March 1, 2004 |
2004-R-0283 | |
EXCLUSION OF BURIAL-RELATED ASSETS UNDER MEDICAID AND OTHER WELFARE PROGRAMS | ||
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By: Helga Niesz, Principal Analyst | ||
You asked for a brief explanation of how the Department of Social Services treats burial expenses for people on Medicaid or other welfare programs and the changes that HB 5364 would make.
CURRENT LAW ON BURIAL PLOTS AND FUNERAL CONTRACTS
When people apply for Medicaid and other welfare programs, DSS does not count certain assets in determining their eligibility. Exclusions related to burials include a burial plot (with no monetary restriction) and certain burial funds that the person sets aside to pay for burial and funeral costs. These burial funds can take one of two forms:
1. up to $ 1,200 in savings or in a revocable funeral contract or trust and, in some cases, another $ 1,500 for the spouse of a person who is in a nursing home or receiving Medicaid home care in the community or
2. up to $ 5,400 in an irrevocable pre-paid funeral contract or trust (CGS § 17b-84, 17b-91, 42-207, DSS Uniform Policy Manual Sec. 4020. 10, 4030. 05).
Another excluded asset is the cash value of a life insurance policy with a face value up to $ 1,500. This must be counted against the $ 1,200, but it does not affect the $ 5,400 irrevocable contract. Term life insurance is another excluded asset (because it has no cash surrender value) that some people may want to use to pay their burial expenses.
HB 5364 REDEFINES BURIAL PLOT TO INCLUDE CASKET AND OUTER CONTAINER
The Aging Committee’s Raised Bill 5364 defines “value of a burial plot” in statute as the value of a gravesite, opening and closing a gravesite, a cremation urn, a casket, an outer burial container, and a headstone or marker. Current regulations define “burial plot” as “a gravesite, crypt, mausoleum, urn, or any other repository traditionally used for the remains of a deceased person” (DSS Uniform Policy Manual § 4000. 01).
Local DSS offices were interpreting the regulation inconsistently and some were including caskets and containers in the burial plot contracts. A June 1, 2003 DSS Program Informational Bulletin No. UP-03-06 clarified that, under the regulation, “the burial plot does not include personal property, funeral services and funeral merchandise such as the casket and container. ” The bulletin says the cost of the casket and container should be included in the irrevocable funeral services contract in order to be treated as an excluded asset. Otherwise, they are considered revocable contracts, which DSS could lay a claim to for benefits it has paid to the deceased. The bill would supersede the DSS interpretation by clearly including the casket and container in the burial plot definition, but on the other hand it would remove mausoleums and crypts from the “burial plot” definition.
The bill also requires the DSS commissioner to calculate the burial fund amount, the burial plot value, and the irrevocable funeral contract value uniformly throughout the state. It takes effect upon passage.
SIMILAR 2003 PUBLIC ACT VETOED
PA 03-67, An Act Concerning Funeral and Burial Plot Allowances, would have defined “burial plot” broadly as including a gravesite, crypt, mausoleum or niche, crematorium urn, or any other repository traditionally used for the remains of a deceased person, and a headstone or marker. It also required the commissioner to apply the exclusions uniformly throughout the state. The legislature passed the bill, but the governor vetoed it due to the unbudgeted $ 4. 2 million annual cost and his belief that the act circumvented the budget negotiation process.
HN: nf