LTC/EW Home Equity Limit (Archive)

Certain applicants and enrollees receiving MA payment of long-term care (LTC) services are limited to a home equity interest of $500,000 or less. The $500,000 home equity limit is verified and reviewed when people apply for MA payment of LTC services.

This section provides home equity limit policy including who has a limit or is excluded from the limit, how to apply the limit and definitions of terminology used when applying the limit.

Definitions.

Verification Requirements.

Steps to Applying the Home Equity Limit.

Notice Requirements.

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Definitions

The following terms are used exclusively in the application of the home equity limit.

Break in Long-Term Care (LTC) Services A gap of one calendar month or more in receiving MA payment of LTC services because the individual either: 1. Became ineligible for MA payment of LTC services; or 2. Stopped residing in a LTC facility or receiving services through a home and community-based waiver program..

A one calendar month or more break in receipt of LTC services when determining the LTC/EW Home Equity Limit.

A break in LTC services includes people who become ineligible for MA and/or stop receiving MA-LTC services.

Home Property an applicant or enrollee owns in whole or in part or has an ownership interest in, and in which he or she occupies, or occupied immediately prior to receiving LTC services, as the primary dwelling. A home includes the primary dwelling, all surrounding land and any building on that land, provided the land is not separated from the dwelling by property owned by another person. Land separated from the dwelling by a public right-of-way is included in the definition of the home..

Property an applicant or enrollee, requesting MA payment of LTC services, owns in whole or in part, in which he or she occupies, or occupied immediately prior to receiving LTC services, as the primary dwelling.

The property includes the primary dwelling, all surrounding land and any building on that land, provided the land is not separated from the dwelling by property owned by another person. Land separated from the dwelling by a public right-of-way is included in the definition of the home.

Primary Dwelling The living structure in which an applicant or enrollee, requesting MA payment of LTC services, currently lives in or lived in immediately prior to receiving LTC services. A primary dwelling can be real or personal property, fixed or mobile and can be located on land or water..

The living structure in which an applicant or enrollee, requesting MA payment of LTC services, currently lives in or lived in immediately prior to receiving LTC services. A primary dwelling can be real or personal property, fixed or mobile and can be located on land or water.

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Verification Requirements

Proof of the home’s fair market value (FMV) must be provided at the time the home equity limit is applied. If the FMV is greater than $500,000 encumbrances must also be verified to determine the home equity value.

Exception:  If the home equity value was verified at the last annual renewal or at application, whichever is later, additional proof is not required, regardless of whether there has been a break in LTC services.

Check with the county assessor’s website to determine the FMV of a property; request verification from the client, if the FMV is not available from the county assessor.

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Steps to Applying the Home Equity Limit

Complete the following steps for people requesting MA payment of LTC services or renewing their eligibility for payment of those services:

1. Determine if the Home Equity Limit is a condition of eligibility. Review policy provided in Applying the Home Equity Limit.

Continue to Step 2 if a review if required.

2. Compare the reported FMV of the home, or if available the county assessor’s FMV, to the home equity limit of $500,000. If the FMV is:

l  Equal to or less than the limit, and the FMV has not been verified, request verification if it is unavailable through the county assessor’s office.

l  Equal to or less than the limit, and the FMV is verified, the client is eligible if all other eligibility criteria are met. See Notice Requirements for information on whether worker comments or a manual notice are needed.

l  Greater than the limit, request verification of encumbrances and FMV if not already received. Continue to Step 3 when verifications are provided.

3. Determine the home’s equity value.

Note: If the client’s home is part of agricultural land A contiguous acreage, of 10 acres or more, used during the preceding year for agricultural purposes, or a contiguous acreage, of less than 10 acres, which is exclusively and intensively used for raising or cultivating agricultural products. with an equity value above the limit, determine the agricultural homestead The property located on agricultural land that meets the definition of "home" and includes the dwelling, the garage, if any, and one acre of land immediately surrounding the dwelling. equity value. See Agricultural Homestead for more information.

4. Compare the home equity value to the home equity limit of $500,000. If the equity is:

l  Equal to or less than the limit, the client is eligible if all other eligibility criteria are met. See Notice Requirements for information on whether worker comments or a manual notice are needed.

l  Greater than the limit, the client is ineligible for MA payment of LTC services.

n  For applicants, deny eligibility for MA payment for LTC services for applicants requesting payment of these services.

n  Close MA payment for LTC services, with 10-day notice.

n  Update MMIS to prohibit MA payment of LTC services. See the MMIS User Manual (RLVA) for instructions.

Note:  An end date must be entered even though actual months of ineligibility are not calculated. Enter an end date of 12/31/63. Update that date when the client meets the home equity limit or no longer has a home equity limit requirement.

n  Do not deny or close MA for non-LTC services if all other eligibility criteria are met.

n  See Notice Requirements for information on whether worker comments or a manual notice are needed.

Clients may request a hardship waiver when denied or closed due to the home equity limit.

These steps are also available on the Home Equity Limit Flowchart.

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Notice Requirements

Worker comments or a manual notice must be sent in certain situations.

l  Add worker comment when a client’s MA payment for LTC services is:

n  Denied, at the time of an application, due to the home equity limit. Add the following worker comment:

"Medical Assistance (MA) will not pay for your long-term care services because your home has an equity value of more than $500,000. (Minnesota Statutes, Section 256B.056, subd. 2)

Call your county worker right away if you feel your life will be in danger as a result of losing MA payment for your long-term care services."

n  Closed at the annual renewal due to the home equity limit. Add the following worker comment:

"Starting (add date) Medical Assistance (MA) will no longer pay for your long-term care services because your home has an equity value of more than $500,000. (Minnesota Statutes, Section 256B.056, subd. 2)

Call your county worker right away if you feel your life will be in danger as a result of losing MA payment for your long-term care services."

n  Send the manual notice, Notice of Action for Payment of Long-Term Care Services (DHS-4915), including the ”Important Information” on the back of the notice when an enrollee’s request for MA payment of LTC services is either:

m Approved.

m Denied due to the home equity limit.

n  Send the manual notice, Notice of Action - Payment of Long-Term Care Services (DHS-4916) giving 10-day notice, when an enrollee’s MA payment of LTC services is closed.

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