§ 42-2-402 — Transfers of assets affecting eligibility; exceptions; disclosures by applicants

(a) If an institutionalized individual or the individual's
spouse has disposed of, for less than fair market value, any
asset or interest therein within sixty (60) months before or any
time after the first date the individual has both applied for
medical assistance and been institutionalized, the individual is
ineligible for medical assistance for long-term care services
for the period of time determined under subsection (b) of this
section.
(b) For a transfer within the provisions of subsection (a)
of this section, the number of months of ineligibility for long-
term care services shall be the total, cumulative uncompensated
value of all assets transferred within the sixty (60) month
period, divided by the average monthly cost to a private patient
for nursing facility services on the date of application. The
period of ineligibility begins with the later of:
(i) The first day of the first month in which the
assets were transferred and which does not occur in any other
period of ineligibility;
(ii) The date on which the individual is eligible for
medical assistance under the state plan and would otherwise be
receiving institutional level care, but for the application of
the penalty period, and which does not occur during any other
period of ineligibility under this section.
(c) In the case of a transfer by the spouse of an
individual which results in a period of ineligibility for
medical assistance under this section for the individual, the
department shall, using a reasonable methodology as specified by
the secretary of health and human services, apportion the period
of ineligibility for any portion of the period, among the
individual and the individual's spouse if the spouse otherwise
becomes eligible for medical assistance under chapter 4 of this
title.
(d) An institutionalized individual is not rendered
ineligible for long-term care services due to a transfer within
the provisions of subsection (a) of this section if the asset
transferred was a home and:
(i) Title to the home was transferred to the
individual's:
(A) Spouse;
(B) Child who is under age twenty-one (21);
(C) Blind or disabled child as defined in 42
U.S.C. 1382c;
(D) Sibling who has equity interest in the home
and who was residing in the home for a period of at least one
(1) year immediately before the date the individual became an
institutionalized individual; or
(E) Child who was residing in the home for a
period of at least two (2) years immediately before the date the
individual became an institutionalized individual, and who
provided care to the individual which permitted the individual
to reside at home rather than in an institution or facility.
(e) An institutionalized individual is not rendered
ineligible for long-term care services due to a transfer within
the provisions of subsection (a) of this section if the
department determines:
(i) The individual intended to dispose of the asset
at fair market value or for other valuable consideration;
(ii) The asset was transferred exclusively for a
purpose other than to qualify for medical assistance;
(iii) That to the extent assets were transferred for
less than fair market value, that the assets or their fair
market equivalent have been returned to the individual; or
(iv) To grant a waiver of the excess resources
created by the uncompensated transfer because denial of
eligibility would cause undue hardship for the individual, based
on criteria established by the secretary of health and human
services.
(f) An institutionalized person who has made or whose
spouse has made a transfer within the provisions of subsection
(a) of this section is not ineligible for long-term care
services if the asset was transferred:
(i) To the individual's spouse or to another
individual for the sole benefit of the individual's spouse;
(ii) From the individual's spouse to another
individual for the sole benefit of the individual's spouse;
(iii) To the individual's child who is blind or
disabled, as defined by 42 U.S.C. 1382c, or to a trust
established solely for the benefit of the child;
(iv) To a trust established solely for the benefit of
an individual under sixty-five (65) years of age who is disabled
as defined by 42 U.S.C. 1382c(a)(3).
(g) An applicant for long-term care services shall
disclose any interest the applicant, or the applicant's spouse
who is not residing in long-term care, has in an annuity or
similar financial instrument, regardless of whether the annuity
or instrument is irrevocable or is treated as an asset. For
purposes of subsection (a) of this section, the purchase of an
annuity shall be treated as the disposal of an asset for less
than fair market value unless:
(i) The state is named as the remainder beneficiary
in the first position for at least the total amount of medical
assistance paid on behalf of the annuitant under this article;
or
(ii) The state is named as the remainder beneficiary
in the second position after the spouse or minor or disabled
child and is named in the first position if the spouse or a
representative of the child disposes of any of the remainder for
less than fair market value.