Montana uses its own life expectancy table.

ANNUITY RULES

According to the Montana Public Health and Human Services Medicaid Manual, section MA 402-1 entitled Countable & Excluded Resources:

Annuities are countable resources when:

1. Owned by the Medicaid applicant/recipient or an eligible spouse* but make payments to anyone else, or have not been annuitized, or any other requirement for exemptions (1-6 below) is not met; or
2. Owned by ineligible spouses, community spouses or deemed parents, even if periodic scheduled payments are being made, and regardless of to whom the payments are made.

If an annuity meeting the above criteria is shown to be legally inaccessible, then the annuity should be evaluated under the general uncompensated asset transfer policy.

Annuities owned by the Medicaid applicant/recipient or an eligible spouse are excluded resources if:

1. Periodic scheduled payments are being made to the Medicaid applicant/recipient or eligible spouse;
2. The periodic scheduled payments are being made on at least an annual basis;
3. Payment contract calls for equal payments; no balloon payments;
4. The payment schedule is actuarially sound (equal payments must be based on full payout of the contract within the annuitant’s life expectancy);
5. The annuity is irrevocable; and
6. The annuity s non-assignable.

If all of the criteria above are not met and the annuity was purchased or converted on or after February 8, 2006, the annuity is a countable resource and must also be evaluated to determine if an uncompensated asset transfer occurred. Annuities purchased or converted prior to February 8, 2006, that do not meet items 1 through 6 above are considered countable resources.

Annuities purchased or converted by the Medicaid recipient or community spouse on or after February 8, 2006, must be changed prior to Medicaid nursing home/waiver coverage approval or redetermination to name the State of Montana Medicaid Program as the residual beneficiary of the annuity, in the following order: (1) community spouse, (2) a minor child, (3) a blind or disabled adult child, (4) State of Montana Medicaid Program.

A community spouse cannot name the institutionalized spouse as a residual beneficiary of the annuity in a position superior to that of the State of Montana Medicaid Program.

A letter from the annuity company stating that the annuity has no value is simply a statement of the company’s contractual obligations regarding cash value and is irrelevant to the true market value of the annuity. There is a thriving secondary market for annuities; even non-assignable annuities can be sold. The calculated value of an annuity may be rebutted by providing verified purchase offers from sources in the legitimate business of buying annuities. (MA 402-1)

An individual retirement annuity, a qualified employer plan annuity, or purchase of an annuity with an IRA, employer or employee association account, or a qualified salary reduction arrangement or a simplified employee pension will not be considered an uncompensated asset transfer (provided the payments are made to the owner of the above-named account or arrangement) or require beneficiary assignment to the State of Montana Medicaid Program.

*An eligible spouse is the ABD spouse of a Medicaid applicant/recipient where neither spouse is institutionalized or waiver. If one member of a couple is institutionalized or waiver the applicant/recipient’s spouse is a community spouse.

For more information please visit the Montana Medical Assistance Policy Manual.

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