*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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: June 1, 2011 |
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19.40 - Transfers |
Archived: June 1, 2016 (Previous Versions) |
The transfer of an asset or income without adequate compensation, known as an uncompensated transfer (formerly called an "improper transfer"), may result in a period of ineligibility for Medical Assistance (MA) payment of long-term care (LTC) services. The transfer provisions do not apply to basic MA or MinnesotaCare.
Transfers can result in a period of ineligibility, known as a transfer penalty, if the client:
l did not receive adequate compensation, and
l there is no transfer penalty exception.
Note: These provisions also apply to transfers made by a spouse, including transfers made in the lookback period and after a spouse receiving LTC services has been approved to receive MA payment for LTC services.
Presume the transfer of an asset or income is for the purpose of obtaining or maintaining eligibility for MA payment of LTC services until the applicant or enrollee has proven otherwise. See Transfers Made for Purposes Other Than to Qualify for MA for information on how a client can prove that a transfer was not done to obtain or maintain eligibility and Transfer Exceptions for information on uncompensated transfers that are exempt from a transfer penalty.
This section of the manual details the policy needed to evaluate transfers and determine potential ineligibility for LTC services.
How Do You Discover a Transfer?
What Are the Steps in Processing a Transfer?
A transfer occurs when a person or the person's spouse gives away, sells, conveys ownership, and/or reduces control, or disposes of any asset or income or an interest in an asset or income.
Examples of transfers may include:
l Transferring an interest in a life estate to another person.
l Annuitizing an annuity.
l Transferring assets or income into a client-funded trust.
l Transferring assets or income into a special needs or pooled trust after the client turns age 65.
l Assigning the right to an income stream to another person.
l Reducing or eliminating ownership or control of income or assets held in common with another person or persons.
l Placing an asset into joint ownership with another person thereby reducing or eliminating ownership, interest, control or right to sell or dispose of an asset.
Example:
June owns her house with a net value of $100,000. Her sister moves into the house and June decides to put the house in both of their names. June’s sister does not reimburse June for any of the equity. June’s sister now has joint ownership of the house.
Action:
This is a transfer of an asset because it reduces the ownership interest in the house for June. She now owns only $50,000 of the equity of the house. The other $50,000 was transferred to her sister.
l Any action that results in a person giving up the right to income or assets to which the person is entitled, unless:
n The person cannot afford to take action to obtain the asset or income.
n The cost of taking the action is more than the asset or income is worth.
Examples of this type of transfer include:
m Refusing to accept an inheritance or testamentary gift, unless the costs associated with accepting it exceed the value of the gift.
Example:
Lester’s father died and left his estate to Lester. The estate included a dilapidated house and barn valued at $40,000. If Lester chose to accept the inheritance he would have to pay $50,000 in back taxes. Lester refused the inheritance.
Action:
This is not a transfer because the back taxes exceed the value of the property.
m A spouse’s refusal to petition the court to receive his or her elective share of a spouse’s estate when the value of the elective share is greater than the provisions for the surviving spouse in a will.
l Waiving pension income or diverting it to a trust or similar device for the benefit of another.
Example:
Angela assigned her pension income to go directly into a trust fund for her child. She does not have access to the income when it is in the trust.
Action:
This is a transfer of income.
l Refusing to take affordable legal action to obtain court-ordered payments that are not being paid, such as child support and alimony.
l Not accepting or taking action to obtain a right to personal injury settlements.
l Diverting personal injury settlements by the defendant into a trust or similar legal device to be held for the benefit of the plaintiff, unless the exception for a disabled person applies.
l Certain purchases. Evaluate the purchase of any of the following on or after July 1, 2006 as an uncompensated transfer:
n A loan, mortgage or promissory note.
n A life estate interest in another person's home.
n Personal care services.
n Other services.
n Personal or real property.
Some actions taken during a person’s lifetime may look like a transfer but are not an actual transfer until after the person dies.
Examples of what is not a transfer:
l When a person signs a transfer on death deed (TODD) the person is not transferring the real property at the time the deed is signed. The real property does not transfer to the grantee until the death of the grantor/owner.
l When there is a change in the beneficiary of a life insurance policy.
Note: A life insurance-funded burial may no longer be excluded if the contingent beneficiary is changed to someone other than the beneficiary’s estate.
How Do You Discover a Transfer?
Health care applications and renewals ask if anyone has transferred income or assets. The client must answer this question to be eligible for MA.
Do not:
l Request information from a client regarding transfers unless evidence from other sources indicates transfers have occurred, or the client or client’s representative has reported a transfer.
l Assume at application or renewal that a transfer has occurred.
l Automatically request information such as bank statements or tax returns for the months of the lookback period.
There must be information reported and evidence presented before any such information is requested.
What Are the Steps in Processing a Transfer?
There are specific steps to follow when any of the following people make a transfer on behalf of the client or the client's spouse:
l The client.
l The client’s spouse.
l The client's representative on behalf of the client or client’s spouse.
Note: This includes a court or administrative body with legal authority to act in place of or on behalf of the person or spouse.
l A person, court or administrative body acting at the direction of or at request of the client or spouse.
The steps are:
1. Determine the transfer date.
2. Determine if the transfer took place during the lookback period or while the client was receiving MA payment of LTC services. Stop here if the transfer took place prior to the lookback period. Continue to the next step if the transfer took place within the lookback period or while the client was receiving MA payment of LTC services.
3. Determine if the transfer meets a transfer exception. Stop here if the transfer meets a transfer exception. Continue to the next step if the transfer does not meet a transfer exception.
4. Determine the uncompensated value of the transfer. This step calculates whether a client has received adequate compensation. Stop here if the client received adequate compensation. Continue to the next step if the if the client did not receive adequate compensation.
5. Determine the transfer penalty.
6. Impose the transfer penalty.
Note: Once the transfer penalty has been imposed it can be waived if the client, the client’s authorized representative or the LTCF requests a hardship waiver of the transfer penalty and the county approves the waiver.
A transfer penalty results in a period of ineligibility for the MA payment of long-term care services for the length of the transfer penalty period.
MA long-term care services include:
n Skilled nursing facility care.
n Nursing facility care in an inpatient hospital.
n Intermediate care facility services.
n Services provided through the following home and community-based waivers:
m CADI.
m CAC.
m DD.
m EW.
m BI.
The person remains eligible for all other MA services.