*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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. ***
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Effective: December 1, 2006 |
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19.30.10 - Step 2 of Burial Fund Exclusion (BFE) Determination |
Archived: June 1, 2016 (Previous Versions) |
The second step in determining the burial fund exclusion is to review any irrevocable burial agreements that are purchased for a person, this includes annuity funded burials (AFB) and insurance funded burials (IFB), as well as irrevocable burial agreements (IBA) established directly with a funeral provider.
Apply insurance funded burials, annuity funded burial and irrevocable burial agreements that have funded burial services to the BFE of the person, for whom the burial was purchased for, in the order they were purchased, beginning with the earliest purchase date.
l If a client has burials which they purchased for themselves and has burials purchased by household members for them, start with the client’s burials first. Process the client-owned burials in the order of purchase date, and then move on to burials purchased for the client by household members. Process those in the order of the purchase date.
l Any amount that is considered available is counted toward the owner’s asset limit.
Reminder: Do not use insurance funded burials in this step that were previously designated toward the BFE in Step 1. The FV of these policies has been excluded and the remaining value for services is unavailable.
How the burial is applied to the BFE, depends on the type of burial being evaluated.
How you apply the IFB or AFB does not vary, regardless of whether the BFE has been met or not. If the BFE has been met prior to review of an IFB/AFB skip Step 1 and move to step two of this sub-section.
1. Apply the value of burial services in the IFB or AFB toward the remaining amount of BFE for the insured for/purchased for person.
Reminder: The BFE cannot exceed $1,500.
2. The remaining value of burial services is considered unavailable.
Example:
Charlotte met $500 of her BFE with a life insurance policy’s FV. She also owns an AFB with burial services totaling $3,000.
Action:
Charlotte has $1,000 of BFE remaining after the designation of the LI FV. Apply $1000 of the $3000 in burial services of the AFB toward her BFE. Her BFE is now maxed at $1,500. The remaining $2,000 of the AFB services is considered unavailable.
Example:
Pierre owns an IFB with a $2,000 FV. The burial services in this agreement are $2,000. He purchased this IFB for his 15 year old daughter, Marie. Neither Pierre nor Marie has designated any amount toward their BFE. Pierre does not own any life insurance.
Action:
Step 1 of BFE Determination determined that the FV of the IFB could not be applied to Marie’s BFE because $2,000 FV is greater than $1,500.
In this step, $1,500 of burial services in the IFB is applied to Marie’s BFE. She has no BFE remaining. The $500 remaining of burial services is considered unavailable.
A portion of burial services in an IBA, which is not applied to the BFE, may be considered unavailable.
l IBAs purchased in Minnesota can have up to $2000 of burial services considered unavailable. Any amount of burial services applied to the BFE from an IBA must be subtracted from the $2000 amount.
l IBAs purchased in another state can have up to that state’s limit considered unavailable.
Follow these steps:
1. Apply the total amount of burial services in the IBA toward the remaining amount of BFE for the insured for/purchased for person.
Reminder: The BFE cannot exceed $1,500.
2. If part of the IBA is applied to the BFE, subtract the amount of the burial services applied to the BFE from the state limit ($2000 for MN) for the owner of the IBA.
3. Determine if the remaining amount of burial services or a portion of that amount can be considered unavailable for the owner based on the remaining amount of the state limit.
4. Consider any amount of burial services over $2000 as an available asset. Count that amount toward the owner’s asset total.
Example:
George owns two IBAs, both of which were purchased in Minnesota for himself. IBA 1 was purchased in August 1995 and has $2,000 in burial services. IBA 2 was purchased in May of 1995 and has $2,000 in burial services. None of the services have been duplicated. He does not own any life insurance.
Action:
Beginning with IBA 2, the earliest purchased burial:
1. Apply $1,500 of the $2,000 burial services of IBA 2 to George’s BFE. He has met his BFE total.
2. Subtract the $1500 used to meet the BFE from the MN state limit of $2,000. $2,000 - $1,500 = $500 of state limit remains.
3. The remaining $500 of burial services in IBA 2 is considered unavailable because it is used to meet the state limit.
Next look at IBA 1:
1. The BFE has been met, so none of IBA 1 can be applied to it.
2. and 3. The Minnesota state limit of $2,000 has been met with IBA 2.
4. Consider the $2000 of burial services in IBA 1 as available and count that amount toward George’s asset total.
Example:
Carlos owns an IBA with $5,000 in burial services. He bought the IBA for his wife, Rhonda, and purchased it in Iowa. Neither he nor his wife own any other burials or life insurance.
Action:
1. Apply $1,500 of the $5000 of burial services toward Rhonda’s BFE. $3,500 of burial services are undesignated.
2. The worker determines Iowa’s state limit is $3000. Subtract the $1,500 in burial services used to meet Rhonda’s BFE from the Iowa state limit ($3,000 - $1,500 = $1,500 of state limit remaining).
3. Consider $1,500 of the remaining $3,500 of burial services to be unavailable. This leaves $2,000 of burial services remaining.
4. Consider the remaining $2,000 of burial services to be available and count them toward Carlos’ asset total.
James and his wife, Maya, apply for health care. James owns a non-term life insurance policy, an IFB, an AFB and two IBAs. Maya owns a non-term life insurance policy, and an IBA. There are no duplicate services. All burials were purchased in Minnesota.
The break down of the policies and burials are:
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FV |
CSV |
Purchase Date |
Burial Services |
Insured For/ Purchased |
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James |
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LI |
$1200 |
$500 |
May 2004 |
N/A |
James |
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IFB |
$3000 |
N/A |
May 2000 |
$3000 |
James |
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AFB |
$3000 |
N/A |
Aug 2004 |
$3000 |
James |
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IBA 1 |
$1500 |
N/A |
May 2004 |
$1500 |
Maya |
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IBA 2 |
$2500 |
N/A |
June 2005 |
$2500 |
James |
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Maya |
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LI |
$500 |
$100 |
May 2004 |
N/A |
Maya |
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IBA |
$2000 |
N/A |
July 2005 |
$2000 |
Maya |
Determine the BFE as follows:
Step 1: Review LI policies and IFBs.
James:
l Total the FV of all LI policies and IFB that James owns. $1200 + $3000 = $4200.
l $4200 is greater that $1500. The FV cannot be used toward James’ BFE.
l Count the $500 CSV of the LI policy toward James’ asset total.
Maya:
l Total the FV of LI policy that Maya owns. The total FV is $500.
l The $500 FV is less than $1,500. Apply the $500 toward Maya’s BFE.
l She has $1000 of BFE remaining.
l The $100 CSV of the LI policy is excluded.
Step 2: Review irrevocable burial agreements (IBA, AFB, and IFB not used in Step 1) for the purchased for.
James:
James has purchased an AFB, IBA and IFB for himself. The IFB was not used in Step 1 and therefore can be used in Step 2.
l Review the earliest purchased burial, the IFB purchased in May 2000, first.
n James has not met his BFE. Apply $1,500 in burial services of the IFB toward the BFE. He has $1,500 of burial services remaining ($3,000 - $1,500 = $1,500), and has met his BFE.
n The remaining $1,500 of burial services is unavailable and not counted toward James’ asset total.
l Review the AFB purchased in August 2004.
n James has met his BFE.
n Consider the $3,000 of burial services in the AFB as unavailable.
l Review the IBA purchased in June 2005.
n James has met his BFE.
n The state limit is $2000. None of the state limit has been used.
n $2000 of the IBA burial services are unavailable as this meets the state limit.
n The remaining $500 of burial services is considered available to James and is counted toward his asset limit.
Maya:
Maya has purchased an IBA for herself and James has also purchased an IBA for her. She has $1000 of BFE remaining based on Step 1.
l Review the IBA which Maya purchased for herself first.
n Apply $1000 of the $2000 in burial services to the BFE. Maya has met her BFE. She has $1000 of burial services remaining.
n Subtract the $1000 used to meet the BFE from the State Limit of $2000. Maya has $1000 of state limit remaining.
n The $1000 of remaining burial services is applied to the state limit and is considered unavailable. She has met the state limit.
l Review the IBA James purchased for Maya.
n Maya has met her BFE and the state limit.
n The remaining $1500 of burial services is counted toward James’ asset limit.