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Recovery on Annuities Language Released
The State Medicaid Manual instructions regarding recovery on annuities was released by HCFA in Transmittal 75 on January 11, 2001. The effective date of the instructions is noted as February 15, 2001.
For a full copy of HCFA State Medicaid Manual Part 3 Eligibility,
Transmittal 75, download from: http://www.cms.hhs.gov/.
The revisions to § 3810, Medicaid Estate Recoveries, include the following:
Note that the instructions are clear that the annuity provisions
are effective for deaths or estates that are opened 90 days after
the publication of this manual provision and after the State
meets applicable State and Federal law for appropriate notice and
due process. We assume that appropriate notice means
the promulgation of regulations. The latest word from the Recovery
Unit is that DHS is in the process of preparing regulations that
would enable recovery from annuities.
Anyone who has sold, or who is currently marketing, annuities to a potential Medi-Cal recipient as a part of Medi-Cal Planning should be aware that recovery is more than likely, if the annuity is in the Medi-Cal beneficiarys name.
Clients should be informed of the potential for recovery. Agents should also be aware that, effective July 1, 2001, specific disclosures will be required when marketing or selling any financial product on the basis of its treatment under the Medi-Cal program. (See California Insurance Code § 798.8)
From the March 2001 Legal Network News