This article is a section taken from MA for Long-Term Care Services (MA-LTC) a part of the revisions and additions to the Minnesota Health Care Program Eligibility Policy Manual.

Annuity Disclosures

People must disclose if they own an annuity or have the right to receive income from an annuity. A person who requests Medical Assistance for Long-Term Care (MA-LTC) services must disclose any interest the person or their spouse has in an annuity and provide additional information about any annuity transactions.

The policies described in this section do not apply to employment-based pension plans held in the form of an annuity. See MA for People who are Age 65 or Older and People who are Blind or Have a Disability (ABD) Retirement Accounts and Retirement Plans.

Disclosure Requirements

A person requesting MA-LTC and his or her spouse must:

  • provide information to determine whether an annuity transaction occurred within the lookback period for all annuities owned by a person requesting MA-LTC and his or her spouse; and
  • report all annuities for which either spouse is an owner, annuitant, payee or beneficiary.

Annuity Transactions

An annuity transaction is an action taken by an annuity owner related to an annuity. The following annuity transactions that occurred during the person’s lookback period result in the annuity being subject to the policies described in Naming Minnesota Department of Human Services (DHS) a Preferred Remainder Beneficiary and Other Asset Transfer Considerations.

Purchasing an annuity

Purchasing an annuity includes setting up a new annuity, converting an existing annuity into another type of annuity or converting an account-based financial arrangement or other type of fund into an annuity. Examples of an account-based financial arrangement include:

  • Rolling over a deferred annuity into an immediate annuity
  • Rolling over a 401(k) into an individual retirement annuity
  • Rolling over an Individual Retirement Account into an annuity

Exercising an annuity election

Exercising an annuity includes the following:

  • Annuitizing the annuity
  • Adding an unscheduled contribution to an annuity, including the rollover of another financial arrangement into an annuity
  • Elective withdrawals – payments made in addition to the scheduled payments provided in the annuity contract (a partial surrender is a type of elective withdrawal if the annuity owners must elect to receive the partial surrender)
  • Changing the distribution from the annuity (that is, how, the amount, or to whom payments are made)
  • Changing the annuity owner, annuitant, payee, or beneficiary, including transferring ownership of the annuity in whole or in part to a trust (assigning a new beneficiary upon the death of a current beneficiary is an annuity transaction)

Changes not treated as annuity transactions

Changes not treated as annuity transactions for purposes of evaluation include:

  • A request to name DHS a preferred remainder beneficiary of an annuity
  • Providing an annuity issuer with updated contact information
  • Notification of the death of a named beneficiary
  • Changes that occur automatically based on terms of the annuity contract that do not require a decision, election or action by the annuity owners to take effect
  • Changes to the annuity beyond the control of the person, including but not limited to changes required by law, operational changes instituted by the issuer, or a judgment of divorce or legal separation

Verification Documents

Eligibility for MA-LTC cannot be determined until verification is provided. The following types of documentation are acceptable for verification purposes if they alone, or together, provide the required information:

  • A copy of the annuity contract
  • A written statement from the annuity issuer
  • If applicable, a written statement from the employer, employer association or union

Legal Citations

Minnesota Statutes, section 256B.056, subdivision 11
United States Code, title 42, section 1396p(e)

CREDIT: The content of this post has been copied or adopted from the Minnesota Healthcare Programs Eligibility Policy Manual, originally published by the Minnesota Department of Human Services.

This is also part of a series of posts on Minnesota Healthcare Eligibility Policies.