Ohio Admin. Code 5160:1-3-05.6 - Medicaid: burial funds and contracts
(A) This rule describes the treatment of
burial funds and burial contracts for purposes
the purpose
of determining eligibility for medical assistance.
(B) Definitions.
(1) "Burial funds" are revocable burial
contracts, revocable burial trusts, other revocable burial arrangements
(including the value of certain installment contract
contracts for
burial spaces), cash, financial accounts (checking or savings accounts), or
other financial instruments with a definite cash value (e.g., stocks, bonds, etc.).
(2) "Prepaid burial contract" means an
agreement whereby the buyer pays in advance for a burial that the seller agrees
to furnish upon the death of the buyer or other designated
individual.
(C) Burial
funds exclusion.
(1) Up to one thousand five
hundred dollars for each person can
shall be excluded in burial funds set aside for:
(a) The burial expenses of the individual;
and
(b) The burial expenses of the
individual's spouse.
(2)
Burial funds must be clearly designated for the individual's or the
individual's spouse's burial and must be kept separate from nonburial-related
assets in order to be excluded.
(3)
The burial funds exclusion is separate from and in addition to the burial space
exclusion described in rule
5160:1-3-05.7 of the
Administrative Code.
(4) Any
accural of interest or appreciation in the value of excluded burial funds is
excluded from resources and income, even if
when the total
value of the burial funds exceeds one thousand five hundred dollars.
(5) Expenses included for burial funds
purposes are generally those related to preparing a body for burial and any
services prior to burial to include
including transportation of the body, embalming,
cremation, flowers, clothing, services of the funeral director and staff,
etc.
(6) Any burial funds that
exceed the burial funds exclusion are combined with all other countable
resources and compared to the resource limit described in rule
5160:1-3-05.1 of the
Administrative Code.
(D)
Irrevocable prepaid burial contracts.
(1)
Irrevocable prepaid burial contracts are not a resource.
(2) Any portion of the contract that
represents burial funds reduces the amount available under the burial funds
exclusion described in paragraph (C) of this rule.
(3) Any portion of the contract that
represents the purchase of a burial
spaces
space
has no effect on the burial funds exclusion.
(E) Revocable or salable prepaid burial
contracts.
(1)
If
When a prepaid
burial contract is revocable or salable it is a countable resource and treated
as a burial fund.
(2) Any portion
of the contract that clearly represents the purchase of a burial space is
excludable as a countable resource if
when it meets the requirements of rule
5160:1-3-05.7 of the
Administrative Code.
(3) The value
of a revocable or salable burial contract is:
(a) The amount payable to the buyer upon
revocation; or
(b)
If
When the
contract is not revocable but is salable, its current
fair market
value.
(F)
Burial space contract.
(1) The burial space
exclusion described in rule
5160:1-3-05.7 of the
Administrative Code is applied to any single-purpose burial space contract
if
when:
(a) The contract lists all of the burial
spaces and either includes a value for each space or the total value of all the
spaces combined; and
(b) The
seller's obligations to provide those items is not contingent on further
payment, as in certain installment contracts (ie.
i.e., the items
are actually being held for the individual's future use).
(2) Treat the burial space contract as burial
funds when:
(a) The unidentified portion of a
contract that implies
that it covers only burial spaces but does not
identify some or all of the spaces or does not include either a value for each
burial space or the total of all the spaces combined;
or
and
(b)
The amount paid on an installment contract for burial spaces
if
when the
contract does not entitle the individual to the spaces until the full purchase
price has been paid.
(G) Life insurance funded burial contracts.
(1) A life insurance funded burial contract
involves an individual owning/purchasing a life insurance policy on his or her
own life and then assigning, revocably or irrevocably, either the ownership or
proceeds of the policy to a third party, generally a funeral provider. The
purpose of the assignment is to fund a burial contract.
(a) Assignment of ownership.
(i) Revocable assignment of ownership.
(a) The burial space exclusion described in
rule 5160:1-3-05.7 of the
Administrative Code does not apply because the funeral provider has not
received payment and no purchase of burial spaces has been made. The provider
has no obligation to provide any spaces until the individual dies and,
therefore, no spaces are being held for the individual.
(b) The resource value of the burial contract
is equal to the cash surrender value (CSV) of the life insurance policy,
subject to the burial funds exclusion described in paragraph (C) of this
rule.
(ii) Irrevocable
assignment of ownership.(b)(c) The life insurance
policy and burial contract are not resources. The face value (FV) of the burial
funds portion of the contract, if any, is subject
to the burial funds exclusion described in paragraph (C) of this
rule.
(a) The burial space
exclusion described in rule
5160:1-3-05.7 of the
Administrative Code may
shall apply if
when the individual has:
the burial space contract with a funeral service company for
specified burial spaces represents current right to the use of the items at the
amount shown. Any portion of the burial contract that represents the purchase
of a burial space has no effect on the burial funds exclusion described in
paragraph (C) of this rule.
(i)
Title to and/or possesses a burial space intended for
the individual's use; or
(ii)
A contract with a funeral service company for a
specified burial space for the individual's burial.
(b)
Any portion of
the burial contract that represents the purchase of a burial space has no
effect on the burial funds exclusion described in paragraph (C) of this
rule.
(b)
Assignment of proceeds.
(i) Revocable
assignment of proceeds.
(a) The burial space
exclusion described in rule
5160:1-3-05.7 of the
Administrative Code does not apply to the CSV of the life insurance policy
because the funeral provider has not received payment and no purchase of burial
spaces has been made. The provider has no obligation to provide any spaces
until the individual dies and, therefore, no spaces are being held for the
individual.
(b) The resource value
of the burial contract is equal to the CSV of the life insurance policy.
(i)
If
When the FV of all
life insurance policies on the individual's life is one thousand five hundred
dollars or less, the CSV is excluded under the life insurance exclusion
described in rule
5160:1-3-05.12 of the
Administrative Code.
(ii)
If
When the FV
of all life insurance polices
policies exceeds one thousand five hundred dollars,
treat the CSV of the policy
policies
according to the burial funds exclusion described in paragraph (C) of this
rule.
(ii)
Irrevocable assignment of proceeds. The irrevocable assignment of proceeds is
not premitted
permitted by insurance companies without requiring the
irrevocable assignment of ownership.
(2) When an individual irrevocably transfers
ownership of a revocable life insurance policy that funds a burial contract to
a trust established by a funeral company, the
CSV
resource
value of the policy is evaluated under the
trust
in accordance with rule
5160:1-3-05.2 of the
Administrative Code based on the date of the
transfer.
(a)
When a life insurance policy is placed irrevocably in a
trust prior to January 1, 2000, evaluate the resource value of the policy in
accordance with rule
5160:1-3-05.2 of the
Administrative Code. The policy's CSV is not a resource when the individual
does not have the legal authority to revoke or terminate the trust or to direct
the use of the trust assets for his or her own support and
maintenance.
(b)
When a life insurance policy is placed irrevocably in a
trust on or after January 1, 2000, the policy's CSV is a resource when the
arrangement constitutes a trust established with the individual's funds.
However, it is not a resource when the arrangement constitutes a purchase of
goods and services by the individual and the subsequent establishment of a
trust with the funeral provider's funds.
(c)
The CSV of the
burial funds portion of the contract is subject to the burial funds exclusion
described in paragraph (C) of this rule.
(3) Life insurance funded burial contracts
are not burial insurance.
(4)
Dividend accumulations of a life insurance policy as part of the value of the
policy or the prepaid burial contract are not excluded. Dividend accumulations
are separate resources and must be designated separately in order to qualify
for the burial funds exclusion.
(H) Burial insurance.
(1) Burial insurance is a contract whose
terms prevents the use of its proceeds for anything other than payment of the
insured's burial expenses.
(2)
Treat burial insurance as burial funds described in paragraph (C) of this
rule.
(3) The value of the burial
insurance policy is the FV of the policy.
(I) Contracts for both burial
spaces
funds
and burial funds
spaces. If
When a contract does not indicate which amounts
represent the purchase of burial spaces and which amount represents burial
funds, and which parts, if any, are irrevocable, the entire contract shall be
considered a resource in the form of burial funds.
Notes
Promulgated Under: 111.15
Statutory Authority: 5160.02, 5163.02
Rule Amplifies: 5160.02, 5163.02
Prior Effective Dates: 09/03/1977, 02/01/1979, 10/01/1979, 01/03/1980, 12/01/1984 (Emer.), 02/01/1985, 05/03/1985 (Emer.), 08/01/1985, 09/01/1985 (Emer.), 11/25/1985, 10/01/1988 (Emer.), 12/20/1988, 10/01/2002, 10/02/2014, 08/01/2016, 09/01/2017
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
(A) This rule describes the treatment of burial funds and burial contracts for purposes of determining eligibility for medical assistance.
(B) Definitions. (3) (2) "Prepaid burial contract" means an agreement whereby the buyer pays in advance for a burial that the seller agrees to furnish upon the death of the buyer or other designated individual.
(1) "Burial funds" are revocable burial contracts, revocable burial trusts, other revocable burial arrangements (including the value of certain installment contract for burial spaces), cash, financial accounts (checking or savings accounts), or other financial instruments with a definite cash value (e.g. stocks, bonds, etc.).
(2) "Liquid assets" means cash or property immediately convertible to cash.
(C) Burial funds exclusion.
(1) Up to one thousand five hundred dollars for each person can be excluded in burial funds set aside for:
(a) The burial expenses of the individual; and
(b) The burial expenses of the individual's spouse.
(2) Burial funds must be clearly designated for the individual's or the individual's spouse's burial and must be kept separate from nonburial-related assets in order to be excluded.
(3) The burial funds exclusion is separate from and in addition to the burial space exclusion described in rule 5160:1-3-05.7 of the Administrative Code.
(4) Any accural of interest or appreciation in the value of excluded burial funds is excluded from resources and income, even if the total value of the burial funds exceeds one thousand five hundred dollars.
(5) Expenses included for burial funds purposes are generally those related to preparing a body for burial and any services prior to burial to include transportation of the body, embalming, cremation, flowers, clothing, services of the funeral director and staff, etc.
(6) Any burial funds that exceed the burial funds exclusion are combined with all other countable resources and compared to the resource limit described in rule 5160:1-3-05.1 of the Administrative Code.
(D) Irrevocable prepaid burial contracts.
(1) Irrevocable prepaid burial contracts are not a resource.
(2) Any portion of the contract that represents burial funds reduces the amount available under the burial funds exclusion described in paragraph (C) of this rule.
(3) Any portion of the contract that represents the purchase of burial spaces has no effect on the burial funds exclusion.
(E) Revocable or salable prepaid burial contracts.
(1) If a prepaid burial contract is revocable or salable it is a countable resource and treated as a burial fund.
(2) Any portion of the contract that clearly represents the purchase of a burial space is excludable as a countable resource if it meets the requirements of rule 5160:1-3-05.7 of the Administrative Code.
(3) The value of a revocable or salable burial contract is:
(a) The amount payable to the buyer upon revocation; or
(b) If the contract is not revocable but is salable, its current market value.
(F) Burial space contract.
(1) The burial space exclusion described in rule 5160:1-3-05.7 of the Administrative Code is applied to any single-purpose burial space contract if:
(a) The contract lists all of the burial spaces and either includes a value for each space or the total value of all the spaces combined; and
(b) The seller's obligations to provide those items is not contingent on further payment, as in certain installment contracts (ie. the items are actually being held for the individual's future use).
(2) Treat the burial space contract as burial funds when:
(a) The unidentified portion of a contract that implies it covers only burial spaces but does not identify some or all of the spaces or does not include either a value for each burial space or the total of all the spaces combined; or
(b) The amount paid on an installment contract for burial spaces if the contract does not entitle the individual to the spaces until the full purchase price has been paid.
(G) Life insurance funded burial contracts.
(1) A life insurance funded burial contract involves an individual owning/purchasing a life insurance policy on his or her own life and then assigning, revocably or irrevocably, either the ownership or proceeds of the policy to a third party, generally a funeral provider. The purpose of the assignment is to fund a burial contract.
(a) Assignment of ownership.
(i) Revocable assignment of ownership.
(a) The burial space exclusion described in rule 5160:1-3-05.7 of the Administrative Code does not apply because the funeral provider has not received payment and no purchase of burial spaces has been made. The provider has no obligation to provide any spaces until the individual dies and, therefore, no spaces are being held for the individual.
(b) The resource value of the burial contract is equal to the cash surrender value (CSV) of the life insurance policy, subject to the burial funds exclusion described in paragraph (C) of this rule.
(ii) Irrevocable assignment of ownership.
(a) The burial space exclusion described in rule 5160:1-3-05.7 of the Administrative Code may apply if the burial space contract with a funeral service company for specified burial spaces represents current right to the use of the items at the amount shown. Any portion of the burial contract that represents the purchase of a burial space has no effect on the burial funds exclusion described in paragraph (C) of this rule.
(b) The life insurance policy and burial contract are not resources. The face value (FV) of the burial funds portion of the contract is subject to the burial funds exclusion described in paragraph (C) of this rule.
(b) Assignment of proceeds.
(i) Revocable assignment of proceeds.
(a) The burial space exclusion described in rule 5160:1-3-05.7 of the Administrative Code does not apply to the CSV of the life insurance policy because the funeral provider has not received payment and no purchase of burial spaces has been made. The provider has no obligation to provide any spaces until the individual dies and, therefore, no spaces are being held for the individual.
(b) The resource value of the burial contract is equal to the CSV of the life insurance policy.
(i) If the FV of all life insurance policies on the individual's life is one thousand five hundred dollars or less, the CSV is excluded under the life insurance exclusion described in rule 5160:1-3-05.12 of the Administrative Code.
(ii) If the FV of all life insurance polices exceeds one thousand five hundred dollars, treat the CSV of the policy according to the burial funds exclusion described in paragraph (C) of this rule.
(ii) Irrevocable assignment of proceeds. The irrevocable assignment of proceeds is not premitted without requiring the irrevocable assignment of ownership.
(2) When an individual irrevocably transfers ownership of a revocable life insurance policy that funds a burial contract to a trust, the CSV of the policy is evaluated under the trust rule 5160:1-3-05.2 of the Administrative Code.
(3) Life insurance funded burial contracts are not burial insurance.
(4) Dividend accumulations of a life insurance policy as part of the value of the policy or the prepaid burial contract are not excluded. Dividend accumulations are separate resources and must be designated separately in order to qualify for the burial funds exclusion.
(H) Burial insurance.
(1) Burial insurance is a contract whose terms prevents the use of its proceeds for anything other than payment of the insured's burial expenses.
(2) Treat burial insurance as burial funds described in paragraph (C) of this rule.
(3) The value of the burial insurance policy is the FV of the policy.
(I) Contracts for both burial spaces and burial funds. If a contract does not indicate which amounts represent the purchase of burial spaces and which amount represents burial funds, and which parts, if any, are irrevocable, the entire contract shall be considered a resource in the form of burial funds.
Notes
Promulgated Under: 111.15
Statutory Authority: 5160.02, 5163.02
Rule Amplifies: 5160.02, 5163.02
Prior Effective Dates: 9/3/77, 2/1/79, 10/1/79, 1/3/80, 12/1/84 (Emer.), 2/1/85, 5/3/85 (Emer.), 8/1/85, 9/1/85 (Emer.), 11/25/85, 10/1/88 (Emer.), 12/20/88, 10/1/02, 10/2/14, 8/1/16