WSR 12-14-112

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Aging and Disability Services Administration)

[ Filed July 5, 2012, 10:28 a.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 11-24-093.

     Title of Rule and Other Identifying Information: WAC 388-527-2754 Assets not subject to recovery and other limits on recovery.

     Hearing Location(s): Office Building 2, Lookout Room, DSHS Headquarters, 1115 Washington, Olympia, WA 98504 (public parking at 11th and Jefferson. A map is available at http://www1.dshs.wa.gov/msa/rpau/RPAU-OB-2directions.html), on August 7, 2012, at 10:00 a.m.

     Date of Intended Adoption: Not earlier than August 8, 2012.

     Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, e-mail DSHSRPAURulesCoordinator@dshs.wa.gov, fax (360) 664-6185, by

5 p.m. on August 7, 2012.

     Assistance for Persons with Disabilities: Contact Jennisha Johnson, DSHS rules consultant, by July 25, 2012,

TTY (360) 664-6178 or (360) 664-6094 or by e-mail at jennisha.johnson@dshs.wa.gov.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: DSHS is amending the rules in estate recovery, WAC 388-527-2754, in order to incorporate needed language from the long-term care partnership (LTCP) program described in WAC 388-513-1400 through 388-513-1455. Individuals with a long-term care partnership policy can designate assets as protected from estate recovery based on the dollar amount paid out by a qualified LTCP policy approved by the Washington state insurance commissioner.

     Reasons Supporting Proposal: See above.

     Statutory Authority for Adoption: RCW 74.08.090, 74.09.520.

     Statute Being Implemented: RCW 74.08.090, 74.09.520.

     Rule is necessary because of federal law, [no further information supplied by agency.]

     Name of Proponent: Department of social and health services, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Lori Rolley, rollelj@dshs.wa.gov, P.O. Box 45600, Olympia, WA 98504-5600, (360) 725-2271.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The preparation of a small business impact statement is not required, as no new costs will be imposed on small businesses or nonprofits as a result of this rule amendment.

     A cost-benefit analysis is not required under RCW 34.05.328. Rules are exempt per RCW 34.05.328 (5)(b)(v), rules the content of which is explicitly and specifically dictated by statute.

June 28, 2012

Katherine I. Vasquez

Rules Coordinator

4367.2
AMENDATORY SECTION(Amending WSR 10-08-110, filed 4/7/10, effective 5/8/10)

WAC 388-527-2754   Assets not subject to recovery and other limits on recovery.   (1) Recovery does not apply to the first fifty thousand dollars of the estate value at the time of death and is limited to thirty-five percent of the remaining value of the estate for services the client:

     (a) Received ((before July 25)) through July 24, 1993; and

     (b) When the client died with:

     (i) No surviving spouse;

     (ii) No surviving child who is:

     (A) Under twenty-one years of age;

     (B) Blind; or

     (C) Disabled.

     (iii) A surviving child who is twenty-one years of age or older.

     (2) For services received on and after ((July 24)) July 25, 1993, all services recoverable under WAC 388-527-2742 will be recovered, even from the first fifty thousand dollars of estate value that is exempt above, except as set forth in subsections (3) through (8) of this section.

     (3) For a client who received services on and after ((July 24)) July 25, 1993 ((and before July 1)) through June 30, 1994, the following property, up to a combined fair market value of two thousand dollars, is not recovered from the estate of the client:

     (a) Family heirlooms;

     (b) Collectibles;

     (c) Antiques;

     (d) Papers;

     (e) Jewelry;

     (f) Photos; and

     (g) Other personal effects of the deceased client and to which a surviving child is entitled.

     (4) Certain properties belonging to American Indians/Alaska natives (AI/AN) are exempt from estate recovery if at the time of death:

     (a) The deceased client was enrolled in a federally recognized tribe; and

     (b) The estate or heir documents the deceased client's ownership interest in trust or nontrust real property and improvements located on a reservation, near a reservation as designated and approved by the Bureau of Indian Affairs of the U.S. Department of the Interior, or located:

     (i) Within the most recent boundaries of a prior federal reservation; or

     (ii) Within the contract health service delivery area boundary for social services provided by the deceased client's tribe to its enrolled members.

     (5) Protection of trust and nontrust property under subsection (4) is limited to circumstances when the real property and improvements pass from an Indian (as defined in 25 U.S.C. Chapter 17, Sec. 1452(b)) to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as members of a tribe and non-Indians, such as spouses and step-children, that their culture would nonetheless protect as family members, to a tribe or tribal organization and/or to one or more Indians.

     (6) Certain AI/AN income and resources (such as interests in and income derived from tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the U.S. Claims Court) are exempt from estate recovery by other laws and regulations.

     (7) Ownership interests in or usage rights to items that have unique religious, spiritual, traditional, and/or cultural significance or rights that support subsistence or a traditional life style according to applicable tribal law or custom.

     (8) Government reparation payments specifically excluded by federal law in determining eligibility are exempt from estate recovery as long as such funds have been kept segregated and not commingled with other countable resources and remain identifiable.

     (9) Assets designated as protected ((under)) by a qualified long term care partnership ((agreement)) (QLTC) policy issued on or after December 1, 2011, may be disregarded for estate recovery purposes if:

     (a) The insured individual's estate is the recipient of the estate recovery exemption; or

     (b) The insured individual holds title to property which is potentially subject to a pre-death lien and that individual asserts the property is protected under the long term care (LTC) partnership policy.

     (10) An individual must provide clear and convincing evidence that the asset in question was designated as protected to the office of financial recovery including:

     (a) Proof of a valid QLTC partnership policy; and

     (b) Verification from the LTC insurance company of the dollar amount paid out by the policy; and

     (c) A current DSHS LTCP asset designation form when the LTC partnership policy paid out more than was previously designated.

     (11) The insured individual's estate must provide evidence proving an asset is protected prior to the final recovery settlement.

[Statutory Authority: RCW 74.08.090 and 2008 Medicare Improvements for Patient and Providers Act (which amended Section 1917 (b)(1)(B)(ii) of the Social Security Act); Deficit Reduction Act of 2005 (incorporating language regarding LTC partnership agreements). 10-08-110, § 388-527-2754, filed 4/7/10, effective 5/8/10. Statutory Authority: RCW 43.17.240, 43.20B.80 [43.20B.080], 74.08.090, 74.34.090, Section 1917(b) of the Social Security Act and 2001 2nd sp.s. c 7, Part II. 04-10-060, § 388-527-2754, filed 4/30/04, effective 6/1/04. Statutory Authority: RCW 43.20B.080, 74.08.090 and 74.34.010. 99-11-076, § 388-527-2754, filed 5/18/99, effective 6/18/99. Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090. 95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2754, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

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