MEDICAID ELIGIBILITY HANDBOOK

RESOURCES

CITATION

340.7 BURIAL RESOURCES

Burial resources include both burial spaces and burial reserves.

55 Pa. Code
178.3

The CAO will verify:

Resource Disregard and Exclusion of Burial Plots-OPS031102

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the status of each burial reserve;

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the amount and availability of interest earned on all burial reserves;

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the balance of each revocable burial reserve; and

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the money set aside for burial if co-mingled with other funds.

Burial reserves may be verified by a statement from the financial institution or funeral director holding the funds.

The CAO should examine the case record for Burial Reserve Agreements (PA 44s) or other similar documents identifying burial reserves established prior to November 1, 1988. If a case record is destroyed, the CAO will retain burial reserve documents. The CAO will write to the person covered by the reserve as a reminder of the reserve's existence.

PA 44

If a person wishes to dissolve a burial reserve established with a PA 44 or other similar document, the CAO will forward the request to OFAIR. The reserve may not be dissolved until any claim for reimbursement of Medicaid received is satisfied.

340.71 BURIAL SPACES

A burial space may be a conventional grave site, crypt, burial drawer, mausoleum, urn, or any other repository for the remains of a deceased person. The CAO will exclude burial spaces as follows:

Resource Disregard and Exclusion of Burial Plots-OPS031102

55 Pa. Code
178.2

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SSI related categories:

55 Pa. Code
178.71

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One burial space for each member of the applicant/recipient group. and

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Burial spaces held for the client's spouse minor or adult children, stepchildren, brothers, sisters, parents, adoptive parents, and the spouses of these persons. The family members do not have to be members of the applicant/recipient group and do not have to live with the group.

EXAMPLE: Mr. and Mrs. Y receive NMP in the PS, Healthy Horizons category. They own three burial spaces. One of the spaces is for Mr. Y's brother who lives in Alaska. All of these burial spaces are excluded.

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GA related categories:

55 Pa. Code
178.161(a)9)

=

One burial space for each member of the applicant/recipient group. and

=

One burial space for each household member.

If the burial space is not excluded, the CAO will count the equity value of the burial space unless one of the following conditions applies:

55 Pa. Code
178.161(a)9)

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The deed or contract is irrevocable and does not allow the client to sell the burial space.

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A joint owner who is not an applicant or recipient refuses to agree to the sale.

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The deed or contract requires the move to another state to sell the burial space.

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The deed or contract permits the sale of the entire burial plot but not individual spaces of the plot.

Burial space information can be obtained from the cemetery where the burial spaces are located. The CAO will verify ownership, conditions of possible resale, and equity value.

340.72 BURIAL RESERVES

Burial reserves are funds that are set aside for the burial of a person. These funds are usually held in an account or trust that is either revocable or irrevocable.

55 Pa. Code
178.2

The funds may also be in the form of a prepaid funeral. A prepaid funeral is an agreement between a person and a funeral home for a funeral that is paid for in advance and specifies the services to be provided at the time of the person's death. The agreement may include such items and services as:

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casket

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cemetery plot

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flowers

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obituary

The CAO will review a prepaid funeral agreement in the same way as any other burial reserve.

340.721 IRREVOCABLE BURIAL RESERVES

An irrevocable burial reserve is a fund held in trust or under contract with a financial institution or a funeral director. No part of the fund may be withdrawn before the client's death and the fund must be used for burial expenses.

55 Pa. Code
178.5

Funds held in an irrevocable burial reserve are excluded. There is no limit on the amount that can be set aside in an irrevocable burial reserve. If the amount is exorbitant in relation to the cost of most funerals in the area, the CAO will want to be very certain that the funds are irrevocable. An irrevocable burial reserve is not considered exorbitant if it exceeds the average local cost by no more than 25 percent.

To be considered irrevocable, burial reserve funds must be deposited with a financial institution or a funeral director under a written agreement which provides that the funds cannot be withdrawn before the death of the beneficiary.

If the CAO cannot determine if a burial reserve is irrevocable, all documentation is sent to the Area Manager for review by the Office of Legal Counsel.

REMINDER: If the interest on the reserve can be and is withdrawn before death, the interest is counted as income to the applicant/recipient group.

NOTE: Life insurance or personal property, such as stock, is considered an irrevocable burial reserve if:

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the applicant/recipient group does not have access to the resource; and

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the beneficiary or co-owner is a financial institution or funeral director.

The CAO will determine and record the amount of any fee charged by the financial institution. The fee to be deducted from the burial reserve upon the death of the person may not exceed 5% of the burial reserve. This information will be needed when the reserve is terminated to pay for burial costs.

Excess funds remaining from the irrevocable burial reserve after the burial expenses become a part of the deceased recipient's estate.

For SSI-related categories, the amount of the irrevocable burial reserve affects the amount which can be excluded from revocable funds. See Section 340.722, Revocable Burial Reserves.

The CAO should advise the client the establishment of a burial reserve is considered a transfer of resources and is subject to a determination of fair consideration when determining eligibility for Nursing Facility Care (NHC). See Section 340.9, Disposition of Resources, and the Nursing Facility Care Handbook.

340.722 REVOCABLE BURIAL RESERVES

The CAO will consider revocable burial reserves based on the category of Medicaid. A revocable burial reserve is a fund held by a financial institution or funeral director and designated for burial expenses, but which may be withdrawn before the client's death.

55 Pa. Code
178.73 SSI
178.161(a)10) GA

The CAO will record the existence of the burial reserve, the date of the arrangement, the name of the funeral director, the amount of the prepayment, and the name of the person covered.

SSI RELATED CATEGORIES

The CAO will exclude up to $1,500 held in a revocable burial reserve, depending on available life insurance benefits and irrevocable funds.

55 Pa. Code
178.73

The CAO will determine if the client has money identifiably set aside for burial by seeing bank books, contracts, or other documents. A review of the terms of the account or agreement should reveal the conditions under which it was established and whether it is revocable or irrevocable.

NOTE: The money in a burial fund must be clearly designated as set aside for burial. If co-mingled with other funds, the money must be identifiable by using items such as personal records or institutional accounts.

The CAO will determine how much of a revocable burial fund may be excluded as follows:

55 Pa. Code
178.73

1.

.$1,500 is the maximum exclusion for each client.

2.

Subtract from the $1,500 the following resources owned by the client:

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The face value of life insurance which accumulates cash value and has a total face value of $1,500 or less, OR the cash value up to $1,000 of life insurance when the face value exceeds $1,500.

NOTE: Cash value which is excluded when determining life insurance is counted when determining how much of a burial fund may be excluded. and

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The value of an irrevocable burial reserve. Do not count interest from the reserve that is being counted as income.

3.

Exclude the remaining amount, up to $1,500 maximum.

4.

Count the remaining value of the burial reserve as a resource.

NOTE: Do not count as a resource or income, any increase in the value of excluded burial funds due to accumulated interest or appreciation.

5.

At each redetermination, determine if any portion of the fund or accrued interest was used for a purpose other than burial. Verify the amount used and the date it was spent.

6.

Add the amount spent, if any, from the burial fund to other countable resources as of the date the money from the burial fund was spent.

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If the total is less than the appropriate Medicaid resource limit, the recipient continues to be eligible.

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If the total exceeds the appropriate Medicaid resource limit, the recipient is not eligible for MA beginning on the date the money was spent and until the date the expenditure was verified by the CAO.

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Submit an overpayment referral to OFAIR based on the ineligibility dates.

PA/FS 162-A

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Notify the applicant/recipient on a PA/FS 162-A of the period of ineligibility and that the information has been referred to OFAIR for potential recovery.

GA-RELATED CATEGORIES

A maximum of $1,500 of a revocable burial reserve is excluded for each applicant/recipient group member. The client's statement of intent to use the fund for burial is sufficient to exclude the fund. Since this fund is not restricted to burial, any amount over $1,500 is counted toward the resource limit.

55 Pa. Code
178.161(a)10)

REMINDER: The interest on an unrestricted account is counted as income.

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Issued: February 8, 2002


*MEDICAID ELIGIBILITY HANDBOOK*
RESOURCES
	CITATION


Burial resources include both burial spaces and burial reserves.			55 Pa. Code 178.3
The CAO will verify:			Resource Disregard and Exclusion of Burial Plots-OPS031102
	<	the status of each burial reserve;
	<	the amount and availability of interest earned on all burial reserves;
	<	the balance of each revocable burial reserve; and
	<	the money set aside for burial if co-mingled with other funds.
Burial reserves may be verified by a statement from the financial institution or funeral director holding the funds.
The CAO should examine the case record for Burial Reserve Agreements (PA 44s) or other similar documents identifying burial reserves established prior to November 1, 1988. If a case record is destroyed, the CAO will retain burial reserve documents. The CAO will write to the person covered by the reserve as a reminder of the reserve's existence.			PA 44
If a person wishes to dissolve a burial reserve established with a PA 44 or other similar document, the CAO will forward the request to OFAIR. The reserve may not be dissolved until any claim for reimbursement of Medicaid received is satisfied.


A burial space may be a conventional grave site, crypt, burial drawer, mausoleum, urn, or any other repository for the remains of a deceased person. The CAO will exclude burial spaces as follows:				Resource Disregard and Exclusion of Burial Plots-OPS031102
				55 Pa. Code 178.2
	<	SSI related categories:		55 Pa. Code 178.71
		=	One burial space for each member of the applicant/recipient group. and
		=	Burial spaces held for the client's spouse minor or adult children, stepchildren, brothers, sisters, parents, adoptive parents, and the spouses of these persons. The family members do not have to be members of the applicant/recipient group and do not have to live with the group.
		EXAMPLE: Mr. and Mrs. Y receive NMP in the PS, Healthy Horizons category. They own three burial spaces. One of the spaces is for Mr. Y's brother who lives in Alaska. All of these burial spaces are excluded.
	<	GA related categories:		55 Pa. Code 178.161(a)9)
		=	One burial space for each member of the applicant/recipient group. and
		=	One burial space for each household member.
If the burial space is not excluded, the CAO will count the equity value of the burial space unless one of the following conditions applies:				55 Pa. Code 178.161(a)9)
	<	The deed or contract is irrevocable and does not allow the client to sell the burial space.
	<	A joint owner who is not an applicant or recipient refuses to agree to the sale.
	<	The deed or contract requires the move to another state to sell the burial space.
	<	The deed or contract permits the sale of the entire burial plot but not individual spaces of the plot.
Burial space information can be obtained from the cemetery where the burial spaces are located. The CAO will verify ownership, conditions of possible resale, and equity value.


Burial reserves are funds that are set aside for the burial of a person. These funds are usually held in an account or trust that is either revocable or irrevocable.			55 Pa. Code 178.2
The funds may also be in the form of a prepaid funeral. A prepaid funeral is an agreement between a person and a funeral home for a funeral that is paid for in advance and specifies the services to be provided at the time of the person's death. The agreement may include such items and services as:
	<	casket
	<	cemetery plot
	<	flowers
	<	obituary
The CAO will review a prepaid funeral agreement in the same way as any other burial reserve.


An irrevocable burial reserve is a fund held in trust or under contract with a financial institution or a funeral director. No part of the fund may be withdrawn before the client's death and the fund must be used for burial expenses.			55 Pa. Code 178.5
Funds held in an irrevocable burial reserve are excluded. There is no limit on the amount that can be set aside in an irrevocable burial reserve. If the amount is exorbitant in relation to the cost of most funerals in the area, the CAO will want to be very certain that the funds are irrevocable. An irrevocable burial reserve is not considered exorbitant if it exceeds the average local cost by no more than 25 percent.
To be considered irrevocable, burial reserve funds must be deposited with a financial institution or a funeral director under a written agreement which provides that the funds cannot be withdrawn before the death of the beneficiary.
If the CAO cannot determine if a burial reserve is irrevocable, all documentation is sent to the Area Manager for review by the Office of Legal Counsel.
	REMINDER: If the interest on the reserve can be and is withdrawn before death, the interest is counted as income to the applicant/recipient group.
	NOTE: Life insurance or personal property, such as stock, is considered an irrevocable burial reserve if:
	<	the applicant/recipient group does not have access to the resource; and
	<	the beneficiary or co-owner is a financial institution or funeral director.
The CAO will determine and record the amount of any fee charged by the financial institution. The fee to be deducted from the burial reserve upon the death of the person may not exceed 5% of the burial reserve. This information will be needed when the reserve is terminated to pay for burial costs.
Excess funds remaining from the irrevocable burial reserve after the burial expenses become a part of the deceased recipient's estate.
For SSI-related categories, the amount of the irrevocable burial reserve affects the amount which can be excluded from revocable funds. See Section 340.722, Revocable Burial Reserves.
The CAO should advise the client the establishment of a burial reserve is considered a transfer of resources and is subject to a determination of fair consideration when determining eligibility for Nursing Facility Care (NHC). See Section 340.9, Disposition of Resources, and the Nursing Facility Care Handbook.


The CAO will consider revocable burial reserves based on the category of Medicaid. A revocable burial reserve is a fund held by a financial institution or funeral director and designated for burial expenses, but which may be withdrawn before the client's death.				55 Pa. Code 178.73 SSI 178.161(a)10) GA
The CAO will record the existence of the burial reserve, the date of the arrangement, the name of the funeral director, the amount of the prepayment, and the name of the person covered.
SSI RELATED CATEGORIES
The CAO will exclude up to $1,500 held in a revocable burial reserve, depending on available life insurance benefits and irrevocable funds.				55 Pa. Code 178.73
The CAO will determine if the client has money identifiably set aside for burial by seeing bank books, contracts, or other documents. A review of the terms of the account or agreement should reveal the conditions under which it was established and whether it is revocable or irrevocable.
	NOTE: The money in a burial fund must be clearly designated as set aside for burial. If co-mingled with other funds, the money must be identifiable by using items such as personal records or institutional accounts.
The CAO will determine how much of a revocable burial fund may be excluded as follows:				55 Pa. Code 178.73
	1.	.$1,500 is the maximum exclusion for each client.
	2.	Subtract from the $1,500 the following resources owned by the client:
		<	The face value of life insurance which accumulates cash value and has a total face value of $1,500 or less, OR the cash value up to $1,000 of life insurance when the face value exceeds $1,500.
			NOTE: Cash value which is excluded when determining life insurance is counted when determining how much of a burial fund may be excluded. and
		<	The value of an irrevocable burial reserve. Do not count interest from the reserve that is being counted as income.
	3.	Exclude the remaining amount, up to $1,500 maximum.
	4.	Count the remaining value of the burial reserve as a resource.
			NOTE: Do not count as a resource or income, any increase in the value of excluded burial funds due to accumulated interest or appreciation.
	5.	At each redetermination, determine if any portion of the fund or accrued interest was used for a purpose other than burial. Verify the amount used and the date it was spent.
	6.	Add the amount spent, if any, from the burial fund to other countable resources as of the date the money from the burial fund was spent.
		<	If the total is less than the appropriate Medicaid resource limit, the recipient continues to be eligible.
		<	If the total exceeds the appropriate Medicaid resource limit, the recipient is not eligible for MA beginning on the date the money was spent and until the date the expenditure was verified by the CAO.
		<	Submit an overpayment referral to OFAIR based on the ineligibility dates.	PA/FS 162-A
		<	Notify the applicant/recipient on a PA/FS 162-A of the period of ineligibility and that the information has been referred to OFAIR for potential recovery.
GA-RELATED CATEGORIES
A maximum of $1,500 of a revocable burial reserve is excluded for each applicant/recipient group member. The client's statement of intent to use the fund for burial is sufficient to exclude the fund. Since this fund is not restricted to burial, any amount over $1,500 is counted toward the resource limit.				55 Pa. Code 178.161(a)10)
	REMINDER: The interest on an unrestricted account is counted as income.