Kentucky uses the life expectancy tables published by the Office of the Actuary of the Social Security Administration, here.

ANNUITY RULES

According to the Kentucky Cabinet for Health and Family Services Statutory Authority, section 907 KAR 1:650 entitled Trust and transferred resource requirements for Medicaid:

1. Transfer of resources on or after February 8, 2006:

a. If the expected return on the annuity is commensurate with the life expectancy of the beneficiary, the annuity shall be actuarially sound and shall not be considered a transfer of resources for less than fair market value.
b. In accordance with 42 U.S.C. 1396p(c)(1)(f), the purchase of an annuity occurring on or after February 8, 2006 shall be treated as the disposal of assets for less than fair market value unless the cabinet is named:

i. As the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the annuitant (see notes below in forum); or
ii. A beneficiary in the second position after the community spouse or a minor or disabled child; and
iii. A beneficiary in the first position if the community spouse or a representative of the child disposes of any remainder for less than fair market value.

c. The purchase of an annuity shall be considered a transfer of resources if:

i. The expected return on the annuity is not commensurate with the life expectancy of the beneficiary, thus making the annuity not actuarially sound; and
ii. The annuity does not provide substantially equal monthly payments and has a balloon or deferred payment of principal or interest. Payments should be considered substantially equal if the total annual payment in any year varies by five (5) percent or less from the payment in the previous year.

For more information please visit the Kentucky Cabinet for Health and Family Services.

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