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Effective: December 1, 2006 |
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19.25.25ar1 - Vehicles (Archive) |
Archived: December 1, 2008 |
This section provides policy for vehicles.
Determining Vehicle Equity Value.
Vehicles - MinnesotaCare, MA Method A, and GHO.
Vehicles - MA Method B and GAMC.
A vehicle may be any conveyance used on air, land, or water.
l It need not be licensed.
l It is considered non-liquid personal property for asset calculation purposes.
Determining Vehicle Equity Value
To determine the equity value of a vehicle, use the fair market value (FMV) minus any encumbrances.
l The encumbrances must be from a secured loan which is any loan for which the vehicle is held as collateral and/or the lender holds title to the vehicle.
l If the client does not supply a value, see the National Automobile Dealers Association (NADA) trade-in value.
Follow program provisions in Verification of Assets for more information on assets that must be verified.
Vehicles - MinnesotaCare, MA Method A and GHO
Count the equity value of any vehicles that are not excluded or unavailable.
l Exclude vehicles used in a trade or business if the criterion is met. See Self-Support Excluded Assets and Self-Employment Excluded Assets.
l 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).
n 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.
n 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. The equity values of the cars are:
n Car 1: $12,000 - used by Jon for work.
n Car 2: $25,000 - used only when the family goes on a trip.
n Car 3: $13,000 - used by Marie to seek employment.
n Car 4: $5,000 - used by Ben to get to work.
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 following vehicles will be excluded:
m Car 2: $25,000 - It has the highest equity value so is first to be excluded even though it isn’t used for employment.
m Car 3: $13,000 - It has the second highest equity and is used for Marie to seek employment.
m Car 1: $12,000 - It has the third highest equity and is used for employment.
m Car 4’s $5,000 equity value will be counted 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.
m If Jessica began working, or started looking for a job and used Car 2 for this purpose, all four cars would be excluded.
Example:
Rolf and Joyce apply for health care for themselves and their two children, under age four. They have three vehicles valued at $5,000, $6,000 and $8,000. They owe $5,000 on the $6,000 vehicle and own the other two outright. Joyce is employed, using one of the vehicles to get to work and Rolf is a stay-at-home dad.
Action:
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 will be counted toward the asset total. $6,000 will be counted toward the asset total. The calculation: $5,000 equity + ($6,000 equity - $5,000 encumbrance).
Vehicle - MA Method B and GAMC
Count the equity value of any vehicles that are not excluded or unavailable.
l Exclude the equity value of the following:
n A vehicle used as the client’s principal place of residence, if a homestead is not already excluded. See Homestead Real Property.
n Vehicles used for self-support. See Self-Support Excluded Assets.
l If a vehicle cannot be excluded for one of the above, exclude the equity value of one vehicle per household, regardless of the value, if it is used for transportation of the client or a member of the client’s household.
n Assume the vehicle is used for transportation unless there is evidence to the contrary.
n If more than one vehicle is used for transportation, exclude the vehicle used for transportation that has the highest equity value.
l Do not exclude the equity value of vehicles that:
n Have been junked.
n Are used only as recreation, such as a boat used on the weekends 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. The first vehicle is used to get to the grocery and has a FMV of $3,400. The second vehicle is used to get to the doctor and has a FMV of $12,000 with $9,000 remaining on a bank loan.
Action:
The RV with equity value of $200,000 is excluded because it is the principal place of residence for Yara and Thor. The equity value of the remaining vehicles, $6,400, must be counted toward the asset total. The calculation: $3,400 equity of the first vehicle + ($12,000 FMV - $9,000 encumbrance = $3,000) = $6,400 equity value.
Example:
Jazz and Max, both disabled and applying for health care, own two vehicles. The first vehicle is used to get to the grocery and has a FMV of $3,400. The second vehicle is used to get to the doctor and has a FMV of $12,000 with $9,000 remaining on a bank loan.
Action:
Only one vehicle can be excluded for transportation and since both are used for transportation, exclude the vehicle with the highest equity. The $3,400 of equity value of the first vehicle is excluded. $3,000 of the second vehicle will be counted toward the asset total. The calculation is $12,000 FMV - $9,000 encumbrance = $3,000.