Method 1 - Step 1

Step 1

The first step of the evaluation process is to determine whether the annuity is a commercial annuity.

Definition: An annuity that is purchased and set up via an insurance company or financial institution licensed or regulated by the Minnesota Department of Commerce or a similar agency of another state.

If the annuity is a commercial annuity, continue to Step 2.

If the annuity is a not a commercial annuity (private annuity), the uncompensated transfer amount must be calculated.
The uncompensated transfer amount is the amount of the annuitized funds less any payments already received.

Annuitized Funds
- Payments Already Received
= Uncompensated Transfer Amount

The uncompensated amount is then used to determine a transfer penalty.
More information about determining and applying a transfer penalty can be found in the Eligibility Policy Manual (EPM) and in the MA-LTC Transfers course.
No further annuity transfer evaluation is required.

Example:

Emilio is requesting MA-LTC today. He owns an annuity he purchased two years ago from his brother, who is not licensed by the state. The annuity contract they established indicated that Emilio gave his brother $10,000 in exchange for receiving payments of $100 each month for ten years. Emilio has received payments for two years.

Action:

Use the $7,600 uncompensated transfer amount to determine a transfer penalty, because Emilio’s annuity was purchased from his brother, a private issuer. The uncompensated transfer amount was calculated as follows:

Annuitized funds = $10,000 (the amount used to purchase the annuity).
Payments Already Received = $2,400 (12 months X 2 years X $100 payment).
Uncompensated Transfer Amount = $7,600 ($10,000 - $2,400).

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Transfer Evaluation - Evaluation Method 1

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