Colorado does use its own life expectancy table.

RELEVANT BLOGS

• Protecting the Community Spouse’s IRAs
• Using a Promissory Note in Medicaid Planning

ANNUITY RULES

According to the State of Colorado Department of Health Care Policy and Financing Medical Assistance Eligibility Manual, § 8.100.7.1.g:

1. An irrevocable non-assignable annuity is not considered to be a countable resource.
2. Payments from an irrevocable non-assignable annuity are considered countable income in the month received.
3. An irrevocable non-assignable annuity purchased by or for the benefit of a community spouse shall not be considered to be a transfer without fair consideration if:

a. The Department is named as the remainder beneficiary in the first position for the total amount of medical assistance paid on behalf of the institutionalized individual; or
b. The Department is named as the remainder beneficiary in the second position after the community spouse or minor or disabled child and is named in the first position if such spouse or a representative of such child disposes of any such remainder without fair consideration.

4. An irrevocable non-assignable annuity purchased by or for the benefit of an institutionalized individual shall not be considered to be a transfer without fair consideration if:

a. The Department is named as the remainder beneficiary in the first position for the total amount of medical assistance paid on behalf of the institutionalized individual; or
b. The Department is named as the remainder beneficiary in the second position after the community spouse or minor or disabled child and is named in the first position if such spouse or a representative of such child disposes of any such remainder without fair consideration.

5. In additional to the requirements listed at 8.100.7.1.5.g.iv (no. four above) for naming the Department as remainder beneficiary, an irrevocable non-assignable annuity purchased by or for the benefit of an institutionalized individual shall not be considered to be a transfer without fair consideration if the annuity meets any one of the following conditions:

a. The annuity is considered either:

i. An Individual Retirement Annuity as described in Section 408(b) of the Internal Revenue Code of1986; or
ii. A deemed Individual Retirement Account under a qualified employer plan described in Section 408(q) of the Internal Revenue Code of 1986; or

b. The annuity is purchased with proceeds from one of the following:

i. An Individual Retirement Account as described in Section 408(a) of the Internal Revenue Code of 1986; or
ii. An account established by an employer or association of employers as described in Section 408(c) of the Internal Revenue Code of1986; or
iii. A simple retirement account as described in Section 408(p) of the Internal Revenue Code of 1986; or
iv. A simplified employee pension plan as described in Section 408(k) of the Internal Revenue Code of 1986; or
v. A Roth IRA as described in Section 408A of the Internal Revenue Code of 1986; or

c. The annuity meets all of the following requirements:

i. The annuity is irrevocable and non-assignable; and
ii. The annuity is actuarially sound based on the life expectancy tables listed at 8.100.7.J.; and
iii. The annuity provides for payments in equal amounts during the term of the annuity with no deferral and no balloon payments made.

6. If an irrevocable non-assignable annuity is considered to be a transfer for less than fair market value, then, for the purpose of calculating the transfer for less than fair market value penalty period, the value that was transferred shall be the amount of funds used to purchase the annuity.

INCOME TRUST GROSS INCOME LIMITS

• Region 1: Adams, Arapahoe, Boulder, Broomfield, Denver, Jefferson.
• Region 2: Cheyenne, Clear Creek, Douglas, Elbert, Gilpin, Grand, Jackson, Kit Carson, Larimer, Logan, Morgan, Park, Phillips, Sedgwick, Summit, Washington, Weld, Yuma.
• Region 3: Alamosa, Baca, Bent, Chaffee, Conejos, Costilla, Crowley, Custer, El Paso, Fremont, Huerfano, Kiowa, Lake, Las Animas, Lincoln, Mineral, Otero, Prowers, Pueblo, Rio Grande, Saguache, Teller.
• Region 4: Archuleta, Delta, Dolores, Eagle, Garfield, Gunnison, Hinsdale, La Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio Blanco, Routt, San Juan, San Miguel.

For more information, please visit the Colorado Department of Health Care Policy and Financing.

Click here for Colorado Desk Reference PDF

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