Washington Administrative Code
Title 182 - Health Care Authority
WASHINGTON APPLE HEALTH
Chapter 182-516 - Trusts, annuities, life estates, and promissory notes-Effect on medical programs
Section 182-516-0400 - Promissory notes and loans
Universal Citation: WA Admin Code 182-516-0400
Current through Register Vol. 24-18, September 15, 2024
(1) General.
(a) In this section, note includes
promissory note, loan or other obligation to pay.
(b) The medicaid agency or the agency's
designee determines the value of outstanding principal and interest payments
using amortization schedules, unless otherwise stated in this
section.
(2) A note as a resource.
(a) A note is a resource. The value
of the note is the fair market value (FMV).
(b) The FMV of a note is the outstanding
principal of the note, unless convincing evidence to the contrary is provided
to the agency or the agency's designee.
(c) If the note owner provides convincing
evidence to the agency or the agency's designee of a legal bar to the sale of
the note, the note's FMV is zero.
(3) A note as income.
(a) Interest on a note is unearned
income.
(b) If the FMV of the note
under subsection (2)(c) of this section is zero, the principal portion of
recurring payments is unearned income.
(c) The agency or the agency's designee may
budget the unearned income in equal monthly amounts at the request of the note
owner, or at the agency's or the agency's designee's discretion. The budgeting
period will be the note owner's certification period under chapter 182-504
WAC.
(4) A note as an asset transfer under WAC 182-513-1363.
(a) Subject to (b) of this subsection:
(i) The agency or the agency's designee
evaluates the purchase of a note as an asset transfer if the purchase price of
the note exceeds the FMV of the note;
(ii) The value of the asset transfer is the
difference between the purchase price of the note and the FMV of the note at
the time of purchase; and
(iii) The
agency or the agency's designee determines the FMV of the note at the time of
purchase using subsection (2) of this section, but can also determine the FMV
of the note at a time after purchase if the agency or the agency's designee
determines FMV of the note has changed since the time it was
purchased.
(b)The assets
used to purchase a note are an uncompensated asset transfer under WAC
182-513-1363,
unless the note:
(i) Prohibits the
cancellation of the balance of the note upon death of the note owner;
and
(ii) Is paid out, in equal
periodic amounts with no deferral and no balloon payments, over a term not
greater than the actuarial life expectancy of that note
owner.
(c)The value of
the uncompensated asset transfer under (b) of this subsection is the
outstanding balance of the note due as of the date of the client's application
for medical assistance for institutional or home and community-based waiver
services.
(d)If the purchase of a
note results in a period of ineligibility under both (a) and (b) of this
subsection, then the period of ineligibility under WAC
182-513-1363
will be the period that is longer.
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