New Mexico Administrative Code › Title 8 - SOCIAL SERVICES › Chapter 281 - MEDICAID ELIGIBILITY - INSTITUTIONAL CARE (CATEGORIES 081, 083 AND 084) › Part 500 - INCOME AND RESOURCE STANDARDS › Section 8.281.500.13 - RESOURCE EXCLUSIONS

Current through Register Vol. 35, No. 13, July 16, 2024
Some types of resources can be excluded from the calculation
				  of countable resources if they meet the specific criteria listed below.
A.
Burial fund exclusion:
Up to
				$1,500 can be excluded from the countable liquid resources of an applicant or
				recipient if designated as their burial fund. An additional amount of up to
				$1,500 can be excluded from countable liquid resources if designated as burial
				funds for the spouse of the applicant or recipient. The burial fund exclusion
				is separate from the burial space exclusion.
(1)
Retroactive designation of burial
				funds:
An applicant or recipient can retroactively designate funds for
				burial back to the first day of the month in which the applicant or recipient
				intended the funds to be set aside for burial. The applicant or recipient must
				sign a statement indicating the month the funds were set aside for
				burial.
(2)
Limit on
				exclusion:
An applicant or recipient can designate as much of their
				liquid resources as they wish for burial purposes. However, only one burial
				fund allowance of up to $1,500 each for the applicant or recipient and their
				spouse can be excluded from countable resources. A burial fund exclusion does
				not continue from one period of eligibility to another (i.e., across a period
				of ineligibility). For each new period of eligibility, any exclusion of burial
				funds must be developed as for an initial application.
(3)
Removal of designation:
An
				applicant or recipient cannot "un-designate" burial funds, unless one of the
				following occurs:
(a) eligibility
				terminates;
(b) part, or all, of
				the funds can no longer be excluded because the applicant or recipient
				purchased excluded life insurance or an irrevocable burial contract which
				partially or totally offsets the available burial fund exclusion; or
(c) the applicant or recipient uses the funds
				or any portion of the funds for another purpose; this action makes the funds
				countable; any designated burial funds used for another purpose will be counted
				as income in the month withdrawn and as a resource
				thereafter.
(4)
Reduction of burial fund exclusion:
The $1,500 burial fund
				exclusion is reduced by the following:
(a)
				the face value of excluded life insurance policies;
(b) assets held in irrevocable burial trusts;
				irrevocable means the value paid cannot be returned to the applicant or
				recipient;
(c) assets that are not
				burial space items held in irrevocable burial contracts;
(d) assets held in other irrevocable burial
				arrangements; and
(e) assets held
				in an irrevocable trust available to meet burial expenses.
(5)
Interest from burial fund:
Interest derived from a burial fund is not considered a countable resource or
				income if all the following conditions exist:
(a) the original amount is
				excluded;
(b) the excluded burial
				fund is not commingled with non-excluded burial funds;
(c) the interest earned remains with the
				excluded burial funds.
(6)
Commingling of burial funds:
Burial funds cannot be commingled with non-burial funds. If only part of the
				funds in an account are designated for burial, the burial fund exclusion cannot
				be applied until the funds designated for burial expenses are separated from
				the non-burial funds. Countable and excluded burial funds can be
				commingled.
(7)
Life
				insurance policy designated as burial fund:
An applicant or recipient
				can designate a life insurance policy as a burial fund at the time of
				application. The ISD caseworker must first analyze Subsection H of 8.281.500.13
				NMAC.
(8)
Burial
				contracts:
If an applicant or recipient has a prepaid burial contract,
				the ISD caseworker determines whether it is revocable or irrevocable and
				whether it is paid for. Until all payments are made on a burial contract, the
				amounts paid are considered burial funds and no burial space exclusions apply.
(a) An applicant or recipient may have a
				burial contract which is funded by a life insurance policy. The life insurance
				may be either revocably or irrevocably assigned to a funeral director or
				mortuary.
(b) A revocable contract
				exists if the value can be returned to the applicant or recipient. An
				irrevocable contract exists when the value cannot be returned. If the contract
				or insurance policy assignment is revocable, the following apply.
(i) If the burial contract is funded by a
				life insurance policy, the policy is the resource which must be evaluated. The
				burial contract itself has no value. It exists only to explain the applicant's
				or recipient's burial arrangements.
(ii) No exclusions can be made for burial
				space items because the applicant or recipient does not have a right to them if
				the contract is not paid for or the policy is not paid up.
(c) If the assignment is irrevocable, the
				life insurance or burial contract is not a countable resource, because the
				applicant or recipient does not own it.
(i)
				The burial space exclusions can apply if the applicant or recipient has the
				right to the burial space items.
(ii) The value of the irrevocable burial
				arrangement is applied against the $1,500 burial fund exclusion only if the
				applicant or recipient has other liquid resources to designate for
				burial.