*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016. Please refer to the EPM for current health care program policy information. ***
Effective: September 1, 2011 |
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19.25.25 - Vehicles |
Archived: June 1, 2016 (Previous Versions) |
Vehicles are assets that must be evaluated when determining eligibility for Minnesota Health Care Programs (MHCP). When to count a vehicle depends on the program and methodology that is used to determine a person’s eligibility for MHCP.
Verifying Equity Value of Non-Excluded Vehicles.
Determining When to Exclude a Vehicle.
MinnesotaCare and MA Method A.
MA Method B and Long-Term Care.
A vehicle may be any registered or unregistered conveyance used on air, land, or water, including, but not limited to cars, trucks, motorcycles, boats, snowmobiles, animal-drawn vehicles, and animals.
l It must be used for transportation.
l It is considered non-liquid personal property for asset calculation purposes.
Note: A vehicle that is temporarily not working that is normally used for transportation meets the definition of a vehicle.
Verifying Equity Value of Non-Excluded Vehicles
For all programs, count the equity value of any vehicles that are not excluded or unavailable.
The equity value of a vehicle is determined by subtracting any encumbrances from the average trade-in value of the vehicle. Use the current National Automobile Dealers Association (NADA) to verify the average trade-in value.
If the NADA value of a non-excluded vehicle puts the client over the program asset limit, contact the client to see if there are encumbrances:
l MA: The client must provide proof of the encumbrances in the form of a secured loan, which is any loan for which the vehicle is held as collateral or the lender holds the title.
l MinnesotaCare: Do not require verification of encumbrances.
If the NADA value cannot be obtained or the client disputes the NADA value, require the client to submit a written statement from a local automobile dealer to verify the current trade-in value. Follow standard guidelines for assisting the client in providing the verification. See Obtaining Verifications.
Determining When to Exclude a Vehicle
n Exclude vehicles used in a trade or business if the criterion is met. See Self-Support Excluded Assets and Self-Employment Excluded Assets.
n Exclude one vehicle, used for employment or seeking employment, for each household member of legal driving age (currently age 16 or over in the State of Minnesota).
m This includes excluding one vehicle used for employment or job search for each household member of legal driving age even if they are not requesting or are not eligible for coverage.
m Exclude the vehicles with the highest equity values, regardless of which vehicles the employed household members actually use to drive to work or seek employment.
Example:
Jon and Marie apply for health care for themselves, their 19-year-old son Ben, and their 17-year-old daughter Jessica. Jon and Ben are employed full time. Marie was laid off from her previous job and is seeking employment. Jessica is a full-time student and is not working. The family owns four vehicles.
Action:
Three vehicles can be excluded. Jon, Marie and Ben are all of legal driving age and are using a vehicle for employment or seeking employment. A vehicle cannot be excluded for Jessica. Although she is of legal driving age she is not using a vehicle for employment or seeking employment.
The equity values of the vehicles are:
q Vehicle 1: $12,000 - used by Jon for work.
q Vehicle 2: $25,000 - used only when the family goes on a trip.
q Vehicle 3: $13,000 - used by Marie to seek employment.
q Vehicle 4: $5,000 - used by Ben to get to work.
Exclude the following vehicles:
q Vehicle 2: $25,000 - It has the highest equity value so it is first to be excluded even though it is not used for employment.
q Vehicle 3: $13,000 - It has the second highest equity and is used for Marie to seek employment.
q Vehicle 1: $12,000 - It has the third highest equity and is used for employment.
q Count Vehicle 4’s $5,000 equity value toward the asset total for Jon and Marie. They have a $20,000 asset limit. The children do not have an asset limit because they are exempt due to their age.
q If Jessica began working, or started looking for a job and used Vehicle 2 for this purpose, all four vehicles would be excluded.
Example:
Rolf and Joyce apply for health care for themselves and their two children, under age four. They list three vehicles on their application. Joyce is employed and uses one of the vehicles to get to work. Rolf is a stay-at-home dad.
Action:
Contact Rolf to get the equity values for the vehicles. The three vehicles are valued at $5,000, $6,000 and $8,000. They owe $5,000 on the $6,000 vehicle and own the other two.
The $8,000 car is excluded because Joyce uses a vehicle for employment and this car has the highest equity. The equity value of the other two vehicles cannot be excluded and counts toward the asset total. $6,000 will be counted toward the asset total. The calculation is $5,000 equity + $1,000 equity ($6,000 FMV - $5,000 encumbrance) = $6,000. Count $6,000 toward the asset total.
MA Method B and Long-Term Care
n Exclude the value of the following:
m A vehicle used as the client’s principal place of residence, if a homestead is not already excluded. See Homestead Real Property.
m A vehicle used for self-support or a PASS plan. See Self-Support Excluded Assets.
n Exclude the value of one vehicle per household if it is used for transportation of the client or a member of the client’s household.
m Assume the vehicle is used for transportation unless there is evidence to the contrary.
m If more than one vehicle is used for transportation, exclude the vehicle used for transportation that has the highest equity value.
n Do not treat the following as vehicles:
m A vehicle that has been junked.
m A vehicle used only for recreation, such as a boat or snowmobile used for pleasure only.
Example:
Yara and Thor are both disabled and applying for health care. They live in a fully paid RV with a FMV of $200,000. They own two other vehicles they use for basic needs such as groceries and medical appointments. The first vehicle has a FMV of $2,400. The second vehicle has a FMV of $12,000 with $9,000 remaining on a bank loan.
Action:
Exclude the RV with equity value of $200,000 because it is the principal place of residence for Yara and Thor. Exclude the $12,000 vehicle because it is assumed to be used for transportation and its equity value ($3,000) is higher than the other vehicle. Count the $2,400 equity value of the remaining vehicle as an available asset.
Example:
Jazz and Max, both disabled and applying for health care, own two vehicles they use for basic needs such as groceries and medical appointments. The first vehicle has a FMV of $3,600. The second vehicle has a FMV of $11,000 with $8,500 remaining on a bank loan.
Action:
Only one vehicle can be excluded for transportation. Since both are used for transportation, exclude the vehicle with the highest equity. Exclude the $3,600 FMV of the first vehicle. Count $2,500 of the second vehicle toward the asset total. The calculation is $11,000 FMV - $8,500 encumbrance = $2,500.