Section 120.381 Exempt Resources

SUBPART H: MEDICAL ASSISTANCE - NO GRANT

TITLE 89: SOCIAL SERVICES

CHAPTER I: DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES

SUBCHAPTER b: ASSISTANCE PROGRAMS

PART 120 MEDICAL ASSISTANCE PROGRAMS

SECTION 120.381 EXEMPT RESOURCES

Section 120.381  Exempt Resources

a)         Effective July 1, 2012, the following resources are exempt

from consideration in determining eligibility for medical assistance:

1)         Homestead Property.

A)        Homestead

property is any property in which a person (and spouse, if any) has an

ownership interest and that serves as the person's principal place of

residence.  This property includes the shelter in which a person resides, the adjoining

land on which the shelter is located and related outbuildings.

B)        If a

person (and spouse, if any) moves out of his or her home without the intent to

return, the home is no longer exempt because it is no longer the person's

principal place of residence.  If a person leaves his or her home to live in a

long term care facility, the property is considered exempt, irrespective of the

person's intent to return, as long as a spouse or dependent relative of the

eligible person continues to live there.  The person's equity in the former

home is treated as an available resource effective with the first day of the

month following the month it is no longer his or her principal place of

residence.

C)        Subject to federal approval, homestead property transferred to

a trust is not exempt unless the Department determines that the person's

spouse, minor child or disabled child resides in the property.

2)         Personal effects and household goods are exempt to the extent

they are excluded under 20 CFR 416.1216

llowing the month it is no longer his or her principal place of

residence.

C)        Subject to federal approval, homestead property transferred to

a trust is not exempt unless the Department determines that the person's

spouse, minor child or disabled child resides in the property.

2)         Personal effects and household goods are exempt to the extent

they are excluded under 20 CFR 416.1216.

3)         Resources (for example, land, buildings, equipment and

supplies or tools), including, effective January 1, 2014, farmland property and

personal property used in the income producing operations related to the

farmland (for example, equipment and supplies, motor vehicles or tools), necessary

for self-support up to $6,000 of the person's equity in the income producing

property are exempt provided the property produces a net annual income of at

least six percent of the excluded equity value of the property. The equity

value in excess of $6,000 is not excluded.  If the activity produces income

that is less than six percent of the exempt equity due to reasons beyond the person's

control (for example, the person's illness or crop failure) and there is a

reasonable expectation that the property will again produce income equal to six

percent of the equity value (for example, a medical prognosis that the person

is expected to respond to treatment or that drought resistant corn will be

planted), the equity value in the property up to $6,000 is exempt.  If the person

owns more than one piece of property and each produces income, each is looked

at to determine if the six percent rule is met and then the amounts of the person's

equity in all of those properties are totaled to see if the total equity is

$6,000 or less.  The total equity value of all properties that is exempt under

this subsection is limited to $6,000.

4)         Automobile

pt.  If the person

owns more than one piece of property and each produces income, each is looked

at to determine if the six percent rule is met and then the amounts of the person's

equity in all of those properties are totaled to see if the total equity is

$6,000 or less.  The total equity value of all properties that is exempt under

this subsection is limited to $6,000.

4)         Automobile.

A)        Exclude one automobile, regardless of value, used by the

client, spouse or other dependent if:

i)          it is necessary for employment;

ii)         it is necessary for the medical treatment of a specific or

regular medical problem;

iii)        it is modified for operation by, or transportation of, a

handicapped person;

iv)        it is necessary because of factors such as climate, terrain or

distance to provide necessary transportation to perform essential daily

activities; or

v)         one vehicle for each spouse is exempt in determining the

amount allowed as the Community Spouse Resource Allowance (as described in

Section 120.379(d)).

B)        If not excluded in subsection (a)(4)(A) of this Section, one

automobile is excluded to the extent its equity value does not exceed $4500.  Any

excess equity value is applied toward the applicable resource disregard (see Section

120.382).

C)        For all other automobiles, apply the equity value toward the resource

disregard (see 89 Ill. Adm. Code 113.142).

5)         Life insurance policies with a total face value of $1,500 or

less and all term life insurance policies.  If the total face value exceeds

$1,500, the cash surrender value must be counted as a resource

oward the applicable resource disregard (see Section

120.382).

C)        For all other automobiles, apply the equity value toward the resource

disregard (see 89 Ill. Adm. Code 113.142).

5)         Life insurance policies with a total face value of $1,500 or

less and all term life insurance policies.  If the total face value exceeds

$1,500, the cash surrender value must be counted as a resource.

6)         For

purposes of this Section, the term "equity value" refers to:

A)        in the

case of real property, the value described in Section 120.385(c); and

B)        in the

case of personal property, the price that an item can reasonably be expected to

sell for on the open market in the particular geographic area involved, minus

any encumbrances (as described in Section 120.385(c)(1)(C)).

b)         Burial spaces that are intended for the use of the person, his

or her spouse, or any other member of his or her immediate family are exempt.

Immediate family is defined as a person's minor and adult children, including

adopted children and stepchildren, a person's brothers, sisters, parents and

adoptive parents, and the spouses of these individuals.

c)         Funds

that are set aside for the burial expenses of a person and his or her spouse in

a bank account owned by the person that is clearly identified as a burial fund

is exempt up to $1500.  This amount is reduced by the face value of any

excluded life insurance on the person and the amount of any funds held in an

irrevocable trust or other irrevocable arrangement that is available for burial

expenses per person.

d)         Prepaid

Funeral/Burial Contracts. Prepaid funeral/burial contracts are exempt to the

following extent:

1)         Funds

in a revocable prepaid funeral/burial contract are exempt up to $1500, except

that any portion of a contract that clearly represents the purchase of burial

space, as that term is defined for purposes of the Supplemental Security Income

program, is exempt regardless of value

Prepaid

Funeral/Burial Contracts. Prepaid funeral/burial contracts are exempt to the

following extent:

1)         Funds

in a revocable prepaid funeral/burial contract are exempt up to $1500, except

that any portion of a contract that clearly represents the purchase of burial

space, as that term is defined for purposes of the Supplemental Security Income

program, is exempt regardless of value.

2)         Funds

in an irrevocable prepaid funeral/burial contract are exempt up to $5,874, except

that any portion of a contract that clearly represents the purchase of burial

space, as that term is defined for purposes of the Supplemental Security Income

program, is exempt regardless of value.  This amount shall be adjusted annually

for any increase in the Consumer Price Index.  The amount exempted shall be

limited to the price of the funeral goods and services to be provided upon

death.  The contract must provide a complete description of the funeral goods

and services to be provided and the price of those goods and services.  Any

amount in the contract not so specified shall be treated as a transfer of

assets for less than fair market value.

3)         A

prepaid, guaranteed price funeral/burial contract, funded by an irrevocable

assignment of a person's life insurance policy to a trust, is exempt.  The amount

exempted shall be limited to the amount of the insurance benefit designated for

the cost of the funeral goods and services to be provided upon the person's

death.  The contract must provide a complete description of the funeral goods

and services to be provided and the price of those goods and services.  Any

amount in the contract not so specified shall be treated as a transfer of

assets for less than fair market value

o the amount of the insurance benefit designated for

the cost of the funeral goods and services to be provided upon the person's

death.  The contract must provide a complete description of the funeral goods

and services to be provided and the price of those goods and services.  Any

amount in the contract not so specified shall be treated as a transfer of

assets for less than fair market value.  The trust must include a statement

that, upon the death of the person, the State will receive all amounts

remaining in the trust, including any remaining payable proceeds under the

insurance policy up to an amount equal to the total medical assistance paid on

behalf of the person.  The trust is responsible for ensuring that the provider of

funeral services under contract receives the proceeds of the policy when it

provides the funeral goods and services specified under the contract.  The

irrevocable assignment of ownership of the insurance policy must be

acknowledged by the insurance company.

4)         As of May 27, 2022, an existing life insurance

policy is exempt when there has been an irrevocable assignment in compliance

with Section 2b of the Illinois Funeral or Burial Funds Act [225 ILCS 45].

A)        The person shall sign a

contract with a funeral home:

i)          which

is licensed under the Illinois Funeral or Burial Funds Act;

ii)         that

describes the cost of the funeral goods and services to be provided upon the

person's death; and

iii)        that

is valued at up to the amount set annually in the Consumer Price Index, except

that any portion of a contract that clearly represents the purchase of burial

space, as that term is defined for purposes of the Supplemental Security Income

program, is exempt regardless of value. This amount shall be adjusted annually

for any increase in the Consumer Price Index.

B)        The

contract shall provide a complete description of the goods and services and any

cash advances to be provided and the price thereof

hat clearly represents the purchase of burial

space, as that term is defined for purposes of the Supplemental Security Income

program, is exempt regardless of value. This amount shall be adjusted annually

for any increase in the Consumer Price Index.

B)        The

contract shall provide a complete description of the goods and services and any

cash advances to be provided and the price thereof.

C)        The

person shall sign a completed Irrevocable Assignment of Benefits of Life

Insurance Policy (HFS 3195), located on the Department's website at

https://hfs.illinois.gov/info/brochures-and-forms.html, declaring that:

i)          any

amounts payable from the policies not used for goods and services and any cash

advances as set forth in the contract, up to an amount equal to the total

medical assistance, shall be paid to the Technical Recovery Department of the

Illinois Department of Healthcare & Family Services within 30 days of

receipt of the benefits and proceeds of such policy.

ii)         any

funds remaining after payment to the State shall be paid to a secondary

beneficiary (if any) listed on the policy; or to the estate of the purchaser,

if no secondary beneficiary is named on the policy.

D)        More

than one policy may be subject to this subsection if the total face value of

the policies is necessary to pay the amount described in the contract with the

funeral home.

E)        Policies

that are not necessary to pay the amount described in the contract are not

exempt

listed on the policy; or to the estate of the purchaser,

if no secondary beneficiary is named on the policy.

D)        More

than one policy may be subject to this subsection if the total face value of

the policies is necessary to pay the amount described in the contract with the

funeral home.

E)        Policies

that are not necessary to pay the amount described in the contract are not

exempt.

F)         The

licensed funeral home to which the life insurance policy benefits have been

irrevocably assigned shall retain copies for inspection by the Comptroller and

shall report annually to the Comptroller the following:

i)          the name of the

insured;

ii)         the name of the insurance

company and policy number;

iii)        an

itemized account of the amount of the contract for goods and services and any

cash advances provided; and

iv)        the

current value of the policy of benefits designated with a record of all amounts

paid back to the State or other beneficiary.

e)         Resources necessary for fulfillment of an approved plan for

achieving self-support under 42 CFR 416.1220.

f)         Resources excluded by express provision of 20 CFR 416.1236 (2009).

g)

Donations or benefits from fund raisers held for a

seriously ill client provided the client or a responsible relative of the

client does not have control

(for example, not available to the client or

the responsible relative)

over the donations or benefits or the disbursement

of donations or benefits

[305 ILCS 5/5-2].

h)         Payments made to veterans who receive an annual disability

payment or to the survivors of deceased veterans who receive a one-time lump

sum payment from the Agent Orange Settlement Fund or any other fund referencing

Agent Orange product liability under Public Law 101-201.

i)          Money received from the Social Security Administration under

a Plan to Achieve Self-Support (PASS) and held in a separate account

eterans who receive an annual disability

payment or to the survivors of deceased veterans who receive a one-time lump

sum payment from the Agent Orange Settlement Fund or any other fund referencing

Agent Orange product liability under Public Law 101-201.

i)          Money received from the Social Security Administration under

a Plan to Achieve Self-Support (PASS) and held in a separate account.

j)          Disaster relief payments provided by federal, State or local

government or a disaster assistance organization.

k)         The amount of earned income tax credit that the client

receives as advance payment or as a refund of federal income tax.

l)          For disabled

persons who have lost eligibility under Section 120.510 and who are only

requesting services other than those described in Section 120.61(a) (except

that subsection's reference to services provided through a Community Integrated

Living Facility (CILA)), the following additional exemptions shall apply:

1)         Retirement accounts that a person with a disability cannot

access without penalty before the age of 59½ and medical savings accounts

established pursuant to 26 U.S.C. 220; and

2)         Up to $25,000 if the person owned assets of equal value when

his or her eligibility under Section 120.510 ended.

m)        The amount of damages recovered by a resident of a nursing home

for any act that injures the resident pursuant to 210 ILCS 45/3-605.

n)         Certain

payments received under the American Recovery and Reinvestment Act of 2009.

1)         Payments

to World War II veterans who served in the Philippines and spouses of those veterans

under Div. A, Title X, Sec. 1002 of P.L. 111-5.

2)         Payments

or reimbursements for Premium Assistance for COBRA Continuous Coverage under

Div. B, Title III, Sec. 3001 of P.L. 111-5.

o)         Certain

payments received under the American Recovery and Reinvestment Act of 2009 are

exempt as an asset the month of receipt and two months thereafter

Philippines and spouses of those veterans

under Div. A, Title X, Sec. 1002 of P.L. 111-5.

2)         Payments

or reimbursements for Premium Assistance for COBRA Continuous Coverage under

Div. B, Title III, Sec. 3001 of P.L. 111-5.

o)         Certain

payments received under the American Recovery and Reinvestment Act of 2009 are

exempt as an asset the month of receipt and two months thereafter.

1)         Making

Work Pay Credit under Div. B, Title I, Sec. 1001 of P.L. 111-5.

2)         Tax

Credit for Certain Government Retirees under Div. B, Title II, Sec. 2202 of

P.L. 111-5.

p)         Economic

Recovery Payments under the American Recovery and Reinvestment Act of 2009 under

Div B, Title II, Sec. 2201 of P.L. 111-5 are exempt as an asset the month of

receipt and nine months thereafter.