LIFE INSURANCE OFFSET (AAM)

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Applicants are allowed to offset medical expenses against the equity value of life insurance for a three-month period. The offset gives the individual access to the Division of Family Services’s financial or medical assistance programs while reducing the equity value of their life insurance policies.

Allow an applicant to offset life insurance if all of the following are met:

• the equity value of countable life insurance policies exceeds the resource limits, but other countable resources are within the limits,

• the applicant is unable to reduce the excess resources within the allowable application time frames, and

• the applicant or applicant’s spouse who is living with the applicant has incurred and is liable for unpaid medical expenses which offset the excess equity value.

Use the following steps to allow a life insurance offset.

1. Determine the excess value of life insurance policies.

2. Subtract in chronological order unpaid medical bills which:

- were incurred before the period eligibility is requested, or

- are incurred within the period eligibility is requested.

3. Continue subtracting unpaid medical bills until the remaining equity value of life insurance combined with other resources is less than or equal to the resource limit, provided the application time frames do not expire.

4. See Chapter 100, Part119 , Benefit Delivery Time Frames, to determine the effective date of eligibility.

5. Allow applicants 3 months to reduce resources within the allowable resource limit. The three-month period begins the date they provide verification of all resources and incurred unpaid medical bills.

6. Follow up at the end of the three-month period. Count the equity value of any countable life insurance policies with other countable resources. Do not allow any further offset of medical expenses.