*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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

Chapter 19 - Assets

Effective:  December 1, 2006

19.30 - Determining Burial Fund Exclusion (BFE)

Archived:  June 1, 2016 (Previous Versions)

Determining Burial Fund Exclusion (BFE)

The burial fund exclusion (BFE) allows the client to set aside assets for their burial services. If the client has not established a burial fund they may designate liquid assets as their burial fund exclusion. The client can often reduce assets to program levels by setting aside their money for their burial.

It is important to keep in mind that while determining the BFE you will be switching the focus of the determination back and forth between the owner of the burial and who it is purchased or insured for. When excluding certain burials you will exclude for the purchased-for person. However, when counting burials toward an asset total it is counted toward the owner of the burial. The outlined steps to determining the BFE indicate which person you are focusing on.

What is the Burial Fund Exclusion (BFE)?

BFE Designation.

Interest Earned on Assets Designated to the BFE.

Order of Assets Applied to the BFE.

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What is the Burial Fund Exclusion (BFE)?

The Burial Fund Exclusion (BFE) allows clients to set aside, or designate, up to $1500 in assets to cover certain burial expenses. These assets that are set aside, or designated, are excluded from the client’s asset total.

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BFE Designation

A client can designate a BFE for:

l  Self.

l  Spouse.

n  Including community spouses of clients who reside in an LTCF or receive Elderly Waiver services.

n  The spouse does not have to be health care eligible.

l  Any Minnesota health care programs eligible dependent child in the household.

n  Including those living with the community spouse of clients who reside in an LTCF or receive Elderly Waiver services.

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Interest Earned on Assets Designated to the BFE

Exclude any interest, which accumulates on assets designated toward the BFE, if the interest remains in the fund after the initial valuation.

For applicants, begin excluding interest the month of application or the month the assets are designated toward the burial fund exclusion in a separate account, whichever is later.

If there is a full calendar month break in eligibility, and the client later reapplies, exclude up to $1,500 as the BFE.

Example:

John applies for health care and designates his savings account of $1,500 toward the BFE. While he receives health care, $300 in interest accumulates on the burial fund.

Action:

This interest is excluded.

John's health care is terminated due to an increase in income and he reapplies several months later. John again designates his savings account as the burial fund exclusion.

Action:

Count the $300 in interest toward John’s asset total because there has been a break in eligibility for a full calendar month or more.

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Order of Assets Applied to the BFE

Assets must be applied to the BFE in a specific order based on:

l  The types of burial assets the client owns.

l  The date of purchase in some instances.

The general order of designating to the BFE is:

1. The face value of non-term life insurance and/or insurance funded burial if the total face value of all LI policies and IFBs owned by the client is $1500 or less. See Determining the BFE - Step 1.

2. Irrevocable burial agreements in the order purchased. This includes annuity-funded burials (AFB), insurance-funded burials (IFB) which are not used in Step 1, and irrevocable burial agreements (IBA). See Determining the BFE - Step 2.

3. Revocable burial agreements (RBA) and cremation society agreements (CSA) in the order purchased. See Determining the BFE - Step 3.

4. Other assets that the client designates to the BFE. See Determining the BFE - Step 4.

These other assets must be liquid assets and include:

n  Accounts.

n  Securities.

n  Retirement Funds.

n  CSV of Life Insurance.

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