7 AAC 100.510 - Transfer of assets | State Regulations | US Law

(a) The requirements of this section apply to

(1) an individual eligible for long-term care Medicaid under 7 AAC 100.500 - 7 AAC 100.502; and

(2) an individual who is receiving home and community-based waiver services, regardless of eligibility category.

(b) To establish Medicaid eligibility for an individual described in (a) of this section, the department will determine whether the applicant transferred an asset for less than fair market value during the look-back period described in (c) of this section. If the department determines that during the look-back period the applicant transferred an asset for less than fair market value, the department will determine if the applicant is subject to a transfer-of-asset penalty under (d) or (e) of this section.

(c) The look-back period is the period beginning with the baseline date and extending back to the look-back date. The baseline date is the date an applicant is admitted to a medical institution for a continuous period of institutionalization, the date home and community-based waiver services are approved under 7 AAC 130.205 - 7 AAC 130.219, or the date of application for Medicaid, whichever is later. The look-back date is the earliest date on which a transfer-of-asset penalty may be assessed, and is always the same day of the month as the baseline date. If an applicant uses a recognized Medicaid trust under 7 AAC 100.600 - 7 AAC 100.619 or relies on an annuity to qualify for Medicaid, the look-back period is 60 months immediately preceding the baseline date and extending back to the look-back date. For all other applicants who apply before July 20, 2007, the look-back period is the 36 months immediately preceding the baseline date and extending back to the look-back date. For an applicant who applies on or after July 20, 2007, the look-back period is 60 months immediately preceding the baseline date and extending back to the look-back date.

(d) For a transfer of an asset for less than fair market value that occurred on or before February 7, 2006, the transfer-of-asset penalty will be determined by

(1) totaling the uncompensated value of all transfers that occurred during the look-back period;

(2) dividing the total in (1) of this subsection by the average monthly cost to a private patient of nursing home care in the individual's community on the date of application or, if the department cannot determine the community in which the individual would receive nursing facility services, the current swing-bed rate established under 7 AAC 150.160(i);

(3) rounding the quotient in (2) of this subsection down to the nearest whole number; and

(4) establishing a transfer-of-asset penalty period equal in months to the number established in (3) of this subsection.

(e) For a transfer of an asset for less than fair market value that occurs on or after February 8, 2006, the transfer-of-asset penalty will be determined by

(1) totaling the uncompensated value of all transfers that occurred during the look-back period;

(2) dividing the total in (1) of this subsection by the average monthly cost to a private patient of nursing home care in the individual's community on the date of application or, if the department cannot determine the community in which the individual would receive nursing facility services, the current swing-bed rate established under 7 AAC 150.160(i); and

(3) establishing a transfer-of-asset penalty period equal in months, including any partial month, to the quotient in (2) of this subsection.

(f) If multiple asset transfers occur within the same look-back period, the total cumulative uncompensated value of all transfers will be treated as one transfer for the purpose of determining the penalty period.

(g) The penalty period determined under (d) of this section begins the first day of the month after the first transfer was made and runs continuously through the end of the penalty period, regardless of whether the individual continues to live in a medical institution or receive home and community-based waiver services. The penalty period determined under (e) of this section begins on the first day of the following month, whichever is later:

(1) the month immediately after the month the transfer occurred;

(2) the month that the department determines the recipient is eligible to receive long-term care services.

(h) Except as provided in (i) of this section, if both spouses are institutionalized or begin receiving home and community-based waiver services in the same month, the penalty period will be divided equally between each spouse. The total of the divided penalty periods imposed on both spouses do not exceed the number of months of the penalty period.

(i) If a community spouse is institutionalized or begins receiving home and community-based waiver services after the first long-term care spouse, and a transfer-of-asset penalty period is still in effect for the first long-term care spouse, the remaining penalty period will be divided equally between the two spouses in accordance with (h) of this section. When determining the Medicaid eligibility of the former community spouse who is now also institutionalized or receiving home and community-based waiver services, the department will establish a new look-back period in accordance with (c) of this section. Only a transfer that occurred during the portion of the former community spouse's look-back period that does not overlap with the look-back period of the first long-term care spouse is subject to a transfer-of-asset penalty, and only the former community spouse is subject to that penalty.

(j) When an individual has multiple periods of institutionalization or has multiple applications for Medicaid, regardless of whether the applications were successful, the look-back period will be based on a baseline date that is the first date upon which the individual has both applied for Medicaid and is institutionalized or receiving home and community-based waiver services. If an individual has applied for Medicaid more than once and has made more than one transfer of assets for less than fair market value, the baseline date is that date on which the individual first applied for Medicaid or, if later, made the first transfer of assets for less than fair market value after applying.

(k) The following asset transfers do not result in a transfer-of-asset penalty:

(1) a compensated transfer in which the transferor has received a tangible object, service, or benefit that has a value equal to or greater than the value of the equity of the transferred asset;

(2) the transfer of an asset that is an excluded asset under 7 AAC 100.400;

(3) the transfer of an asset in which an individual attempted to dispose of the asset at fair market value, but actually disposed of the property at less than fair market value; the individual must provide the department with documentation to support the value at which the asset was disposed and why that value was used, including changes in the market or condition of the asset;

(4) a transfer made exclusively for a purpose other than to qualify for Medicaid or remain eligible for Medicaid at a future date; a transferor must provide the department with documentation that substantiates the specific purpose for which the asset was transferred;

(5) a transfer in which the transferred asset has been returned to the individual;

(6) the transfer of a home if the home was transferred to

(A) a spouse;

(B) a child of the transferor who is under 21 years of age;

(C) a child of the transferor who is blind under 7 AAC 40.140(a) or disabled under 7 AAC 40.170(a);

(D) a sibling of the transferor who is a co-owner of the home and was residing in the home for a period of at least one year immediately before the individual was institutionalized or began receiving home and community-based waiver services; or

(E) an adult child of the transferor who

(i) resided in the home for at least two years immediately before the transferor was institutionalized or began receiving home and community-based waiver services; and

(ii) provided care to the transferor throughout the two-year period in (i) of this subparagraph that allowed the transferor to live at home rather than in a medical institution or live at home without the use of home and community-based waiver services;

(7) a transfer of income to a Medicaid qualifying income trust under 7 AAC 100.610, or a transfer of assets to a special needs trust under 7 AAC 100.612 or pooled trust under 7 AAC 100.614;

(8) a transfer to a community spouse under 7 AAC 100.506 to prevent spousal impoverishment;

(9) a transfer to a spouse, child, or disabled person that complies with (l) of this section;

(10) the purchase of a promissory note, loan, or mortgage if the note, loan, or mortgage

(A) is actuarially sound under 7 AAC 100.514(b);

(B) provides for scheduled periodic payments of equal amount evenly distributed over the term of the note, loan, or mortgage, with no deferral or balloon payments; and

(C) prohibits cancellation of the balance upon the death of the lender.

(l) The transfer of an asset to an individual's spouse or child, or to a disabled person is not subject to a transfer-of-asset penalty if the individual transferred the asset

(1) to the individual's spouse or to another individual for the sole benefit of the individual's spouse;

(2) from the individual's spouse to another individual for the sole benefit of the individual's spouse;

(3) to the individual's child for the sole benefit of the individual's child, if the child has been determined blind under 7 AAC 40.140(a) or disabled under 7 AAC 40.170(a);

(4) to a trust established for the sole benefit of the individual's child, if the child has been determined blind under 7 AAC 40.140(a) or disabled under 7 AAC 40.170(a); or

(5) to a special needs trust established under 7 AAC 100.612 for the sole benefit of an applicant or recipient who is under 65 years of age and who is blind under 7 AAC 40.140(a) or disabled under 7 AAC 40.170(a).

(m) To verify that a transfer of assets under (k) and (l) of this section is for the sole benefit of an individual's spouse or child, or for the sole benefit of an applicant or recipient who is blind or disabled, the transferor must provide the department with documentation legally binding the transferor and transferee to a specified course of action and identifying the beneficiary of the assets.

(n) If an asset is jointly held by an individual and another person, the asset will be considered transferred by the individual when the individual takes any action that reduces or eliminates the individual's ownership or control of the asset.

(o) Except as provided in (p) of this section, a transfer of asset for less than fair market value occurs if an individual takes an action that prevents the receipt of an asset to which the individual or the individual's spouse is entitled or if an individual fails to take an action that makes an asset available to the individual, including

(1) irrevocably waiving pension income;

(2) waiving or disclaiming the right to an inheritance;

(3) rejecting or not accessing tort or personal injury settlement proceeds;

(4) except as provided in 7 AAC 100.514 and 7 AAC 100.604 - 7 AAC 100.619, agreeing to the diversion of tort or personal injury settlement proceeds into a trust, annuity, or similar device that results in those proceeds becoming an excluded resource or unavailable to the individual; and

(5) refusing to seek enforcement of a court-ordered judgment, including child support or spousal support.

(p) Failure to take action that makes an asset available as described in (o) of this section is not a transfer of assets for less than fair market value if the department determines that the

(1) transferor cannot afford to take the necessary action to obtain the asset; or

(2) cost of obtaining the asset is equal to or greater than the asset's worth.

(q) The penalty for transferring an asset for less than fair market value is ineligibility for long-term care services for the duration of the penalty period determined under this section.

(r) If an applicant or recipient disposes of an asset for less than fair market value, the department will reduce its determination of uncompensated value under (d) and (e) of this section if the applicant or recipient provides evidence satisfactory to the department that

(1) the physical or legal condition or market value of the real property at the time of transfer is different than at the time the tax-assessed value was determined; or

(2) changes to the market, condition of the asset, or other circumstances beyond the control of the applicant or recipient prevented the applicant or recipient from receiving fair market value in compensation.

7 AAC 100.510 - Transfer of assets

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