Library: Policy

317:35-5-41.9. Exclusions from resources

Revised 9-1-21

(a) The following are excluded resources. In order for payments and benefits listed in paragraph (b) and (c) to be excluded from resources, such funds must be segregated and not commingled with other countable resources so that the excludable funds are identifiable.

(b) Resources excluded by the Social Security Act, in accordance with Section 416.1210 of Title 20 of the Code of Federal Regulations (C.F.R.), unless otherwise noted:

(1) The home that is the principal place of residence, as described at Oklahoma Administrative Code (OAC) 317:35-5-41.1; • 1

(2) Household goods and personal effects, as described at OAC 317:35-5-41(a)(5);

(3) One automobile, as described at OAC 317:35-5-41.3;

(4) Property essential to self-support:

(A) Property of a trade or business which is essential to the means of self-support, as described at OAC 317:35-5-41.12(c);

(B) Nonbusiness property used to produce goods or services essential to self-support, as described at OAC 317:35-5-41.12(c);

(5) Resources of a blind or disabled individual which are necessary to fulfill an approved plan for achieving self-support;

(6) Stock in regional or village corporations held by natives of Alaska during the twenty-year (20-year) period in which the stock is inalienable pursuant to the Alaska Native Claims Settlement Act;

(7) Life insurance policies, as described at OAC 317:35-5-41.2(b);

(8) Restricted allotted Indian lands;

(9) Disaster relief assistance provided under Federal law or by state or local government;

(10) Burial spaces, as described at OAC 317:35-5-41.2(c);

(11) Burial funds, as described at OAC 317:35-5-41.2(d);

(12) Irrevocable burial contracts as described at OAC 317:35-5-41.2(e);

(13) Supplemental Security Income (SSI) and Social Security retroactive payments for nine (9) months following the month of receipt;

(14) Housing assistance paid pursuant to:

(A) The United States Housing Act of 1937;

(B) The National Housing Act;

(D) Title V of the Housing Act of 1949;

(E) Section 202(h) of the Housing Act of 1959;

(15) Refunds of Federal income taxes and advances made by an employer relating to an earned income tax credit for nine (9) months following the month of receipt;

(16) Payments received as compensation for expenses incurred or losses suffered as a result of a crime;

(17) Relocation assistance for nine (9) months beginning with the month following the month of receipt. The assistance must be provided by a State or local government that is comparable to assistance provided under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 that is subject to the treatment required by Section 216 of that Act;

(18) Money in a dedicated account for SSI-eligible individuals under age eighteen (18) that is required by 20 C.F.R. ' 416.640(e);

(19) Gifts to children under age eighteen (18) with life-threatening conditions from an organization described at 26 United States Code (U.S.C.) ' 501(c)(3) that is exempt from taxation under 26 U.S.C. ' 501(a);

(20) Restitution of Social Security, SSI, or a Special Benefit for World War II Veterans made because of misuse by a representative payee, for nine (9) months following the month of receipt;

(21) Any portion of a grant, scholarship, fellowship, or gift used or set aside for paying tuition, fees, or other necessary educational expenses, for nine (9) months beginning the month after the month of receipt;

(22) Payment of a refundable child tax credit for nine (9) months following the month of receipt;

(23) Any annuity paid by a State to a person (or his or her spouse) based on the State's determination that the person is:

(A) A veteran (as defined in 38 U.S.C. ' 101); and

(B) Blind, disabled, or aged;

(24) The principal and income of trusts complying with OAC 317:35-5-41.6(6). See also 42 U.S.C. ' 1396p(d)(4);

(25) Workers' Compensation Medicare Set Aside Arrangements (WCMSAs) which allocate a portion of the workers' compensation settlement for future medical expenses; and/or

(26) For individuals with an Oklahoma Long-Term Care Partnership Program approved policy, resources equal to the amount of benefits paid on the insured's behalf by the long-term care insurer. Said disregard is made at the time of application for long-term care services provided by SoonerCare. The Oklahoma Insurance Department approves policies as Long-term Care Partnership Program policies.

(c) Resources excluded by federal laws other than the Social Security Act, in accordance with 20 C.F.R. ' 416.1236, unless otherwise noted:

(1) An Achieving a Better Life Experience (ABLE) account is regulated by the Internal Revenue Service as a tax-advantaged account that protects resources from being counted toward the resource limit of public benefits programs (including Medicaid) if used according to the federal regulations. Funds and interest held in an ABLE account, pursuant to 26 U.S.C. ' 529A: • 2

(A) A contribution to an ABLE account by another individual is neither income nor a resource to the individual with the ABLE account. If the individual who made the contribution later requests Medicaid for long-term care services, the contribution shall be evaluated in accordance with OAC 317:35-5-41.8. • 3

(B) A distribution from an ABLE account that is retained after the month of receipt is neither income nor a resource to the individual in any month when spent on a qualified disability expense (QDE).

(C) A QDE is any expense related to the blindness or disability of the individual and made for the benefit of the individual. QDE's include but are not limited to:

(i) Education;

(ii) Housing;

(iii) Transportation;

(iv) Employment training and support;

(v) Assistive technology;

(vi) Health;

(vii) Prevention and wellness;

(viii) Financial management and administrative services;

(ix) Legal fees;

(x) Expenses for ABLE account oversight and monitoring;

(xi) Funeral and burial; and

(xii) Basic living expenses.

(D) A distribution, or portion of a distribution, from an ABLE account that is retained after the month of receipt, and used for a non-QDE in the next or subsequent month, is a countable resource to the individual in the month in which the funds were spent. Any unspent portion of the distribution the individual continues to retain is not a countable resource.

(E) A distribution, or portion of a distribution, from an ABLE account that is received and used for a non-QDE in the same month, is considered unearned income to the individual in the month of receipt. Any unspent portion of the distribution the individual retains after the month of receipt is not a countable resource. • 4

(F) The responsibility of an Oklahoma Medicaid administrator is to ask the ABLE account beneficiary or Authorized Legal Representative (ALR) if the account has been used only in accordance with ABLE regulations and, if so, to exclude the balance of the ABLE account from the determination of countable resources.

(G) The testimony of the ABLE account beneficiary or ALR is all that is required in the determination of appropriate use of the ABLE account.

(2) Payments made under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (84 Stat. 1902, 42 U.S.C. _ 4636);

(3) Payments made to Native Americans as listed in paragraphs (b) and (c) of section IV of the Appendix to Subpart K of Part 416 of C.F.R. Title 20;

(4) Indian judgment funds held in trust by the Secretary of the Interior or distributed per capita pursuant to a plan prepared by the Secretary of the Interior and not disapproved by a joint resolution of the Congress under Public Law 93-134, as amended by Public Law (Pub.L.) 97-458 (25 U.S.C. ' 1407). Indian judgment funds include interest and investment income accrued while the funds are so held in trust. This exclusion extends to initial purchases made with Indian judgment funds, but will not apply to proceeds from sales or conversions of initial purchases or to subsequent purchases;

(5) Supplemental Nutrition Assistance Program benefits;

(6) The value of assistance to children under the National School Lunch Act (60 Stat. 230, 42 U.S.C. '' 1751 et seq.) as amended by Pub.L. 90-302 [82 Stat. 117, 42 U.S.C. ' 1761 (h)(3)];

(7) The value of assistance to children under the Child Nutrition Act of 1966 [80 Stat. 889, 42 U.S.C. ' 1780(b)];

(8) Any grant or loan to any undergraduate student for educational purposes made or insured under any program administered by the Commissioner of Education as provided by section 507 of the Higher Education Amendments of 1968, Pub.L. 90-575 (82 Stat. 1063);

(9) Incentive allowances received under Title I of the Comprehensive Employment and Training Act of 1973 [87 Stat. 849, 29 U.S.C. ' 821(a)];

(10) Compensation provided to volunteers by the Corporation for National and Community Service (CNCS), unless determined by the CNCS to constitute the minimum wage in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. '' 201 et seq.) or applicable State law, pursuant to 42 U.S.C. ' 5044(f)(1). Programs include:

(A) AmeriCorps;

(B) Special and demonstration volunteer programs;

(D) Retired senior volunteer program;

(E) Foster grandparents program; and

(F) Senior companion program;

(11) Distributions received by an individual Alaska Native or descendant of an Alaska Native from an Alaska Native Regional and Village Corporation pursuant to the Alaska Native Claims Settlement Act, as follows: cash, including cash dividends on stock received from a Native Corporation, is disregarded to the extent that it does not, in the aggregate, exceed two-thousand ($2,000) per individual each year [the $2,000 limit is applied separately each year, and cash distributions up to $2,000 which an individual received in a prior year and retained into subsequent years will not be counted as resources in those years]; stock, including stock issued or distributed by a Native Corporation as a dividend or distribution on stock; a partnership interest; land or an interest in land, including land or an interest in land received from a Native Corporation as a dividend or distribution on stock; and an interest in a settlement trust. This exclusion is pursuant to the exclusion under section 15 of the Alaska Native Claims Settlement Act Amendments of 1987, Pub.L. 100-241 [43 U.S.C. ' 1626(c)], effective February 3, 1988;

(12) Value of Federally donated foods distributed pursuant to section 32 of Pub.L. 74_320 or section 416 of the Agriculture Act of 1949 [7 C.F.R. ' 250.6(e)(9) as authorized by 5 U.S.C. ' 301];

(13) All funds held in trust by the Secretary of the Interior for an Indian tribe and distributed per capita to a member of that tribe under Pub.L. 98-64;

(14) Home energy assistance payments or allowances under the Low-Income Home Energy Assistance Act of 1981, as added by Title XXVI of the Omnibus Budget Reconciliation Act of 1981, Pub.L. 97-35 [42 U.S.C. ' 8624(f)];

(15) Student financial assistance for attendance costs received from a program funded in whole or in part under Title IV of the Higher Education Act of 1965, as amended, or under Bureau of Indian Affairs (BIA) Student assistance programs if it is made available for tuition and fees normally assessed a student carrying the same academic workload, as determined by the institution, including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study; and an allowance for books, supplies, transportation, and miscellaneous personal expenses for a student attending the institution on at least a half-time basis, as determined by the institution, under section 14(27) of Pub.L. 100-50, the Higher Education Technical Amendments Act of 1987 (20 U.S.C. ' 1087uu) or under BIA student assistance programs. This includes, but is not limited to:

(A) Pell grants;

(B) Student services incentives;

(D) Byrd scholars;

(E) Federal supplemental education opportunity grants;

(F) Federal educational loans (federal PLUS loans, Perkins loans, Stafford loans, Ford loans, etc.);

(G) Upward Bound;

(H) GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs);

(I) State educational assistance programs funded by the leveraging educational assistance programs; and

(J) Work-study programs;

(16) Amounts paid as restitution to certain individuals of Japanese ancestry and Aleuts under the Civil Liberties Act of 1988 and the Aleutian and Pribilof Islands Restitution Act, sections 105(f) and 206(d) of Pub.L. 100-383 (50 U.S.C. app. 1989 b and c);

(17) Payments made on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.) under Pub.L. 101-201 (103 Stat. 1795) and section 10405 of Pub.L. 101-239 (103 Stat. 2489);

(18) Payments made under section 6 of the Radiation Exposure Compensation Act, Pub.L. 101-426 (104 Stat. 925, 42 U.S.C. ' 2210);

(19) Payments made to individuals because of their status as victims of Nazi persecution excluded pursuant to section 1(a) of the Victims of Nazi Persecution Act of 1994, Pub.L. 103-286 (108 Stat. 1450);

(20) Any matching funds and interest earned on matching funds from a demonstration project authorized by Pub.L. 105-285 that are retained in an Individual Development Account, pursuant to section 415 of Pub.L. 105-285 (112 Stat. 2771);

(21) Any earnings, Temporary Assistance for Needy Families matching funds, and accrued interest retained in an Individual Development Account, pursuant to section 103 of Pub.L. 104-193 [42 U.S.C. ' 604(h)(4)];

(22) Payments made to individuals who were captured and interned by the Democratic Republic of Vietnam as a result of participation in certain military operations, pursuant to section 606 of Pub.L. 105-78 and section 657 of Pub.L. 104-201 (110 Stat. 2584);

(23) Payments made to certain Vietnam veteran's children with spina bifida, pursuant to section 421 of Pub.L. 104-204 [38 U.S.C. ' 1805(d)];

(24) Payments made to the children of women Vietnam veterans who suffer from certain birth defects, pursuant to section 401 of Pub.L. 106-419, [38 U.S.C. ' 1833(c)];

(25) Assistance provided for flood mitigation activities under section 1324 of the National Flood Insurance Act of 1968, pursuant to section 1 of Public Law 109-64 (119 Stat. 1997, 42 U.S.C. ' 4031); and/or

(26) Payments made to individuals under the Energy Employees Occupational Illness Compensation Program Act of 2000, pursuant to section 1, app. [Div. C. Title XXXVI section 3646] of Public Law 106-398 (114 Stat. 1654A-510, 42 U.S.C. ' 7385e).

INSTRUCTIONS TO STAFF 317:35-5-41.9

Revised 11-22-21

1. Proceeds from a reverse mortgage or a deferred payment loan are treated as a loan. If the proceeds are not spent or encumbered within 90-calendar days of receiving the proceeds, these funds are considered a countable resource. Examples of an encumbrance are loans for home repairs, remodeling, or personal expenses. If the proceeds are used to purchase an income producing resource, such as an annuity or certificate of deposit, the income and interest are counted as income.

2. (a) The Oklahoma State Treasurer is responsible for certifying an achieving a better life experience (ABLE) account through the Oklahoma STABLE program. The Oklahoma STABLE program is administered through a partnership with Ohio's STABLE Accounts. ABLE account rules state:

(1) only individuals whose disability was established before 26 years of age can set up an ABLE account and only one account is allowed per individual;

(2) there is no limit to the number of individuals who can contribute to the ABLE account; and

(3) upon the death of an ABLE participant, qualified disability expenses (QDE) may be paid from the account. All remaining funds in the account must be paid to the state Medicaid agency to repay costs of care received by the participant up to the amount of Medicaid paid after establishment of the ABLE account.

(b) Centers for Medicare and Medicaid Services (CMS) guidance states that, per Section 103 of the ABLE Act, contributions to an ABLE account, distributions from the account for QDE, and the account balance are disregarded in determining the individual's SoonerCare (Medicaid) eligibility. This disregard also applies to the ABLE accounts of individuals whose income or resources are deemed available to a SoonerCare (Medicaid) applicant who receives Supplemental Security Income (SSI), such as a spouse.

(c) Any money deposited in the ABLE account in a calendar year that is in excess of the annual federal gift tax exclusion is considered a countable resource. A distribution from an ABLE account is only considered a countable resource when it is retained after the distribution month and is used for a non-QDE. Distributions are never considered countable income. The current gift tax exclusion amount is $15,000 per calendar year and the maximum balance in an ABLE account is $468,000. Refer to okstable.org for current eligibility information.

(d) When an individual receives SSI and his or her ABLE account balance exceeds $100,000, the Social Security Administration suspends the individual's SSI income based on excess resources. When this occurs, the individual continues to be eligible for SoonerCare (Medicaid) benefits.

(e) Once the individual provides documents that verify the ABLE account is valid, no further account verification is required. When the individual receives SSI and is passively renewed, no further inquiry regarding the ABLE account is made at renewal. At renewal, when the individual does not receive SSI, the worker asks if the account is still open and if he or she believes the deposits in and expenditures from the account are in compliance with the terms and requirements of that particular 529 account. When the individual answers yes, no further inquiry is needed.

3. Contributions made to an ABLE account by the parent(s) of the individual with the ABLE account are not considered transfers of assets without commensurate return if the parent(s) later applies for long term care services. Parents are able to transfer their assets to their disabled child of any age without it affecting their eligibility for long term care. However, when any person other than the parent(s) of the individual with the ABLE account makes a contribution to the ABLE account and later applies for long term care services, the worker must determine if the transfer of assets without commensurate return rule applies to the contribution.

4. Refer to Instruction to Staff #2(c) of this Section.