461-145-0020 Effective 07/01/08
Annuities; Not OSIPM
- For the purposes of this rule:
- "Actuarially sound" means a commercial annuity which pays principal and interest out in equal monthly installments over the actuarial life expectancy of the annuitant. For purposes of this definition, the actuarial life expectancy is established by the Periodic Life Table of the Office of the Chief Actuary of the Social Security Administration, and, for transactions (including the purchase of an annuity) occurring on or after July 1, 2008, the payout period must be within three months of the actuarial life expectancy.
- For a client, an annuity does not include benefits that are set up and accrued in a regularly funded retirement account while an individual is working, whether maintained in the original account or used to purchase an annuity, if the Internal Revenue Service recognizes the account as dedicated to retirement or pension purposes. (The treatment of pension and retirement plans is covered in OAR 461-145-0380)
- The definition of "child" in OAR 461-001-0000 does not apply.
- "Child" means a biological or adoptive child who is:
- Under age 21; or
- Any age and meets the Social Security Administration criteria for blindness or disability.
- "Commercial annuities" mean contracts or agreements (not related to employment) by which an individual receives annuitized payments on an investment for a lifetime or specified number of years.
- An annuity is counted as a resource if--
- The annuity does not make regular payments for a lifetime or specified number of years; or
- The annuity does not qualify for exclusion as a resource under subsection (4)(c) of this rule.
- If an annuity is a countable resource under this rule, the cash value is equal to the amount of money used to establish the annuity, plus any additional payments used to fund the annuity, plus any earnings, minus any regular payments already received, minus any early withdrawals, and minus any surrender fees.
- Commercial annuities and payments from such annuities are counted as follows:
- In all programs except OSIP, OSIPM, and QMB, annuity payments are counted as unearned income to the payee.
- In the OSIP and QMB programs:
- For a client in a nonstandard living arrangement (see OAR 461-001-0000), if a client or the spouse of a client purchases or transfers an annuity prior to January 1, 2006, the transaction may be subject to the rules on asset transfers at OAR 461-140-0210 and following. For an annuity that is not disqualifying or for a client in a standard living arrangement (see OAR 461-001-0000, the annuity payments are counted as unearned income to the payee.
- If a client or the spouse of a client purchases an annuity on or after January 1, 2006, the annuity is counted as a resource unless it is excluded under paragraph (C) of this subsection.
- An annuity described in paragraph (B) of this subsection is excluded as a resource if the criteria in subparagraphs (i), (ii), and (iii) of this paragraph are met, except that if an unmarried client is the annuitant, the requirements of subparagraph (iv) of this paragraph must also be met and if a spouse of a client is the annuitant, the requirements of subparagraph (v) of this paragraph must also be met.
- The annuity is irrevocable.
- The annuity must be actuarially sound.
- The annuity is issued by a business that is licensed and approved to issue commercial annuities by the state in which the annuity is purchased.
- If an unmarried client is the annuitant, the annuity must specify that upon the death of the client, the first remainder beneficiary is either of the following:
- The Department, for all funds remaining in the annuity up to the amount of medical benefits provided on behalf of the client.
- The child of the client, if the Department is the next remainder beneficiary (after this child), up to the amount of medical benefits provided on behalf of the client, in the event that the child does not survive the client.
- If a spouse of a client is the annuitant, the annuity must specify that, upon the death of the spouse of the client, the first remainder beneficiaries are either of the following:
- The client, in the event that the client survives the spouse; and the Department, in the event that the client does not survive the spouse, for all funds remaining in the annuity up to the amount of medical benefits provided on behalf of the client.
- A child of the spouse; and the client in the event that this child does not survive the spouse.
- If an annuity is excluded under paragraph (C) of this subsection, annuity payments are counted as unearned income to the payee.
- For OSIPM, see OAR 461-145-0022.
Stat. Auth.: ORS 411.060, 411.816, 412.049
Stats. Implemented: ORS 411.060, 411.816, 412.049