There is a new life expectancy table to use when determining if an annuity, loan, promissory note or mortgage is actuarially sound. GIS 14 MA/28 states that the life expectancy table in its attachment is to be used in place of the life expectancy table at 06 OMM/ADM-5.
Medicaid Financial Eligibility Rules for Nursing Home Care in New York State should be updated as follows:
RESOURCE LEVEL FOR THE MEDICAID APPLICANT FOR 2015:
The resource level for the Medicaid applicant is $14,850 for the year 2015. GIS 14 MA/29.
RESOURCE LEVEL FOR THE COMMUNITY SPOUSE FOR 2015:
For 2015, the minimum resource level for the community spouse is $74,820 and the maximum is $119,220. GIS 14 MA/29. For an explanation of how this rule works, see page 9 of Medicaid Financial Eligibility Rules for Nursing Home Care in New York State.
Medicaid Financial Eligibility Rules for Nursing Home Care in New York State should be updated as follows:
HOME EQUITY LIMIT FOR 2015:
The home equity limit for Medicaid coverage of nursing facility services is $828,000 for 2015. GIS 14 MA/29.
For an explanation of how this rule works, see pages 13-14 of Medicaid Financial Eligibility Rules for Nursing Home Care in New York State.
There is a new life expectancy table to use when determining if an annuity, loan, promissory note or mortgage is actuarially sound. GIS 13 MA/020 states that the life expectancy table in its attachment is to be used in place of the life expectancy table at 06 OMM/ADM-5. This GIS was issued in 2013. Note that GIS 12 MA/025, which had an updated table, was issued in 2012.
Medicaid Financial Eligibility Rules for Nursing Home Care in New York State should be updated as follows:
HOME EQUITY LIMIT FOR 2014:
The home equity limit for Medicaid coverage of nursing facility services is $814,000 for 2014. GIS 13 MA/022, page 3.
Note that it was $803,000 for the year 2013. GIS 13 MA/02, page 3.
For an explanation of how this rule works, see pages 13-14 of Medicaid Financial Eligibility Rules for Nursing Home Care in New York State.
Medicaid Financial Eligibility Rules for Nursing Home Care in New York State should be updated as follows:
RESOURCE LEVEL FOR THE MEDICAID APPLICANT FOR 2014:
The resource level for the Medicaid applicant is $14,550 for the year 2014. GIS 13 MA/022, page 2 and Attachment 2. Note that Attachment 1 lists the amount as $14,400, which was the 2013 amount; I assume this is a typo.
RESOURCE LEVEL FOR THE COMMUNITY SPOUSE FOR 2014:
For 2014, the minimum is $74,820 and the maximum is $117,240. GIS 13 MA/022, page 3 and Attachment 1.
For an explanation of how this rule works, see page 9 of Medicaid Financial Eligibility Rules for Nursing Home Care in New York State.
GIS 13 MA/06 advises that GIS 12 MA/001 has the correct method for calculating the value of a life estate, but the IRS website addresses provided in GIS 12 MA/001 are incorrect. This problem has already been noted on this website.
Unfortunately, GIS 13 MA/06 also contains an incorrect web address.
GIS 13 MA/06 does note that the IRS website can be changed at any time. Thus, GIS 13 MA/06 suggests that interest rates can be found by going to the IRS website and typing the following term in the search box: \”Section 7520 Interest Rates\”
GIS 13 MA/06 suggests that Table S can be found by going to the IRS website and typing the following term in the search box: \”Table S\”
As previously noted on this website, GIS 12 MA/001 changed the method of calculating the value of a life estate. Page 40 of Medicaid Financial Eligibility Rules for Nursing Home Care in New York State describes the old rule which was changed by GIS 12 MA/001.
Medicaid Financial Eligibility Rules for Nursing Home Care in New York State should be updated as follows:
RESOURCE LEVEL FOR THE MEDICAID APPLICANT FOR 2013:
The resource level for the Medicaid applicant is $14,400 for the year 2013. GIS 13 MA/02, Attachment I.
COMMUNITY SPOUSE RESOURCE ALLOWANCE FOR 2013:
For 2013, the minimum is $74,820 and the maximum is $115,920. The community spouse may keep $74,820 or the amount of the spousal share, up to $115,920, whichever is greater. The \”spousal share\” is the amount equal to one-half of the total value of the couple\’s countable resources as of the beginning of the most recent continuous period of institutionalization of the institutionalized spouse. GIS 03 MA/02, Attachment I.
There is a new life expectancy table to use when determining if an annuity, promissory note, loan or mortgage is actuarially sound. GIS 12 MA/025 states that the life expectancy table in its attachment is to be used in place of the life expectancy table at 06 OMM/ADM-5.
The third full paragraph on page 40 of Medicaid Financial Eligibilty Rules for Nursing Home Care in New York State describes how to calculate the value of a life estate for Medicaid purposes. At the time the book was published, 96 ADM-8, at 20, and Medicaid Reference Guide, at 353, stated that Social Service Districts may, but are not required to, use the life estate and remainder interest table attached to 96 ADM-8 when calculating the value of life estates and remainder interests.
Effective September 26, 2011, a different method must be used when calculating the value of a life estate or a remainder interest for Medicaid purposes. 11 OHIP/ADM-8, at 7; GIS 12 MA/001. The Internal Revenue Service tables must now be used. 11 OHIP/ADM-8, at 7; GIS 12 MA/001.
In order to do the calculation, you must know the age of the life estate holder on the date of the transaction.
STEP ONE
When doing the calculation, the first step is to find the IRS code 7520 interest rate for the appropriate month and year. 11 OHIP/ADM-8, at 7.
The ADM contained a link which was supposed to take you to the 7520 interest rate table. The link in the ADM was http://www.irs.gov/businesses/small/article/0,,id=112482,00.html
Unfortunately, if you use that link, you get the following error message from the IRS website: \”We have redesigned the IRS.gov website to make it easier and faster to find the information you need. If you have reached this page by selecting a bookmark that worked previously, it is likely the URL has changed. To navigate to the new redesigned IRS website click on the homepage link. You may also Search the site for specific information. Once you have arrived at the desired page, please update your bookmark.\”
To find the 7520 interest rate table, go to www.irs.gov
In the search box, type in: 7520
Click on SEARCH
Click on the link for 7520 interest rates.
You will be taken to a table which shows Section 7520 interest rates for the current year.
If you need the Section 7520 interest rates for a prior year, you will see \”For prior years\’ rates, please refer to Section 7520 Interest Rates for Prior Years\” directly beneath the table for the current year.
However, this link does not work, either.
If you click on the link, it will take you to a list of years. If you click on the year that you need, you will get a message telling you that you will be leaving the IRS website. If you click on LEAVE IRS WEBSITE, you will be taken to a blank page.
Several non-IRS websites contain the Section 7520 rate tables for prior years. To find one, google a search term such as: 7520 Rates 2011.
Once you get to a Section 7520 table that you are able to use, make a note of the interest rate for the month and year that you need.
STEP TWO
11 OHIP/ADM-8, at 7, says that the next step is to find Table S.
11 OHIP/ADM-8, at 7 stated that a direct link could be found at http://www.irs.gov/retirement/article/0,,id=206601,00.html
However, if you try this link, you will get the same error message from the IRS website that is shown in Step One, above.
To find Table S, go to www.irs.gov
In the search box, type in: Section 7520 Actuarial Table
Click on SEARCH
Click on the link for Actuarial Tables.
You will be taken to the Table of Contents for Publication 1457: Annuities, Life Estates & Remainders.
Click on TABLE S, which is in Section 1.
Note that this is an Excel spreadsheet. If you do not have the Excel application on your computer, you might not be able to open this document.
You will see a table with headings Age, Annuity, Life Estate, Remainder and then Age, Annuity, Life Estate and Remainder again. Above those headings, you will see that it says Interest at 0.2 Percent. If you scroll down, it will say Interest at 0.4 Percent above the next table. Keep scrolling down until you find the interest rate that you were told to use in Step One.
When you find the correct interest rate, scroll down until you find the row for the age of the person for whom you are calculating the life estate value.
Use the Life Estate column for that row.
EXAMPLE FROM 11 OHIP/ADM-8, AT 7
Calculate the value of a life estate owned by a 76-year old in July of 2011. The fair market value of the property is $270,000.
Step One: find the IRS Code 7520 interest rate for the appropriate month and year.
For July 2011, it is: 2.4%.
Step Two: Find Table S.
Find the Interest at 2.4% heading.
Find the Life Estate column for a 76-year old: it is 0.21231.
$270,000 x 0.21231 = $57,323.70. That is the value of the 76-year-old\’s life estate.
