type of shared ownership involved and uses it to compute the countable value of the resource. If an individual submits evidence supporting another type of shared ownership, the department makes a decision about which type applies. When the department decides not to use the type suggested by the individual, it provides the individual with a written notice stating the basis for its decision.
Under Vermont law, a co-owner may demand partition, the dividing of lands held by more than one person. For this reason, the department counts the individual's proportionate share of the lands as an available resource, unless excluded as a home (M232.11) or property up for sale (M232.13).
Tenancy in common applies to all jointly owned resources when title to the resource does not specify joint tenancy or tenants by the entirety.
Tenancy in common means that each party has a portion of interest that may not be equal. In tenancy in common, two or more persons each have an interest, which may not be equal, in the whole property for the duration of the tenancy. Co-owners may sell, transfer, or otherwise dispose of their respective shares of the property without permission of other owners but cannot take these actions with respect to the entire property. When a tenant in common dies, a surviving tenant has no automatic survivorship rights to the deceased's ownership interest in the property. Upon a tenant's death, the deceased's interest passes to his or her estate or heirs.
When one or more members of the financial responsibility group (M221) own a resource as tenants in common with one or more persons who are not members of the financial responsibility group, the department counts the resource depending on its classification as either a nonliquid resource (M231.1) or a liquid resource (M231.2).
The department divides the total value of the property among the total number of owners in direct proportion to the ownership interest held by each.
Unless otherwise excluded (M232.7), the department counts the entire equity value of funds held in an account in a financial institution. The department considers that the entire equity value is available to the members of the financial responsibility group who own the account.
Joint tenancy means each of two or more persons has an equal undivided interest in the whole resource.
The department follows state law in requiring the presence of four unities in order to recognize that joint tenants hold a resource. The four unities are: interest, possession, title, and time. A joint tenancy requires an undivided share and interest (interest) by all owners to possess the whole resource (possession). The words "joint tenants" must appear on the account or deed (title). Lastly, the joint tenants must have acquired their interest in the property at the same time (time).
When a member of the financial responsibility group owns a resource as a joint tenant, the department counts the entire equity value of the resource as available to the member. When the instrument creates an unequal interest of the joint tenants, the department counts only the portion available to the member of the financial responsibility group.
Upon the death of one of only two joint tenants, the survivor becomes sole owner. Upon the death of one of three or more joint tenants, the survivors become joint tenants of the entire interest.
Tenancy by the entirety means that each person owns all of the resource. It applies only to real property of spouses and must be so designated in the document establishing ownership. It means the property can be disposed of only with the consent of both parties. Upon the death of one tenant by the entirety, the survivor takes the whole. Upon legal dissolution, the former spouses become tenants in common (M233.21), and one can sell his or her share without the consent of the other.
When a member of the financial responsibility group owns a resource as a tenant by the entirety, the department counts the entire equity value of the resource as available to the member.
Section 4252 Value of Certain Resources
The following sections describe exceptions to the general rules in M233. They describe how the department values certain resources of financial responsibility group members.
Unless otherwise excluded under M232.4 or treated as a transfer under M440.34, the department counts the fair market value of annuities, as defined in section M231.24 as well as those that may be cashed or sold.
The fair market value is equal to the amount of money used to establish the annuity and any additional payments used to fund the annuity, plus any earnings and minus any early withdrawals and surrender fees, unless the individual can furnish evidence from a reliable source showing that the annuity is worth a lesser amount to the beneficiary. Reliable sources include banks, other financial institutions, insurance companies, and brokers, as well as any other the department considers, in its discretion, to be reliable.
Unless the life estate is excluded, the department establishes the value of life estates by multiplying the fair market value of the property at the time of the transfer by the number in the life expectancy table that corresponds with the individual's age at the time of the transfer creating the life estate. The life estate table is found in the Medicaid Procedures Manual. Individuals may submit evidence supporting another method of establishing the fair market value of such a life estate. The department shall make a decision about which method to use. If the department decides not to use the alternate method advocated by an individual, the department shall provide that individual with a written notice stating the basis for its decision.
Regardless of any co-owner's refusal to sell, the department presumes that individuals who own real property jointly with others own the entire equity value of the real property if the joint ownership was created after July 1, 2002 and less than 36 months prior to the date of application. Individuals may rebut this presumption by showing through reliable sources that others have purchased shares of the property at fair market value. Reliable sources include cancelled checks or property transfer tax returns. When individuals establish that one or more co-owners purchased shares of the property, the department counts the proportional interest owned by the individual requesting long-term care.
Savings bonds are counted as a resource beginning on the date of purchase unless:
To establish the value of the bonds, the department uses the
Savings Bond Calculator or the Comprehensive Savings Bond Value Table on the
U.S. Bureau of Public Debt's Internet web site at:
Promissory notes are counted as a resource unless:
Unless one of the above criteria for exclusion is met, or is subject to a transfer penalty under M440.36, the department counts the fair market value of promissory notes and similar income-producing resources (contracts). Regardless of negotiability, fair market value equals the amount of money used to establish the contract and any additional payments used to fund it, plus any earnings and minus any payments already received. If the individual furnishes evidence of a good faith effort to sell by obtaining three independent appraisals by reliable sources which reflect that the value of the note is less than the fair market value, the department will consider the note available only in the amount of this discounted value. Reliable sources include banks, other financial institutions, insurance companies, and brokers, as well as any other the department considers, in its discretion, to be reliable.
For individuals requesting long-term care, contracts valued at a discount either shall be treated as an available resource at the discounted amount or subject to a transfer penalty to the extent of the amount discounted from the fair market value, in the discretion of the department. Where the contract is determined to have no value on the open market, a transfer penalty for the full value used to establish the contract and any additional payments used to fund it, plus any earnings and minus any payments already received shall be applied.
Home equity means the value of a home based on the town assessment minus the total amount owed on it in mortgages, liens, or other encumbrances. For example, when a Medicaid applicant has a joint tenancy with someone other than their spouse, the equity should be considered reduced by the amount of the other individual's equity interest in the property when the joint tenant resides in the home.
Individuals with equity interest in their home (M232.11) in excess of $ 500,000 are ineligible for long-term care services due to excess resources unless one of the following individuals lawfully reside in the individual's home.
. . Individual's spouse;
. Individual's child who is under age 21; or
. Individual's child who is blind or permanently and totally disabled, regardless of age.
Individuals with excess equity in their home who are found ineligible for long-term care services may receive other Medicaid services besides those for long-term care, if they meet the eligibility criteria for a coverage group that covers services other than long-term care.
Beginning with the year 2011, the $ 500,000 amount shall be increased from calendar year to year based on the percentage increase in the consumer price index for all urban consumers (all items; United States city average), rounded to the nearest $ 1,000.
Individuals who are ineligible for long-term care services due to excess equity in their homes may request an undue hardship waiver based on the criteria specified at M440.44.
Individuals are permitted to use a reverse mortgage or home equity loan to reduce the individual's equity interest in the home. In such circumstances, the department values the funds as follows:
The department does not consider the existence of a line of credit to diminish the equity value except in amounts from the line of credit actually paid to the borrower.
During the month of receipt, lump sum payments are an excluded resource (M232.14(b)) and proceeds paid in a stream of income are excludable income (M242.22(hh)). Lump sum payments from loans that are retained for more than a month, continue to be an excluded resource. Lump sum payments and streams of income are subject to transfer penalties if given away in the month of receipt or thereafter.
Section 4260 Countable Resources
The department determines countable resources by combining the resources of the members of the financial responsibility group (M222), and comparing them to the Medicaid group's resource standard. The department determines countable resources for different types of SSI-related Medicaid groups: adults without spouses, adults with spouses, children, and individuals requesting long-term care. If the resources of the Medicaid group fall below or are equal to the applicable resource standard, the resource test is passed. If an excess resource amount remains after all exclusions have been applied (M232), the individual has not passed the resource test. Individuals may become eligible for Medicaid by spending down or giving away excess resources as provided in M411 subject to transfer of resource rules (M440) for those seeking long-term care coverage.
Section 4261 Individuals Other than Children
The department follows the general rule in M234 to determine whether total resources, after exclusions, of individuals other than children fall below the resource maximum for one.
Section 4262 Individuals with Spouses and Not in Long-Term Car
The department follows the general rule in M234 to determine whether the total resources, after exclusions, of individuals living with their spouses and requesting SSI-related Medicaid, other than long-term care, fall below the resource maximum for two.
Section 4263 Blind or Disabled Children
Unless otherwise specified in the coverage group rules at M200.22-M200.3, the department determines the countable resources of blind or disabled children by:
. combining the resources of the parents living with the child with the child's resources, until the child reaches the age of 18,
. subtracting the resource maximum for one, if one parent or two, if two parents, from the parent's countable resources; and
. deeming and adding the remainder to the blind or disabled child's own countable resources.
If the blind or disabled child's total countable resources fall below the resource maximum for one, the resource test is passed.
Section 4264 Individuals with Spouses and in Long-Term Care
For individuals requesting long-term care who have spouses, the department performs the resource evaluation process of assessment and allocation set forth M234.41 and M234.42 at the beginning of the first continuous period of long-term care. Individuals discharged from long-term care and readmitted later do not undergo these steps again; only the resources of and any new transfers by the readmitted spouse are counted.
An institutional spouse who receives additional resources after allocating less than the community spouse resource allocation (CSRA) maximum and being found eligible for Medicaid, may continue to transfer resources to their community spouse up to a combined total transfer of no more than the CSRA maximum until the annual review of eligibility. After the first regularly scheduled annual redetermination of eligibility, the rules regarding transfers apply (M440).
At the time of admission to long-term care and application for Medicaid long-term care services, including waiver programs, the department completes an assessment of resources. An individual or their spouse may also request an assessment prior to admission to long-term care. The department provides a copy of the assessment to each spouse and retains a copy. The assessment must include at least:
. the total value of countable resources in which either spouse has an ownership interest;
. the basis for determining total value;
. the spousal share or one-half the total;
. conclusion as to whether the institutionalized spouse would be eligible for Medicaid based on resources;
. the highest amount of resources the institutionalized and community spouse may retain and still permit the institutionalized spouse to be eligible;
. information regarding the transfer of assets policy; and
. the right of the institutionalized spouse or the community spouse to a fair hearing at the time of application for Medicaid.
The department completes an allocation of resources at the time of application for Medicaid long-term care services, including waiver programs, as follows:
. community spouse resource allocation maximum,
. amount set by a fair hearing, or
. amount transferred from the institutional spouse (IS) to the community spouse (CS) under a court order.
. the IS assigns any rights to support from the CS to the department; or
. denial would work an undue hardship, as specified in M440.44.
Section 4270 Income Requirements
Income means any form of cash payment from any source received by individuals or their financially responsible relatives. Income is considered available and counted in the month it is received or credited to the individual with the exception of a lump sum receipt of earnings such as sale of crops or livestock. These receipts are only counted if received during the six-month accounting period and are averaged over the six-month period.
The department counts all earned and unearned income of individuals who are aged, blind or disabled and their financially responsible relatives, except income that is specifically excluded (M242) or deducted (M245). The department verifies all countable income.
Countable income depends on the coverage group for which individuals are eligible. It is determined according to the rules at (M243) and compared to the highest applicable income standard. If total countable income for the Medicaid group exceeds the income standard for every coverage group in rules M200. 2-M200.44, individuals are denied eligibility and given a spend-down (see rules M410, M420).
Section 4271 Types of Income
This section describes the kinds of income the department considers when determining SSI-related Medicaid eligibility.
Section 4272 Earned Income
Earned income includes all gross salary, wages, commissions, bonuses, severance pay received as a result of employment. It includes income from self-employment.
Earned income includes payments from Economic Opportunity Act of 1964 programs as recipients or employees, such as:
. Youth Employment Demonstration Act Programs
. Job Corps Program (Title I, Part A)
. Work Training Programs (Title I, Part B)
. Work Study Programs (Title I, Part C)
. Community Action Programs (Title II)
. Voluntary Assistance Program for Needy Children (Title II)
Earned income also includes income from:
. employment under Title I of the Elementary and Secondary Education Act (e.g., as a teacher's aide, lunch room worker, etc.)
. wages from participation in the Limited Work Experience Program under the Workforce Investment Act of 1998 ( 29 U.S.C. § 794 d )
. earnings from the Senior Community Service Employment (SCSE) program.
The department counts net earnings from self-employment. Net earnings means gross income from any trade or business less the allowable deductions specified in M245.11.
The department uses tax forms to determine countable income from self-employment. Applicants who state that income on their tax forms is no longer reflective of their situation may submit alternate documentation.
When the applicant's business has been the same for several years, the department uses income reported on tax forms from the last year.
When the applicant's business was new in the previous or current year and the applicant has business records, the department uses income reported on tax forms and other available business records and divides the income by the number of months the individual has had the business.
When the applicant's business has no records, is seasonal or has unusual income peaks, the department includes income reported on the applicant's signed statement estimating annual income.
Section 4273 Unearned Income
Unearned income means any payments other than earned income from any source received by individuals or their financially responsible relatives. It is the gross payment, less allowable deductions at M245.2. The department counts periodic benefits received by individuals as unearned income.
Unearned income includes income from capital investments in which the individual is not actively engaged in managerial effort. This includes rent received for the use of real or personal property, and interest earned on liquid resources. Ordinary and necessary expenses of rental property such as interest on debts, State and local taxes, the expenses of managing or maintaining the property, etc. are deducted in determining the countable unearned income from this source. The deduction is permitted as of the date the expense is paid. Depreciation or depletion of property is not a deductible expense.
Unearned income also includes, but is not limited to, the items listed below.
Section 4280 Income Exclusions
The following are excluded from earned income.
Unearned income exclusions are limited to the following items.
Medical care and services or social services provided in cash or in-kind, including vocational rehabilitation and payment of medical insurance premiums by a third party.
Section 4281 Determination of Countable Income
The department counts the earned and unearned income of the members of the financial responsibility group. Income is considered available and counted in the month it is received or credited to the individual.
This section describes the general approach the department follows when it determines countable income for SSI-related Medicaid. These general rules apply to all applicants.
The department combines the income of all members of the financial responsibility group, and applies the appropriate exclusions (M242) and standard deductions (M245).
Applicants pass the income test when their Medicaid group's income does not exceed the appropriate PIL, or the applicable income maximum, whichever is higher.
Applicants with income greater than the applicable income standard may establish financial eligibility by incurring eligible medical expenses that at least equal the difference between their countable income and the applicable PIL.
The subsections which follow specify how the department allocates and deems income based on the type of coverage sought and the size of the financial responsibility group.
The department determines countable income for individuals seeking SSI-related community Medicaid with a financial responsibility group of one according to the following rules. Common financial responsibility groups of one include single adults, residential care home residents, and children seeking Katie Beckett coverage.
The following steps must be followed in determining the countable income of individuals who are aged, blind or disabled.
The department determines countable income for SSI-related Medicaid applicants with a financial responsibility group of two according to the rules at M243.1, as well as the following additional rules.
The department deems earned and unearned income to the applicant at step M243.1(1) from their ineligible spouse or ineligible parent, except no income is deemed to adult applicants from their ineligible children.
The department allocates income from the financial responsibility group to each member of the financial responsibility group who is not applying for SSI-related Medicaid at step M243.1 (3) in the amounts listed below:
The department determines countable income for adults whose spouse is not applying for Medicaid, according to the rules at M243.1, except at step M243.1(13) the department compares the countable income of the Medicaid group to the PIL or the SSI/AABD payment standard for two, whichever is higher.
When a parent and child in the same household both request SSI-related Medicaid, the department determines countable income as a financial responsibility group of two according to the following rules. These groups include a parent who is aged, blind or disabled and a child who is blind or disabled.
If the adult applicant's countable income is below the highest applicable income standard, the adult has passed the income test for eligibility. If the adult applicant's income exceeds the highest applicable income standard, deem the amount of income in excess of the highest applicable income standard to the child applicant as unearned income.
If the parent's spend-down requirement is less than the child's and the parent meets it, the parent will become eligible. The child, however, will remain ineligible until the remainder of the child's spend-down is met. The department deducts the parent's incurred eligible medical expenses from the spend-down requirements of both the parent and child because the parent's income was included in both income computations.
The department determines countable income for SSI-related Medicaid child applicants other than Katie Beckett (see M243.1), children whose parent also requests Medicaid (see M243.3), or long-term care (see M243.5) as a financial responsibility group of one according to the following rules. Since parents are responsible for their children, their income must be considered available to their disabled or blind children requesting SSI-related Medicaid coverage, until the child reaches the age of 18.
The department determines countable income for SSI-related Medicaid long-term care applicants, including waiver and hospice services, according to the following rules.
The department compares the countable income of individuals requesting long-term care to the applicable income standard for their coverage group beginning with the date of admission to long-term care.
The institutional income standard (IIS) for individuals equals 300 percent of the maximum SSI federal payment to an individual living independently in the community. The IIS for couples equals twice the IIS for individuals.
When the department has an indication that individuals will need long-term care for fewer than 30 days, it uses the protected income level (PIL) for the month of admission, and applies the rules for SSI-related Medicaid, other than long-term care.
The department determines countable income for applicants for long-term care in nursing facilities according to the rules at M243.1, except the department:
For individuals whose gross income exceeds the IIS, the department determines whether they may spend-down their excess income to the protected income level (PIL) to establish their financial eligibility as medically needy, according to the rules at M412. The department determines whether the individual has incurred eligible medical expenses that equal the difference between their countable income and the PIL.
The department determines countable income for applicants for long-term care in nursing facilities according to the rules at M243.1, except the department:
For individuals whose gross income exceeds the IIS, the department determines whether they may spend-down their excess income to the PIL to establish their income eligibility as medically needy using the rules in M412. The department determines whether the individual has incurred eligible medical expenses that equal the difference between their countable income and the PIL.
Section 4282 Income Deductions
The department allows deductions from earned income (M245.1), self employment (M245.11), and unearned income (M245.2).
Section 4283 Earned Income Deductions
A deduction of $ 65.00 and one-half of the remainder applies to all determinations of earned income.
Deductions of business expenses from self-employment income are limited to the ones specified below.
In addition to other allowable deductions specified throughout section M245 and its subsections, work expenses from income of blind individuals includes the following items.
. cost of purchasing and caring for a dog guide;
. work-related fees such as licenses, professional association dues or union fees;
. transportation to and from work including vehicle modifications;
. training to use an impairment-related item such as braille or a work-related item such as a computer;
. federal, state and local income taxes;
. Social security taxes and mandatory pension contributions;
. meals consumed during work hours;
. attendant care services;
. structural modifications to the home; and
. medical devices such as wheelchairs.
In addition to other allowable deductions specified throughout section M245 and its subsections, work expenses from income of disabled individuals includes the following items.
. transportation to and from work, including vehicle modifications;
. impairment-related training;
. attendant care;
. structural modifications to the home; and
. medical devices such as wheelchairs.
Section 4284 Unearned Income Deductions
