*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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. ***
Effective: December 1, 2006 |
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19.30.25 - Burial Examples |
Archived: June 1, 2016 (Previous Versions) |
LI, RBA and Other Designated Assets Example.
Emily purchased a life insurance (LI) policy for $9,200, which is also it’s current face value (FV), and immediately had it irrevocably assigned to ”any funeral provider as designated.” The burial’s statement of goods and services includes $3,200 for burial services, $1,500 for a casket, $1,500 for a vault, and $3,000 for a burial plot.
Action:
Evaluate burial assets.
l The life insurance policy is an insurance funded burial (IFB) because it is irrevocably assigned.
l Review the IFB to be sure Emily received adequate compensation. Because it was immediately used to fund a burial, compare the purchase price to the total of goods and services.
$3,200 burial services + $1,500 casket + $1,500 vault +$3000 burial plot = $9,200 total goods and services = $9,200 purchase price.
Emily did receive adequate compensation.
l As this is Emily’s only burial asset there are no duplicate goods or services.
l It is determined that the goods and services all fall within the normal and customary charges for the area in which Emily lives.
l The $3,000 Burial plot is excluded as a burial space.
l The $1,500 vault and $1,500 casket are excluded as burial space items.
Determining the Burial Fund Exclusion (BFE):
Step 1. Because Emily does not have any non-term LI policies and only owns an IFB, Step 1 does not pertain to her situation.
Step 2. Apply $1,500 of the $3,200 of burial services to the BFE. Emily’s BFE has been satisfied.
l The remaining $1,700 of burial services is unavailable because it is an IFB.
All of Emily’s burial assets are either excluded or considered unavailable.
Gladys has a life insurance policy (LI) with a face value (FV) of $800 and a $100 cash surrender value (CSV), and an irrevocable burial agreement (IBA) with $2,000 deposited with a Minnesota funeral director. The list of goods and services is as follows: $100 for flowers, $1000 for a memorial service and $900 embalming services.
Action:
Evaluate burial assets.
l Review the IBA to be sure Gladys received adequate compensation.
$100 flowers + $1000 memorial service + $900 embalming services = $2000 total which is equal to what was deposited.
Gladys did receive adequate compensation.
l There are no duplications of goods or services.
l It is determined that the goods and services all fall within the normal and customary charges for the area in which Emily lives.
l There are no exclusions for burial space items or a burial space.
l Flowers are a cash advance item and cannot be excluded or unavailable in an IBA. Count the $100 value of the flowers toward Gladys’ asset total.
Determining the Burial Fund Exclusion (BFE):
l Apply the $800 FV of the LI to the BFE because the $800 FV of the LI is less than $1,500. The $100 of CSV is excluded. Gladys has $700 of BFE remaining.
l Gladys has $1,900 in burial services (memorial and embalming). Apply $700 of the services to the BFE. Gladys’ BFE has been satisfied.
l Subtract the $700 of services applied to the BFE from the Minnesota state limit of $2000. Gladys has $1300 of state limit remaining.
l Gladys has $1,200 of burial services remaining, which is applied to the state limit and thus are considered unavailable. Gladys still has $100 remaining of state limit.
All but the $100 of cash advance items is excluded from being counted toward Gladys’ asset total.
LI, RBA and Other Designated Assets Example
Jackson is applying for health care. He owns a non-term life insurance policy with FV of $500, an RBA with $750 in burial services and accrued interest of $150 for a total of $900, and a savings account with a balance of $2,500.
Action:
Evaluate burial assets.
The RBA does not contain any duplicated, excluded or unavailable burial assets.
Designating to the BFE:
l The $500 FV of the LI is less than $1,500. Apply the FV toward the burial fund exclusion. A balance of $1,000 remains for the BFE.
l Apply $750 of burial services in the RBA to the BFE. A balance of $250 remains for the BFE.
l There are no other burial assets left to apply to the BFE thus other designated assets may be applied. Jackson may designate $250 from his savings account to the burial fund exclusion. The money designated for his burial must be kept separate unless there is a circumstance beyond Jackson’s control that prevents this separation.
l Count the remaining amount of the savings account ($2,250) toward Jackson’s asset total.
l The interest of $150 the RBA has made is also counted toward Jackson’s asset total. Any interest earned after designation will be excluded while the RBA is excluded as part of the BFE.