49.453(4)(ag)
(ag) For the purposes of
sub. (2), whenever a covered individual or his or her spouse, or another person acting on behalf of the covered individual or his or her spouse, transfers assets to an irrevocable annuity, or transfers assets by promissory note or similar instrument, in an amount that exceeds the expected value of the benefit, the covered individual or his or her spouse transfers assets for less than fair market value. A transfer to an annuity, or a transfer by promissory note or similar instrument, is not in excess of the expected value only if all of the following are true:
49.453(4)(ag)1.
1. The periodic payments back to the transferor include principal and interest that, at the time that the transfer is made, is at least at one of the following:
49.453(4)(ag)1.a.
a. For an annuity, promissory note or similar instrument that is not specified under
subd. 1. b. or
par. (am), the applicable federal rate required under section
1274 (d) of the Internal Revenue Code, as defined in
s. 71.01 (6).
49.453(4)(ag)1.b.
b. For an annuity with a guaranteed life payment, the appropriate average of the applicable federal rates based on the expected length of the annuity minus 1.5%.
49.453(4)(ag)2.
2. The terms of the instrument provide for a payment schedule that includes equal periodic payments, except that payments may be unequal if the interest payments are tied to an interest rate and the inequality is caused exclusively by fluctuations in that rate.
49.453(4)(am)
(am) Paragraph (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.
49.453(4)(b)
(b) The amount of assets that is transferred for less than fair market value under
par. (ag) is the amount by which the transferred amount exceeds the expected value of the benefit.
49.453(4)(c)
(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. (ag) on the date of the transfer.
49.453(4)(cm)
(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.
49.453(4)(d)
(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:
49.453(4)(d)1.
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.
49.453(4)(d)2.
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.
49.453(4)(e)
(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:
49.453(4)(e)1.
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:
49.453(4)(e)1.a.
a. An account or trust described in section
408 (a), (c), or (p) of the Internal Revenue Code of 1986.
49.453(4)(e)1.b.
b. A simplified employee pension, within the meaning of section
408 (k) of the Internal Revenue Code of 1986.
49.453(4)(e)2.
2. All of the following apply with respect to the annuity:
49.453(4)(e)2.b.
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.
49.453(4)(e)2.c.
c. The annuity provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments made.
49.453(4)(em)2.
2. Annuities purchased before February 8, 2006, for which a transaction has occurred on or after February 8, 2006.
49.453(4c)
(4c) Purchase of note, loan, or mortgage. 49.453(4c)(a)(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: