Section 210-RICR-40-00-3.6 - SSI Methodology: Treatment of Resources3.6.1Scope and PurposeA. For the purposes of Medicaid eligibility, the assessment of resources is not tied, at least directly, to their availability to pay for health care. Instead, a resource is defined broadly as cash or other property that a person owns or has access to that is or could be used for personal support and maintenance. This Section describes the general treatment of resources when using the SSI methodology to determine eligibility for the IHCC groups to which it applies. There are differences in the types of resources that count and how they are reviewed for Community and LTSS Medicaid. Key differences in the review process are as follows: 1. Simplified Resource Review for Community Medicaid - States that have expanded eligibility for low-income elders and adults with disabilities up to one hundred percent (100%) of the FPL have the authority under Federal Regulations to utilize a simplified standard when evaluating resources for initial eligibility and at renewal. Although the same resources are considered when using this simplified standard, they are evaluated in less depth than required for Medicaid LTSS eligibility because the provisions on resource transfers and spousal allocations do not apply. In addition, attestations with respect to certain resources are accepted at the time of initial application and the point of renewal. Depending on the availability of electronic data sources, verification through materials may be required subsequent to the determination of eligibility in the post-eligibility verification process. Note income and resource deeming is included in the simplified standard in Rhode Island.2. Comprehensive Resource Review for LTSS - There are both MAGI and SSI-related eligibility pathways for LTSS that differ in terms of the treatment of income and resource limits, at least at the point in which an institutional level of care becomes required. Applicants evaluated using the SSI method (IHCC groups) are subject to a resource review and, in some instances, using specialized criteria as indicated in Part 50-00-6 of this Title; the resources of applicants seeking coverage through a MAGI pathway (MACC groups) are not an eligibility factor and therefore are not considered on that basis. However, all LTSS applicants, irrespective of eligibility pathway, are subject to an in-depth review of the transfer of assets - including income and resources - to ensure that the rules are applied equitably and in accordance with the standards set in Federal and State laws and Regulations governing estate recovery. The specific provisions applicable to the evaluation of resources and transfers if assets for Medicaid LTSS are set forth in Part 50-00-6 of this Title.3.6.2DefinitionsA. For the purposes of this Section the following terms apply:1. "Annuity" means a purchased contract in which one (1) party (annuity issuer) agrees to pay the purchaser, or the person the purchaser designates (the payee or payees), a return on money deposited with the annuity issuer (either in the form of a single lump sum or several payments deposited over several months or years) according to the terms of the annuity contract.2. "Available resource" means that a person has the legal ability to access and use the resource(s) for support and maintenance. A resource is considered unavailable when there is a legal impediment that prevents the person from utilizing it for such purposes.3. "Burial expense fund" means any resources set aside for the payment of burial services or expenses. Includes burial fund and burial space funds designated for a person or a person's spouse related to burial, cremation or other burial-related expenses. May take the form of revocable burial contracts, revocable burial trusts, other revocable burial arrangements (including the value of certain installment sales contracts for burial spaces); cash accounts and other financial instruments with a definite cash value or irrevocable burial contracts.4. "Equity value" means the price an item can be reasonably expected to sell for on the local open market minus any encumbrances.5. "Fair market value" means a certified appraisal or an amount equal to the last or average price of the property or good on the open market in the locality at the time of the transfer transaction or contract for sale, if earlier.6. "Guardian" means a person or institution appointed by a court in any State to act as a legal representative for another person, such as a minor or a person with disabilities.7. "Home" means a residential property in which the person and/or person's spouse possess an ownership interest providing it also serves as the principal place of residence of the applicant and/or the applicant's spouse or dependent child.8. "Intent to return" means an expression by a person indicating that they plan to live in the home used as the principal place of residence after a temporary absence. The intent to return home is subjective rather than objective and, as such, must be expressed by the applicant or beneficiary, or an authorized representative, and take the form of a signed, written statement.9. "Life estate" means a legal arrangement entitling the owners to possess, rent, and otherwise profit from real or personal property during their lifetime. 10. "Liquid resources" means cash or other personal property that can be converted to cash within twenty (20) working days.11. "Non-liquid resources" means property that is not cash, including real and personal property that cannot be converted to cash within twenty (20) working days.12. "Ownership interest" means the person seeking Medicaid holds sole or joint legal title to the residential property or is a party to a legal covenant establishing property ownership, such as a life estate.13. "Principal place of residence" means the residential property where the beneficiary, and/or in the instances specified the spouse or a dependent child of such a person lives the majority of the time during the year - one hundred eighty-three (183) days in the previous twelve (12) months.14. "Real property" means land and generally whatever is erected, growing on, or affixed to land.15. "Representative payee" means an individual, agency, or institution selected by a court or the Social Security Administration to receive and manage benefits on behalf of another person.16. "Resource transfer" means the conveyance of right, title, or interest in either real or personal property from one (1) person to another. The conveyance may be by sale, gift, or other process.17. "Temporary absence" means a limited period in which an applicant/beneficiary is not residing in the home in which they have an ownership interest due to a hospitalization or convalescence with a relative. Temporary absences do not affect the determination of a person's principal place of residence.18. "Trust" means property that is legally held or managed by a person or organization other than by its owners.3.6.3State ResponsibilitiesA. In calculating countable resources, the State's responsibilities include, but are not limited to:1. Scope of Resource Evaluation - The resources of the person seeking Medicaid and each member of the FRU when deeming applies are evaluated at the time of initial application, when a beneficiary reports, or the State receives, information about a change in an eligibility factor, including in conjunction with the annual renewal of Medicaid eligibility and when applying for Medicaid LTSS or moving across eligibility pathways.2. Factors Affecting the Evaluation of Resources - The following factors must be considered when evaluating resources:a. Availability. The extent to which a resource can be legally accessed, and used for income support and maintenance, affects how resources are evaluated and counted. Availability is often affected when more than one (1) person has an ownership interest in the same resource.b. Liquidity. The ease of converting a resource into cash - sometimes referred to as a liquid asset - is considered when determining how it is treated for financial eligibility purposes.c. Equity value. Equity value of a resource is considered when determining the amount of a resource that counts. In general, equity value means the price an item is expected reasonably to sell for on the local open market minus any encumbrances. d. Countable vs. Excluded Resources. A resource may be counted or excluded when determining financial eligibility. The State must consider whether a resource is counted or subject to a general or coverage group-specific exclusion and then assure any applicable exclusions are considered as follows: (1) Countable Resource: A resource, whether real or personal property, that is available to the applicant or beneficiary and thus counts toward a resource limit. Resource deeming applies unless otherwise specific when determining eligibility for IHCC groups providing Community Medicaid;(2) Excluded Resource: A resource that is not counted toward the resource limit because of a specific provision in Federal or State laws or Regulations. Some resources are excluded categorically under Federal law or Regulations; other resources are excluded regardless of value for some IHCC coverage groups but at a set amount for other groups - there is no limit on the value of a home for Community Medicaid but a cap based on equity value for LTSS; and still other resources are excluded only to the extent they do not exceed a specific threshold amount, such as life insurance face value limit.3. Deemed Resources - non-LTSS only - The resources of members of the FRU must also be evaluated and any that are countable attributed to the applicant(s) in the deeming process in accordance with Subchapter 05 Part 1 of this Chapter. For Medicaid LTSS, there is no deeming and the evaluation of resources is always based on the applicant or individual - that is, an FRU and Medicaid eligibility unit size of one (1) - unless both spouses are seeking coverage subsequent to the initial determination of eligibility.4. Determination of Resource Eligibility - Resource eligibility is determined by comparing the countable resources of the FRU to the resource limits for the applicable IHCC group adjusted for the Medicaid eligibility group size.3.6.4Beneficiary's ResponsibilitiesA. Applicants and beneficiaries are responsible for: providing accurate information about their resources in the application process and submitting any necessary documentation and/or signed authorizations that may be necessary for verification purposes.3.6.5Types of Resources and Related ExclusionsA. The SSI-methodology generally divides resources into non-liquid and liquid resources. Except for cash, any kind of property may be either liquid or non-liquid. A third (3rd) distinction has been added below for resources of both kinds managed by a third (3rd) party, such as trusts. 1. Non-Liquid Resources - A non-liquid resource is property that is not cash, including real and personal property that cannot be converted to cash within twenty (20) business days. Real property, life estates, life insurance and burial funds, described below, are some of the more common kinds of non-liquid resources. Certain other non-cash resources, though they may occasionally be liquid, are nearly always non-liquid including, but not limited to, household goods and personal effects, vehicles, livestock, and machinery. Types of non-liquid resources evaluated when determining eligibility for IHCC groups are as follows: a. Home and Adjoining Land (real property). A home is a residential property which includes the shelter where a person lives, the land on which the shelter is located, related outbuildings, and surrounding property not separated from the home by intervening property owned by others. Public rights of way, such as roads that run through the surrounding property and separate it from the home, do not affect the exemption of the property. A home in which the applicant or the spouse of an applicant has an ownership interest is excluded as a resource, regardless of its value, for EAD or MN Community Medicaid. A home is also excluded for LTSS, but only up to the equity value limits established in § 3.2.7(A)(7)(e) of this Part and the provisions set forth in Part 50-00-6 of this Title with respect to the intent to remain are met. Factors affecting application of the exclusion include: (1) Principal Place of Residence. The excluded home must serve as the owner's principal place of residence. A home serves as the principal place of residence if the person or spouse with an ownership interest, sibling with an equity interest and/or dependent (minor child or relative with a disability) resides in the home for at least six (6) months and one (1) day (one hundred eighty-three (183) days) in any given year.(2) Multiple Residences. Although an applicant may own residential properties either alone or in conjunction with others, only one (1) is considered a home and may be treated as an excluded resource at any given point in time. Even in situations in which both spouses in the household are applicants, the value of only one (1) home may be excluded. When the person and their spouse/dependent child make conflicting claims over which residential property is subject to the home exclusion the following decision Rules apply: (AA) If the applicant and applicant's spouse live in separate residential properties in Rhode Island in which they share ownership, the home exclusion applies to the residential property where the person lived at the time the application for Medicaid health coverage was received by the State.(BB) If each spouse lives in a separate residential property in Rhode Island in which they share ownership, and both spouses apply for Medicaid, the home exclusion applies to the property where the spouse who applied first resides.(CC) If both spouses apply on the same day, the spouses must agree in writing which home is to be excluded. If no agreement can be reached, the home exclusion is applied to the residential property with the greatest value.(3) Out-of-State Residences. To be eligible for Medicaid, a person must be a Rhode Island resident and, as such, have intent to stay in the State permanently or for an indefinite period. Accordingly, an applicant who declares an out-of-State residential property as a home to return to is not considered a Rhode Island resident for the purposes of determining Medicaid eligibility. The out-of-State residence is considered a countable resource.(4) Multi-State Residences - When a person owns residential properties both in and out-of-State, the home exclusion is applied to the residential property located in Rhode Island. The value of any out-of-State residential property is a countable resource, even if it is the principal place of residence of the applicant's spouse/dependent child, as long as the applicant maintains an ownership interest in any Rhode Island residential property.(5) Out-of-State property owner - If the person does not own residential property in Rhode Island but lives and intends to remain in the State, the home exclusion may be applied to an out-of-State residential property if, and only if, it is the principal place of residence of the person's spouse or dependent child.(6) Sale of the Home - The home exclusion remains in effect if the Medicaid beneficiary or spouse with an ownership interest is making an effort to sell the home. For Medicaid LTSS purposes, the provisions in Part 50-00-6 of this Title apply if the home serves as the principal place of residence for an applicant or beneficiary. If efforts to sell a home that is not or no longer meets the criteria to be excluded under this Section are unsuccessful, the value of the home is treated as a countable resource unless documentation of such efforts is provided by a competent authority such as an attorney or real estate broker. Even when such documentation is provided, there is a limit on the length of time the resource is treated as unavailable as indicated in Part 50-00-6 of this Title.(7) Proceeds from the Sale - Once a home has been sold, the proceeds are excluded for six (6) months from the date they are received for Community Medicaid eligibility in accordance with Subchapter 05 Part 1 of this Chapter. Unless obligated or used for the purchase, repair or construction of another domicile or another excluded resource, the proceeds become countable on the first (1st) of the month (FOM) in the month after the sale Medicaid LTSS eligibility.(8) Temporary Absences - A home exclusion is unaffected by temporary absences due to placement in a health facility or institutional setting, including a correctional facility, provided that the owner has not placed the home in a revocable trust and the owner and:(AA) Intends to return to the home even if the likelihood of return is apparently nil;(BB) Has a spouse or dependent residing in the home; or(CC) Has a health condition that prevented the owner from living there before.b. Business/Trade Property (real property). Real estate used in business or a trade is excluded regardless of its equity value and whether it produces income.c. Income Producing Real Estate (real property). Up to six thousand dollars ($6,000.00) of the equity value in non-business real estate (excluding the home), mortgages, deeds of trust or other promissory notes may be excluded. For the exclusion to apply, the property must produce an annual income of six percent (6%) of the net market value or current face value of the property. d. Vehicle (personal property). Any motorized mode of transportation that moves persons or articles from place to place. This includes automobiles, trucks, motorcycles, tractors, snowmobiles, recreational vehicles, campers, and motorized boats. One (1) vehicle that is used as the primary source of transportation for the applicant or beneficiary is excluded, regardless of its value. The equity value above four thousand five hundred dollars ($4,500.00) of any other vehicles owned by members of the FRU is counted.e. Life estate (real property). Life estate means a legal arrangement entitling the owner of the life estate (sometimes referred to as the "life tenant") to possess, rent, and otherwise profit from real or personal property during their lifetime. The amount of a life estate that is countable depends on when it was established, whether the applicant(s) have the legal right to sell the home, and the portion of the proceeds of the sale, if allowed, is available. The owner of a life estate sometimes may have the right to sell the life estate but does not normally have future rights to the property. Life estates are only excluded in full when the owner retains the power to sell or mortgage the home. If the owner does not retain this right, the provisions in Part 50-00-6 of this Title apply.f. Burial Funds (personal property). Any funds clearly designated for burial expenses including burial spaces and related items and services. May take the form of contracts, revocable or irrevocable trusts, or other agreements, accounts, or instruments with a cash value. The following applying when determining the amount of burial expenses that may be excluded under one (1) of the following: (1) Burial Fund Exclusion (BFE). The BFE allows an individual to exclude up to one thousand five hundred dollars ($1,500.00) of resources for services including preparing the body for burial and services that are not performed at the burial site. The exclusion for a couple is three thousand dollars ($3,000.00) and for a person seeking MN eligibility is four thousand dollars ($4,000.00). These resources must be clearly designated for the person or their spouse's burial, cremation, or other burial-related services; they cannot be commingled with other resources intended for burial. This exclusion applies only if the funds set aside for burial expenses are kept separate from all other resources not intended for burial. The BFE is reduced by the face value of any whole life insurance policy excluded under this Section as well as any amounts for such services covered in a revocable burial contract.(2) Burial Space Exclusion (BSE). The BSE allows burial space items to be excluded without limiting their value. Burial space items include the burial site, a repository for bodily remains, services performed at the burial site, and items related to the burial site. Only burial space items may be excluded under the BSE. Burial services are never excluded under the BSE.(3) Irrevocable burial contracts. If a burial contract is irrevocable, the funds deposited into the agreement are unavailable and cannot be withdrawn by the person or the funeral provider until the time of need. Irrevocable burial contracts include those funded by life insurance, those funded by annuities, and those in which the person directly pays the funeral provider. Interest earned on these contracts may be separately designated as revocable or irrevocable. If the interest is designated as irrevocable, it is unavailable. If the interest is designated as revocable, it is a counted resource. The maximum amount of an exclusion for an irrevocable contract is fifteen thousand dollars ($15,000.00). Any amounts above this limit are treated as a resource for the purposes of determining financial eligibility.(4) Revocable burial contracts. If an agreement is revocable, the funds deposited into the agreement are available and can be withdrawn at any time. A revocable burial contract may be an excludable resource depending on what burial costs it is intended to cover and whether any portion of the allocated funds can be excluded due to the BSE or BFE. When a revocable burial contract is a countable resource, either the amount the owner would receive if the contract was revoked, or the current market value if it is a saleable contract, is counted less the BFE amount if not otherwise applied - that is, one thousand five hundred dollars ($1,500.00) for an individual, three thousand dollars ($3,000.00) for a couple, or four thousand dollars ($4,000.00) for a person seeking MN eligibility.g. Personal Effects and Household Goods (personal property). Personal effects are items goods such as clothing, heirlooms, jewelry and accessories. Household goods include home furnishings, such as furniture, rugs, and decorations and recreational items, such as televisions, table or digital games, musical instruments and equipment. Such items are excluded.
h. Life Insurance Policy. A contract between the policy holder and an insurer in which the insurer agrees to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of the insured person - in this case the applicant/beneficiary (often the policy holder). Whole life insurance is permanent and builds cash value over the insured person's lifetime because it has an added investment component along with its death benefit. The value of a whole life insurance policy is only counted if the person, or the person's spouse (couple) is the owner. Policies on the life of a person or applicant's spouse owned by another member of the FRU are not considered even when deeming applies (non-LTSS). Whether a policy is counted as a resource depends on two (2) factors:(1) Cash surrender value. Cash surrender value is the amount which the insurer will pay (usually to the owner) upon cancellation of the policy before death of the insured or before maturity of the policy.(2) Face value. Face value is the basic death benefit of the policy exclusive of dividend additions or additional amounts payable because of accidental death or under other special provision.(3) Counting rule. If the total face value of all life insurance policies on any person is at or below four thousand dollars ($4,000.00), no part of the cash surrender value of the life insurance is included when determining countable resources. If the face value is above four thousand dollars ($4,000.00) only the cash surrender value above four thousand dollars ($4,000.00) is a countable resource. The total amount of the cash surrender value above four thousand dollars ($4,000.00) is added to all other countable resources when determining whether an applicant or beneficiary is at or below the resource limit for Medicaid financial eligibility. The cash surrender value below four thousand dollars ($4,000.00) is treated as an unavailable resource unless or until the policy is cashed out. Term insurance and burial insurance are not taken into account.2. Liquid Resources - A liquid resource is cash or other property that can be converted to cash within twenty (20) business days. Accounts in financial institutions; retirement funds; stocks, bonds, mutual funds, and money market funds; annuities; mortgages and promissory notes; and home equity conversion plans, described below, are some of the more common kinds of liquid resources. a. Annuities. A contract reflecting payment to an insurance company, bank, charitable organization, or other registered or licensed entity; it may also be a private contract between two (2) parties. The purchase of an annuity may constitute a disqualifying transfer that results in a period of ineligibility for seeking initial or continuing Medicaid LTSS. The applicable provisions related to asset transfers are set forth in Part 50-00-6 of this Title. In addition, there are two (2) phases to an annuity, each of which also affects how it is treated as resource: an accumulation phase and a payout phase. Annuities also vary significantly by type, how beneficiaries are treated, and how they accumulate and pay out money, such as lump sum v. scheduled, usually on a monthly basis. All these factors influence whether the value of the annuity is counted or excluded. In addition, the State considers whether the annuity is a liquid resource, and ownership. Since annuities are trust-like instruments, terminology similar to trusts is used when it describes the availability of cash from annuities. The amount of any penalties paid when cashing-in an annuity is deducted from the amount of the payout. In general, exclusions are as follows: (1) Annuity that can be surrendered, cashed in or assigned. An annuity that can be surrendered, cashed in or assigned by the owner is presumed to be a revocable annuity. A revocable annuity is considered a countable resource when the person seeking Medicaid is the owner. An annuity is presumed to be revocable when the annuity contract is silent on revocability.(2) Annuity owned by someone other than the applicant or spouse. An annuity is an unavailable resource when the owner of the annuity is not the person or the person's spouse or either spouse has abandoned all rights of ownership. However, if payments from the annuity are being made to the person seeking Medicaid (or spouse), those payments may be counted as income and considered for both income eligibility and deeming purposes.(3) Treatment by Phase. An annuity owned by a person seeking Medicaid is a countable resource in its accumulation phase because it can be liquidated for a lump sum or sold. An annuity in its pay-out phase is considered an excluded resource if the person only has the right to liquidate the annuity for the present value of all future payments and this commuted value is less than its equity value.b. Cash and Accounts in Financial Institutions. Cash on hand is a countable resource. In addition, accounts held in financial institutions - checking and draft accounts, savings and share accounts, money market account, and certificates of deposit - are all countable resources for both the person seeking Medicaid and members of the FRU for deeming purposes. In instances in which an account is jointly held, the value is apportioned equally among owners unless there is a title or deed to the contrary. In cases in which there is ownership in common or in entirety, the provisions in § 3.7.2(A)(4) of this Part apply. For the purposes of calculating Medicaid LTSS eligibility, an applicant who is a joint owner of an account is presumed to be legally able to withdraw and obtain unrestricted access to funds in the account. An applicant may rebut this presumption by providing documentation such as a deed or title. Absent such documentation, the full value of the account is treated as a countable resource when determining financial eligibility including allocation of resources for Medicaid LTSS eligibility in accordance with Part 50-00-6 of this Title.c. Investments. Stocks, bonds, mutual funds and other investment instruments are evaluated in terms of sole or joint ownership as follows:(1) Savings Bonds. For U.S. Savings Bonds, the value of the bond is the amount that is paid out if the bond is cashed. The value of the bond is a countable resource, unless the bond cannot be cashed for a legal reason other than the standard twelve (12) month waiting period.(2) Bonds and Securities. The cash value of bonds/securities is the bid price. The bid price is a countable resource unless it was not paid for in full at the time of purchase - that is, bought on the margin. Any debt owed is deducted from the value when calculating the amount of the resource that is countable.(3) Stocks. The value of a stock is the closing price if it is publicly traded. The value of stocks is a countable resource.(4) Availability. The value of a jointly owned investment, account or holding is considered unavailable and does not count toward the resource limit, if it cannot be redeemed or sold because the co-owner cannot be located or refuses to cooperate by providing a necessary signature/authorization or, in the case of a bond, the paper bond or access to electronic transaction authority.d. Loans. A loan is an oral or written contract or statement clearly indicating a borrower's indebtedness, the personal or real property used to secure the borrowed amount (collateral), if any, and the terms of repayment. Loans may be made through commercial entities including financial institutions and informally between persons and entities. The treatment of loans depends on whether it is "bona fide" - that is, the terms of the loan agreement are made in good faith and are enforceable under applicable State law (the borrower can be sued if the loan is not paid back), the agreement is in effect at the time the lender transfers funds, the loan is secured, and the borrower agrees to the terms of repayment. Any loan that is not bona fide may be treated as a gift, unless it qualifies as a promissory note under § 3.6.5(A)(2)(f) of this Part below; in such instances, the full value of the loan may be counted as income and/or a resource depending on whether the applicant is the lender or borrower and the manner in which it is paid. In addition, such loans may be considered a disqualifying transfer for Medicaid LTSS purposes if their fair market value cannot be discerned in accordance with Part 50-00-6 of this Title. In general, unless explicitly excluded as a resource under § 3.7.4 of this Part, bona fide loans are treated as follows for the lender or borrower:(1) Borrower. The amount of the loan that the borrower must repay, along with any interest, is excluded as a countable resource in the month the loan is executed. Any portions of the loan remaining on the FOM after the month it is executed is a countable resource.(2) Lender. The amount the lender loans and the loan repayments may be treated as countable resources depending on the circumstances of its execution. If a loan is negotiable and can be sold or discounted on the open market it is considered a countable resource. Interest is always treated as unearned income; principal payments are the conversion of a resource and are not treated as income.e. Mortgages. A debt instrument, secured by the collateral of specific piece of real estate property, that a borrower is obliged to pay back without paying the entire purchase price upfront by making a pre-determined set of payments. A borrower is considered an owner of a mortgaged property for the purposes of determining Medicaid eligibility. The purchase of a mortgage may be treated as a disqualifying transfer for Medicaid LTSS purposes if made for less than fair market value in accordance with Part 50-00-6 of this Title.f. Promissory notes. A promissory note is a written, unconditional agreement, usually given in return for goods, money loaned, or services rendered, whereby one (1) party promises to pay a certain sum of money at a specified time (or on demand) to another party. It may be given in return for goods, money loaned, or services rendered to the owner of the agreement (the seller). A promissory note is a liquid resource. The property itself is not a resource because the seller cannot legally convert it to cash while it is encumbered by the agreement. If payments received by the seller consist of both principal and interest, only the interest portion is income. The principal portion the promissory note is the conversion of a resource and is not income but is an available resource unless it is non-negotiable and the person provides evidence of a legal bar to the sale of the promissory note. Treatment of a promissory note for Medicaid LTSS eligibility related to the transfer of assets is located in Part 50-00-6 of this Title.g. Retirement funds. Any resource set aside by a person to be used for self-support upon their withdrawal from active life, service, or business. Retirement funds include, but are not limited to, certain IRAs, Keogh plans, 401K plans, pensions, mutual funds, stocks, bonds, securities, money market accounts, whole life insurance, and retirement annuities. The value of a retirement fund is the amount of money that can currently be withdrawn from the fund, less any penalties for withdrawal. An applicant or beneficiary who owns a retirement fund must apply for such funds or liquidate the fund. Retirement funds are excluded when owned by the person seeking Medicaid and termination of employment is required to obtain a payout from the fund; the owner is not eligible for periodic payments and does not have the option of withdrawing a lump sum; or the owner is eligible for periodic payments and is drawing down on the fund at a rate consistent with their life expectancy. When funds are being drawn down, the payout is treated as countable income for financial eligibility purposes and there is no deeming under Subchapter 05 Part 1 of this Chapter or attribution under Part 50-00-6 of this Title to a non-applicant spouse or child. The retirement fund of a non-applicant spouse is a non-deemable resource. In instances in which the retirement accounts are countable as a resource, the amount counted is the amount that can be withdrawn from the account, less any penalties. Any taxes owed as a result of the withdrawal are not deducted when determining the countable value of the retirement fund. Medicaid LTSS-specific provisions related to the treatment of retirement funds for the purposes of the community spouse resource allocation and the transfer of assets are located in Part 50-00-6 of this Title.h. Education funds. Resources set aside to pay for qualified education expenses such as 529 accounts and Coverdell Educational Savings Accounts. The full amount of such funds is excluded as a resource and are unavailable for deeming in the determination of financial eligibility when the monies deposited into the account are for the qualified educational expenses of the applicant or beneficiary, or their non-LTSS spouse, or dependent(s). Distributions are excluded as income when made for qualified educational expenses, even if the applicant or beneficiary as co-owner must consent to the release of funds and/or receives the distribution and provides the payment or receives reimbursement for the qualified education expenses of the spouse or dependent(s). Third (3rd) party contributions to an education fund made by an applicant or beneficiary in which they are not the named co-owner are considered gifts. For the purposes of Medicaid eligibility in Rhode Island, such contributions are excluded providing the amount does not exceed the limit for the special deduction permitted under Rhode Island law (R.I. Gen. Laws § 44-30-12(c)(4)) of five hundred dollars ($500.00) for an individual and one thousand dollars ($1,000.00) for a couple even if the beneficiary is a member of the FRU.i. Health Savings Accounts (HSAs). Accounts used to set aside funds to meet medical expenses. Unless the individual can demonstrate that the funds in their HSA are not available to them, the HSA is a countable resource.B. Resources, liquid and non-liquid, managed by a third (3rd) party include, but are not limited to, trusts, guardianship accounts, and retirement funds. Resources of a person managed by a third (3rd) party, such as a trustee, guardian, conservator, or agent under a power of attorney are considered available to that person as long as they can direct the third (3rd) party to dispose of the resource, or the third (3rd) party has the legal authority to dispose of the resource on the person's behalf without the person's direction. 1. Guardianship/Conservator funds - A person or institution appointed by a court in any State to act as a legal representative for another person, such as a minor or a person with disabilities. Cash or funds held by a guardian or conservator in bank or similar financial institution are presumed to be available for the support and maintenance of the protected person and are countable resources. Other resources of the person subject to a guardianship or conservatorship, such as real estate, brokerage accounts, stocks, bonds, life insurance policies, and automobiles, are presumed to be unavailable due to a legal impediment and are not countable resources for the purposes of determining Medicaid eligibility. Such other resources may become available when the guardian or conservator is required as a condition of obtaining or maintaining the person's Medicaid eligibility to seek court approval to liquidate and convert assets into cash or funds in a bank or similar accessible account available for the person's support and maintenance.2. Power of attorney - Funds managed by an agent under a power of attorney are not property of the agent and cannot be counted as resources of the agent.3. Representative payee - A person, agency, or institution selected by a court or the SSA to receive and manage benefits on behalf of another person. A representative payee has responsibilities to use these payments only for the benefit of that person, to notify the payer of any event that will affect the amount of benefits the person receives or circumstances that would affect the performance of the representative payee's responsibilities, and account periodically for the benefits received. Funds managed by a representative payee are not property of the representative payee and cannot be counted as resources of the representative payee.4. Trust - A property interest that usually takes the form of fund comprised of a variety of liquid and non-liquid resources, including but not limited to, cash, stocks, bonds, personal effects, life insurance, business interests, and real estate - that is held by a person or entity (called a "trustee") who is legally responsible for ensuring the property owned by trust is used to benefit another person (the "trust beneficiary). The person who transfers the resources to the trust is known as the "grantor." In some instances, the grantor is also named as a trust beneficiary or "grantee." The treatment of a trust for Medicaid eligibility purposes depends on its type, whether the property it holds is accessible, and who is the grantor, grantee and/or trustee. In general, the treatment of trusts is determined in accordance with Part 50-00-6 of this Title.210 R.I. Code R. 210-RICR-40-00-3.6
Amended effective 1/8/2019
Amended effective 4/28/2020
Amended effective 11/5/2020
Amended effective 1/1/2021
Amended effective 6/3/2021
Amended effective 6/25/2021
Amended effective 9/12/2021
Amended effective 2/4/2022
Amended effective 6/17/2022
Amended effective 7/23/2022
Amended effective 4/22/2023
Amended effective 7/29/2023(EMERGENCY)
Amended effective 11/23/2023
Amended effective 5/20/2024