3. A request to change the distribution of the annuity.
4. An election to annuitize the contract.
5. A change in ownership.
SECTION 18. 49.453 (4) (am) of the statutes is amended to read:
49.453 (4) (am) Paragraph (a) (ag) 1. does not apply to a variable annuity that is tied to a mutual fund that is registered with the federal securities and exchange commission.
SECTION 19. 49.453 (4) (b) of the statutes is amended to read:
49.453 (4) (b) The amount of assets that is transferred for less than fair market value under par. (a) (ag) is the amount by which the transferred amount exceeds the expected value of the benefit.
SECTION 20. 49.453 (4) (c) of the statutes is amended to read:
49.453 (4) (c) The department shall promulgate rules specifying the method to be used in calculating the expected value of the benefit, based on 26 CFR 1.72-1 to 1.72-18, and specifying the criteria for adjusting the expected value of the benefit based on a medical condition diagnosed by a physician before the assets were transferred to the annuity, or transferred by promissory note or similar instrument. In calculating the amount of the divestment when a transfer to an annuity, or a transfer by promissory note or similar instrument, is made, payments made to the transferor in any year subsequent to the year in which the transfer was made shall be discounted to the year in which the transfer was made by the applicable federal rate specified under par. (a) (ag) on the date of the transfer.
SECTION 21. 49.453 (4) (cm) of the statutes is created to read:
49.453 (4) (cm) Paragraphs (ag) to (c) apply to annuities purchased before February 8, 2006, for which no transaction has occurred on or after February 8, 2006.
SECTION 22. 49.453 (4) (d) of the statutes is created to read:
49.453 (4) (d) For purposes of sub. (2), the purchase of an annuity by an institutionalized individual or his or her community spouse, or anyone acting on their behalf, shall be treated as a transfer of assets for less than fair market value unless any of the following applies:
1. The state is designated as the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the institutionalized individual.
2. The state is named as a beneficiary in the 2nd position after the community spouse or a minor or disabled child and is named in the first position if the community spouse or a representative of the minor or disabled child disposes of any remainder for less than fair market value.
3. The annuity satisfies the requirements under par. (e) 1. or 2.
SECTION 23. 49.453 (4) (e) of the statutes is created to read:
49.453 (4) (e) For purposes of sub. (2), the purchase of an annuity by or on behalf of an annuitant who has applied for medical assistance for nursing facility services or other long-term care services described in sub. (2) is a transfer of assets for less than fair market value unless either of the following applies:
1. The annuity is either an annuity described in section 408 (b) or (q) of the Internal Revenue Code of 1986 or purchased with proceeds from any of the following:
a. An account or trust described in section 408 (a), (c), or (p) of the Internal Revenue Code of 1986.
b. A simplified employee pension, within the meaning of section 408 (k) of the Internal Revenue Code of 1986.
c. A Roth IRA described in section 408A of the Internal Revenue Code of 1986.
2. All of the following apply with respect to the annuity:
a. The annuity is irrevocable and nonassignable.
b. The annuity is actuarily sound, as determined in accordance with actuarial publications of the office of the chief actuary of the social security administration.
c. The annuity provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made.
SECTION 24. 49.453 (4) (em) of the statutes is created to read:
49.453 (4) (em) Paragraphs (d) and (e) apply to all of the following:
1. Annuities purchased on or after February 8, 2006.
2. Annuities purchased before February 8, 2006, for which a transaction has occurred on or after February 8, 2006.
SECTION 25. 49.453 (4c) of the statutes is created to read:
49.453 (4c) PURCHASE OF NOTE, LOAN, OR MORTGAGE. (a) For purposes of sub. (2), the purchase by an individual or his or her spouse of a promissory note, loan, or mortgage after February 8, 2006, is a transfer of assets for less than fair market value unless all of the following apply with respect to the note, loan, or mortgage:
1. The repayment term is actuarially sound.
2. The payments are to be made in equal amounts during the term of the loan, with no deferral and no balloon payment.
3. Cancellation of the balance upon the death of the lender is prohibited.
(b) The value of a promissory note, loan, or mortgage that does not satisfy the requirements under par. (a) 1. to 3. is the outstanding balance due on the date that the individual applies for medical assistance for nursing facility services or other long-term care services described in sub. (2).
SECTION 26. 49.453 (4m) of the statutes is created to read:
49.453 (4m) PURCHASE OF LIFE ESTATE. For purposes of sub. (2), the purchase by an individual or his or her spouse of a life estate in another individual's home after February 8, 2006, is a transfer of assets for less than fair market value unless the purchaser resides in the home for at least one year after the date of the purchase.
SECTION 27. 49.453 (8) of the statutes is renumbered 49.453 (8) (a) (intro.) and amended to read:
49.453 (8) (a) (intro.) Subsections (2) and (3) do not apply to transfers of assets if the any of the following applies:
1. The assets are exempt under 42 USC 1396p (c) (2) or if the (A), (B), or (C).
2. The department determines under the process under par. (b) that application of this section would work an undue hardship. The department shall promulgate rules concerning the transfer of assets exempt under 42 USC 1396p (c) (2).
SECTION 28. 49.453 (8) (b) of the statutes is created to read:
49.453 (8) (b) The department shall establish a hardship waiver process that includes all of the following:
1. The department determines that undue hardship exists if the application of subs. (2) and (3) would deprive the individual of medical care to the extent that the individual's health or life would be endangered, or would deprive the individual of food, clothing, shelter, or other necessities of life.
2. A facility in which an institutionalized individual who has transferred assets resides is permitted to file an application for undue hardship on behalf of the individual with the consent of the individual or the individual's authorized representative.
3. The department may, during the pendency of an undue hardship determination, pay the full payment rate under s. 49.45 (6m) for nursing facility services for up to 30 days for the individual who transferred assets, to hold a bed in the facility in which the individual resides.
SECTION 29. 49.47 (4) (a) (intro.) of the statutes is amended to read:
49.47 (4) (a) (intro.) Any individual who meets the limitations on income and resources under pars. (b) and to (c) and who complies with par. pars. (cm) and (cr) shall be eligible for medical assistance under this section if such individual is:
SECTION 30. 49.47 (4) (b) 1. of the statutes is amended to read:
49.47 (4) (b) 1. A Subject to par. (bc), a home and the land used and operated in connection therewith or in lieu thereof a mobile home if the home or mobile home is used as the person's or his or her family's place of abode.
SECTION 31. 49.47 (4) (bc) of the statutes is created to read:
49.47 (4) (bc) 1. Subject to subd. 2., a person shall be ineligible under this section for medical assistance for nursing facility services or other long-term care services described in s. 49. 453 (2) if the equity in his or her home and the land used and operated in connection with the home exceeds $750,000. This subdivision does not apply if any of the following persons lawfully resides in the home:
a. The person's spouse.
b. The person's child who is under age 21 or who is disabled, as defined in s. 49.468 (1) (a) 1.
2. Subdivision 1. applies to all of the following:
a. At the time of application, to a person who applies for medical assistance for nursing facility services or other long-term care services described in s. 49.453 (2) after the effective date of this subd. 2. a. .... [revisor inserts date].
b. At the time of the person's first recertification after the effective date of this subd. 2. b. .... [revisor inserts date], to a person not specified in subd. 2. a. who applied for medical assistance for nursing facility services or other long-term care services described in s. 49.453 (2) on or after January 1, 2006, and who was eligible for medical assistance for those services on the effective date of this subd. 2. b. .... [revisor inserts date].
SECTION 32. 49.47 (4) (bm) of the statutes is created to read:
49.47 (4) (bm) For purposes of determining eligibility or benefits amount for a person described in par. (a) 3. or 4. who resides in a continuing care retirement community or a life care community, any entrance fee paid on admission to the community shall be considered a resource available to the person to the extent that all of the following apply:
1. The person has the ability to use the entrance fee, or the contract provides that the entrance fee may be used, to pay for care if the person's other resources or income are insufficient to pay for the care.
2. The person is eligible for a refund of any remaining entrance fee when the person dies or terminates the continuing care retirement community or life care community contract and leaves the community.
3. The entrance fee does not confer an ownership interest in the continuing care retirement community or life care community.
SECTION 33. 49.47 (4) (cr) of the statutes is created to read:
49.47 (4) (cr) 1. As a condition of receiving medical assistance for long-term care services described in s. 49.453 (2) (a), an applicant for or recipient of the long-term care services shall disclose on the application or recertification form a description of any interest the individual or his or her community spouse, as defined in s. 49.453 (1) (ar), has in an annuity, regardless of whether the annuity is irrevocable or is treated as an asset. The application or recertification form shall include a statement that the state becomes a remainder beneficiary under any annuity in which the individual or his or her spouse has an interest by virtue of the provision of the medical assistance. The applicant or recipient shall, no later than 30 days after the department receives the application or recertification form, take any action required by the annuity issuer to make the state a remainder beneficiary.
2. The department shall notify the issuer of an annuity disclosed under subd. 1. of the state's right as a remainder beneficiary and shall request that the issuer notify the department of any changes to or payments made under the annuity contract.
3. This paragraph applies to all of the following:
a. Annuities purchased on or after February 8, 2006.
b. Annuities purchased before February 8, 2006, for which a transaction, as defined in s. 49.453 (4) (ac), has occurred on or after February 8, 2006.
SECTION 34. 632.48 (3) of the statutes is created to read:
632.48 (3) NOTICE OF CHANGES. An insurer that receives a request from the department of health and family services under s. 49.47 (4) (cr) 2. for notification shall comply with the request and notify the department of any changes to or payments made under the annuity contract to which the request for notification relates.
SECTION 35. 647.02 (2) (g) of the statutes is amended to read:
647.02 (2) (g) The figure to be used by the provider as the actual or projected length of a resident's stay in the facility in the formula in the contract provision required under s. 647.05 (9) (1m) (i) and supporting information showing how the figure was determined.
SECTION 36. 647.04 (5) of the statutes is amended to read:
647.04 (5) Inform the commissioner of any change in the figure used by the provider as the actual or projected length of a resident's stay in the facility in the formula in the contract provision required under s. 647.05 (9) (1m) (i) within 30 days after the change is made and submit supporting information showing how the change was determined.
SECTION 37. 647.05 of the statutes is renumbered 647.05 (1m), and 647.05 (1m) (g), as renumbered, is amended to read:
647.05 (1m) (g) Provides that if a resident dies or the continuing care contract is terminated after the first 30 days of occupancy, but within the first 90 days of occupancy, the provider will refund at least 90% of the amount computed under sub. (6) par. (f).
SECTION 38. 647.05 (2m) of the statutes is created to read:
647.05 (2m) Subject to s. 49.455, a continuing care contract may require that, before a resident applies for medical assistance, the resident must spend on his or her care the resources declared for purposes of admission to the facility.
SECTION 9321. Initial applicability; Health and Family Services.
(1) MEDICAL ASSISTANCE ASSET TRANSFER CHANGES.
(a) Eligibility changes. The treatment of section 49.47 (4) (a) (intro.), (bm), and (cr) of the statutes first applies to individuals who apply or are recertified for medical assistance on the effective date of this paragraph.
(b) Divestment changes. The treatment of section 49.453 (1) (f) (intro.), 1., 2., and 2m. and (fm), (3) (b) (intro.) and (bc), (4) (a), (ac), (am), (b), (c), (cm), (d), (e), and (em), (4c), and (4m) of the statutes, the renumbering and amendment of section 49.453 (3) (a) and (8) of the statutes, the creation of section 49.453 (3) (a) 2. and (8) (b) of the statutes first apply to individuals who apply for or are receiving medical assistance for nursing facility services or other long-term care services on the effective date of this paragraph.
(c) Continuing care contracts. The treatment of section 647.05 (2m) of the statutes first applies to contracts entered into on the effective date of this paragraph.
SECTION 9421. Effective dates; Health and Family Services.
(1) MEDICAL ASSISTANCE ASSET TRANSFER CHANGES. The treatment of sections 49.45 (6m) (m), 49.453 (1) (a), (ar), (d), (e), (f) (intro.), 1., 2., and 2m., (fm), and (i), (3) (b) (intro.) and (bc), (4) (a), (ac), (am), (b), (c), (cm), (d), (e), and (em), (4c), and (4m), 49.47 (4) (a) (intro.), (b) 1., (bc), (bm), and (cr), 632.48 (3), 647.02 (2) (g), and 647.04 (5) of the statutes, the renumbering and amendment of section 49.453 (3) (a) and (8) and 647.05 of the statutes, the creation of section 49.453 (3) (a) 2. and (8) (b) and 647.05 (2m) of the statutes, and SECTION 9321 (1) (a), (b), and (c) of this act take effect on October 1, 2007, or on the first day of the 4th month beginning after publication, whichever is later.
(End)
LRB-0267LRB-0267/7
PJK:jld&kjf:jf
2007 - 2008 LEGISLATURE
DOA:......Rhodes, BB0002 - DHFS and DWD TANF and CCDF allocations
For 2007-09 Budget -- Not Ready For Introduction
