WSR 98-01-127

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES

(Medical Assistance Administration)

[Filed December 18, 1997, 1:25 p.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-08-035.

Title of Rule: WAC 388-511-1160 SSI-related resource exemptions.

Purpose: This amendment is to ensure appropriate exemption of an automobile when determining eligibility for medical assistance. It increases the amount of the exemption to $5,000 as allowed under less restrictive federal methodology. It exempts funds received under a class settlement in the case of Susan Walker v. Bayer Corporation, et al., 96-C-5024 (N.D.Ill.) (May 8, 1997).

Statutory Authority for Adoption: RCW 74.08.090, 74.04.050, and 74.04.057.

Statute Being Implemented: 42 CFR 435.601 and Section 4735 of the Federal Balanced Budget Act of 1997 (P.L. 105-33 (H.R. 2015)).

Summary: See Purpose above.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Joanie Scotson, Medical Assistance Administration, 617 8th S.E., Olympia, WA, (360) 753-7462.

Name of Proponent: Department of Social and Health Services, governmental.

Rule is necessary because of federal law, 42 CFR 435.601 and Section 4735 of the Balanced Budget Act of 1997 (P.L. 105-33 (H.R. 2015)).

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal Changes the Following Existing Rules: See Purpose above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposed rule does not have an economic impact on small businesses. It concerns eligibility policy and affects only clients and staff.

RCW 34.05.328 does not apply to this rule adoption. RCW 34.05.328 (5)(b)(vii) exempts the Department of Social and Health Services rules that relate only to client medical program eligibility.

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104B, Lacey, WA 98503, on January 27, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by January 16, 1998, phone (360) 902-7540, TTY (360) 902-8324, e-mail pwall@dshs.wa.gov.

Submit Written Comments to and Identify WAC Numbers: Paige Wall, Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, FAX (360) 902-8292 or pwall@dshs.wa.gov, by January 27, 1998.

Date of Intended Adoption: No sooner than January 28, 1998.

December 18, 1997

Merry A. Kogut, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION (Amending WSR 97-03-034, filed 1/9/97, effective 2/9/97)

WAC 388-511-1160 SSI-related resource exemptions. (1) ((The department shall exempt the following resources in)) When determining eligibility for SSI-related medical care programs, the following resources are exempt:

(a) One home((;

(i) "Home" means)), which may be any shelter((:

(A))) in which ((a)) the client has ownership interest((; and

(B))) , when:

(i) The client uses ((as)) the ((principal place of residence. The department shall only consider one)) home as the ((client's)) principal place of residence((.

(ii) The client's absence from the home shall not affect the home exemption. The client's home shall remain the principal place of residence as long as:

(A) The client intends to return home. The department shall accept the client's statement of intent without challenge; or

(B) A client's spouse or dependent relative uses the home during the client's absence. The department shall:

(I) Consider a person a dependent relative when such a person is either financially or medically dependent on the client; and

(II) Accept the client's or dependent relative's written statement of dependency or relationship unless the department has reason to question such statement.

(iii) The department shall exempt the proceeds from the sale of the home providing the client uses the proceeds to purchase another home within three months of the receipt of the proceeds. Proceeds include:

(A) Real estate contracts or any similar home financing arrangements; and

(B) The amount of income that does not reflect interest from such a contract.

(iv) The department shall evaluate transfers of the home by an institutional client or client's spouse under WAC 388-513-1365;

(b)));

(ii) The client's spouse resides in the home; or

(iii) The client does not currently live in the home and the client:

(A) Intends to return to the home; and

(B) Provides the department with an oral or written statement of the intent.

(iv) A relative resides in the home when:

(A) The relative is financially or medically dependent on the client; and

(B) The client or dependent relative provides the department with a written statement of the dependency.

(b) Proceeds from the sale of the home described under subsection (1)(a) of this section when the client purchases another home within three months of receipt of the proceeds. Proceeds include:

(i) Cash; or

(ii) A real estate contract or similar home financing arrangement with the exception of the amount of income from such a contract that represents interest payments. See subsection (2) of this section when the client does not intend to purchase another home within the three-month time period.

(c) Household goods and personal effects;

(((c))) (d) One vehicle((; the department shall:

(i) Exempt one vehicle regardless of its value if, for)) with up to five thousand dollars in equity value. The five thousand dollar limitation does not apply when the client or a member of the client's household, uses the vehicle ((is:

(A) Necessary for employment; or

(B) Necessary for the treatment of a specific or regular medical problem; or

(C) Modified for operation by, or transportation of, a handicapped person; or

(D) Necessary due to climate, terrain, distance, or similar factors to provide the client transportation to perform essential daily activities.

(ii) Exempt one of the client's vehicles up to the extent its current market value does not exceed four thousand five hundred dollars;

(iii) Count any excess against the resource limit;

(iv) Exempt a vehicle under this subsection only if a vehicle is not exempt under (c)(i) of this subsection;

(v) Treat the client's ownership of other vehicles as nonexempt resources and count the equity value toward the resource limit.

(d))) as described under 20 CFR 416.1218(b)(1).

(e) Property essential to self-support((. The department shall exempt)):

(i) ((Property)) Regardless of value, when the client uses the property for income-producing activity:

(A) In a trade or business; or

(B) As an employee for work((; or

(C) As authorized by the government for income-producing activity)).

(ii) Nonbusiness property up to six thousand dollars in equity, when the client uses the property for producing:

(A) Goods or services essential to daily activities, solely for the client's household;

(((iii) Nonbusiness property up to six thousand dollars equity, when the client uses the property to produce))

(B) An annual income return of six percent or more of the exempt equity; or ((is expected to produce at least))

(C) A six percent return within a twenty-month period ((as long as)) when the client((:

(A) Currently)) uses the property, or is expected to resume using the property within twelve months in the activities described in subsection (1)(((d))) (e) of this section((; or

(B) Is expected to resume using the property in the activities described in subsection (1)(d) of this section within twelve months;

(e))).

(f) Resources necessary for a blind or disabled client to fulfill an approved self-sufficiency plan ((for a blind or disabled client to achieve self-support as long as such plan remains in effect;

(f))).

(g) Alaska Native Claims Settlement Act including:

(i) Shares of stock held in a regional or village corporation;

(ii) Cash ((received)) or dividends on stock received from a native corporation((, including cash dividends on stock received from a native corporation)) up to ((the extent the cash does not exceed)) two thousand dollars per person per year;

(iii) Stock issued ((or distributed)) by a native corporation as a dividend ((or distribution on the stock));

(iv) A partnership interest;

(v) Land or an interest in land((, including land or an interest in land received from a native corporation, as a dividend or distribution on stock)); and

(vi) An interest in a settlement trust.

(((g) Life insurance:

(i) The department shall exempt the total cash surrender value when the total face value of all policies held by each person is one thousand five hundred dollars or less;

(ii) The cash surrender value applies to the resource limit under WAC 388-511-1110 if the face value of all policies held by each person is over one thousand five hundred dollars; and

(iii) When determining total face value in subsection (1)(g)(i) of this section, the department shall not include term or burial insurance with no cash surrender value.))

(h) The total cash surrender value (CSV) of a life insurance policy or policies when the total face value of all policies held by the client is one thousand five hundred dollars or less. For a client whose policies have a total face value of more than one thousand five hundred dollars apply the CSV to the resource limit described under WAC 388-511-1110.

(i) Restricted allotted land owned by an enrolled tribal member and spouse, ((if married,)) if ((such)) the land cannot be ((sold, transferred, or otherwise)) disposed of without the permission of other persons, the tribe, or an agency of the federal government;

(((i))) (j) A settlement the client receives for the purpose of repairing or replacing a specific exempt resource for a period of:

(i) Nine months when the client uses the total amount of the cash to repair or replace the exempt resource;

(ii) Nine additional months when:

(A) Circumstances beyond the control of the client prevent the repair or replacement of the exempt resource; and

(B) The client uses the total amount of the cash to repair or replace the exempt resource; and

(iii) Twelve additional months, for a maximum of thirty months, when:

(A) The settlement is a result of a catastrophe which is declared a major disaster by the President of the United States;

(B) The exempt resource is geographically within the disaster area as defined by the presidential order;

(C) The client intends to repair or replace the exempt resource; and

(D) Circumstances beyond the control of the client prevented the repair or replacement of the exempt resource in the time frames described under subsection (1)(((i)))(j)(i) and (ii) of this section.

(iv) ((The department shall consider)) Except, any settlement excluded and not used within the allowable time period as described under subsection (1)(((i)))(j) of this section as an available resource.

(((j))) (k) Burial spaces for the client, the client's spouse, or any member of the client's immediate family((.)) including:

(i) ((The department shall consider burial spaces includes)) Conventional grave sites((,));

(ii) Crypts((,));

(iii) Mausoleums((,));

(iv) Urns((,)) and other repositories customarily ((and traditionally)) used for the remains of deceased persons((.

(ii) The department shall consider burial spaces as including)); or

(v) A burial space purchase agreement as well as any interest accrued on and left to accumulate as part of the value of the burial space purchase agreement.

(((iii))) For purposes of subsection (1)(((j) and)) (k) of this section, "immediate family" means a client's minor and adult children, including adopted children and stepchildren; a client's brothers, sisters, parents, adoptive parents, and the spouses of those persons. ((The department shall not consider)) Dependency or living-in-the-same-household ((as)) are not factors in determining whether a person is an immediate family member;

(((k) Burial funds:

(i) The department shall ensure funds specifically set aside for the burial arrangements of a client or the client's spouse not exceed one thousand five hundred dollars for each spouse. The department shall count burial funds in excess of this limit toward the resource limit in WAC 388-511-1110.

(ii) The department shall require funds set aside for burial expenses to be kept separate from all other resources and separately identified and designated as set aside for burial. If the exempt burial funds are mixed with other resources, the department shall not apply this exemption to any portion of the funds unless the client intends to use the nonexempt funds for burial-related items or services. The department may exempt designated burial funds retroactively back to the first day of the month in which the person intended the funds to be set aside for burial.

(iii) Funds set aside for burial include revocable burial contracts, burial trusts, other burial arrangements, cash, accounts, or other financial instruments with a definite cash value the person clearly designates as set aside solely for the person's or spouse's burial expenses.

(iv) The department shall reduce the one thousand five hundred dollar exemption by:

(A) The face value of the client's insurance policies owned by the person or spouse on the life of the person if the policies have been exempted as provided in subsection (1)(g) of this section; and

(B) Amounts in an irrevocable burial trust.

(v) The department shall exempt the interest earned on exempt burial funds and appreciation in the value of exempt burial arrangements if the exempt interest and appreciation are left to accumulate and become part of the separately identified burial fund.

(vi) When used for other purposes, the department shall consider as available income any exempt burial funds, interest, or appreciated values set aside for burial expenses if, at the first of the month of use, when added to other nonexempt resources, the total exceeds the resource limit;))

(l) Burial funds:

(i) Up to one thousand five hundred dollars each for a client or a client's spouse when funds are specifically set aside solely for burial expenses;

(ii) In a revocable burial contract, burial trust, cash, account, or other financial instrument with a definite cash value; and

(iii) Including interest earned and appreciation in the value of exempt burial funds when left to accumulate and become part of the burial fund;

(iv) "Specifically set aside solely for burial expenses" means funds:

(A) Kept separate from all other resources except nonexempt funds the client intends to use solely for burial-related items or services and identified as a burial fund; and

(B) Which may be designated as burial funds back to the first day of the month in which the person intended the funds to be set aside for burial.

(v) Limitation described under subsection (1)(l)(i) of this section is reduced by:

(A) The face value of insurance policies owned by the client or spouse if the policies have been exempted as provided in subsection (1)(h) of this section; and

(B) Amounts in an irrevocable burial trust.

(vi) Except:

(A) Burial funds mixed with other resources lose exemption status; or

(B) When any exempt burial funds, interest, or appreciated values are used for another purpose, the funds are considered as available income if, at the first of the month of use, when added to other nonexempt resources, the total exceeds the resource limit.

(m) Other resources considered exempt by federal statute;

(((m))) (n) Retroactive SSI payments, including benefits a client receives under the interim assistance reimbursement agreement with the Social Security Administration, or OASDI payments for six months following the month of receipt. This exemption applies to:

(i) Payments received by the client, spouse, or any other financially responsible person ((received that the department considers available to meet the client's needs));

(ii) SSI payments made to the client for benefits due for a month before the month of payment;

(iii) OASDI payments made to the client for benefits due for a month that is two or more months before the month of payment; and

(iv) Payments that remain in the form of cash, checking accounts, or saving accounts. ((The department shall not apply)) This exemption does not apply once the retroactive payment has been converted to any other form.

(((n) Payments for medical or social services, for one-calendar month following the month of receipt, certain))

(o) Cash payments an SSI person receives from a ((governmental or nongovernmental)) medical or social service agency to pay for medical or social services for one calendar month following the month of receipt;

(((o))) (p) Restitution payment and any interest earned from ((such)) the payment to persons of Japanese or Aleut ancestry relocated and interned during war time, under P.L. 100-383;

(((p))) (q) The annuity payment of trust funds to Puyallup Tribal Indians received under P.L. 101-41;

(((q))) (r) Funds received from the Agent Orange Settlement Fund or any other funds established to settle Agent Orange liability claims under P.L. 101-201;

(((r))) (s) Payments from the Dutch government under the Netherlands' Act on Benefits for Victims of Persecution (WUV). See WAC 388-511-1140 (1)(aa) for the treatment of interest earned on such payment.

(((s))) (t) Payments to ((certain)) survivors of the Holocaust under the Federal Republic of Germany's Law for Compensation of National Socialist Persecution or German Restitution Act. Interest earned on ((conserved)) payment is not exempt;

(((t) Unspent assistance payments the client receives because of a presidential declaration of a major disaster, under P.L. 93-288, are exempt for nine months from the date of receipt.

(i) The department shall determine the exemption may extend an additional nine months, if circumstances beyond the client's control:

(A) Prevents the client from repairing or replacing the damaged or destroyed property; or

(B) Keeps the client from contracting for such repair or replacement.

(ii) Interest earned on the exempt resource is exempt for the period the exemption applies;))

(u) Earned income tax credit refunds and payments are exempt during the month of receipt and the following month;

(v) Payments from a state administered victim's compensation program for a period of nine calendar months after the month of receipt;

(w) Payments, or interest accrued on payments received under the Radiation Exposure Compensation Act received by the injured person, the surviving spouse, children, grandchildren, or grandparents;

(x) Payments under section 500 through 506 of the Austrian General Social Insurance Act. The department shall:

(i) Not consider such payments as income or resources for determining eligibility or post-eligibility; and

(ii) Count the interest from such payments as unearned income for the client;

(y) Payments from Susan Walker v. Bayer Corporation, et al., 96-C-5024 (N.D. Ill.) (May 8, 1997) settlement funds.

(2) ((The department shall consider)) A sales contract is an:

(a) ((An)) Exempt resource when the current market value of the contract:

(i) Is zero or the contract is unsalable; or

(ii) When combined with other resources, exceeds the resource limit, and the sales contract was executed:

(A) On or before November 30, 1993; or

(B) On or after December 1, 1993, and:

(I) Was received as compensation for the sale of the client's principal place of residence((. For an institutionalized client, this rule shall apply only to the client's principal place of residence before institutionalization of the client)); ((and))

(II) Provides for an interest rate within prevailing rates at the time of the sale; ((and))

(III) Requires the repayment of a principal amount equal to the fair market value of the property; and

(IV) Payment on the amount owed does not exceed thirty years.

(iii) ((The department shall consider payment)) Refer to WAC 388-505-0590(4)(b) for treatment of principal and interest on a sales contract meeting the criteria of subsection (2)(a)(i) or (ii) of this section ((under WAC 388-505-0590 (4)(b)));

(b) ((An)) Available resource when the ((current market value of a)) sales contract does not meet the requirements in subsection (2)(a)(i) or (ii) of this section. For a sales contract the department determines to be an available resource, ((the department shall consider)) the payment that represents:

(i) Principal, is an available resource; and

(ii) Interest, ((under)) refer to WAC 388-505-0590 (4)(c).

(c) ((An)) Available resource when transferred by the client to a person other than the client's spouse. See WAC 388-513-1365((; and

(d) An exempt resource to the extent the proceeds from the sale of a home are used to purchase another home. The department shall not consider payments received under such sales contract as income as described under subsection (1)(a)(iii) of this section)).

(3) ((The department shall consider)) Cash received from the sale of an exempt resource ((as)) is a nonexempt resource ((to the extent that)) unless the cash is ((not)):

(a) Used to replace an exempt resource; or

(b) Invested in an exempt resource within the same month, unless specified differently under this section.