SR 06-06 Dated 04/06

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

This SR releases:

§   the following expansions in the Department’s recovery policy:

-   in addition to seeking recovery for costs of providing Old Age Assistance (OAA) and Aid to the Permanently and Totally Disabled (APTD), the Department will now also seek recovery for the costs of providing Aid to the Needy Blind (ANB) financial or medical assistance and Medicaid for Employed Adults with Disabilities (MEAD) medical assistance;

-   liens placed on OAA, APTD, ANB, or MEAD financial or medical assistance cases in accordance with policy, will be enforced if the property is voluntarily sold or refinanced while a lien is in place;

-   for the purpose of recovery of OAA, APTD, ANB or MEAD medical assistance provided, the recipient’s "estate" includes:

a) both assets that pass through probate and assets that pass outside the probate process, such as certain trust assets, assets held jointly, and unpaid annuity balances that benefit the recipient; and

b) all property, real or personal, in which the recipient holds an interest on the date of the recipient’s death. Such interests include joint tenancy with rights of survivorship, tenancy in common, life estates, and living trusts, without regard to the date that such title or interest was established; and

§   the following changes in the treatment of life insurance policies:

-   When determining eligibility for NHEP/FAP financial or medical assistance, the equity value of each individual’s life insurance policies will now be counted as a resource when the total combined value of the policies is greater than $1,500, unless the state has been named the beneficiary to the policies.

-   When determining eligibility for the adult categories of financial or medical assistance, except for QMB/SLMB/QDWI, the face value of life insurance policies will no longer be used in the resource eligibility determination. The equity value of each individual’s life insurance policies will now be counted as a resource only when the total combined equity value of the policies exceeds $1,500. The equity value of each individual’s life insurance policies will be excluded as a resource if the combined equity value of the policies is less than $1,500 or the state has been named the beneficiary to the policies.

This SR also releases an unrelated revision to Form 778, Authorized Representative Declaration, to add text emphasizing that the Department will consider that the individual assigned to be the authorized representative will continue to act in that capacity unless the recipient alerts the Department in writing of changes in the designation.

The following forms were revised to incorporate the expanded recovery policy:

§   Form 77c, New Hampshire State Supplement Program;

§   Form 77s, What Are Liens and Estate Claims?, and its instructions;

§   Form 770, Reimbursement Agreement and Acknowledgment, and its instructions; and

§   Form 770(Bo) and Form 770(Sp), the Bosnian and Spanish versions of Form 770.

POLICY

Expanded Recovery Efforts

The Department’s recovery policy has been expanded to include the recovery of costs for providing ANB financial or medical assistance and MEAD medical assistance. Under the expanded policy, the Department will now seek recovery of:

§   all OAA, APTD, and ANB financial assistance provided; and

§   all OAA, APTD, ANB, and MEAD medical assistance provided during the time the recipient is age 55 or older, unless otherwise prohibited.

Currently, applicants for OAA and APTD cash assistance are required to sign the Form 770, Reimbursement Agreement and Acknowledgment, as a condition of eligibility. Applicants for ANB cash assistance will now also be required to sign the Form 770 as a condition of eligibility for ANB cash assistance. All applicants for OAA, APTD, and ANB cash assistance will additionally be required to initial each "I understand" statement on the first page of the form 770.

Although the Department will now also seek recovery of costs associated with providing MEAD and ANB medical assistance, initialing each "I understand" statement and obtaining a signature on the second page of the Form 770 is requested, but not required, of medical assistance applicants.

For OAA, APTD, ANB, or MEAD cash or medical assistance cases, the state will enforce liens placed in accordance with current policy when the property is voluntarily sold or refinanced while a Department lien is in place, or after the recipient’s death if not otherwise prohibited. For the purpose of recovery of OAA, APTD, ANB, or MEAD medical assistance provided, "estate" includes:

§   both assets that pass through probate and assets that pass outside the probate process, such as certain trust assets, assets held jointly, and unpaid annuity balances that benefit the recipient; and

§   all property, real or personal, in which the recipient holds an interest on the date of the recipient’s death. Such interests include joint tenancy with rights of survivorship, tenancy in common, life estates, and living trusts without regard to the date that such title or interest was established.

Form 77c, New Hampshire State Supplement Program, Form 77s, What Are Liens and Estate Claims?, and its instructions, Form 770, Reimbursement Agreement and Acknowledgment, and its instructions, and the Bosnian and Spanish Versions of Form 770, Forms 770(Bo) and 770(Sp), were revised accordingly and are attached to this SR for reference.

Treatment of Life Insurance Policies

For NHEP/FAP and adult categories of cash or medical assistance (except for QMB/SLMB/QDWI), the equity value of each individual’s life insurance policies is now counted as a resource when the total combined equity value of the policies exceed $1,500.

The equity value of each individual’s life insurance policies is excluded as a resource for NHEP/FAP and adult categories of cash or medical assistance if:

§   the total combined equity value of the policies is less than $1,500; or

§   the State has been made the beneficiary to the policies of any proceeds in excess of the amount spent on funeral/burial.

Note: The following policies remain unchanged for the adult categories of cash or medical assistance:

§   the Life Insurance Offset (see AAM 411, COMMON TYPES OF RESOURCES: LIFE INSURANCE OFFSET); and

§   the Burial Fund Exclusion (see AAM 411, COMMON TYPES OF RESOURCES: BURIAL FUND EXCLUSION).

NEW HEIGHTS CHANGES

Changes related to the policies released in this SR will enter the production region on 3/31/06 with an effective date of 4/1/06.

Expanded Recovery Efforts to Include ANB and MEAD

Beginning on April 1, 2006, eligibility for ANB cash assistance will:

§   pend for all new applicants if the response to the "Is the household cooperating with the reimbursement of lien process?" question on the "Estate Lien Reimbursement" screen is "Yes" with a verification response of "Not Yet Verified;" and

§   be denied or closed if the response to the cooperation question is "No," or if the verification response is "Refused/Failed."

For all currently open ANB cash cases, the Form 770 process must be followed at next redetermination. If, however, an action must be taken on the case prior to the next redetermination:

§   change the verification response on the "Estate Lien Reimbursement" screen to "Verified;"

§   take the needed action; and then

§   go back to the screen and change the verification response back to "Not Yet Verified."

Life Insurance Changes

A new checkbox "State Named Beneficiary," has been added to the "Life Insurance Information" screen to capture when the state has been named the beneficiary to the policies. If the box has been checked, New HEIGHTS will exclude the identified policies for NHEP/FAP and adult categories of cash or medical assistance. Additionally, beginning on April 1, 2006, New HEIGHTS will:

§   exclude an individual’s life insurance policies with a combined equity value equal to or less than $1,500 from the resource eligibility test; and

§   count an individual’s life insurance policies with a combined equity value greater than $1,500 towards the resource eligibility test unless the "State Named Beneficiary" box has been checked.

DISTRICT OFFICE PROCEDURES

Expanded Recovery Efforts to Include ANB and MEAD

For all OAA, APTD, ANB or MEAD applicants, Family Services Specialists (FSS) must now:

§   present the Form 770 for signature and initialing of the "I understand" statements on page one of the Form. Note: The applicant’s signature and initials on page 1 of the Form 770 is a condition of eligibility for cash applicants, but signatures and initials on page 2 of the Form 770 are only requested, not required, for medical assistance-only applicants; and

§   supply the Form 77s, What Are Liens and Estate Claims?.

For current recipients of ANB, OAA, APTD, and MEAD, present both forms at the recipient’s next redetermination. Cash recipients must resign and initial the Form 770, or, in the case of current ANB recipients, sign and initial Form 770 for the first time, to continue to receive assistance.

Note: Approximately 253 currently open ANB cash cases will be impacted by the new requirement mandating signature of the Form 770 at next redetermination. As a notarized signature on this form is a condition of eligibility, cash will subsequently pend for these cases unless the Form 770 is signed and confirmation of cooperation with the reimbursement of lien process is entered into New HEIGHTS.

Life Insurance Changes

The value of life insurance policies will need to be re-verified at each redetermination for the following reasons:

§   the value of the policies, if the recipient continues to pay the premiums, will increase over time, so the increase in value between redeterminations may conceivably increase enough for eligibility to be impacted. For example, an applicant's policy could have an equity value of $1,400 but in a few years increase in value so that the equity value now exceeds $1500. This resource would then count in the eligibility determination, unless the recipient changed the beneficiary of the policy to the state;

§   after an individual completes the application or redetermination process, there is nothing to prevent the individual from removing the State of NH as the beneficiary to those policies exceeding $1,500 in equity value. If this type of situation is discovered, a referral to the Office of Special Investigations would be appropriate; or

§   if the recipient stops payment on the life insurance policies once required to make NH the beneficiary, the assistance group’s countable resources would change.

POLICY MANUAL REVISIONS

Revised Family Assistance Manual Topics

PART 409   COMMON TYPES OF RESOURCES: BURIAL FUND

PART 409   COMMON TYPES OF RESOURCES: LIFE INSURANCE

Section 611.03   Deeming Principles

Revised Adult Assistance Manual Topics

PART 317   REIMBURSEMENT

Section 317.01   Reimbursement - Financial Assistance

Section 317.03   Reimbursement - Medical Assistance for Non-Institutionalized Individuals

Section 317.04  Reimbursement - Medical Assistance Provided to Permanent Residents of Medical Institutions

Section 317.05   Verification

Section 317.11   Tax Sale

Section 317.19   Recovery for Medical Assistance Provided – Estates

PART 411   COMMON TYPES OF RESOURCES: BURIAL FUND EXCLUSION

PART 411   COMMON TYPES OF RESOURCES: LIFE INSURANCE

FORMS REVISIONS

Form 77c, New Hampshire State Supplement Program, and Form 77s, What Are Liens and Estate Claims?

Form 77c, New Hampshire State Supplement Program, and Form 77s, What Are Liens and Estate Claims?, were revised to include the new recovery policy. The phone number to contact the Ombudsmen and the address for the Manchester DO were additionally updated.

Because the use of Form 77c remains unchanged and FSS should continue to provide it to all applicants of OAA, ANB, or APTD, and upon request, the instructions required no revisions. However, since the Form 77s will now need to be provided to applicants of ANB and MEAD in addition to applicants of OAA and APTD, the instructions for this form were updated accordingly.

Form 770, Reimbursement Agreement and Acknowledgment

Form 770, Reimbursement Agreement and Acknowledgment, and Form 770(i), Instructions for Form 770, were revised to include the new policy on recovery efforts, including adding a space next to each "I understand" statement for applicants to initial.

Form 770(Bo) and Form 770(Sp), the Bosnian and Spanish language versions of the Form 770, were updated only to include the ANB and MEAD recovery policy, as the more complex policy clarifications will have to be translated into the respective languages. Once the additional text has been translated and added to the forms, the updated versions will be released under separate cover.

All District Offices have been provided with an advance supply of the updated Form 77c, Form 77s, and the English, Bosnian, and Spanish versions of the Form 770. These forms are to be used beginning April 1, 2006. The old versions of the forms should be recycled in accordance with the Certificate of Destruction at the end of this SR.

Form 778, Authorized Representative Declaration

Form 778, Authorized Representative Declaration, was revised to include text emphasizing that the Department will consider that the individual assigned to be the authorized representative will continue to act in that capacity unless the recipient alerts the Department in writing of changes in the designation. Because there were no changes in the use of the form, the instructions required no revisions.

The current version of Form 778 can be used until the supply is depleted. The revised version of the form will be printed at the next reorder.

IMPLEMENTATION

The changes in this SR are effective for all new applicants beginning April 1, 2006, and will apply to all open recipients beginning at the next redetermination.

CLIENT NOTIFICATION

The policies released in the SR were a result of legislative changes described in HB2 and HB691 and, as such, allowed for public input at the legislative level. In addition, the Department held public hearings on:

§   Friday, September, 16, 2005 for the ANB and MEAD recovery effort changes; and

§   Friday, February 3, 2006 for the revised treatment of Life Insurance policies for the NHEP/FAP and adult categories of medical assistance.

No additional client notification is planned.

TRAINING

Since the policy released in this SR is viewed as an expansion of current procedures for other programs, no special training will be held. However, the policy changes were discussed at the Supervisor’s Meeting held on Wednesday February 1, 2006 and Wednesday March 22, 2006.

FORMS POSTING INSTRUCTIONS

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the On-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at http://www.dhhs.nh.gov/DHHS/DFA/LIBRARY, effective May 1, 2006.

This SR, and printed pages with posting instructions, will be distributed under separate cover to all hard copy holders of the Adult Assistance, Family Assistance, and Forms Manuals.

DFA/JBV:s

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CERTIFICATE OF DESTRUCTION

I certify that all copies of the following forms have been destroyed:

§   Form 77c, dated 10/00, SR 00-46;

§   Form 77s, dated 8/04, SR 04-09;

§   Form 770, dated 4/03, SR 03-06;

§   Form 770(Bo), dated 4/03, SR 03-06; and

§   Form 770(Sp), dated 4/03, SR 03-06.

District Office Manager of Operations:      

District Office       

Return this certificate to the Policy Development Unit, 129 Pleasant St, Brown Building, SOPS, Concord, NH 03301, after the instructions in the SR have been carried out.