19.45.10 Determining Asset Eligibility for LTC Spouse

*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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. ***

Determining Asset Eligibility for the Long-Term Care (LTC) Spouse

This section of the manual discusses how to determine asset eligibility for the long-term care (LTC) spouse when an agency receives a request for MA payment of LTC services. This process involves identifying assets owned by the couple, determining which assets make up the Community Spouse Asset Allowance and applying MA eligibility rules to the assets attributed to the LTC spouse. The result of this process is that the LTC spouse is either asset eligible for MA payment of LTC services or the worker determines an amount of assets the LTC spouse must reduce in order to achieve asset eligibility for MA payment of LTC services.

The asset eligibility process may involve a division of the couple’s assets to determine which of the couple’s assets make up the Community Spouse Asset Allowance. The role of the agency is to determine eligibility based on MA policy. The agency should not provide advice or recommendations to a couple on how to divide assets. The role of the agency is to explain to a couple how it evaluates assets attributed to the LTC spouse so that the couple can make an informed decision.

There are many factors that a couple must consider when determining how to divide their assets. These factors can include tax implications as well as personal factors such as the desire to retain ownership of a particular asset. The decision on how to divide the couple’s assets is up to the couple. Do not attempt to answer questions unrelated to MA policy; the couple can contact a tax accountant, an attorney or someone who specializes in estate planning for answers to those questions.

Which Month is Asset Eligibility Determined using the Community Spouse Asset Allowance?

Determine asset eligibility for the LTC spouse beginning with the first month that the LTC spouse requests MA payment of LTC services to begin.

For an individual who requests MA payment of LTC services when applying for basic MA, it is:

l the first month in which the individual resides in an LTCF, no earlier than the three months prior to the month of application, or

l the first month in which a lead agency case manager anticipates the individual will receive EW/AC services after a Long-term Care Consultation (LTCC), no earlier than the three months prior to the month of application.

For an MA enrollee who is not currently receiving MA payment of LTC services, it is:

l the first month in which a lead agency case manager anticipates the individual will receive EW/AC services after a Long-term Care Consultation (LTCC).

For an MA enrollee who is currently receiving MA payment of LTC services, it is:

l the first month in which a change occurs which requires an asset assessment, or

l the first month in which a lead agency case manager anticipates the individual will receive EW/AC services after a Long-term Care Consultation (LTCC).

You must close MA payment of LTC services while the asset assessment determination is pending. Ten-day advance notice is required in situations where the worker initiates the closing; a notice is not required if the lead agency case manager has closed waiver eligibility and notified the enrollee. The effective date of the closure may not necessarily be the month in which eligibility for MA payment of LTC services is determined using the Community Spouse Asset Allowance.

Exception: Communicate with the lead agency case manager for enrollees on a disability waiver who requests EW. Do not close eligibility for MA payment of LTC services because of the need for an asset assessment if the enrollee continues to receive disability waiver services.

Jonah and Julia are married. Jonah resides in an LTCF and is receiving MA payment of LTC services. Julia also resides in an LTCF; however, she is not on MA and has been privately paying her cost of care. An asset assessment was not required at the time Jonah requested MA payment of LTC services because Julia was not a community spouse. In March, Julia returned to their home. On March 2, Jonah’s worker determines an asset assessment is required since Jonah is now an LTC spouse.

Determine asset eligibility for Jonah using the Community Spouse Asset Allowance in March, the month in which Julia became a community spouse. Close MA payment of LTC services effective April 1 while the asset assessment is pending.

Carl and Susan are married. Susan is on CADI, and Carl is a community spouse. Susan turned 65 in June and she is deciding whether or not to continue on CADI or switch to EW. Her case manager communicated on the Lead Agency Case Manager/Worker Communication Form (DHS-5181) that Susan meets the level of care requirements for EW and is anticipated to begin EW in June if she meets the eligibility requirements for MA payment of LTC services. She will continue to receive CADI services while the worker determines the MA eligibility requirements for EW. An asset assessment is required since Susan is now an LTC spouse.

Determine asset eligibility for Susan using the Community Spouse Asset Allowance in June, the first month in which a lead agency case manager anticipates she will receive EW services. Do not close MA payment of LTC services since Susan will continue to receive CADI services.

If an individual is not eligible for MA payment of LTC services effective the first month the LTC spouse requests it to begin, determine asset eligibility using the Community Spouse Asset Allowance for the next month. Continue to determine asset eligibility for each subsequent month until either the client is eligible for MA payment of LTC services or you reach the current month.

Fred and Ethel are married. Fred went into an LTCF on December 25 for a permanent stay. He applied for MA on January 2 requesting retroactive coverage back to December 1. Ethel is a community spouse. An asset assessment is required in order to determine asset eligibility for MA payment of LTC services since Fred is an LTC spouse.

Determine asset eligibility for Fred using the Community Spouse Asset Allowance in December, the first month that Fred requests MA payment of LTC services to begin.

On February 2, the worker determines Fred has $26,000 in excess countable assets for MA payment of LTC services for the month of December.

Send Fred a notice stating he has $26,000 in excess countable assets and must reduce those assets by the end of the processing period in order to be asset eligible for MA payment of LTC services. Fred must follow standard guidelines for the reduction of excess assets in a retroactive period.

On February 8, Fred informs his worker that he does not have enough medical bills to reduce excess assets for December.

Determine asset eligibility for Fred using the Community Spouse Asset Allowance in January, the next month that Fred requests MA payment of LTC services to begin.

Asset Verification Requirements

Follow standard guidelines for verification of assets. The value of all of the couple’s assets for the month in which MA payment of LTC services is requested to begin must be verified, regardless of whether the asset is excluded or unavailable. Follow standard Minnesota Health Care Programs policy for obtaining verifications.

Asset eligibility is determined based on the following steps when an asset assessment is required:

1. Require the couple to complete an Asset Assessment (DHS-3340) form if one hasn’t already been completed that identifies assets owned by the couple on the LTC spouse’s asset assessment effective date. Determine the Community Spouse Asset Allowance based on the minimum and maximum asset allowances in effect for the month the LTC spouse requests MA payment of LTC services to begin.

2. Identify and obtain verification for all assets owned by the couple for the first month the LTC spouse requests MA payment of LTC services to begin.

Follow standard Minnesota Health Care Programs policy for the types of assets evaluated.

Continue to count certain assets, such as an annuity, which the couple has converted to income between the asset assessment effective date and the request for MA payment of LTC services. Count the value of the asset at the time the couple converted it to income.

Megan had an annuity in her name that was in the accumulation phase on her asset assessment effective date. Two months before she requested MA payment of LTC services the couple annuitized the annuity and it became an income stream.

Evaluate the income stream as an asset. Count the value of the annuity on the annuitized date.

Ed is married to Mary, a community spouse. They had $100,000 in countable assets on his asset assessment effective date. Between his asset assessment effective date and his request for MA payment of LTC services, Mary purchased an immediate annuity using $40,000 from their savings account. She begins receiving payments from the annuity. Ed requests MA payment of LTC services four months later.

Evaluate the income stream as an asset. Count the value of the annuity ($40,000) on the annuitized date.

Follow the standard guidelines for excluded assets for Method B. Follow Method B policy even if the LTC spouse’s basis of eligibility requires a different methodology to calculate assets eligibility for MA.

Note: Standard guidelines allow for one vehicle (regardless of which spouse owns the vehicle) to be excluded for the couple. Exclude the vehicle with the highest equity value.

Evaluate whether an asset is excluded based on the couple’s situation at the time the LTC spouse requests MA payment of LTC services. Assets excluded previously on the LTC spouse’s asset assessment effective date may no longer meet the criteria to be excluded.

George is married to a community spouse. George currently resides in an LTCF. On George’s asset assessment effective date, his spouse resided in their home so his worker excluded it as a homestead. At the time of his request for MA payment of LTC services his spouse no longer resides in the home and the property does not qualify for a homestead exemption.

Follow standard Method A or Method B policy depending on the LTC spouse’s basis of eligibility to determine the value of each asset. Round the counted value of each asset up or down to the nearest cent, if applicable. The availability of an asset is not a factor in this step.

Add together the counted value of all non-excluded assets to determine the total counted value, regardless of availability, of the couple’s non-excluded assets.

5. Determine if the total value of all non-excluded assets is less than or equal to the Community Spouse Asset Allowance plus the LTC spouse’s asset limit.

n If yes, stop. The LTC spouse is asset eligible for MA payment of LTC services. Notify the couple the results of the asset eligibility determination. Indicate asset eligibility on the Asset Assessment Results (DHS-3340A) in this situation.

6. Consult with the couple to determine which assets will make up the Community Spouse Asset Allowance.

Work with the couple to explain MA policy on how an agency evaluates an asset if attributed to the LTC spouse so that the couple can make an informed decision about which assets will make up the Community Spouse Asset Allowance.

The couple may not be able to legally transfer certain assets, such as a trust, to the other spouse. In addition, it may not be legally possible for the couple to transfer a percentage of an asset. The couple must take this into account when determining which assets make up the Community Spouse Asset Allowance. The couple may wish to consult an attorney or financial planner.

Alicia is married to Orin, a community spouse. The community spouse asset allowance is $31,094. At the time Alicia requested MA payment of LTC services the couple owned the following non-excluded assets:

Explain to the couple that MA policy allows the couple to set aside $31,094 in assets for Orin and the rest the agency attributes to Alicia. Explain that they need to determine which assets will make up the $31,094, and the agency will evaluate the rest of the assets based on MA eligibility rules to determine if Alicia is within the MA asset limit for MA payment of LTC services. Explain that MA policy would consider the life estate interest, if Orin can legally transfer it to Alicia, to be an unavailable asset and the counted value would be $0. Alicia would be asset eligible for MA payment of LTC services if the couple designates the savings account, US Savings Bonds and boat to Orin and attributes the life estate interest to Alicia.

7. Evaluate the assets attributed to the LTC spouse using MA eligibility policy.

Follow Method A or Method B depending on the LTC spouse’s basis of eligibility. The availability of an asset is considered in this step.

8. Determine if the community spouse meets his or her monthly maintenance needs based on the community spouse’s income and the community spouse income allocation from the LTC spouse’s income calculation. Follow the steps to calculate the community spouse income allocation to determine if the community spouse meets his or her monthly maintenance needs. Count the income earned from assets according to how the couple designated their assets in step 6.

n If the community spouse does not provide verification of income and shelter expenses, skip Step 9 and continue with Step 10.

n If the community spouse meets his or her monthly maintenance needs, skip Step 9 and continue with Step 10.

n If the community spouse does not meet his or her monthly maintenance needs, continue with Step 9.

9. Determine if the community spouse qualifies for additional assets to meet the community spouse’s monthly maintenance needs. If the community spouse qualifies, consult with the couple to determine if they want the community spouse to receive additional assets to meet his or her monthly maintenance needs. The couple must take specific actions and provide additional verifications in order for the community spouse to qualify for additional assets.

n If the LTC spouse is within the asset limit after the couple uses additional assets to meet the community spouse’s monthly maintenance needs, continue with Step 11.

n If the couple decides not to take advantage of using additional assets to meet the community spouse’s monthly maintenance needs, or the LTC spouse is not within the asset limit after they use additional assets to meet the community spouse’s monthly maintenance needs, continue with Step 10.

10. Notify the couple that the LTC spouse has excess assets and, if the LTC spouse meets all other eligibility requirements for MA payment of LTC services, that excess assets must be properly reduced in order to achieve eligibility for MA payment of LTC services. The amount of the excess assets is the amount of counted assets that are above the LTC spouse’s asset limit.

11. Send the Designation of Assets (DHS-3340C) form to both the client, including the client’s authorized representative if applicable, and the community spouse. This form documents how the couple decided to designate their assets. Retain a copy of the form in the case file.

A long-term care spouse may have excess assets attributed to him or her when determining asset eligibility using the Community Spouse Asset Allowance. Follow the policy listed below regarding how a client can achieve asset eligibility for MA payment of LTC services when the LTC spouse has excess assets.

l An individual who requests MA payment of LTC services when applying for basic MA must follow standard guidelines regarding the reduction of excess assets.

l An MA enrollee may have excess assets for MA payment of LTC services due to attributing assets from the community spouse when the spouse’s assets weren’t previously deemed because either the spouses did not reside together or the MA enrollee was receiving services through the CADI, CAC, BI or DD waiver programs.

Enrollees with excess countable assets for MA payment of LTC services must reduce their assets by the last calendar day of the month that provides 10-day advance notice.

Send a notice to enrollees who have excess countable assets informing them they are over the asset limit and must reduce assets prior to the last calendar day of the month that provides 10-day advance notice. Failure to reduce assets prior to this date results in ineligibility for MA payment of LTC services. Acceptable ways for the enrollee to reduce assets follows the standard guidelines for an MA enrollee.

John is on CADI. He resides with his wife Anna in their home. Anna is a community spouse. John had transferred all of his assets to Anna in order to achieve CADI eligibility. On October 25, he went into an LTCF for an anticipated stay of 30 days or more. Per the Lead Agency Case Manager/Worker Communication Form (DHS-5181), John’s case manager stated John exited the waiver program on October 25. On October 26, the worker determines an asset assessment is required since John is now an LTC spouse.

Determine asset eligibility for John using the Community Spouse Asset Allowance for assets the couple owned in October, the month in which John became an LTC spouse. While the asset assessment is pending, close MA payment of LTC services effective December 1.

On November 15, the worker determines John has $15,000 in excess countable assets for MA payment of LTC services.

Send John a notice stating he has $15,000 in excess assets and must reduce those assets by November 30 in order to be asset eligible for MA payment of LTC services. Provide John with information on acceptable ways in which he can reduce excess assets.

On November 23, John notified his worker that he reduced his assets by paying off a credit card debt. He provided documentation from his bank showing the new value of the asset.

Base asset eligibility for an LTC spouse on the asset assessment process when eligibility is being determined for MA payment of LTC services and the individual is an LTC spouse. Follow standard MA guidelines for household composition and asset deeming to determine asset eligibility when an individual is ineligible for MA payment of LTC services.

Note: The LTC spouse’s asset eligibility must be determined based on the asset assessment process in order to determine, in part, if the client is Otherwise Eligible for MA payment of LTC services. If an individual does not meet the eligibility requirements for MA payment of LTC services, asset eligibility for basic MA must be redetermined based on standard MA guidelines for household composition and asset deeming.

Angela is married to a community spouse. Angela is applying for MA beginning the month of June and is requesting MA payment of LTC services because she entered a nursing home on June 15 for a stay of more than 30 days. Based on the results of the couple’s asset assessment, Angela has $12,000 in excess assets attributed to her. She also made an uncompensated transfer to her grandson in her lookback period that does not meet a transfer penalty exception. She meets all other eligibility requirements for MA payment of LTC services.

Angela must properly reduce her excess assets in order to be otherwise eligible for MA payment of LTC services and start her transfer penalty. She cannot transfer excess assets to her spouse as an acceptable way to reduce assets since her spouse cannot have more assets than the Community Spouse Asset Allowance.

If Angela does not properly reduce her excess assets, she is not otherwise eligible for MA payment of LTC services. Her transfer penalty cannot start. She is ineligible for MA payment of LTC services due to excess assets.

Determine eligibility for basic MA. Angela remains a household size of one for basic MA, so her spouse’s assets do not deem to her. Base her asset eligibility on all assets that she owns.

Note: If Angela requests MA payment of LTC services in the future, eligibility for MA payment of LTC services is redetermined. If she meets the requirements for an asset assessment, base her asset eligibility on the assets the couple own in the month she requests MA payment of LTC services to begin. Attribute assets that do not make up the Community Spouse Asset Allowance to her. If the transfer to her grandson occurred within her new lookback period, impose the penalty period if she is otherwise eligible for MA payment of LTC services.

Bethany is married to a community spouse. Bethany is applying for MA payment of LTC services because she entered a nursing home on March 9 for a stay of more than 30 days. Based on the results of the couple’s asset assessment, the couple can attribute all of their marital assets to Bethany’s spouse. She also made an uncompensated transfer in her lookback period that does not meet a transfer penalty exception. She meets all other eligibility requirements for MA payment of LTC services.

Bethany is otherwise eligible for MA payment of LTC services and the agency can impose her transfer penalty.

Since she is ineligible for MA payment of LTC services due to the transfer penalty, determine eligibility for basic MA. Bethany remains a household size of 1 for basic MA, so her spouse’s assets do not deem to her. Base her asset eligibility on all assets that Bethany owns. She is not eligible for basic MA until her assets are within the asset guidelines.

At the end of the transfer penalty, Bethany must request MA payment of LTC services in order for the agency to make a new eligibility determination for MA payment of LTC services. If Bethany meets the requirements for an asset assessment at that time, base her asset eligibility for MA payment of LTC services on the assets she and her spouse owned in the month she requested MA payment of LTC services to begin. Attribute assets that do not make up the Community Spouse Asset Allowance to her.

Carl is married to a community spouse. They reside together in their home. He is requesting services through EW. He had an LTCC on September 4 that demonstrated he needs an institutional level of care and his lead agency case manager anticipates he will receive EW services for at least 30 consecutive days. Based on the results of the couple’s asset assessment, the couple can attribute all of their marital assets to his spouse. However, Carl is ineligible for MA payment of LTC services because he refuses to name DHS the preferred remainder beneficiary of an annuity he owns.

Determine asset eligibility for basic MA following standard MA guidelines for household composition and asset deeming since Carl is not eligible for MA payment of LTC services. Do not determine asset eligibility based on the asset assessment process. Count Carl’s spouse in his household size for basic MA, and deem his spouse’s assets to him. Base Carl’s asset eligibility on all assets he and his wife own. Carl is not eligible for basic MA until the couple’s assets are within the asset guidelines for his household size.

If the couple attributes assets in the name of the LTC spouse or in the name of both spouses to the community spouse, the couple must transfer ownership of the assets to the community spouse to avoid having them counted in the LTC spouse’s future eligibility determinations. Encourage the couple to do this as soon as possible before the LTC spouse’s first annual renewal. At the LTC spouse’s first annual renewal, evaluate all assets owned by the LTC spouse toward his or her asset limit.

A worker must base the LTC income calculation on the actual income of the LTC spouse even if the source of the income is an asset that is included in the Community Spouse Asset Allowance. Therefore, it is in the best interests of the couple to transfer any income-producing asset in the name of the LTC spouse that the couple designated to the community spouse as soon as possible. Count the income from the income-producing asset in the LTC spouse’s name until the couple transfers the asset.

Eleanor is married to Alexander, a community spouse. The Community Spouse Asset allowance is $31,094. At the time of Eleanor’s request for MA payment of LTC services the couple owned two non-excluded assets: a jointly-owned savings account of $15,000 which earns $20 per month in interest and a money market account owned by Eleanor with a value of $8,000 that earns $50 per month in income. Eleanor’s worker determines Eleanor to be asset eligible for MA payment of LTC services since the couple can designate all of the couple’s assets to Alexander. She meets all eligibility requirements for MA payment of LTC services, and her worker uses an LTC income calculation to determine the amount she must contribute toward the cost of her care.

Eleanor must transfer the assets to Alexander to avoid having them counted in her eligibility determination at her annual renewal. Encourage the couple to transfer the assets as soon as possible since Eleanor’s share of the income earned by the assets she owns ($10 per month for the savings account and $50 per month from the money market account) counts as income in her LTC income calculation.

If the couple attributes their assets so that the couple needs to transfer assets from the community spouse to the LTC spouse, the transfer must occur prior to approving eligibility for the LTC spouse. The couple cannot wait until the LTC spouse’s first annual renewal. Verify that the transfer has taken place before approving eligibility.

Rudolph is married to Maya, a community spouse. The Community Spouse Asset allowance is $40,000. At the time of Rudolph’s request for MA payment of LTC services the couple owned four non-excluded assets:

The couple decides they want Maya’s Community Spouse Asset Allowance to include the savings account, the boat and the CD. MA policy considers the life estate to be an unavailable asset if attributed to Rudolph, so he is determined to be asset eligible for MA payment of LTC services. He meets all eligibility requirements for MA payment of LTC services.

The transfer of the life estate interest to Rudolph must occur prior to approving eligibility for him. Verify the transfer before approving eligibility of MA payment of LTC services for Rudolph.

Community Spouse Does Not Make Assets Available to the LTC Spouse

The community spouse must make assets attributed to the LTC spouse available to the LTC spouse. If the community spouse refuses to cooperate in the asset assessment process, asset eligibility for the LTC spouse is still possible. If the assets the LTC spouse has access to are equal to or below the asset limit for MA eligibility, the LTC spouse can be considered asset eligible for MA payment of LTC services if one of the following conditions is met:

l The LTC spouse is unable to assign rights to support because of a physical or mental impairment.

l The agency determines that denying eligibility would cause an imminent threat to the health and well-being of the LTC spouse.

The LTC spouse must provide as much information as known about the assets owned by the community spouse. If the worker approves MA payment of LTC services without the cooperation of the community spouse, a cause of action exists against the community spouse for the dollar value of assets over the community spouse asset allowance or the amount of MA expenditure, whichever is less. Refer the case to the county attorney’s office.

Redetermine asset eligibility following standard MA guidelines for household composition and asset deeming if:

l the LTC spouse has not had a Break in Long-Term Care (LTC) Services and eligibility is being determined on or after the LTC spouse’s first annual renewal.

Zeke is married to Donna. Zeke requested MA payment of LTC services in March because he entered a nursing home for a permanent stay. His worker based his asset eligibility on an asset assessment since Donna was a community spouse at the time. Zeke was determined eligible for MA payment of LTC services. Nine months later Donna passed away.

Redetermine asset eligibility for Zeke. Base his asset eligibility on all assets that he owns. Do not count any of Donna’s assets toward Zeke’s asset limit until the assets are available to him.

Violet is married to Harry. Violet requested MA payment of LTC services in April because she entered a nursing home for an expected stay of more than 30 days. Her worker based her asset eligibility on an asset assessment since Harry was a community spouse. Violet was determined eligible for MA payment of LTC services. Four months later her health improved and she moved back home. She is not requesting EW services.

Close MA payment of LTC services. Redetermine asset eligibility for Violet by counting Harry in her household size. Base her asset eligibility on all assets the couple owns.

Sonya is married to Doug. Sonya requested MA payment of LTC services in May because she wanted to receive services through EW. At the time of her request she resided with Doug in their home. Her worker approved eligibility for Sonya based on the results of the asset assessment. Six months later, Doug injured himself and his health deteriorated. He entered an LTCF and a physician expects him to reside there permanently.

Redetermine asset eligibility for Sonya. She remains a household size of 1 since she is on EW. Base her asset eligibility on all assets that she owns.

Note: If Doug requests MA payment of LTC services, he would also be a household size of 1. Since his wife is on EW, he would not have a community spouse. Therefore, do not base his asset eligibility on an asset assessment. Determine his asset based on all assets that he owns.

After the LTC spouse is determined eligible for MA payment of LTC services, do not use the community spouse’s assets to determine eligibility for the LTC spouse as long as there is not a break in LTC services. If the LTC spouse acquires assets in excess of the asset limit, the LTC spouse may transfer the assets, without incurring a transfer penalty, to either:

Note: Sole benefit means that no other individual or entity can benefit in any way from the assets or income at the time of a transfer or at any time in the future.

Truman enters an LTCF and applies for MA payment of LTC services. He is married to a community spouse. The asset assessment is completed and the couple attributes their assets based on the results of the asset assessment. Truman receives an inheritance five years after his worker approved eligibility for MA payment of LTC services. He reduces his assets to maintain MA eligibility by transferring the inheritance to his wife for her sole benefit.

The transfer of the inheritance to Truman’s wife is not subject to a transfer penalty. Truman remains eligible for MA payment of LTC services.

Chapter 19 - Assets	Effective: January 1, 2011
19.45.10 - Determining Asset Eligibility for the LTC Spouse	Archived: June 1, 2016 (Previous Versions)