Eligibility Policy Manual

Transmittal #21

Subject: Irrevocable Assignment of Flat Rate Nursing Home Insurance Payments

Implementation Date: October 1, 2005

Per 903.11.A, transfers of assets between spouses do not result in a transfer penalty. Recently, we have encountered instances where an institutionalized spouse covered by a flat rate nursing home insurance policy has attempted to irrevocably assign the flat rate payments to the community spouse. This tactic is used:

• To remove the payments from the income eligibility determination process for the institutionalized spouse,
• Remove the payments from the share of cost calculation for the institutionalized spouse, and
• Because MS 903.11.A states that transfers of assets between spouses do not result in a period of ineligibility.

However, the fact that the institutionalized spouse or person legally entitled to act on their behalf has signed a statement stating that the payments are irrevocably assigned does not verify that the payments are actually irrevocably assigned. Two other requirements must be met first:

• The flat rate nursing home insurance company must permit the irrevocable assignment, and
• The company must have received and implemented the irrevocable assignment request.

If these two requirements are met, then the irrevocable assignment is considered a valid spousal transfer. However, if these requirements are not met, then the payments are only revocably assigned and are counted as constructively received income to the institutionalized spouse.

Accordingly, MS 607.54 is revised and Process Number 64 "How to Determine if Flat Rate Insurance Policy Payments have been Irrevocably Assigned" has been added to Chapter 2000, the Process Chapter, to provide instructions on how to verify whether flat rate nursing home insurance payments have been irrevocably assigned.

Please call Dan McKeever at 602-417-4455 if you have any questions regarding this transmittal.