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.

Transfer Penalty Exceptions and Hardship Waiver

Not all uncompensated transfers result in a transfer penalty. Some uncompensated transfers meet an exception, which means a penalty is not imposed.

The following uncompensated transfers are exempt from a transfer penalty:

  • Uncompensated transfers made prior to the lookback period
  • The transferred assets are excluded assets (other than a homestead)
  • Uncompensated transfers granted a hardship waiver
  • There is convincing evidence of intent to receive fair market value (FMV)
  • There is convincing evidence to show the purpose of the transfer was exclusively for a reason other than to obtain or maintain Medical Assistance (MA)
  • Assets are transferred to an applicant or enrollee’s spouse or another person for the sole benefit of the applicant or enrollee’s spouse
  • Assets are transferred to a child of either the person or the person’s spouse, regardless of the child’s age, if the child is blind or certified disabled.
  • Assets are transferred into a trust established for the sole benefit of a child of either the person or the person’s spouse, regardless of the child’s age, if the child is blind or certified disabled
  • Assets are transferred into a trust established for the sole benefit of any person under age 65 certified disabled by the Social Security Administration (SSA) or the State Medical Review Team (SMRT)

Homestead Transfers

An uncompensated transfer of a homestead is exempt from a transfer penalty when the transfer is made to:

  • A spouse
  • A child under age 21 of the person or the person’s spouse
  • A child (of any age) of the person or the person’s spouse if the child is blind or certified disabled.
  • A child (of any age) of the person or person’s spouse, when both of the following occur:
    • The child lived in the home for at least two years immediately before the person entered a Long-Term Care Facility (LTCF) or began receiving services through a home and community-based services (HCBS) waiver program.
    • The child provided verifiable care that allowed the person to remain at home rather than enter an LTCF. A physician’s statement that verifies the care provided by the child allowed the person to remain at home is required.
  • A sibling of the person or person’s spouse, when that sibling meets both of the following:
    • The sibling has an equity interest in the home.
    • The sibling lived in the home at least one year immediately before the person entered an LTCF or began receiving services through a HCBS.

The homestead is not required to be the primary residence of the transferee or be occupied by the transferee at the time of the transfer.

The exemption from a transfer penalty for the transfer of a homestead applies even if the homestead has lost its excluded status because the person has lived in an LTCF for more than six months. See MA for People Age 65 or Older and People who are Blind or have a Disability (ABD) Homestead Exclusion for more information.

Transfers Made for Purposes Other than to Qualify for Medical Assistance

The presumption is that an uncompensated transfer is made for the purpose of obtaining MA eligibility unless the person provides convincing evidence that it was made exclusively for another reason.

A person cannot overcome the presumption that an uncompensated transfer was made for the following reasons:

  • Preserving an estate for heirs
  • Avoiding probate
  • Reducing taxes

Convincing Evidence

Convincing evidence that a transfer was not made for the purpose of obtaining or maintaining MA eligibility may include:

  • Assets owned by the person would be below the applicable limit even if the transferred asset had been retained
  • For people requesting MA-LTC, total countable assets including the transferred asset were within the asset limit at all times from the month in which the transfer occurred through the month in which the person requests MA-LTC.
    • For people receiving MA-LTC, total countable assets including the transferred asset were within the asset limit in the month in which the transfer occurred.
    • The person documents that the transfer was beyond his or her control, such as a court-ordered payment.
  • The person demonstrates that the need for LTC services could not have been anticipated at the time of the transfer.
  • The person demonstrates that after the time of the transfer, an unexpected loss of other assets or income resulted in an inability to pay for LTC services.
  • The person demonstrates a well-established history, which began prior to the lookback period, of making regular contributions to a religious or charitable nonprofit organization to which he or she belongs.
  • The person provides proof of intent to receive FMV.

Verbal assurances and statements signed by the person are not sufficient without further documentation.

Waiver of Transfer Penalty

A county, tribal, or state agency must waive a transfer penalty if there is an imminent threat to the person’s health and well-being and waiving the transfer penalty will resolve the imminent threat.

Notification Requirement

A notice is required whenever the county, tribal, or state agency has determined that the person is ineligible for MA-LTC due to a transfer penalty. The notice must inform the person of his or her right to request a waiver of the transfer penalty if it will cause an undue hardship.

Requests to Waive a Transfer Penalty

The following people can request a waiver of a transfer penalty:

  • The applicant or enrollee
  • The applicant or enrollee’s authorized representative
  • The LTCF in which the applicant or enrollee resides. In order to accept a request from an LTCF, the request must include a signed statement from the applicant or enrollee or their authorized representative acknowledging approval of the request.
    • An LTCF’s role is limited to requesting a waiver of a transfer penalty on behalf of the applicant or enrollee. Once an agency receives a request, it must work with the applicant or enrollee or their authorized representative to obtain the information needed to make a determination. A release of information signed by the applicant or enrollee or their authorized representative is required to share any information with the agency.

The request to waive a transfer penalty received from an applicant or enrollee’s authorized representative can be verbal or written. A request from an LTCF must be in writing because an applicant or enrollee’s signed statement must accompany it.

The information needed to make the determination should be requested from the applicant or enrollee or their authorized representative if the agency receives a request to waive a transfer penalty.

Imminent Threat to Health and Well-Being

A person who resides in an LTCF has an imminent threat to his or her health and well-being when all of the following conditions exist:

  • The person receives a 30-day notice of discharge/transfer from the LTCF.
  • The reason for the discharge/transfer is due to non-payment.
  • The location to which the person will be discharged/transferred would endanger the person’s health or life or cause serious deprivation of food, clothing or shelter.
    • An LTCF is required to include the reason for the discharge/transfer as well as the location to which it will discharge/transfer the person in its 30-day notice.
    • The person or their authorized representative can support his or her claim of imminent threat by providing a copy of the 30-day discharge/transfer notice and proof that the location to which the LTCF will discharge/transfer the person will endanger them.

A waiver request cannot be approved when there is no imminent threat. There is no imminent threat in situations where:

  • The person has not received a 30-day notice of discharge/transfer from the LTCF.
  • The reason for discharge/transfer from the LTCF is something other than non-payment.
  • The LTCF is discharging/transferring the person to another LTCF.
  • The person files a timely appeal of the discharge/transfer from the LTCF. When a person files an appeal timely, the LTCF cannot discharge/transfer the person until resolution of the appeal.

A person who resides in the community has an imminent threat to his or her health and well-being when the person or their authorized representative provides convincing evidence that the person’s health and well-being are in immediate danger because he or she:

  • Can no longer receive services through an HCBS waiver program
  • Cannot access other community supports
  • Is unable to move to an LTCF because he or she is ineligible for MA-LTC

No Other Alternative for Payment of LTC Services

The person or their authorized representative must provide proof that no other alternatives for payment of his or her LTC services exist that will resolve the imminent threat. This requires proof of the dollar amount needed for LTC services to resolve the imminent threat.

Hardship Waiver Decision

A county, tribal, or state agency must make a decision as soon as possible but no later than 30 calendar days from the date all of the necessary information is received and notify the person and their authorized representative in writing.

If the hardship waiver is denied, the notice will include the person’s right to appeal within 30-days of the denial.

If the hardship waiver is approved, the county, tribal, or state agency will refer the matter to a county attorney to determine if a cause of action exists against the person who received the transferred asset.

Cause of Action Referral

In order to determine if a cause of action may exist against the transferee, it first must be determined if:

  • The transferee actively solicited the transfer with the intent to assist the person to obtain or maintain MA-LTC.
  • The transferee knew or should have known that the transfer was being made to assist a person in obtaining or maintaining MA, or that the person was receiving MA-LTC as a resident of an LTCF or recipient of HCBS through a waiver program.

The following criteria must then be established:

  • MA-LTC was approved and MA-LTC paid for services during the time period the transfer penalty was waived.
  • And the transfer was not reported timely, which means:
    • For an applicant: the applicant, or the applicant’s representative, failed to report a transfer at the time of application
    • For an enrollee: the enrollee, or the enrollee’s representative, failed to report a transfer within 10 days of the transfer.

The maximum amount that can be collected under a cause of action is the cost of LTC services during the transfer period or the value of the transferred asset, whichever amount is less.

Legal Citations

Minnesota Statutes, section 256B.0595
United States Code, title 42, section 1396p(c)

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.