Michigan Final Department Clearance Review (FDR) For April 2011 Bridges Medicaid Policy

DEPARTMENTAL CLEARANCE/FINAL DEPARTMENTAL REVIEW Author: Bridget Heffron & Fidelia Notman
Michigan Department of Human Services

Date: 11/29/2010 Project Number: BPB 2011-004 Project Title: April
EMAIL TO:
Ismael Ahmed, Director Cash Assistance Payments FOA (Jane Goetschy)
Interagency & Community Service(Jocelyn Vanda) Children’s Services (Kathryne O’Grady)
State Legislation (Dawn Pline) Juvenile Justice (John Evans)
Community Action (Stacie Gibson) Child Welfare Bureau (Suzanne Stiles Burke)
Communications (Edward Woods III) Child Welfare Improvement (Terri Gilbert)
Customer Service (Karen Golejewski) Child Welfare Training Inst. (Carol Siemon)
Relative Licensing (Nancy Rostoni) Chief Administrative Officer (Susan Kangas)
Chief Deputy Director (Susan Kangas) Administrative Services (Dan Werk)
Legal Affairs (Luttrell Levingston) Contracts & Rate Setting (Helen Weber)
Child Support (Marilyn Stephen) Accounting (Russ Hecko)
Inspector General (Alan Kimichik) Budget (Jane Schultz)
Equal Opportunity (James Newsom) Financial & Quality Services(Barbara Anders)
Family Advocate (Stacie Bladen) Division of Adult & Family Services(Kim Keilen)
Early Ed/Care, Fed Liaison (L.Brewer-Walraven) Adult Services (Cynthia Farrell)
FAP Payment Accuracy (Sandy Mose) Quality Assurance (Julie Horn Alexander)
Internal Audit (Rod Markowski) Technology & Info Mgm't (J. Kurnick-Ziegler)
Human Resources (Susan King) Interstate(Ted Forrest)
Field Operations (Terry Salacina) Chief Information Officer (Jim Hogan)
Child Welfare Outstate FOA (Steve Yager) Wayne County Director (Dwayne Haywood)
DCH Program Policy (Edmund Kemp) Training Division (Dawn Callahan)
DCH MA Director (Stephen Fritton)
FROM:
Office Name Purpose
Office of Communications, Grand Tower Suite 1510, Clearance Required
PO Box 30037, Lansing, MI 48909 Information Only – Sent to all offices checked above.
Contact Person: Phone Number Due Date
Judith Galant 517-241-7084
Medicaid Due Date: December 30, 2010
Contact Email: Fax Number
galantJ@michigan.gov 517-373-8471 CDC Due Date: December 20, 2010
THIS SECTION COMPLETED BY RECEIVER

INSTRUCTIONS
Please review the attached manual material.
Combine all comments from your administration and forward one consolidated recommendation by the due date.
If you wish to discuss the material, please contact the above named “contact person.”
Clearance
No Comments Discussion Required Prior to Making Changes
Approved See Comments Below This Office Must Review After Changes
Disapproved See Comments in Text Review Not Necessary After Changes
Signature Date Bureau/Office Name Phone Number
Comments
Department of Human Services (DHS) will not discriminate against any individual or group
AUTHORITY: P.A. 280 of 1939.
because of race, religion, age, national origin, color, height, weight, marital status, sex,
COMPLETION: Voluntary.
sexual orientation, gender identity or expression, political beliefs or disability. If you need
CONSEQUENCE FOR NOT RESPONDING: Comments cannot
help with reading, writing, hearing, etc., under the Americans with Disabilities Act, you are
be considered.
invited to make your needs known to a DHS office in your area.
DHS-311 (Rev. 5-09) Previous editions obsolete. MS Word

BPB 2011-004 1 of 2 BRIDGES POLICY BULLETIN
EFFECTIVE April 1, 2011.
Subject(s) 1. Medicaid (MA).

2. Child Development and Care (CDC).
1) MEDICAID BEM 124, Plan First! Family Planning Program
An ex parte review is not required before Medicaid closures when there

is an actual or anticipated change.
Reason: Not part of lawsuit settlement.
BEM 174, Freedom to Work (FTW)
FTW clients requiring a disability determination from MRT must be

clearly indicated on the medical packet by checking the other Program
box and writing “Freedom to Work” or “FTW” in the blank on the DHS-
49A Medical Social Eligibility Certification form.
Reason: This language had been removed during the transition to

BEM.
BEM 220, Residence
Residency continues for an individual who is temporarily absent from

Michigan or intends to return to Michigan when the purpose of the
absence has been accomplished.
Reason: Clarification for local offices.
BEM 400, Assets
Jointly owned real property is only excludable if it creates a hardship for

the other owners.
In SSI related MA a divestment has occurred if joint owners are added

during the five year look back period. See BEM 405 for determination of
a divestment penalty.
For jointly owned real property count the individual’s share unless sale
of the property would cause undue hardship. Undue hardship for this
item is defined as: a co-owner uses the property as his or her principal
place of residence and they would have to move if the property were
sold and there is no other readily available housing.
Reason: To bring policy in line with federal guidelines.
Life Insurance Value for SSI-Related MA
A life insurance policy is an asset if it can generate a cash surrender

value. A policy is the policy owner's asset.
Issued: STATE OF MICHIGAN

Distribution: DEPARTMENT OF HUMAN SERVICES
BPB 2011-004 2 of 2 BRIDGES POLICY BULLETIN
Policies called graded term or level term may have a cash surrender
value and must be verified and counted as an asset.
Tables included with a life insurance policy are not considered accurate.
Verification of the CSV should be either a current notice (within the
year) from the company or by contacting the company for the current
value.
Reason: Clarification of current policy as well as updates on new types

of policies in the market.
BEM 401, Trusts - MA
A trust is not a Medicaid trust if it contains the resources of a person

who is disabled (not blind), and under age 65 per BEM 260.
Reason: To bring policy in line with federal law.
BEM 405, MA Divestment
Full implementation of the Deficit Reduction Act (DRA) now creates a

60 month look-back period for all transfer of assets.
Reason: DRA is now in full force for MA divestment policy.
2) CDC BEM 704, CDC Providers
Individuals Who May Not Receive Payment For Care
The applicant/client has been added to this section and the bullet
regarding home help has been revised.
Unlicensed (AIDE/Relative) Provider Enrollment Process
A sentence was added that the DHS-220, Child Development and Care
Unlicensed Provider Application, must be completely filled out.
Central Registry Expungement
The procedure for a central registry expungement has been revised.
Central Registry
The automated daily central registry clearances do not include house-

hold members.
Individuals Who May Not Receive Payment For Care
The applicant/client has been added.
Reason: Policy clarification.
STATE OF MICHIGAN
DEPARTMENT OF HUMAN SERVICES
BEM 124 1 of 4 PLAN FIRST! FAMILY PLANNING PROGRAM
DEPARTMENT
POLICY MA Only
The Plan First! Family Planning Program is a health coverage program

operated by the Department of Community Health (DCH).
Plan First! will enable DCH to provide family planning services to

women who would not have coverage for these services and do not
have other comprehensive health insurance.
The program is administered by the centrally located Plan First! Unit. All
eligibility factors in this item must be met. All nonfinancial eligibility fac-
tors must be met in the calendar month being tested.
TARGETED
POPULATION Non-pregnant women who are:
• 19-44 years of age, and
• Not currently covered by Medicaid, including deductible cases, or

Adult Medical Program (AMP), and
• Not covered by any other comprehensive health insurance.
Note: If the other health insurance does not include family planning
services the client may be eligible for Plan First! .
• Have family income at or below 185% of the federal poverty level,

and
• Residents of Michigan, meet residency requirements, and
• Meet Medicaid citizenship requirements.
APPLICATION FOR
PLAN FIRST The MSA-1582, Plan First! Family Planning Program, application is
used for this program. The MSA-1582 must be sent to the Plan First!
Unit.
MSA-1582’s received in the local office should be forwarded to the Plan

First Unit.
Applications for Plan First! may be submitted to:
Plan First!
PO Box 30412
Lansing, MI 48909
Applications may be faxed to Plan First! at 517-324-0710.
Applications are also accepted online at Healthcare4mi.com.
BRIDGES ELIGIBILITY MANUAL STATE OF MICHIGAN

QUESTIONS Refer questions regarding Plan First! to 1-800-642-3195. For persons

with hearing difficulties the TTY number is 1-866-501-5656.
ELIGIBILITY
DETERMINATION The Plan First! Unit will determine eligibility for Plan First! when they
receive an MSA-1582, no other MA programs will be considered.
The Plan First! Unit will register the application and determine MA eligi-
bility at application and redetermination. Once the client has been
determined eligible they will be issued a mihealth card.
The Plan First! Unit is responsible for:
• Completing a Bridges clearance to determine if the client has a

deductible case. If so, the Plan First! application is denied.
• Issuing a denial letter and sending a new Plan First! application to

the client, instructing them to have their deductible case closed if
they wish to pursue Plan First!
• Evaluating the applicant for other Medicaid programs based on the

information provided, which may provide more comprehensive
services and refer the client to the local DHS office.
• Registering the application in Bridges and completing an eligibility

determination.
• Sending a DHS-3503, Verification Checklist, when additional infor-

mation is needed.
• Sending notices to the client regarding her eligibility.
• Maintaining the case record, including processing an address

change if the client is active Plan First! only.
Note: Address changes for clients with other active DHS programs will
be referred to the local office.
COVERAGE
PERIOD Once a client is determined eligible for Plan First! eligibility will be for a
12-month period. An annual redetermination will be completed by the
Plan First! Unit. Coverage may continue for the duration of the waiver
as long as the eligibility criteria is met.
The begin date of eligibility for Plan First! is the first day of the month
the application is received via U.S. mail, fax, online or interoffice trans-
fer.

NONFINANCIAL
ELIGIBILITY
FACTORS
Residence The client must be a resident of the State of Michigan. A person is con-
sidered a resident if she lives in Michigan and intends to remain in
Michigan.
Age The woman must be age 19 through 44.
Citizenship The client must be a U.S. citizen or have acceptable alien status.
Persons whose alien status limits them to emergency services Medicaid

(ESO) do not have acceptable status.
The MA eligibility factors in the following items must also be met.
• BEM 221, Identity.

• BEM 223, Social Security Numbers.
• BEM 256, Spousal/Parental Support.
• BEM 257, Third Party Resource Liability.
• BEM 265, Institutional Status.
FINANCIAL
ELIGIBILITY
FACTORS
Fiscal Group The fiscal group policies for FIP-related groups in BEM 211 apply.
Assets There is no asset test.
Divestment Policy in BEM 405 applies as income can be divested.
Income Eligibility The adjusted gross income must be at or below 185% of the Federal
Poverty Level (FPL). All income (earned and unearned) of the fiscal
group must be reported on the application. The income limit’s are in
RFT 246. Apply MA policy in BEM 500, 501, 502, 503, 504, 530 and
536 to determine net income.
ONGOING
ELIGIBILITY Once eligible, eligibility continues until redetermination unless the-
woman meets one of the following:
• Reaches age 45.

• Moves out of state.
• Is ineligible due to Institutional Status, see BEM 265.
• Obtains comprehensive health insurance.
• Dies.

Note: An ex parte review (see glossary) is required before Medicaid

closures when there is an actual or anticipated change, unless the
change would result in closure due to ineligibility for all Medicaid. When
possible, an ex parte review should begin at least 90 days before the
anticipated change is expected to result in case closure. The review
includes consideration of all MA categories. See BAM 115 and 220.
COVERED
SERVICES Family planning services are defined as any medically approved
means, including diagnostic evaluation, drugs, and supplies, for volun-
tarily preventing or delaying pregnancy.
ELIGIBILITY FOR
OTHER
PROGRAMS When a Plan First! recipient is determined eligible for Medicaid (includ-
ing a deductible case), AMP, or FIP, contact the Plan First! worker to
request case closure.
Women can receive Plan First! services or Medicaid/AMP but not both.
Worker contact information is available in Bridges.
If MA coverage must be added to Bridges for the same months the cli-
ent received Plan First! coverage, contact the exception unit (1-800-
292-9570) for a Plan First! override. Plan First! must be closed prior to
requesting an override.
LEGAL BASE Social Security Act, Section 1115 Waiver, Section 1905(a)(4)(C) and
Section 1902(a)(10)(A)
JOINT POLICY
DEVELOPMENT
Medicaid, Adult Medical Program (AMP), Transitional Medical Assistance (TMA/TMA-Plus), and
Maternity Outpatient Medical Services (MOMS) policy has been developed jointly by the
Department of Community Health (DCH) and the Department of Human Services (DHS).

BEM 174 1 of 3 FREEDOM TO WORK (FTW)
DEPARTMENT
POLICY MA Only
Do not consider Freedom to Work (FTW) eligibility if the month being

tested is before January 2004.
This is an SSI-related Group 1 MA category.
Consider client’s eligibility for all other MA categories before consider-

ing eligibility for Freedom to Work (FTW).
FTW is available to a disabled client age 16 through 64 who has earned

income.
Eligibility begins the first day of the calendar month in which all eligibility
criteria are met. All eligibility factors must be met in the calendar month
being tested.
Note: SSI recipients whose SSI eligibility has ended due to financial
factors are among those who should be considered for this program.
NON-FINANCIAL
ELIGIBILITY
FACTORS 1. The client must be MA eligible before eligibility for FTW can be
considered.
2. The client does not access MA through a deductible.
3. The client must be disabled according to the disability standards of

the Social Security Administration, except employment, earnings,
and substantial gainful activity (SGA) cannot be considered in the
disabilty determination.
Note: FTW clients requiring a disability determination from MRT must

be clearly indicated on the medical packet by checking the other Pro-
gram box and writing “Freedom to Work” or “FTW” in the blank on the
DHS-49A Medical Social Eligibility Certification form.
4. The client must be employed.
Note: A client may have temporary breaks in employment up to

24 months if the break is the result of an involuntary layoff or is
determined to be medically necessary and retain FTW eligibility.
5. The MA eligibility factors in the following items must be met:
• BEM 220, Residence.

• BEM 221, Identity.
• BEM 223, Social Security Numbers.
• BEM 225, Citizenship/Alien Status.

• BEM 257, Third Party Resource Liability.

• BEM 265, Institutional Status.
• BEM 270, Pursuit of Benefits.
FINANCIAL
ELIGIBILITY
FACTORS
Groups Clients eligible under the FTW category is a fiscal and asset group of
one.
Assets Once a client is determined eligible for FTW, the countable assets can-
not exceed the asset limit for FTW in BEM 400.
Refer to BEM 400 for jointly owned assets.
Divestment Do not apply policy in BEM 405.
Income Eligibility Income eligibility exists when the client’s net unearned income does
not exceed 100 percent of the Federal Poverty Level (FPL), which is:
• $867 effective April 1, 2008.

• $903 effective April 1, 2009.
If the client’s net earned income is above 250 percent of the FPL, refer
the client to FTW; see FTW Referrals in this item.
Determine countable earned and unearned income according to SSI-

related MA policies in BEM 500, 530, 540 (for children) or 541 (for
adults). Unemployment compensation benefits are not countable
income for FTW.
PREMIUM
PAYMENTS A client with net earned income exceeding 250 percent of the FPL is
required to pay a monthly premium based on earned income to keep
MA coverage. Premiums will be billed and collected by the Department
of Community Health (DCH) through FTW.
Monthly FTW
Premiums Monthly FTW Premiums
Effective 04/01/09
Premium Level Monthly Countable Premium Amount

Earned Income
Level 1 $2257 to $3158 $50

Level 2 $3159 to $4512 $190
Level 3 $4513 to $6249 $460
Level 4 (max. $75,000) $6,250 and over $920

FTW Referrals If you determine that a client’s earned income exceeds 250 percent of
the FPL and meets all other financial and non-financial factors in this
item, use a DHS-45, DHS to DCH/MIChild/FTW Transmittal, and send a
legible photocopy of the FTW budget sheet to the address below:
Freedom to Work
PO Box 30412
Lansing, MI 48909
FTW will use the budget information to determine the premium pay-
ment. When the client’s income increases to the point they would be
required to pay a different premium amount, send a copy of the new
budget to the above address.
Use a DHS-14, MIChild/Freedom to Work Referral, to inform the client

of the referral to FTW. This notice also informs the client if a premium is
required.
Do not end the client’s medical assistance onBridges. FTW will notify
the client of the premium payment and collection process. If the pre-
mium is not paid, DCH’s Exception Unit will close the case and notify
DHS staff.
Note: An ex parte review (see glossary) is required before Medicaid

closures when there is an actual or anticipated change, unless the
change would result in closure due to ineligibility for all Medicaid. When
possible, an ex parte reivew should begin at least 90 days before the
anticipated change is expected to result in case closure. The review
includes consideration of all MA categories; see BAM 115 and 220.
MEDICARE
SAVINGS
PROGRAM (MSP) MSP and FTW have different group composition, income and asset lim-
its. A separate determination must be done when there is a spouse.
Reminder: A client eligible for MA under FTW is not eligible for ALMB.
LEGAL BASE MA
Title XIX of the Social Security Act

Public Act 33 of 2003
JOINT POLICY
DEVELOPMENT
Medicaid, Adult Medical Program (AMP) also known as Adult Benefit Waiver (ABW), Transi-
tional Medical Assistance (TMA/TMA-Plus), and Maternity Outpatient Medical Services
(MOMS) policy has been developed jointly by the Department of Community Health (DCH) and
the Department of Human Services (DHS).

BEM 220 1 of 8 RESIDENCE
DEPARTMENT
POLICY
All Programs USCIS refers to the U.S. Citizenship and Immigration Services, for-
merly, the Bureau of Citizenship and Immigration or Immigration and
Naturalization Service.
To be eligible, a person must be a Michigan resident. Bridges uses the

requirements in the Residence section in this item to determine if a per-
son is a Michigan resident.
See also WHERE TO APPLY/PROCESS APPLICATIONS in BAM 110.
MA Only Bridges uses the requirements in the Institutionalized Persons section

in this item when the fiscal group consists of only a person in, or
expected to be in, an institution the entire calendar month you are eval-
uating and certifying. In all other situations, it uses the requirements in
the Residence section, based on circumstances for the calendar month
being evaluated and certified.
RESIDENCE
FIP, SDA and AMP A person is a resident if he:
• Is not receiving assistance from another state; and

• Is living in Michigan, except for a temporary absence, and
• Intends to remain in the state permanently or indefinitely.
CDC and FAP A person is considered a resident while living in Michigan for any pur-
pose other than a vacation, even if he has no intent to remain in the
state permanently or indefinitely. Eligible persons may include:
• Persons who entered the state with a job commitment or to seek

employment; and
• Students (For FAP only, this includes students living at home dur-
ing a school break.)
MA Only (non- A person is not a Michigan resident for any month in which he received
institutionalized an SSI state supplement payment from another state.
persons)
An individual is a Michigan resident if either of the following apply:
• He lives in Michigan, except for a temporary absence, and intends

to remain in Michigan permanently or indefinitely. If the individual
indicates an intent to remain in Michigan, but his official USCIS
documents indicate a temporary or time-limited period to the
visit, the individual does not meet the intent to remain require-
ments, unless he verifies that official steps are being taken with

USCIS to apply for lawful permanent resident status. See BEM

225.
• He or a member of his MA fiscal group has entered the state of

Michigan for employment purposes, and
•• Has a job commitment, or

•• Is seeking employment.
Note: An individual who claims that he or a member of his MA fis-

cal group has entered the state for employment purposes must
verify that he has a job commitment or is seeking employment. If
the official USCIS documents indicate a status that does not per-
mit the individual to work, the USCIS documents are verification
that the individual did not enter Michigan for purposes of employ-
ment.
HOMELESS
PERSONS
All Programs A homeless person is an individual who lacks a fixed and regular
nighttime dwelling or whose temporary nighttime dwelling is one of the
following:
• Supervised private or public shelter for the homeless.
Exception: For FAP, a client is considered homeless only for the

first 90 days.
• Halfway house or similar facility to accommodate persons

released from institutions.
• Home of another person.

first 90 days.
• Place not designed or ordinarily used as a dwelling (e.g., building

entrance or hallway, bus station, park, campsite, vehicle).

first 90 days.
Lack of a permanent dwelling or fixed mailing address does not affect

an individual’s state residence status. Assistance cannot be denied
solely because the individual has no permanent dwelling or fixed
address.

Use the local office address or another location agreeable to the individ-
ual as the mailing address in Bridges. Do not designate a temporary
mailing address as the individual’s physical address.
INSTITUTONAL-
IZED PERSONS
FIP, SDA, MA and An institution is an establishment that furnishes food, shelter and
AMP some treatment or services to more than three people unrelated to the
proprietor. For SDA/AMP clients, this also includes group living facili-
ties. See BEM 615.
MA Only In this section only, institution includes an out-of-state foster care

home licensed by that state that provides food, shelter and supportive
services to at least one person unrelated to the proprietor.
OUT-OF-STATE
PLACEMENTS
FIP, SDA and AMP Incompetent adults and dependent children are sometimes placed in
another state by a person or agency legally responsible for their care.
The individual remains a Michigan resident unless the move is to
establish a permanent out-of-state home.
Note: An incompetent adult or dependent child placed in Michigan

from another state is not a Michigan resident unless the move is to
establish a permanent home in Michigan.
MA Only An individual is a Michigan resident if placed in an out-of-state institu-

tion by a Michigan agency (e.g., DHS, juvenile court). An individual is
not a Michigan resident if placed in a Michigan institution by another
state's agency.
DETERMINATION
OF CAPABILITY
MA Only If the individual is institutionalized, you must first determine whether he

is capable or incapable of indicating his intent to remain in the state.
Exception: This does not apply to out-of-state placements (see above)

or to unmarried persons under age 18.
Consider an individual capable of indicating intent unless one of the fol-

lowing factors is documented:
• IQ under 50.
• Mental age under 8.
• Judgment of incompetence by a court.
• In a psychiatric facility by court order.
• Determined incapable by the medical review team.

CAPABLE
PERSONS AT
LEAST AGE 18 OR
MARRIED
MA Only An institutionalized, capable individual at least age 18 or married has

Michigan residence if he lives in Michigan and intends to remain in the
state permanently or indefinitely.
Exception: An individual remains a Michigan resident if he:
• Is currently in an out-of-state LTC facility, and

• Was a Michigan resident immediately prior to entering the LTC
facility.
Note: A Michigan resident who voluntarily enters an out-of-state long

term care facility on or after October 1, 2007 is not considered a Michi-
gan resident for Medicaid purposes.
UNDER AGE 18
AND UNMARRIED;
OR INCAPABLE
BEFORE AGE 21
MA Only An individual who (1) is under age 18 and unmarried, or (2) became
incapable of indicating an intent before age 21, has Michigan residence
in any of the following circumstances:
• One of his legal parents lives in Michigan or did so at the time of

the institutional placement.
• Parental rights of his parents were terminated; the court appointed

a legal guardian for him; and the guardian lives in Michigan or did
so at the time of the institutional placement.
• He was abandoned by his parents and he does not have a court-

appointed legal guardian, but a person who lives in Michigan com-
pleted the most recent application for him.
INCAPABLE AT OR
AFTER AGE 21
MA Only An institutionalized individual who became incapable at or after age 21

has Michigan residence if physically present in Michigan and not placed
by an out-of-state agency.
Exception: An individual remains a Michigan resident if he:
• Is currently in an out-of-state LTC facility, and

• Was a Michigan resident immediately prior to entering the LTC

facility.
Note: A Michigan resident who voluntarily enters an out-of-state long

term care facility on or after October 1, 2007 is not considered a Michi-
gan resident for Medicaid purposes.
VERIFICATION
REQUIREMENTS Record the verification source in Bridges for all items below that have a
verification source field. Bridges will list them on a DHS-3503, Verifica-
tion Checklist if they are not verified or if the verification source is not
valid for the program(s) on the case.
Assistance from FIP and SDA only

Another State
Verify receipt of assistance from another state. See BEM 222.
Address FIP and SDA only
You do not have to verify the individual's address.
FAP only
Verify that the individual lives in the area your office serves. However,
do not deny benefits to an individual with no permanent address (e.g.,
new arrival, migrant, homeless) solely for lack of a verified address.
Note the lack of this verification and reason for it on the DHS-1171 or in
case comments in Bridges.
CDC only
Verify the client’s address.
Intent to Remain in FIP, SDA, MA and AMP

Michigan
Accept an individual’s statement of intent to remain in Michigan unless
the statement is inconsistent or conflicts with known facts.
Note: For MA only, if the individual indicates an intent to remain in

Michigan, but the individual’s official USCIS documents indicate a tem-
porary or time-limited period to the visit, the individual does not meet
the intent to remain requirements, unless the individual verifies that offi-
cial steps are being taken with USCIS to apply for lawful permanent res-
ident status. See BEM 225. See the Verification Sources in this item.
Intent to Return to FIP, SDA, MA and AMP

Michigan
If an individual is temporarily absent from Michigan, verify the intent to
return. See the Verification Sources section in this item.
MA and AMP

Residency continues for an individual who is temporarily absent from

Michigan or intends to return to Michigan when the purpose of the
absence has been accomplished.
Job Commitment/ CDC only

Seeking
Employment Accept an individual’s statement of entering the state with a job commit-
ment or to seek employment unless it is inconsistent or conflicts with
known facts.
MA only
Verify that the individual or a member of his MA fiscal group has

entered the state for employment purposes and either has a job com-
mitment or is seeking employment.
Note: For MA only, If the official USCIS document indicates a status

that does not permit the individual to work, the USCIS document is veri-
fication that the individual did not enter Michigan for purposes of
employment; see BEM 225 and Verification Sources in this item.
Incapability to MA only
Indicate Intent
Verify an institutionalized individual’s incapability to indicate intent
unless he is:
• An out-of-state placement, as defined in this item, or

• Under age 18 and unmarried.
VERIFICATION
SOURCES
Address All programs
• Driver's license.
• Other ID which provides a name and address.
• Mortgage or rent receipt.
• Utility bill.
• Collateral contact with a person who knows the individual’s living
arrangement.
FAP only
Exception: Verification of residence is not needed for categorically eli-

gible groups; see BEM 213.
Intent to Remain In MA only

Michigan
An individual’s USCIS documents indicating the individual entered for a
temporary or time-limited period is verification that the individual
does not intend to remain in Michigan, unless the individual verifies that
official steps are being taken with USCIS to apply for lawful permanent
resident status.
Intent to Return to FIP,and SDA, MA and AMP

Michigan
• Evidence that rent, property taxes, utilities or house payments in
Michigan are being paid.
• Evidence that a local job is being held for the individual.
• Evidence that the reason for the absence implies intent to remain
a Michigan resident.
Incapability to MA only
Indicate Intent
• Medical evidence of an IQ under 50 or mental age under 8. Use a
DHS-49D, Psychiatric Examination Report, or other professional
medical certification.
• Legal evidence of a court judgment of incompetence or court-

ordered placement in a psychiatric facility. Use copies of court doc-
uments or other official legal evidence.
• Follow the procedures in BAM 815 to obtain medical evidence or

make a referral to the medical review team.
Job Commitment/ MA only

Seeking
Employment • Department of Labor and Economic Growth work registration.
• Statement from employer, pay stubs, job offer letter, employment

contract, employee work schedule, verification of employment
form, DHS-38.
• An official USCIS document that does not indicate that the individ-
ual is prohibited from working.
Example: I-551, Resident Alien Card, I-766 Employment Authori-

zation Card.
LEGAL BASE FIP
42 USC 602(a)(1)(A)(i)
MCL 400.32
MA
42 CFR 435.403
Section 11005 of P.L. 99-570
Social Security Act, Sections 1902(a)(48), 1902(b)(2)
MCL 400.32

FAP
7 CFR 273.2 (f)(1)(vi), (vii),.3
SDA
DHS Annual Appropriations Act
AMP
TITLE XXI of the Social Security Act

(1115)(a)(1) of the Social Security Act
CDC
Child Care and Development Block Grant Act of 1990

45 CFR Parts 98 and 99
Social Security Act, Titles IVA, XX
JOINT POLICY
DEVELOPMENT

BEM 400 1 of 41 ASSETS
DEPARTMENT
POLICY FIP, SDA, RAPC, LIF, Group 2 Persons Under Age 21, Group 2
Caretaker Relative, SSI-Related MA, and AMP
Assets must be considered in determining eligibility for FIP, SDA,

RAPC, LIF, Group 2 Persons Under Age 21 (G2U), Group 2 Caretaker
Relative (G2C), SSI-related MA categories and AMP.
FIP, SDA, RAPC, LIF, G2U, G2C and AMP consider only the following
types of assets:
• Cash (which includes savings and checking accounts).

• Investments.
• Retirement Plans.
• Trusts.
Assets Defined Assets means cash, any other personal property and real property.
Real property is land and objects affixed to the land such as buildings,
trees and fences. Condominiums are real property. Personal property
is any item subject to ownership that is not real property (examples:
currency, savings accounts and vehicles).
Overview of Asset FIP asset rules apply to RAPC

Policy
Countable assets cannot exceed the applicable asset limit. Not all
assets are counted. Some assets are counted for one program, but not
for another program. Some programs do not count assets; see Pro-
grams With No Asset Test in this item.
You must consider both of the following to determine whether, and how
much of, an asset is countable.
• Availability:
•• See Available.
•• See Jointly Owned Assets.
•• See Non-Salable Assets.
• Exclusions.
An asset is countable if it meets the availability tests and is not

excluded.
Note: Only certain types of assets are considered by FIP, RAPC, SDA,
LIF, G2U, G2C, and AM. See below in this section.
You must consider the assets of each person in the asset group. See
the program's asset group policy in this item.

An asset converted from one form to another (example: an item sold for
cash) is still an asset.
Exception: See SALE OF PROPERTY IN INSTALLMENTS in BEM

500.
FIP, SDA, LIF, G2U, G2C, and AMP Only
The following types of assets are the only types considered for FIP,
SDA, LIF, G2U, G2C, and AMP:
• Cash (which includes savings and checking accounts).

• Investments.
• Retirement plans.
• Trusts.
SSI-Related MA
All types of assets are considered for SSI-related MA categories.
PROGRAMS WITH
NO ASSET TEST CDC
There is no asset test for CDC.
Healthy Kids, Group 2 Pregnant Women, TMAP, RAPM
There is no asset test for the following:
• Healthy Kids (BEM 125, 129 and 131).

• Group 2 Pregnant Women (BEM 126).
• TMA-Plus (BEM 645).
• Refugee Assistance Program Medical (RAPM) BEM 630)
Do not deny or terminate those benefits because of a refusal to provide

asset information or asset verification requested for purposes of deter-
mining eligibility for a category or program that has an asset test, such
as FIP or LIF.
Example: The Smith family (Mrs. Smith and daughter age 12) failed to
return verification of their bank account by the due date. Therefore, LIF
eligibility cannot be determined. However, Healthy Kids must still be
considered.
FAP Only
There is no asset test for the food assistance program as all groups are
either:
• Categorically eligible.

• All members of the group are eligible for domestic violence com-
prehensive services.
FIP, RAPC AND SDA

ASSET ELIGIBILITY FIP, RAPC and SDA
Policy Overview Determine asset eligibility prospectively using the asset group's assets
from the benefit month. Asset eligibility exists when the group’s count-
able assets are less than, or equal to, the applicable asset limit at least
one day during the month being tested.
Application At application, do not authorize the Family Independence Program

(FIP), Refugee Assistance Program Cash (RAPC), or State Disability
Program (SDA) for future months if the person has excess assets on
the processing date.
Pending For pending FIP, RAPC, and SDA applications, use asset policy that is
Application in effect for the month you are determining eligibility.
Months
Ongoing If an ongoing FIP, RAPC, or SDA recipient has excess assets, initiate
closure. However, reinstate the program if it is verified that the excess
assets are under the limit on or before the timely hearing request date.
FIP, RAPC and SDA Only
Bridges produces an over payment referral for benefits issued after the
last month of eligibility only if a closure delay was caused by the group's
failure to report the asset change timely. BAM 700 and 705 explain
overissuance and recoupment policies and procedures.
RAPC Only
Do not consider the assets of a refugee's sponsor in determining the

refugee's eligibility.
Exclude as an asset any cash assistance given to a refugee from a

resettlement agency.
Evaluate and treat other assets as they are evaluated and treated for
FIP.
FIP/RAPC/SDA/ FIP, RAPC, SDA and AMP Only

AMP Asset Group
The asset group includes individuals with an EDG participation status of
eligible or disqualified; see BEM 210, 214 and 215.
FIP, RAPC and FIP, RAPC and SDA Only

SDA Asset Limit
$3,000

AMP Asset Limit AMP Only
$3,000
MA ASSET
ELIGIBILITY LIF, G2U, G2C, AMP and SSI-Related MA Only
Asset eligibility is required for LIF, G2U, G2C, AMP and SSI-related MA
categories.
Note: Do not deny or terminate TMA-Plus, Healthy Kids or Group 2

Pregnant Women because of a refusal to provide asset information or
asset verification requested for purposes of determining LIF, G2U, G2C
or SSI-related MA eligibility.
Use the special asset rules in BEM 402 for certain married L/H and
waiver patients. See BPG Glossary, for the definition of L/H patient and
BEM 106 for the definition of waiver patient.
Asset eligibility exists when the asset group's countable assets are less
than, or equal to, the applicable asset limit at least one day during the
month being tested.
At application, do not authorize MA for future months if the person has

excess assets on the processing date.
If an ongoing MA recipient or active deductible client has excess

assets, initiate closure. However, delete the pending negative action if it
is verified that the excess assets were disposed of. Payment of medical
expenses, living costs and other debts are examples of ways to dispose
of excess assets without divestment. LTC and waiver patients will be
penalized for divestment; see BEM 405.
LIF Asset Group LIF Only
See BEM 110.
LIF Asset Limit LIF Only
$3,000
G2U and G2C G2U and G2C

Asset Group
See BEM 211.
G2U and G2C G2U and G2C

Asset Limit
$3,000

SSI-Related MA SSI-Related MA Only

Asset Group
See BEM 211.

Asset Limit
For Freedom to Work (BEM 174) the asset limit is $75,000. IRS recog-
nized retirement accounts (including IRA’S and 401(k)’s) may be of
unlimited value.
For Medicare Savings Programs (BEM 165) and QDWI (BEM 169) the
asset limit is:
• $6,600 for an asset group of one.

• $9,910 for an asset group of two.
For all other SSI-related MA categories, the asset limit is:
• $2,000 for an asset group of one.

• $3,000 for an asset group of two.
DEEMING OF
PARENTAL ASSETS SSI-Related MA Only
Deeming means counting a portion of parents' assets as their child's

assets. Do not deem when:
• Any parent living with the child (see BEM 211) is an SSI or FIP
recipient.
• When determining a child's eligibility under BEM 170, Home Care

Children.
• When determining a child's eligibility under BEM 171, Children’s

Waiver.
Deeming SSI-Related MA Only

Calculation
Use the following to calculate the deemed amount.
1. Determine the total value of the parents’ countable assets, as if

they were an asset group, even if they are not married.
Note: The child is not eligible for SSI-related MA if the parents

refuse to provide asset information or a required verification.
2. Subtract $2,000 for one parent ($3,000 for two parents) from the
amount of the parents' countable assets (step 1). The result is the
deemable asset amount.

3. Divide the deemable asset amount (step 2) by the number of the

parents' unmarried children under age 18 in the parents' home
who are:
• SSI recipients.
• Applicants for, or recipients of, MA based on blindness or dis-
ability, who also meet both:
•• The nonfinancial eligibility factors in BEM 155 or

166.Are not Home Care Children (BEM 170) or Chil-
dren’s Waiver (BEM 171).
The result is the amount of assets deemed to the child whose eligibility
is being determined.
AVAILABLE FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
An asset must be available to be countable. Available means that

someone in the asset group has the legal right to use or dispose of the
asset.
Exception: This does not apply to trusts. There are special rules about
trusts. See Trusts below for FIP, SDA and AMP; see BEM 401 for MA
trust policy.
Assume an asset is available unless evidence shows it is not available.
An asset remains available during periods in which a guardian or con-

servator is being sought. This includes situations such as:
• A person's guardian dies and a new guardian has not been

appointed yet.
• A court decides a person needs a guardian, but has not appointed

one yet.
• A person is unconscious and his family asks the court to appoint a

guardian.
Availability might also be affected by joint ownership and efforts to sell

or the possibility of domestic violence. See Jointly Owned Assets, Non-
Salable Assets and Victims of Domestic Violence in this item.
SSI-Related MA and AMP Only
A person's death and probating his estate does not make his assets
unavailable for purposes of determining his eligibility. Determine asset
eligibility for the days of the month the person was alive.

VICTIMS OF
DOMESTIC
VIOLENCE FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Assets owned by victims of domestic violence may be unavailable due

to domestic violence. These assets do not have to be jointly owned but
accessing them could put the client in danger. You may exempt these
assets for a maximum of three months. With FIM approval one three-
month extension is permitted. Document in the case record the reasons
for the temporary exclusion, and, if any extension is requested, docu-
ment what steps have been taken to secure the asset. Clients should
be advised at the time of the exemption that they are required to report
any changes in the status of the asset within 10 days.
JOINTLY OWNED
ASSETS FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Jointly owned assets are assets that have more than one owner.
Note: For FTW determinations jointly owned assets are considered to

belong to the initial person.
An asset is unavailable if an owner cannot sell or spend his share of an

asset:
• Without another owner's consent, and

• The other owner is not in the asset group, and
• The other owner refuses consent.
Exception: In SSI-related MA, when ownership is shared by an SSI-

related child and his parent(s) and parental asset deeming applies,
refusal to sell by either the child or the parent(s) does not make an
asset unavailable.
Exception: Jointly owned real property is only excludable if it creates a

hardship for the other owners. See below in this item.
Note: In SSI related MA a divestment has occured if joint owners are

added during the five year look back period. See BEM 405 for determi-
nation of a divestment penalty.
Ownership documents for jointly owned real property commonly use

one of four phrases:
• Joint Tenancy: no owner can sell unless all owners agree.
• Joint Tenancy with Right of Survivorship: no owner can sell

unless all owners agree.

• Tenancy by the Entirety: same as joint tenancy except the own-

ers are husband and wife. Neither owner can sell unless both own-
ers agree.
• Tenancy-in-Common: each owner can sell his share without the

other owner's agreement.
Joint Cash and FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Retirement Plans
This section applies to the types of assets listed under CASH and
RETIREMENT PLANS in this item.
Count the entire amount unless the person claims and verifies a differ-
ent ownership. Then, each owner's share is the amount he owns.
SSI-Related MA Only
Exception: Apply the following when an L/H or waiver patient (see

PRG, Glossary, and BEM 106) and his spouse jointly own the asset:
• Consider the client the sole owner in determining the community

spouse resource allowance (CSRA). BEM 402 describes the
CSRA.
• Proceed as follows for all other purposes:
•• If the spouse is an MA-only client or receives FIP or SSI,

each spouse owns an equal share unless otherwise claimed
and verified.
•• If the spouse is not an MA-only client and does not receive

FIP or SSI, consider the asset totally available unless other-
wise claimed and verified.
Exception: Count equal shares of an asset owned by more than one

SSI-related MA child unless the person claims and verifies a different
ownership.
Exception: If the owners are an SSI-related MA child and his parent(s)

and asset deeming applies, count the total amount as the child's unless
the person claims and verifies a different ownership.
Other Joint Assets FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
This applies to all assets that are not included under Cash or Retire-
ment Plans.
Count an equal share for each owner.
Note: For jointly owned real property count the individual’s share
unless sale of the property would cause undue hardship. Undue hard-

ship for this item is defined as: a co-owner uses the property as his or
her principal place of residence and they would have to move if the
property were sold and there is no other readily available housing.
Exception: If specified otherwise by the ownership document, each

owner's share is the amount specified.
NON-SALABLE
ASSETS

Non-Salable
Assets Give the asset a $0 countable value when it has no current market
value as shown by one of the following:
• Two knowledgeable appropriate sources (example: realtor,

banker, stock broker) in the owner's geographic area state that the
asset is not salable due to a specific condition. This applies to any
assets listed under:
•• Investments.
•• Vehicles.
•• Livestock.
•• Burial Space Defined.
•• Employment and Training Assets.
•• Homes and Real Property (see below)
• In addition, for homes, life leases, land contracts, mortgages, and

any other real property an actual sale attempt at or below fair mar-
ket value in the owner's geographic area results in no reasonable
offer to purchase. The asset becomes salable when a reasonable
offer is received. Count an asset that no longer meets these condi-
tions.
For applicants, an active attempt to sell must have started at least

90 days prior to application and must continue until the property is
sold. For recipients, the asset must have been up for sale at least
30 days prior to redetermination and must continue until the prop-
erty is sold. An active attempt to sell means the seller has a set
price for fair market value, is actively advertising the sale in publi-
cations such as local newspaper, and is currently listed with a
licensed realtor.
CASH FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
This section is about the following types of assets:
• Money/currency.
• Uncashed checks, drafts and warrants.

• Checking and draft accounts.
• Savings and share accounts.
• Money market accounts.
• LTC patient trust fund.
• Money held by others-- Example: Sally does not have a bank

account. She puts money in her mother's checking account, but it
is not a joint account.
• Time deposits-- A time deposit is a contract between a person

and a financial institution whereby the person agrees to leave
funds on deposit for a specified period in return for a specified
interest rate. Common time deposits are certificates of deposit
(CDs) and savings certificates.
Lump Sums and Lump sums and accumulated benefits are defined in the PRG, Glos-
Accumulated sary.
Benefits
FIP, SDA and AMP Only
Lump-sums and accumulated benefits are assets starting the month

received.
A person might receive a single payment that includes both accumu-

lated benefits and benefits intended as a payment for the current
month. Treat the portion intended for the current month as income.
LIF, G2U, G2C, SSI-Related MA
Lump sums and accumulated benefits are income in the month

received. See BEM 500 about countable income policy.
Exception: The following are assets:
• Income tax refunds; see Tax Refund & Tax Credit exclusions in this
item.
• Nonrecurring proceeds from the sale of assets.
• Payments that are excluded assets.
Retroactive SSI FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Benefits
Retroactive SSI benefits may be paid as a one-time payment or in
installments over several months. The Social Security Administration
determines how payment will be made.

Retroactive SSI benefits are treated as accumulated benefits (see

above) even when paid in installments. See Retroactive RSDI and SSI
Exclusion in this item for SSI-related MA determinations.
Value of Cash FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
The value of the types of assets described above is the amount of the:
• Money/currency.
• Uncashed check, draft or warrant.
• Money in the account or on deposit.
• Money held by others.
Exception: Reduce the value of a time deposit by the amount of any

early withdrawal penalty, but not the amount of any taxes due.
CASH EXCLUSIONS
Homestead-Loss FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP

Funds Exclusion
Use this exclusion only if the funds are not commingled with countable
assets and not in time deposits.
Exclude funds an owner received for repairs or replacement of a dam-

aged or destroyed homestead (example: insurance settlement) if:
• The owner intends to reoccupy the home, and

• There is a written repair/replacement agreement.
The client must declare an estimated completion date. The exclusion

lasts until that date. The local office may grant extensions.
Exclude funds for temporary housing while the homestead is being

repaired or replaced.
Also see Homestead-Loss Land Exclusion in this item regarding the

land the home was on.
Homestead Sale FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Exclusion
assets and are not in time deposits.
Exclude funds received from the sale of a homestead, or the land the
home was on, for 12 months if there is a written agreement to purchase
another homestead. The 12-month period starts the month the funds
are received.
Note: See Homestead Land Retained Exclusion below if ownership of

the land was retained.

Nonhomestead FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP

Loss Exclusion
Exclude funds received for the planned repair or replacement of a non-

homestead exempt item (example: furniture, clothing, vehicle) that was
lost, stolen or destroyed. Exclude the funds until the item is repaired or
replaced.
Loan Exclusion FIP
Exclude funds a person has borrowed provided it is a bona fide loan.

This includes a loan by oral agreement if it is made a bona fide loan.
Bona fide loan means all the following are present:
• A loan contract or the lender's written statement clearly indicating

the borrower's indebtedness
• An acknowledgment from the borrower of the loan obligation
• The borrower's expressed intent to repay the loan by pledging real

or personal property or anticipated income
This exclusion does not apply to:
• Interest earned on borrowed money.

• Purchases made with borrowed money.
Note: When a client has loaned money to another person please refer
to the policy in Promissory Notes/Land Contracts/Mortgages/Loans.
Reverse Mortgage FIP and SDA only

Exclusion
A reverse mortgage allows a homeowner to borrow some percentage of

the value of his home via a mortgage. The homeowner receives peri-
odic payments (or a line of credit) that does not have to be repaid while
the homeowner lives in the home. Exclude these payments.They are
loans.
Tax Refund and FIP, SDA

Tax Credit
Exclusion Exclude tax refunds and credits.

LIF, G2U, G2C, SSI-Related MA and AMP
Exclude tax credits for 9 months after the month of receipt. Tax credits
include credit such as Earned Income Tax Credit and Child Tax Credit.
Exclude tax refunds.
Excluded Income FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Under BEM 500
BEM 500 identifies certain sources of funds that are excluded as both
income and assets. Time limits and other conditions applicable to the
income exclusion also apply to the asset exclusion.
Current Income FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Exclusion
Do not count funds treated as income by a program as an asset for the
same month for the same program.
When income must be prorated or averaged (example: self-employ-

ment) exclude the resulting assets for the months of proration.
Business Account FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Exclusion
Exclude a savings, share, checking or draft account used solely for the
expenses of a business. Continue the exclusion while the business is
not operating provided the person intends to return to the business.
Retroactive RSDI SSI-Related MA Only

and SSI Exclusion
Exclude retroactive RSDI and SSA-issued SSI benefits for nine calen-
dar months beginning the month after payment is received. Do not
exclude purchases made with such funds including CDs and other time
deposits.
This exclusion applies only to any unspent portion of the retroactive

payment from RSDI or SSI. Once the money from the retroactive pay-
ment has been spent, this exclusion does not apply to the items pur-
chased with the money, even if the nine month period has not expired.

The money may be commingled with other funds but, if this is done in
such a fashion that the retroactive amount can no longer be separately
identified, that amount will count toward the resource limit.
Use the following to separate countable and excluded funds that are
commingled:
• Assume that countable funds are withdrawn first, leaving as much

of the excluded funds as possible.
• Excluded funds withdrawn are not excluded if redeposited. The

excluded amount can be increased only by deposits of subse-
quently received excluded payments.
• Count any interest paid to the account.
Example: A person received a $1,000 retroactive RSDI payment on

December 3 via direct deposit. The account already contained $1,800.
DATE DEPOSIT WITHDRAW BALANCE EXCLUDE COUNTABLE
12/3 $1,000 $2,800 $1,000 $1,800

12/4 $500 2,300 1,000 1,300
12/31 5 2,305 1,000 1,305
1/3 400 250 2,455 1,000 1,455
1/4 1,500 955 955 0
2/10 50 1,005 955 50
2/12 400 605 605 0
3/8 100 705 605 100
3/15 50 655 605 50
Funds for Burial SSI-Related MA Only

Arrangements
Money set aside for burial expenses might be excludable. See Burial
Fund Exclusion in this item.
Student Savings FIP, LIF, G2U, and G2C

Exclusion
Exclude funds in a separate account under a student's name and

accrued solely from a student's earnings; see Student Earnings in BEM
500.
INVESTMENTS FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP

• U.S. Savings bonds.

• Securities such as:
•• Stocks.
•• Bonds.
•• Mutual funds.
Value of FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP

Investments
The value of a U.S. Savings bond is the amount the owner could get if
the bond were cashed-in.
LIF, G2U, G2C, SSI-Related MA and AMP
U.S. Savings bonds cannot be cashed in until twelve months after the
date of issuance. However, if bonds are in this waiting period and the
value of the bond(s) and other assets is over the client’s asset limit, the
client must seek a waiver of the waiting period.
The waiver is a written request from the bond holder or representative

to the United States Department of Treasury outlining why a waiver of
the waiting period is necessary. If the waiver is granted the value of the
U.S. Savings bond is considered available. If the waiver is denied the
bond becomes available at the expiration of the waiting period.
The value of other investments is the amount the asset is selling for:
• Use the closing price for publicly traded stocks.

• Use the bid price or net asset value (NAV) for mutual funds.
• Use the bid price for bonds.
If a security was not paid for in full at the time of purchase (bought on
margin), the securities firm has made a loan to the buyer. Deduct the
balance owed from the price if there is written proof that the balance
owed must be repaid when the security is sold.
INVESTMENT
EXCLUSION SSI-Related MA Only
Investments set aside for burial expenses might be excludable. See

Burial Fund Exclusion in this item.
RETIREMENT
PLANS FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
• Individual retirement accounts (IRAs).

• Keogh plans (also called H.R. 10 plans).
• 401k plans.
• Deferred compensation.

• Pension plans.
• Annuities-- An annuity is a written contract establishing a right to
receive specified, periodic payments for life or for a term of years.
Retirement Plan FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Value
The value of these plans is the amount of money the person can cur-
rently withdraw from the plan. Deduct any early withdrawal penalty, but
not the amount of any taxes due.
Funds in a plan are not available if the person must quit his job to with-
draw any money.
Freedom to Work (FTW) only
Exclude the total value of funds in retirement accounts and individual

retirement accounts.
Annuity LIF, G2U, G2C and SSI-Related MA
Annuities are similar legal devices to trusts. Annuities are a written con-
tract with a commercial insurance company, establishing a right to
receive specified, periodic payments for life or for a term of years. They
are usually designed to be a source of retirement income. Only certain
types of annuities are excluded as resources. Policy in BEM 401 Trusts
applies, including referring annuities to Medicaid Eligibility Policy Sec-
tion.
TRUSTS FIP, SDA and AMP Only
A trust is a right of property created by one person for the benefit of

himself or another.
Trust Definitions FIP, SDA and AMP Only
Beneficiary - the person for whose benefit a trust is created.
Grantor or settlor - the person who established the trust. It includes

anyone who furnishes real or personal property for the creation of the
trust.
Principal (or corpus) - the assets in the trust. The assets may be real
property (example: house, land) or personal property (example: stocks,
bonds, life insurance policies, saving accounts).
Trustee - the person who has legal title to the assets and income of a
trust and the duty to manage the trust for the benefit of the beneficiary.

FIP/SDA/AMP Trust FIP, SDA and AMP Only

Policy
The Probate Court decides availability of the trusts it administers. A
grantor must petition the Probate Court to make the principal available.
For other trusts, the principal is an available asset of the person who is
legally able to:
• Direct use of the principal for his needs.

• Direct that ownership of the principal revert to himself.
MA Trust Policy LIF, G2U, G2C, and SSI-Related MA Only
See BEM 401.
Referrals to Send all trusts and annuities to Medicaid Eligibility Policy Section for
Medicaid Eligibility evaluation. Your referral must be in writing and include the following
Policy Section information:
• Your name, telephone number and local office.
• Client's name.
• Grantor's relationship to the client.
• Source of the assets used to establish the trust (example: money

from client's lawsuit settlement, client's savings).
• Legible copies of the complete trust document, any amendments

or addenda to the trust, correspondence, and similar information.
• Legible copies of all documents transferring ownership of property

to the trustee.
• Relationship to the client of persons who transferred resources to

trustee (example: client's parent, client's guardian).
Send referrals to:

Attn: Trusts and Annuities
P.O. Box 30037
Suite 1307
Lansing, MI 48909
Advice is only available to local offices and only for purposes of deter-
mining eligibility when a trust actually exists. Advice is not available for
purposes of estate planning, including advice on proposed trusts or pro-
posed trust amendments.

HOME CARETAKER
AND PERSONAL
CARE CONTRACTS A contract that prospectively pays for expenses such as repairs, main-
tenance, property taxes, homeowner’s insurance, heat and utilities for
real property/homestead or that provide for monitoring health care,
securing hospitalization, medical treatment, visitation, entertainment,
travel and/or transportation, financial management or shopping, etc.
would be considered a divestment. Consider all payments for care and
services which the client made during the look back period as divest-
ment; refer to BEM 405.
Note: The preceding are examples and should not be considered an all
inclusive or exhaustive list.
Assets transferred in exchange for a contract/agreement for a personal

services/assistance or expenses of real property/homestead provided
by another person after the date of application are considered an avail-
able and countable asset even if the contract is irrevocable.
INDIVIDUAL
DEVELOPMENT
ACCOUNTS FIP, SDA, LIF, G2U, G2C, SSI-Related MA, AMP
Individual Development Accounts (IDA) are established pursuant to

Michigan Public Act 361 of 1998 and section 404(h) of the Social Secu-
rity Act or Public Law 105-285. IDAs allow low-income families to pro-
mote their economic independence by saving for:
• Postsecondary educational expenses.

• First home purchase.
• Business capitalization.
IDAs are funded by periodic contributions from the family’s earnings

and matching contributions by or through a nonprofit organization. The
IDA must be a trust or a joint account that requires the signatures of
both the nonprofit organization and a family member to authorize with-
drawals.
An IDA is excluded as an asset.
A 529 college savings plan is similar to an IDA. See Education and

Training Exclusion in this item for FIP, SDA, LIF, G2U, and G2C.
HOMES AND REAL

PROPERTY SSI-Related MA Only
• Real property.
• Mobile homes.

• Life estates and life leases.
Real Property SSI-Related MA Only

Definition
Real property is land and objects affixed to the land such as buildings,
trees and fences. Condominiums are real property.
Real Property and SSI-Related MA Only

Mobile Home Value
The value is the equity value. Equity value is the fair market value
minus the amount legally owed in a written lien provision.
To determine the value of real property and mobile homes use:
• Deed, mortgage, purchase agreement or contract.
• State Equalized Value (SEV) on current property tax records multi-

plied by two.
• Statement of real estate agent or financial institution.
• Attorney or court records.
• County records.
Liens must be filed with the register of deeds or other appropriate

agency.
Note: In Michigan, a lien on a mobile home is on record with the Secre-

tary of State. If the mobile home is on land the person owns, the lien
may also be recorded with the land deed.
Life Estate/Life SSI-Related MA Only

Lease Definition
A life estate or life lease gives the person who holds it certain rights to
property during the person's lifetime. Usually, the right is the right to live
on the property. The person holding the life estate or life lease can sell
it, but does not own the actual property and normally cannot sell the
actual property.
Life Estate/Life SSI-Related MA Only

Lease Value
Use the life estate factors in Exhibit II to compute the value of a life
estate or life lease. Choose the life estate factor that corresponds to the
person's age. Multiply the fair market value of the actual property by the
appropriate life estate factor. The result is the value of the life estate or
life lease.
Use the value of the life estate to determine if the purchase price was
for fair market value when a person purchases a life estate in another
individuals’ home.

When a person purchases a life estate in another individuals’ home,

they must actually reside there for at least one year after the date of
purchase to qualify for the homestead exclusion. If the person resides
in the home for less than one year treat the transaction as a transfer of
assets. The amount of the transfer is the entire amount used to pur-
chase the life estate. See BEM 405 to determine the penalty period.
Exception: Use a lower amount if verified. Verified means statements

from two financial institutions or real estate firms with a lower value and
the reason for it (example: terminal illness). Use the lowest amount if
the statements have different values.
HOMES AND REAL

PROPERTY
EXCLUSIONS
Homestead SSI-Related MA Only

Definition and
Exclusion A homestead is where a person lives (unless Absent from Homestead,
see below) that he owns, is buying or holds through a life estate or life
lease. It includes the home, all adjoining land and any other buildings
on the land. Adjoining land means land which is not completely sepa-
rated from the home by land owned by someone else. Adjoining land
may be separated by rivers, easements and public rights-of-way (exam-
ple: utility lines and roads).
Determine the equity value of the homestead; see Real Property and
Mobile Home Value in this item.
MA will not pay the client’s cost for:
• Home health services.

• Home and community based services (MIChoice Waiver).
• LTC services.
• Home Help.
When the equity in the client’s homestead exceeds $500,000.
Exclude the asset group's homestead. Do not apply the home equity
limit to the client if the spouse, child under 21, or the client’s blind or dis-
abled child is residing in the home.
Exclude only one homestead for an asset group. If a migrant claims two
homesteads, exclude the homestead of the migrant's choice.
See below about exempting a homestead when the owner is Absent

from Homestead.

SSI-Related MA Only
BEM 402 describes when both a client's and community spouse's

assets are counted. If a client and community spouse own two homes
or they are separated and each owns a homestead, exclude the home-
stead with:
• The lower equity value for purposes of the initial asset assess-
ment, and
• The higher equity value for purposes of determining initial eligibil-

ity.
Absent from SSI-Related MA Only

Homestead
Exclude a homestead that an owner formerly lived in if any of the fol-
lowing are true:
• The owner intends to return to the homestead.
• The owner is in an LTC facility, a hospital, an adult foster care

(AFC) home or a home for the aged.
• A co-owner of the homestead uses the property as his home.
Relative Occupied. Exclude a homestead even if the owner never

lived there provided:
• The owner is in an institution (see BPG Glossary), and

• The owner's spouse or relative (see below) lives there.
Relative for this purpose means a person dependent in any way (finan-
cial, medical, etc.) on the owner and related to the owner as any of the
following:
• Child, stepchild or grandchild.

• Parent, stepparent or grandparent.
• Aunt, uncle, niece or nephew.
• Cousin.
• In-law.
• Brother, sister, stepbrother, stepsister, half brother or half sister.
Homestead Land SSI-Related MA Only

Retained
Exclusion If an owner sells his homestead (example: mobile home), but retains
ownership of the land it was on, exclude the land for 12 months. The
first month is the month the owner receives any payment from the sale.
Also, exclude the land for the time between the sale and the receipt of
such payment.

Homestead-Loss SSI-Related MA Only

Land Exclusion
Exclude the land of a damaged, destroyed or condemned homestead if:
• The owner intends to reoccupy it, and

• There is a written repair or replacement agreement.
The client must declare an estimated completion date. The exclusion

lasts until that date. The local office may grant extensions.

Employment
Assets Employment-related assets such as farmland and the building where a
business is located might be excluded; see Employment Asset Exclu-
sions in this item.

Burial
Arrangements Property intended as burial space might be excludable; see Burial
Space Exclusion in this item.
Income-Producing SSI-Related MA Only

Real Property
Exclude up to $6000 of equity in income producing real property if it
produces annual countable income equal to at least six percent of the
asset group's equity in the asset. Countable income is total proceeds
minus actual operating expenses.
Exception: Use the Employment Asset Exclusions in this item for

property used in a business or trade.
HOUSEHOLD AND
PERSONAL GOODS
DEFINED SSI-Related MA Only
Household Goods- those items customarily found in the home and

used in connection with the maintenance, use and occupancy of the
premises. This includes items necessary for an adequate standard of
sustenance, accommodation, comfort, information and entertainment of
occupants and guests. Examples are appliances, furniture, television
sets, carpets, cooking utensils, eating utensils and dishes.
Personal Goods- items of personal property that are worn or carried by

a person or that have intimate relationship to him. Examples are per-
sonal clothing and jewelry, personal care items, and educational or rec-
reational items such as books, musical instruments or hobby material.

HOUSEHOLD AND
PERSONAL GOODS
EXCLUSION SSI-Related MA Only
Exclude household and personal goods.
VEHICLES SSI-Related MA Only
A vehicle is a device used to transport people or goods. Vehicle

includes passenger cars, trucks, motorcycles, motorbikes, trailers,
campers, motor homes, boats and all-terrain vehicles.
Note: See Homes and Real Property about mobile homes.
Vehicle Value SSI-Related MA Only
The value of a vehicle is its equity value. Equity value is the fair market
value minus the amount legally owed in a written lien provision.
Liens must be on record with the Secretary of State or other appropriate

agency.
VEHICLE
EXCLUSIONS

Vehicle Exclusion
Exclude one motorized vehicle owned by the asset group. If the asset
group owns multiple motorized vehicles:
• Use the Employment Asset Exclusions first, then

• From any remaining motorized vehicles, exclude the one with the
highest equity value.
PROMISSORY
NOTES/LAND
CONTRACTS/
MORTGAGES
LOANS SSI-Related MA Only
A note is a written promise to pay a certain sum of money to another

person at a specified time. The note may call for installment payments
over a period of time (installment note) or a single payment on a speci-
fied date. The most common type of note involves the sale of real prop-
erty and is called a land contract or a mortgage. A homeowner might
also sell his home via a sale-leaseback agreement.
The person who sold the property is holder of the note. The note is the
holder's asset.

Example: John sells land to Irma on a land contract. John is the land
contract holder. The land contract is John's asset. The land is Irma's
asset.
Count money used to purchase a promissory note, loan, or mortgage

unless all of the following are true:
• The repayment schedule is actuarially sound; and
• The payments are made in equal amounts during the term of the
agreement with no deferral of payments and no balloon payments;
and
• The note, loan, or mortgage must prohibit the cancellation of the

balance upon the death of the lender; see Uncompensated Value
in BEM 405 to determine the value.
Note Value SSI-Related MA Only
The value of a land contract or mortgage is the amount it can be sold for
in the holder's geographic area on short notice (usually at a commercial
discount rate) minus any lien on the property the holder must repay.
Sale-Leaseback SSI-Related MA Only

Agreement Defined
In a sale-leaseback agreement, a homeowner sells his home on an
installment note and receives monthly payments from the buyer. The
buyer allows the former homeowner to live in the home in exchange for
rent. The difference between the buyer's payment and the rent is
money the former homeowner can use for current expenses. Some-
times the arrangement involves purchase of an annuity that pays
money to the former homeowner.
Sale-Leaseback SSI-Related MA Only

Asset Value
The note held by the former homeowner is an asset. The value is the
amount the note can be sold for in the holder's geographic area on
short notice (usually at a commercial discount rate) minus any liens on
the property the former homeowner must repay.
The sale might also create income for the note holder; see Sale-Lease-
back Income in BEM 500.
LIFE INSURANCE SSI-Related MA Only
A life insurance policy is a contract between the policy owner and the
company that provides the insurance. The company agrees to pay
money to a designated beneficiary upon the death of the insured. Pure
Endowment Life Insurance Contracts pay out on a specific date in the

future not just when the beneficiary dies, and does not meet the defini-
tion of life insurance for Medicaid.
Life Insurance SSI-Related MA Only

Definitions
Cash surrender value (CSV) - the amount of money the policy owner
can get by canceling the policy before it matures or before the insured
dies. It may be titled the cash surrender value or the cash value.
Face value (FV) - the amount of the basic death benefit contracted for
at the time the policy is purchased. It might be titled the face value, face
amount, amount of insurance, amount of policy or sum insured. It does
not include dividends or additional amounts payable because of acci-
dental death or other special circumstances.
Insured- the person whose life the policy insures.
Insurer- the company that contracts with the policy owner.
Policy owner- the person who has the right to change the policy. This
is usually the person who pays the premiums. The policy owner and the
insured can be different people.
Life Insurance SSI-Related MA

Value
A life insurance policy is an asset if it can generate a CSV. A policy is
the policy owner's asset.
• A policy's value is its CSV. A policy can generate a CSV, but have
a CSV of zero. Such a policy is an asset with zero value.
• Generally, term insurance does not have a CSV. Whole or straight

life policies generate a CSV. Policies called graded term or level
term may have a CSV and must be verified and counted as an
asset.
• The CSV usually increases over time. A loan against a policy

reduces its CSV. Pre-death payment of the death benefit might
reduce the CSV. See Accelerated Life Insurance Payments in
BEM 500 about the payments received.
• CSV and FV are not the same thing.
• Tables included with a life insurance policy are not considered

accurate. Verification of the CSV should be either a current notice
(within the year) from the company or by contacting the company
for the current value.

LIFE INSURANCE
EXCLUSIONS
Life Insurance for SSI-Related MA

Funeral
In addition to the general exclusion below, some or all of the value of
insurance might be excluded to pay for funeral expenses. See Funeral
Plans below.
General SSI- SSI-Related MA Only

Related MA Life
Insurance Look at each policy owner's life insurance separately.
Exclusion
Exclude the entire cash surrender value when the total face values of
all policies a policy owner has for the same insured are $1,500 or less.
See the example and exceptions below.
Example:
Mr. and Mrs. Smith own the following policies:
Policy Owner FV Insured CSV
1 Mr. $1,000 Mrs. $500

2 Mr. 800 Mrs. 300
3 Mr. 1,500 Mr. 1,000 Exclude
4 Mr. 2,000 Son 1,000
5 Mrs. 1,500 Mr. 500 Exclude
6 Mrs. 2,000 Mrs. 1,000
CSVs for policies 1 and 2 are not excludable under this policy for Mr.
Smith. He owns both policies. They insure the same person. The com-
bined FVs exceed $1,500.
CSV for policy 4 is not excludable under this policy for Mr. Smith. The
FV exceeds $1,500.
CSV for policy 6 is not excludable under this policy for Mrs. Smith. The
FV exceeds $1,500.
Exceptions: Do not count the face value of:
• Term insurance that does not generate a CSV.
• Burial insurance. Burial insurance is an insurance policy whose

terms prevent the use of its proceeds for anything other than pay-
ment of the insured's burial expenses. A policy is not burial insur-
ance if the policy has a CSV the owner can access. A policy used
for a Life Insurance Funded Funeral below is not burial insurance.
Michigan does not have burial insurance, but a person from

another state could have such insurance.
• Endowment policies. An endowment policy is a policy which

enables the insured to accumulate a sum of money payable to him
at a date named in the policy (the maturity date). The policy says
whether the money is paid over time or all at once. The policy
matures on the maturity date. An endowment policy is not life
insurance. Because the applicant gives up the rights to control
the money until the maturity date, a non-matured endowment pol-
icy must be considered a divestment; see BEM 405.
FUNERAL PLANS SSI-Related MA Only
Funeral plan refers to the prearrangement for cemetery and/or funeral

goods and services. Normally, the plan is established using one or more
of the following:
• Burial fund.
• Purchase of burial space.
• Prepaid funeral contract.
• Life insurance funding.
Burial Fund SSI-Related MA Only

Exclusion
A limited amount of certain types of assets a person has clearly desig-
nated to pay for burial expenses are excluded as a burial fund. See
below for information about:
• Types of assets.
• Burial expenses.
• Clearly designated.
• Not commingled.
• Amount excluded.
• Misuse of funds.
See Exhibit I of this item for examples of this exclusion.
Types of Assets Assets under the following headings in this item can be a burial fund:
• Cash.
• Investments.
• Life insurance.
• Prepaid funeral contract.
Other types of assets (example: real property, vehicles, livestock) may

not be a burial fund.

Burial Expenses Expenses that qualify for the burial fund exclusion are generally those
related to preparing a body for burial and any services prior to burial.
Examples are:
• Services of funeral director and staff.

• Transportation of the body.
• Embalming.
• Cremation.
• Clothing.
• Cost of guest registry book.
• Cost of obituary.
• Flowers not displayed at gravesite.
• Cleric's honorarium if no services at gravesite.
• Burial space items that do not meet the held for test described in
SSI-Related MA Burial Space Exclusion in this item.
Note: Luncheons or similar services do not meet the definition of a

burial fund expense as it is not related to the preparation of the body for
burial. Do not certify a DHS-8A with such an expense and do not con-
sider it as an allowable burial fund expense item.
Clearly The asset must be clearly designated. The designation can be on the
Designated asset (example: title on a bank account, prepaid funeral contract) or on
a signed statement from the client. The designation must include the
following information:
• Value and owner of the asset.

• Whose burial the fund is for.
• Date the funds were set aside for the person's burial.
• Form in which the asset is held (example: bank account, life insur-
ance).
Not Commingled Burial funds may not be commingled with any assets except excluded
burial space assets; see SSI-Related MA Burial Space Exclusion in this
item.
Amount Exclude up to $1,500 for each qualified fiscal group member and/or
Excluded spouse. In addition, exclude accumulated interest and dividends.
Reduce the $1,500 per person maximum by the following:
• The face value of excluded life insurance policies (including term

insurance) when the person is the insured and:
•• If an adult, the policy is owned by the person or the person's

spouse.
•• If a child, the policy is owned by the child, the child's parent or

the parent's spouse.

• The principal amount (not accumulated interest or dividends) held

in an irrevocable prepaid funeral contract for the person's burial
expenses (see above). Do not count the identifiable cost of burial
space assets; see Burial Space Defined in this item.
• The cost of burial expenses (see above) identifiable in a life insur-

ance funded funeral plan that was irrevocably transferred (see Life
Insurance Funded Funeral and Life Insurance Irrevocably Trans-
ferred in this item.
• The face value of burial insurance on the person. See Life Insur-
ance above for the definition of burial insurance.
Count only the original principal amount and any additions to the princi-
pal to determine if the maximum limit has been reached. Do not count
accumulated interest and dividends.
Note: The principal amount of a life insurance policy is the cash sur-
render value (CSV) of the policy, not the face value. Increases in the
CSV count against the limit. Increases in the CSV above the person's
burial fund limit are countable as the policy owner's assets.
Misuse of Fund Count the amount of an excluded burial fund used for another purpose
while the person was an MA recipient as unearned income for one
month. The month must be far enough in the future so that any negative
action pend period would end before the month begins.
Exception: Do not do this if the value of countable assets plus the

misused funds were within the asset limit for the month the misuse
occurred.
Burial Space SSI-Related MA and AMP

Defined
A burial space is a(n):
• Burial plot, gravesite.
• Crypt, mausoleum.
• Casket, urn, niche.
• Some other type of repository customarily and traditionally used

for the deceased's bodily remains.
• Necessary and reasonable improvements or additions to or upon

such spaces including:
•• Vaults.
•• Headstones, markers or plaques.
•• Burial containers.

•• Opening and closing of the gravesite.

•• Contracts for care and maintenance of the gravesite.
Note: Reasonable and necessary are those items required by the

cemetery.
• Flowers if displayed at gravesite.

• Cleric’s honorarium for service at gravesite.
Note: Of the items that serve the same purpose, exclude only one item
per person.
Example: Exclude a cemetery lot and casket for the same person, but
not a casket and an urn.
Value of Burial SSI-Related MA and AMP

Space
The value of a burial space item is its equity value. Equity value is fair
market value minus the amount legally owed in a written lien provision.
SSI-Related MA SSI-Related MA and AMP

and AMP Burial
Space Exclusion Exclude one burial space held for (see below) each of the following:
• Each qualified fiscal group member.

• Whether by blood, adoption or marriage, the member's:
•• Parents.
•• Minor and adult children.
•• Siblings.
• The spouse of each person listed above.
For a member's relatives only by marriage, apply the exclusion only if

the marriage has not ended by death or divorce.
Burial space items in a prepaid funeral contract must be identified and

valued separately from non-burial space items to be excluded.
If the contract shows the purchase of a specified burial space at a spec-

ified price, determine whether such space is held for the client or mem-
ber of the client’s immediate family. If the space is held for the
individual, determine if the contract is irrevocable or revocable. If irrevo-
cable, it is not a resource. If the contract is revocable, it is an excludable
resource. The burial space must continue to meet the held for criteria
to be excluded.
Held For. A burial space is held for an individual when someone cur-
rently has:

• Title to and/or possesses a burial space intended for the individ-

ual's use (example: has title to a burial plot, owns a burial urn
stored in the basement for his own use).
• A contract with a funeral service company for specified burial

spaces for the individual's burial (that is, an agreement that repre-
sents the individual's current right to the use of the items at the
amount shown).
Until the purchase price is paid in full, a burial space is not held for an
individual under an installment sales contract or similar device unless
all of the following are true:
• The individual does not currently own the space.
• The individual does not currently have the right to use the space.
• The seller is not currently obligated to provide the space.
Until all payments are made on the contract, the amounts paid might be
considered burial funds; see Burial Fund Exclusion in this item.
Prepaid Funeral SSI-Related MA and AMP

Contract
A prepaid funeral contract means a contract requiring payment in
advance for funeral goods or services. Contracts may be revocable or
irrevocable.
• See Revocable Prepaid Funeral Contract Exclusions and

Value below if the contract is revocable.
• See Irrevocable Prepaid Funeral Contracts below if the contract

is irrevocable.
• See BAM 805 about making Michigan contracts irrevocable.
Revocable Prepaid SSI-Related MA and AMP

Funeral Contract
Exclusions and Funds in a revocable prepaid funeral contract might be excludable
Value using the Burial Fund Exclusion and/or the SSI-Related MA Burial
Space Exclusion above.
The countable amount of the contract is the amount remaining on

deposit after deducting those exclusions and any commissions or fees
that would be charged upon withdrawal. Exclude only burial space
items for AMP. There is no burial funds exclusion.
Irrevocable LIF, G2U, G2C, SSI-Related MA and AMP

Prepaid Funeral
Contracts Funds in an irrevocable prepaid funeral contract are unavailable and
thus are not counted.

Funds in a Michigan contract (DHS-8A, Irrevocable Funeral Contract

Certification) certified irrevocable are excluded.

Funded Funeral
A funeral plan can be funded using life insurance. A person purchases
a life insurance policy and directs the proceeds to be used to pay for his
funeral. In addition, the person might irrevocably/permanently transfer
ownership of the policy to:
• A trust, or
• A funeral director who then transfers ownership to a trust.
Note: An annuity can be used in the same way to fund a funeral plan.
Proceeds of a life insurance policy means the face value of the policy
plus any additions payable at maturity or death. Proceeds are reduced
by the amount of outstanding loans against the policy and Accelerated
Life Insurance Payments; see BEM 500.
A funeral plan funded with life insurance is not a prepaid funeral con-
tract per BAM 805.

Funded Funeral
Trusts Life Insurance funded trusts, regardless of including specific goods or
services, or naming a funeral provider, are countable if revocable and a
divestment if irrevocable. Send a life insurance funded trust to the Trust
and Annuity Evaluation Unit.
Other Funded Other funded funeral trusts, regardless of including specific goods or
Funeral Trusts services, or naming a funeral provider, are countable assets if revoca-
ble and divestment if irrevocable. These trusts are not prepaid funeral
agreements and do not qualify for any funeral exemptions. A DHS-8A
cannot be used to certify a revocable trust as irrevocable for purposes
of exclusion.
SSI-Related MA Only
If a person has directed the proceeds of a life insurance policy be used

to pay for his funeral, but has not irrevocably transferred ownership, the
policy is treated as life insurance. See Life Insurance and Burial Fund
Exclusion in this item.

Irrevocably
Transferred Use the following when a person directs that the proceeds of a life
insurance policy be used for his funeral and has irrevocably trans-
ferred ownership of the policy. Do this even if the person retains the
right to change funeral providers, items or services.

• Do not count the cash surrender value of the policy as an asset

effective the month of transfer.
• Do not count the funeral contract as an asset.
• Do not apply policy in BEM 401, Trusts - MA.
• Do not consider the ownership transfer as divestment when all of

the following are true:
•• The proceeds are still to be used to pay the insured’s funeral

expenses.
•• The value of the goods and contracted services at least

equals the cash surrender value of the insurance.
•• The new owner cannot use the cash surrender value of the
insurance policy for himself.
Note: If the value of the goods and services contracted for is less than
cash surrender value of the insurance, the difference is transferred for
less than fair market value.
Limited Liability SSI-Related MA Only

Companies
Count any assets in a Limited Liability Company (LLC).
LIVESTOCK SSI-Related MA Only
Exclude farm animals used for personal consumption. Exclude family

pets.
Other livestock might be excluded as an employment asset; see

Employment Asset Exclusions in this item.
EMPLOYMENT AND
TRAINING ASSETS SSI-Related MA Only
Employment assets are those assets commonly used in a business, a

trade or other employment. Examples:
• Farmland.
• Tools, equipment and machinery.
• Inventory, livestock.
• Savings or checking account used solely for a business.
• The building a business is located in.
• Vehicles used in business such as a farm tractor or delivery truck.
It does not include vehicles used solely for transportation to and
from work.
Such assets might also be used in education or job training.

Employment or SSI-Related MA Only

Training Asset
Value See the appropriate sections above regarding the value of vehicles, real
property and savings or checking accounts. The value of other employ-
ment or training assets is their equity value. Equity value is fair market
value minus the amount legally owed in a written lien provision.
Payment-In-Kind SSI-Related MA Only

(PIK) Program
A PIK commodity or commodity certificate may be an asset; see BEM
500, PAYMENT-IN-KIND (PIK) PROGRAM.
EMPLOYMENT
ASSET
EXCLUSIONS
General SSI-Related MA Only

Employment
Exclusion Exclude employment assets (see above) that:
• Are required by a person's employer.

• Produce income directly through their use.
Such assets remain excluded when a person is unemployed only if the

person intends to return to that type of work.
EDUCATION AND
TRAINING
EXCLUSION FIP, SDA, LIF, G2U, G2C
529 college savings plans are designed to allow individuals to make

after-tax deposits for their children’s future higher education expenses.
In Michigan, these plans are administered by the Department of Trea-
sury and are known as Michigan Education Savings Plans. Funds
deposited into these accounts may qualify for matching funds. After a
child reaches age 18, the funds may be used for post secondary educa-
tion or a certified training program.
Disregard funds on deposit in a 529 college savings plan, interest

earned on a 529 plan, and any matching funds deposited in a 529 plan.
SSI-Related MA Only
Exclude assets directly related to a person's current education or job

training program. Directly related means the asset is necessary for the
major program of study or related occupation. Current means ongoing
participation except for school breaks.
Example: Exclude tools the person needs for his ongoing auto
mechanics program.

Continue this exclusion for six calendar months following the month the
program is completed if the person intends to seek employment in that
occupation.
Note: This exclusion does not apply to real property, life estates and
life leases.
VERIFICATION
REQUIREMENTS FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
Do not require verification when countable assets exceed the limit

based on a person's own statement of value.
Verify the value of countable assets at application, redetermination and

when a change is reported.
Verify joint ownership and that the countable amount is less than that
presumed by policy at application and when a change is reported.
Verify the following factors affecting exclusion of an asset at application,

redetermination, and when a change is reported:
• An asset is not available.
• Joint ownership prevents sale (other owner refuses to sell).
• There is a written agreement to repair/replace a damaged or

destroyed homestead (cash exclusion for FIP, SDA, LIF, G2U,
G2C, SSI-related MA and AMP; land exclusion for SSI-related
MA).
• There is a written agreement to purchase another homestead.
• The asset is a bona fide loan.
SSI-Related MA Only
• An asset is non-salable.
• The equity value in income-producing real property
• Any transfer of ownership of life insurance to fund a funeral
VERIFICATION
SOURCES FIP, SDA, LIF, G2U, G2C, SSI-Related MA and AMP
The following prove ownership and/or value of assets. You may use the
DHS-20, Verification of Assets, the DHS-27, Release of Information, the
DHS-503, Asset Verification, or other specified form as appropriate,
when assisting a person verify assets.
Document information verified by telephone contact on a DHS-223,

Documentation Record.

Other sources of verification are listed by asset type.
Checking or Draft Monthly statement (Examination of checkbook is not sufficient.)

Account Telephone contact with financial institution
Individual Copy of documents establishing the IDA

Development Statement from the trustee or custodian of the account
Account
• Documentation must specify the purpose for which the trust or
account is established, that the trust or account will receive match-
ing funds, and that withdrawals must be authorized by the trustee
or custodian.
Irrevocable Copy of DHS-8A, Irrevocable Funeral Contract Certification, certifying

Funeral Contract contract irrevocable or equivalent form used by the Department of Com-
munity Health.
Loan Copy of financial institution loan contract.

Lender's financial statement showing withdrawal of borrowed amount.
Life Insurance DHS-4786, Life Insurance Verification, completed by agent or company.

Statement from insurance company or agent.
LTC Patient Trust Written statement from LTC facility.

Fund
Money Held By Written statement from person holding the money.

Other
Prepaid Funeral Statement of funeral home or contract seller.

Contract Copy of contract.
Real Property Deed, mortgage, purchase agreement or contract.
State Equalized Value (SEV) on current property tax records multiplied

by two.
Attorney or court records.
County records.
Statement of real estate agent or financial institution.
Retirement Plan Written statement from plan administrator.

Current plan statement.
Savings or Share Passbook with current entries posted.

Account Christmas club coupon book.
Written statement from financial institution.
Telephone contact with financial institution.

Savings Certificate Written statement from financial institution.

Certificate itself.
Stocks and Bonds Written statement from broker or company.

Listing in current newspaper.
Trust Copy of trust document.

Copy of documents transferring ownership of assets to the trust.
Appropriate source for the asset types owned by the trust.
U.S. Savings Bond Statement from financial institution.

Bond itself.
Vehicles Secretary of State inquiry.
Title, registration or proof of insurance.
Blue book or NADA book wholesale (trade-in) value.
• Do not add the value of optional equipment, special equipment or

low mileage when determining value.
Kelley Blue Book at www.kbb.com:
• Enter the greater of actual mileage or 12,000 per year.

• Enter the client’s zip code.
• Do not change the preset typical equipment.
• Enter “fair” as the condition.
• Use the trade-in value.
Loan statement or payment book.
Statement of vehicle dealer or junk dealer, as appropriate.
Allow the person to verify a claim that the vehicle is worth less (exam-
ple: due to damage) than wholesale book value. If the vehicle is no
longer listed, accept the person's statement of value.
Exception: Verify the value of antique, classic or custom vehicles.

EXHIBIT I - BURIAL
FUNDS EXAMPLES:
SSI-RELATED MA
CATEGORIES
ONLY
EXAMPLE 1: EXAMPLE 2:
Client has: Client has:
1. $2500 Savings Account 1. $2500
2. $2000 Savings Account
Irrevocable Funeral Contract - No Burial
Space Items
BURIAL FUNDS MAXIMUM: BURIAL FUNDS MAXIMUM:
$1500 - MAXIMUM $1500
-2000 Principal Sum of Irrevocable Funeral
0 Contract
Maximum


Client may: Designate up to $1500 for self as Client may not designate any assets as excludable
excludable burial funds. burial funds. However, the client could use savings to
purchase burial space items.
Client must: Establish a separate account for the
amount designated.
Client has: Client has:
1. $2500 Savings Account 1. $2500 Savings Account
2. $2000 Irrevocable Funeral Contract as 2. $1000 Face Value of Excludable Life Insurance
follows:
- $1000 Casket
- $600 Headstone
- $400 Assorted Professional Services
$1500 Principal Amount of Irrevocable $1500
- $400 Funeral -1000 Face Value of Excludable Life Insurance
Contract for Non-Burial Space Items
$1100 $500 MAXIMUM
Client may: Designate up to $1100 excludable Client may: Designate up to $500 as excludable
burial funds or buy more burial space. burial funds or buy burial space items.
Client must: Establish a separate account for the Client must: Establish a separate account for the
amount designated. amount designated.
Client has: Couple has:
1. $2500 Savings Account 1. $2800 Savings Account (Joint)
2. $400 Irrevocable Funeral Contract for Profes- 2. $1300 Common Stock Account (Husband)
3. $500 sional Services 3. $1600 Face Value Life Insurance - CSV=$300
Face Value of Excludable Life Insurance. (Wife)
$1500
- $400 Principal Amount of Irrevocable $1500 - MAXIMUM PER PERSON
$1100 Funeral Contract
- 500
$600 Face Value of Excludable Life Insur-
ance
MAXIMUM
Client may: Designate up to $600 as excludable Client may: Designate up to $1500 per person as
burial funds or buy burial space items. excludable burial funds. One way to do
this is:
HUSBAND WIFE
$200 Savings Account $1200
$1300 Common Stock 0
_0 Life Insurance $300
$1500 $1500
Client must: Establish a separate savings account for Client must: Establish a separate savings account for
the amount designated. any amounts designated from savings.

EXHIBIT II - LIFE
ESTATE AND LIFE
LEASE FACTOR
TABLE
Age Factor Age Factor Age Factor
0 .97188 40 .91571 80 .43659
1 .98988 41 .91030 81 .41967
2 .99017 42 .90457 82 .40295
3 .99008 43 .89855 83 .38642
4 .98981 44 .89221 84 .36998
5 .98938 45 .88558 85 .35359

6 .98884 46 .87863 86 .33764
7 .98822 47 .87137 87 .32262
8 .98748 48 .86374 88 .30859
9 .98663 49 .85578 89 .29526
10 .98565 50 .84743 90 .28221

11 .98453 51 .83674 91 .26955
12 .98329 52 .82969 92 .25771
13 .98198 53 .82028 93 .24692
14 .98066 54 .81054 94 .23728
15 .97937 55 .80046 95 .22887

16 .97815 56 .79006 96 .22181
17 .97700 57 .77931 97 .21550
18 .97590 58 .76822 98 .21000
19 .97480 59 .75675 99 .20486
20 .97365 60 .74491 100 .19975

21 .97245 61 .73267 101 .19532
22 .97120 62 .72002 102 .19054
23 .96986 63 .70696 103 .18437
24 .96841 64 .69352 104 .17856
25 .96678 65 .67970 105 .16962

26 .96495 66 .66551 106 .15488
27 .96290 67 .65098 107 .13409
28 .96062 68 .63610 108 .10068
29 .95813 69 .62086 109 .04545
30 .95543 70 .60522
31 .95254 71 .58914
32 .94942 72 .57261
33 .94608 73 .55571
34 .94250 74 .53862
35 .93868 75 .52149
36 .93460 76 .50441
37 .93026 77 .48742
38 .92567 78 .47049
39 .92083 79 .45357

LEGAL BASE FIP
P.A. 280 of 1939, as amended
MA
Social Security Act, Sections 1902(a)(10); (r)(2)

Deficit Reduction Act of 2005
42 CFR 435.840 -.845
MCL 400.106
SDA
Annual Appropriations Act
AMP
Title XXI of the Social Security Act

(1115) (a) (1) of the Social Security Act

BEM 401 1 of 14 TRUSTS - MA
DEPARTMENT
POLICY MA Only
This item contains Medicaid policy for trusts. The item is divided into
three parts:
• Medicaid trusts.
• Medicaid qualifying trusts (MQTs).
• Other trusts.
Which policy applies depends on the terms of the trust and when the
trust was established.
Use policy in BEM 400 and BAM 805 for prepaid funeral contracts and
life insurance funded funerals.
Group 2 Pregnant Women and Healthy Kids
The instructions in this item about counting assets and that asset trans-
fers may be divestment do not apply to the following because they have
no asset test:
• Healthy Kids categories.

• Group 2 Pregnant Women.
GENERAL
DEFINITIONS MA Only
These definitions apply to all trust policy. There are special definitions
for Medicaid trusts.
Beneficiary - the person for whose benefit a trust is created.
Grantor or settlor - the person who established the trust. Any person
who contributes to a trust is considered a grantor.
Principal or corpus - the assets in the trust. The assets may be real
property (e.g., house, land) or personal property (for example, stocks,
bonds, life insurance policies, savings accounts).
Trust - a right of property created by one person for the benefit of him-
self or another. It includes any legal instrument or device that exhibits
the general characteristics of a trust but is not called a trust or does not
qualify as a trust under state law. Examples of such devices might be
annuities, escrow accounts, pension funds and investment accounts
managed by someone with fiduciary obligations.
Trustee - the person who has legal title to the assets and income of a
trust and the duty to manage the trust for the benefit of the beneficiary

REFERRALS TO
MEDICAID
ELIGIBILITY
POLICY SECTION Send a copy of the trust, including similar legal instruments such as
annuities, to the Medicaid Eligibility Policy Section for evaluation.
This does not apply to the following:
• Prepaid funeral contracts.

• Life insurance funded funerals.
• Healthy Kids categories; see BEM 125, 129 and 131.
• Group 2 Pregnant Women; see BEM 126.
• Limited Liability Corporations (LLC).
• S-Corporations.
Once a trust has been evaluated, a reevaluation is not required unless

the local office believes a change has occurred affecting availability of
the trust principal or income including a change in department policy.
An evaluation of a trust advises local offices on:
• Whether a trust is revocable or irrevocable, and

• Whether any trust income or principal is available.
Advice is only available to local offices for purposes of determining eligi-

bility or an initial assessment when a trust actually exists. Advice is not
available for purposes of estate planning including advice on proposed
trusts or proposed trust amendments.
Send your referral as soon as possible so that everyone can complete

their tasks timely. Your referral must be in writing and include:
• Your name, email address, phone number and local office.
• What advice you are requesting.
• What programs are involved.
• Whether the grantor is living or dead.
• Whether the person is an applicant or recipient.
• Source of the assets used to establish the trust (for example

money from the grantor's lawsuit settlement).
• The MA client’s name and, if applicable, their spouse's name.
• The grantor's relationship to the MA client or spouse.
• The name of the person(s) who contributed to the trust and their
relationship to the MA client and spouse.

• Legible copies of the complete trust document, all amendments to

the trust, addenda, correspondence and other pertinent informa-
tion.
Send the referral via ID mail to:

Attn: Trust & Annuities
Grand Tower Suite 1307
P.O. Box 30037
Lansing, MI 48909
EVALUATING
TRUSTS Determine if a trust established on or after August 11, 1993, is a Medic-
aid trust using:
• MEDICAID TRUST DEFINITIONS and

• MEDICAID TRUST CRITERIA.
Use the following policies if the trust is a Medicaid trust:
• COUNTABLE ASSETS FROM MEDICAID TRUSTS.

• COUNTABLE INCOME FROM MEDICAID TRUSTS.
• TRANSFERS FOR LESS THAN FMV.
Determine if a trust established before August 11, 1993, is a MEDICAID

QUALIFYING TRUST (MQT). Use the following policies if the trust is an
MQT.
• Countable MQT Assets.

• Countable MQT Income.
Use OTHER TRUST policy when a trust is not:
• An MQT.
• A Medicaid trust.
MEDICAID TRUST
DEFINITIONS Use the GENERAL DEFINITIONS and these definitions when determin-
ing:
• Whether a trust is a Medicaid trust, and

• What is available from and transferred for a Medicaid trust.
Irrevocable Trust - a trust that is not a revocable trust; see revocable

trust in this item.
Resources - all income and assets of a person and the person's

spouse. It includes any income and assets the person or spouse is enti-
tled to but does not receive because of action:

• By the person or spouse.
• By someone else (including a court or administrative body) with

legal authority to act in place of or on behalf of the person or
spouse.
• By someone else (including a court or administrative body) acting

at the direction or upon the request of the person or spouse.
Revocable trust - a trust which can be revoked or modified by:
• The grantor.
• A court.
• The trustee.
• Any other person or entity.
This includes a trust which allows for revocation or modification only

when a change occurs such as the grantor leaves the LTC facility or the
beneficiary becomes competent.
Modify means changing the beneficiaries or the availability of principal

or income.
Annuity- A written contract, with a commercial insurance company,

establishing a right to receive specified, periodic payments for life or for
a term of years. They are usually designed to be a source of retirement
income. Only certain types of annuities are excluded as resources.
TRANSFERS TO AN
ANNUITY
EFFECTIVE 9/1/05 Converting countable resources to income through the purchase of an
annuity or the amendment of an existing annuity on or after 09/01/05, is
considered a transfer for less than fair market value unless the annuity
meets the conditions listed below:
• Is commercially issued by a company licensed in the United States

and issued by a licensed producer, (a person required to be
licensed under the laws of this state to sell, solicit, or negotiate
insurance), and
• Is irrevocable, and
• Is purchased by an applicant or recipient for Medicaid or their

spouse and solely for the benefit of the applicant or recipient or
their spouse, and
• Is actuarially sound and returns the principal and interest within

the annuitant’s life expectancy, and

• Payments must be in substantially equal monthly payments (start-

ing with the first payment) and continue for the term of the payout
(no balloon or lump sum payments).
• An annuity purchased or amended on or after February 8, 2006

must name the State of Michigan as the remainder beneficiary, or
as the second remainder beneficiary after the community spouse
or minor or disabled child, for an amount at least equal to the
amount of the Medicaid benefits provided. The naming of the State
in the first or second position must be verified at application or
redetermination.
MEDICAID TRUST
CRITERIA A Medicaid trust is a trust that meets conditions 1 through 5 below:
1. The person whose resources were transferred to the trust is some-

one whose assets or income must be counted to determine MA eli-
gibility, an MA post-eligibility patient-pay amount, a divestment
penalty or an initial assessment amount. A person's resources
include his spouse's resources (see definition).
2. The trust was established by:
• The person.
• The person's spouse.
• Someone else (including a court or administrative body) with

legal authority to act in place of or on behalf of the person or
the person's spouse, or an attorney, or adult child.
• Someone else (including a court or administrative body) act-

ing at the direction or upon the request of the person or the
person's spouse or an attorney ordered by the court.
3. The trust was established on or after August 11, 1993.
4. The trust was not established by a will.
5. The trust is not described in Exception A, Special Needs Trust or

Exception B, Pooled Trust in this item.
Exception A, A trust is not a Medicaid trust if it meets all the following conditions:
Special Needs
Trust • The trust must be unchangeable with regard to the provisions that
make it an Exception A, Special Needs Trust. This is necessary to
ensure that a trust initially meeting the other conditions still meets
those conditions when the person dies, it must be Irrevocable.

• The trust contains the resources of a person who is under age 65

and is disabled (not blind) per BEM 260. See Continuing Excep-
tion A when the person has attained age 65.
• The trust was established for the person described above. This
means that the trust must ensure that none of the principal or
income can be used for someone else during the person's lifetime,
except for Trustee Fees per BEM 405.
• The trust was established by a court or by the person's:
•• Parent.
•• Grandparent.
•• Legal guardian/conservator.
• The trust imposes on the trustee an automatic duty to repay Med-

icaid upon the person's death.
When a person has lived in more than one state, the trust must
provide that the funds remaining in the trust are distributed to each
state in which the individual received Medicaid, based on the
state's proportionate share of the total amount of Medicaid benefits
paid by all of the states on the person's behalf.
Examples of circumstances under which a trust fails this repay

condition are:
•• Requiring a trustee to reimburse Medicaid only if Medicaid

first submits a claim.
•• Failing to provide that repaying Medicaid has priority over all

debts and expenses except those given higher priority by law.
Transfers to Treat assets and income transferred into an Exception A, Special

Exception A Trust Needs Trust as part of the trust for the entire month of transfer.
Continuing A trust that is an Exception A, Special Needs Trust when the person
Exception A was under age 65 continues being an Exception A, Special Needs
Trust after the person attains age 65. However, any additions or aug-
mentations to the trust after the person attains age 65 are not protected
by the exception. The additions/ augmentations are subject to trust and
divestment policies without regard to Exception A, Special Needs
Trust.
Countable Count as a person's unearned income any payment received from the
Exception A trust.
Payments
Exception B, A trust is not a Medicaid trust if it meets all of the following conditions:
Pooled Trust

• The trust must be unchangeable with regard to the provisions that

make it an Exception B, Pooled Trust. This is necessary to ensure
that a trust initially meeting the other conditions still meets those
conditions when the person dies.
• The trust contains the resources of a person who is disabled (not

blind), and under age 65 per BEM 260. See Transfers to an
Exception B trust in this item.
• The trust is established and managed by a nonprofit association.
• A separate account is maintained for each beneficiary of the trust,

but for purposes of investment and management of funds, the trust
pools these accounts.
• Accounts in the trust are established for the benefit of persons who
are disabled (not blind) per BEM 260. This means the trust must
ensure that none of the principal or income attributable to a per-
son's account can be used for someone else during the person's
lifetime, except for Trustee Fees per BEM 405.
• Accounts in the trust are established by courts or by disabled per-

sons':
•• Parents.
•• Grandparents.
•• Legal guardians/conservators.
• The trust provides that to the extent any amounts remaining in the
beneficiary’s account upon the death of the beneficiary are not
retained by the trust, the trust will pay to the State the amount
remaining up to an amount equal to the total amount of medical
assistance paid on behalf of the beneficiary under a State Medic-
aid plan.
When a person has lived in more than one state, the trust must
provide that the funds remaining in the trust are distributed to each
state in which the individual received Medicaid, based on the
state's proportionate share of the total amount of Medicaid benefits
paid by all of the states on the person's behalf.
Examples of circumstances under which a trust fails this repay

condition are:
•• Requiring a trustee to reimburse Medicaid only if Medicaid

first submits a claim.
•• Failing to provide that repaying Medicaid has priority over all

debts and expenses except those given higher priority by law.

Transfers to Treat assets and income transferred into an Exception B, Pooled

Exception B Trust Trust as part of the trust for the entire month of transfer.
Transfers to an Exception B, Pooled Trust by a person age 65 or older

mightis a be divestment. Do a complete divestment determination if the
person is in a Penalty Situation per BEM 405.
Countable Count as a person's unearned income any payment received from the
Exception B trust by the client as unearned income in the month received.
Payments
Multiple When someone other than the person or the person's spouse has con-
Contributors tributed to the principal of a trust, do not count as the person's assets or
transferred assets an amount proportional to that other person's contri-
butions to the principal.
Example: The Lang family contributed assets to the Lang Trust as fol-
lows:
John (MA applicant) $50,000

Sally (John’s daughter) $10,000
Total Contributions $60,000
Sally has contributed 1/6 of the total contributions. The value of the
entire principal is currently $102,000. Therefore, $17,000.00 (one-sixth)
of the current value cannot be counted as John's assets. Do not count
the contributors share as an asset.
REPAYMENT
INQUIRIES Refer trustees seeking to repay Medicaid to the following:
Michigan Department of Community Health

Court Originated Liability Section
PO Box 30479
Lansing, Michigan 48909
COUNTABLE
ASSETS FROM
MEDICAID TRUSTS How much of the principal of a trust is a countable asset depends on:
• The terms of the trust, and

• Whether any of the principal consists of Countable Assets or
Countable Income.
Countable Assets The following are countable assets.
• Assets that are countable using SSI-related MA policy in BEM 400.

Do not consider an asset unavailable because it is owned by the
trust rather than the person.

• The homestead of an L/H or waiver patient or the patient's spouse

even if the home was transferred before the patient was institution-
alized or approved for the waiver.
Countable Income Countable income is income that is countable using SSI-related MA pol-
icy in BEM 500.
Revocable Trust Count as the person's countable asset the value of the Countable
Assets and Countable Income in the principal of a revocable trust.
Exceptions:
• Reduce the countable amount when there are Multiple Contribu-

tors.
• Do not count the amount if it creates an Undue Hardship.
• The modification allowed does not permit distribution of the princi-

pal to the person (or his share when there are Multiple Contribu-
tors). Use the Irrevocable Trust policy in this item.
Example: The trustee of the Lang Trust can cancel the trust, but must
pay all of the principal to Sally if the trust is cancelled. Therefore, none
of the principal is John's countable asset.
Irrevocable Trust Count as the person's countable asset the value of the Countable
Assets in the trust principal if there is any condition under which the
principal could be paid to or on behalf of the person from an irrevocable
trust. Real property (land) left to children in equal shares have no estate
tax on the transfer of property,
Count as the person's countable asset the value of the trust's Countable
Income if there is any condition under which the income could be paid
to or on behalf of the person. Individuals can keep income made off of
property and the money goes to the individual not the trust. Property
cannot be taken out of the trust.
Exceptions:
• Reduce the countable asset amount by the amount of principal or

income actually paid to or on behalf of the person during the
month.
• Reduce the countable amount for Multiple Contributors.
• A trust may allow use of one portion of the principal, but not
another portion. Count only the usable portion.
• Do not count the amount if it creates an Undue Hardship.

Example: The principal of the Lang Trust consists of stocks, bonds,

CD's and a life insurance policy with a face value of $5,000 and a cash
surrender value of $2,000. The trustee is prohibited from using the life
insurance policy in any way. The trustee can pay from the remaining
portion of the trust principal enough to maintain John in the style to
which he is accustomed. The trustee must pay the trust income to John.
John wants MA for May. In May, the entire principal was worth
$102,000. However, the usable portion of the trust principal (the stocks,
bonds and CD's) was worth $100,000. The trustee used $300 to buy a
TV for John and gave John $50 from the principal in May.
$100,000 usable principal

- 16,666 one-sixth reduction for multiple
contributors from first example.
$83,334
- 350 actually paid
$82,984 John's countable asset amount
Any portion of the principal or income that could never be paid to or on

behalf of the person is transferred for less than fair market value. The
look-back period is 60 months; see BEM 405. Reduce the transferred
amount to account for Multiple Contributors and assets and income that
are not Countable Assets or Countable Income.
Undue Hardship Assume there is no undue hardship unless you have evidence to the
contrary. Undue hardship exists when the person’s physician (M.D. or
D.O.) says:
• Necessary medical care is not being provided, and

• The person needs treatment for an emergency condition.
A medical emergency exists when a delay in treatment may result in the

person's death or permanent impairment of the person's health.
A psychiatric emergency exists when immediate treatment is required

to prevent serious injury to the person or others.
Payments actually made by a trustee to or on behalf of a beneficiary do

not create an undue hardship.
See BEM 100, Policy Exception Request Procedure.
COUNTABLE
INCOME FROM
MEDICAID TRUSTS Count as a person's unearned income any payment from a Medicaid
Trust that is made to the person or his legal representative.

Example: In the preceding example for the Lang Trust, the $50 paid to
John from the principal is countable unearned income. The trust income
is also countable unearned income when paid to John.
TRANSFERS FOR
LESS THAN FMV
Revocable Trust Count payments from a revocable Medicaid trust to or on behalf of

someone other than the person as follows:
• If the other person never contributed to the principal - any payment

of Countable Assets or “ountable Income is a resource transfer for
less than fair market value for purposes of BEM 405.
• If the other person contributed to the principal - any payment of

Countable Assets or Countable Income exceeding the other per-
son's proportional contribution to the principal is a resource trans-
fer for less than fair market value for purposes of BEM 405.
Exception: Use the Irrevocable Trust policy in this item if a trust is con-
sidered revocable because it can be modified, but the modification does
not permit distribution of the principal to the person (or his share when
there are Multiple Contributors).
The look-back period for such transfers is 60 months; see BEM 405.
Example: The Lang Trust pays Sally $300 per month from the trust's
$600 per month income. Sally contributed only 1/6 of the trust principal.
Therefore, $200 (1/6 of 600 = $100. $300 - 100 = $200) is a resource
transferred for less than fair market value.
Irrevocable Trust Count any portion of a trust's principal or income that is Countable
Assets or Countable Income which cannot be paid to or on behalf of the
person as transferred for less than fair market value for purposes of
BEM 405.
Note: Be sure to adjust the transferred amount to account for Multiple

Contributors.
The look-back period for such transfers is 60 months.
The date of transfer is the date payment is prohibited. The amount

transferred is the amount which cannot be used as of that date plus any
countable resources added by the person after that date.
Example: On 8/12/07 Ms.Thomas established an irrevocable Medi-

caid trust. Ms.Thomas transferred $50,000 cash to the trust on that date
and $10,000 cash on 9/9/07. The trustee may pay all of the trust income
to Ms.Thomas but cannot use any of the principal for Ms. Thomas.

Ms.Thomas has transferred $60,000 for less than fair market value;
$50,000 on 8/12/07 and $10,000 on 9/9/07.
Example: On 10/1/07 Mr. Lewis established an irrevocable Medicaid

trust with $100,000 cash. The trustee has discretion to pay Mr. Lewis as
much of the trust income and principal as Mr. Lewis may direct as long
as Mr. Lewis is not in a nursing home. Once Mr. Lewis enters a nursing
home, the trustee may only pay the trust income to Mr. Lewis. Mr. Lewis
enters a nursing home on 12/12/07. The trust principal on 12/12/07 has
a value of $101,250. On 12/14/07 Mrs. Lewis transfers $10,000 cash to
the trust. The Lewis's have transferred $111,250 for less than fair mar-
ket value; $101,250 on 12/12/07 and $10,000 on 12/14/07.
Count payments from an irrevocable Medicaid trust to or on behalf of

someone other than the person as follows:
• If the other person never contributed to the principal - any payment

of Countable Assets or Countable Income is a resource transfer
for less than fair market value for purposes of BEM 405.
• If the other person contributed to the principal - any payment of

Countable Assets or Countable Income exceeding the other per-
son's proportional contribution to the principal is a resource trans-
fer for less than fair market value for purposes of BEM 405.
The look-back period for such transfers is 60 months; see BEM 405.
Transfers made prior to February 8, 2006 have a look-back period of 36
months.
MEDICAID
QUALIFYING
TRUST Use the GENERAL DEFINITIONS in this item.
A Medicaid qualifying trust (MQT) is a trust that has all of the following
characteristics:
a. It was established before August 11, 1993.
b. It is established by a person whose assets must be considered or

by that person's spouse.
c. The person whose assets must be considered is the beneficiary of

all or part of the payments from the trust.
d. The amount distributed from the trust is determined by one or

more trustees who are permitted to exercise at least some discre-
tion with respect to the amount to be distributed to the person in (c)
above.

A trust that is established by a person's guardian or legal representa-

tive, acting on the person's behalf, using the person's assets is treated
as having been established by the person.
Exceptions:
• A trust is not considered an MQT if the sole beneficiary is a men-

tally retarded person who resides in an intermediate care facility
for the mentally retarded and the trust or initial trust decree was
established prior to April 7, 1986.
• A trust established by a will is not considered an MQT.
Countable MQT The countable asset amount for each person for whom assets must be
Assets considered is:
• The maximum payment that could be made from the trust (princi-
pal or income) to that person as a beneficiary of the trust if the
trustee exercised his full discretion under the terms of the trust
• Minus actual payments made by the trust to or on behalf of the

person.
Clauses such as those that prohibit distributions that would affect MA

eligibility are not considered limits on a trustee's discretion for purposes
of this policy. To do otherwise would effectively negate the MQT policy.
Countable MQT Count payments made to a beneficiary of an MQT as that person's

Income unearned income.
OTHER TRUSTS Use the GENERAL DEFINITIONS in this item.
Use this policy for any trust that is not a Medicaid trust or an MQT.
Countable Assets The trust principal is considered an available asset of the person who is
legally able to:
• Direct use of the trust principal for his needs.

• Direct that ownership of the principal revert to himself.
Count only the value of assets that are countable for the MA category
being tested per BEM 400. Assume the person owns the asset in deter-
mining what is countable.
Transfers to Trust Do a complete divestment determination when:
• A person has transferred assets to a trust,

• The principal is unavailable (see above), and
• The person is in a penalty situation per BEM 405.

Countable Income Count as a person's unearned income any payment received from the
trust. This includes Exception A, Special Needs Trust and Exception B,
Pooled Trust trusts.
VERIFICATION
REQUIREMENTS Verify income from a trust:
• Prior to authorizing benefits at application.

• At redetermination, and
• Whenever a change affecting income occurs.
Verify the value of a trust's principal if any portion is countable unless

countable assets exceed the asset limit based on the client’s statement
of value.
See BEM 405 regarding verifications for divestment.
Verification Sources to verify income from a trust include:

Sources
• Trust records.
• Trustee correspondence.
Sources to verify the value of a trust's principal include:
• Statements from experts for the types of assets held by the trust.
• Trust records.
• Trustee correspondence.
LEGAL BASE MA
Before August 11, 1993
Social Security Act, Section 1902(a)(10) and 1902(k)

42 CFR 435.840-.845
MCL 400.106
Starting August 11, 1993
Social Security Act, Section 1902(a)(18) and 1917(d)-(e)
JOINT POLICY
DEVELOPMENT

BEM 405 1 of 17 MA DIVESTMENT
DEPARTMENT
POLICY MA ONLY
Divestment results in a penalty period in MA, not ineligibility. Divest-

ment policy does not apply to Qualified Working Individuals; see BEM
169.
Divestment is a type of transfer of a resource and not an amount of

resources transferred.
Divestment (see RESOURCE DEFINED in this item) means a transfer

of a resource by a client or his spouse that are all of the following:
• Is within a specified time; see LOOK-BACK PERIOD in this item.
• Is a transfer for LESS THAN FAIR MARKET VALUE.
• Is not listed below under TRANSFERS THAT ARE NOT DIVEST-

MENT.
Note: See Annuity Not Actuarially Sound and Joint Owners and
Transfers below and BEM 401 about special transactions consid-
ered transfers for less than fair market value.
During the penalty period, MA will not pay the client’s cost for:
• LTC services.
• Home and community-based services.
• Home Help.
• Home Health.
MA will pay for other MA-covered services.
Do not apply a divestment penalty period when it creates an undue

hardship; see UNDUE HARDSHIP in this item.
RESOURCE
DEFINED Resource means all the client’s and his spouse's assets and
income. It includes all assets and all income, even countable and/or
excluded assets, the individual or spouse receive. It also includes all
assets and income that the individual (or their spouse) were entitled to
but did not receive because of action by one of the following:
• The client or spouse.
• A person (including a court or administrative body) with legal

authority to act in place of or on behalf of the client or his spouse.
• Any person (including a court or administrative body) acting at the

direction or upon the request of the client or his spouse.

TRANSFER OF A
RESOURCE Transferring a resource means giving up all or partial ownership in (or
rights to) a resource. Not all transfers are divestment. Examples of
transfers include:
• Selling an asset for fair market value (not divestment).
• Giving an asset away (divestment).
• Refusing an inheritance (divestment).
• Payments from a MEDICAID TRUST that are not to, or for the
benefit of, the person or his spouse; see BEM 401 (divestment).
• Putting assets or income in a trust; see BEM 401.
• Giving up the right to receive income such as having pension pay-

ments made to someone else (divestment).
• Giving away a lump sum or accumulated benefit (divestment).
• Buying an annuity that is not actuarially sound (divestment).
• Giving away a vehicle (divestment).
• Putting assets or income into a Limited Liability Company (LLC)
Also see Joint Owners and Transfers for examples.
Transfers to a LLC Treat transfers to a LLC as a divestment unless the client retains the
rights to the asset or income invested and may withdraw the asset
invested on demand.
Treat transfers to a LLC that has no discernable product (goods and or

services) produced as a divestment.
Transfers by Treat transfers by any of the following as transfers by the client or

Representatives spouse.
• Parent for minor.

• Legal guardian.
• Conservator.
• Court or administrative body.
• Anyone acting in place of, on behalf of, at the request of or at the
direction of the client or spouse.
Joint Owners and When a client jointly owns a resource with another person(s), any
Transfers action by the client or by another owner that reduces or eliminates the
client’s ownership or control is considered a transfer by the client.

Example: Mr. Jones is applying for MA. In 2005, he added his sister's
name to his bank account. Each is free to withdraw as much money as
desired so adding the sister's name did not affect the client’s ownership
or control. On September 1, 2007, the sister withdrew $10,000 and
deposited the money in her own bank account. Mr. Jones is considered
to have transferred $10,000 on September 1, 2007, the day he no
longer had ownership and control of his money.
Example: Mr. Jones is applying for MA. On September 1, 2007, Mr.

Jones gave his sister half interest in real estate. His equity value at the
time was $100,000. The ownership arrangement prevents either sibling
from selling without the other's permission. Mr. Jones transferred a
resource on September 1, 2007, the day he reduced his ownership and
control by giving his sister part ownership and the power to prevent
sale. The amount transferred depends on whether his sister is refusing
to sell. The transferred amount is:
• $100,000 if she now refuses to sell.
Note: The asset is unavailable and not countable for purposes of

Mr. Jones' asset eligibility.
• $50,000 if she now agrees to sell.
Note: Unless otherwise excluded, one-half the equity for the

month being tested is a countable asset for purposes of Mr. Jones'
asset eligibility.
The same policy applies to resources the client’s spouse owns jointly
with other persons.
Exception: No penalty is imposed if the parties involved verify that the

resource transferred actually belonged solely to the person to whom it
was transferred.
Annuity Not Purchase of an annuity that is not actuarially sound is a transfer for less
Actuarially Sound than fair market value. The transfer was made by the annuity’s owner.
Owner means the person who pays the premium for the annuity.
Annuitant means the person to whom the annuity payments are made
during the guarantee period of the annuity.
An annuity is not actuarially sound if the annuitant is not expected to

live until the end of the guarantee period of the annuity. Use the Life
Expectancy Tables, EXHIBIT I - FEMALE or EXHIBIT II - MALE to make
this determination.
Note: Guarantee period may be called annuity certain or period cer-

tain.

Example: John purchased an annuity at age 65 with a guarantee

period of 10 years and payments starting at purchase. John’s life
expectancy is 16.67 years. The annuity is actuarially sound.
Example: Sally purchased an annuity at age 70 with a guarantee

period of 15 years and payments starting five years after purchase. The
annuity is not actuarially sound because Sally’s life expectancy at pur-
chase was 15.72 years while the guarantee period ends in 20 years
(five year delay plus 15 years).
Example: Diane purchased an annuity at age 65 with a guarantee

period of 25 years. The annuity is not actuarially sound because
Diane’s life expectancy is only 19.50 years.
The amount transferred for less than fair market value for an annuity
that is not actuarially sound is the amount that would be paid after the
end of the person’s life expectancy.The amount transferred for less than
fair market value is the value of the payments due in the last 5.5 years
of the annuity (25 minus 19.50 = 5.50).
Example: Sally purchased an annuity at age 70 with a guarantee

period of 15 years and payments starting five years after purchase. The
annuity is not actuarially sound because Sally’s life expectancy at pur-
chase was 15.72 years while the guarantee period ends in 20 years.
The amount transferred for less than fair market value is the value of
the payments due in the last 4.28 years of the annuity (20 - 15.72 =
4.28).
LOOK-BACK
PERIOD The first step in determining the period of time that transfers can be
looked at for divestment is determining the baseline date; see Baseline
Date below.
Once you have determined the baseline date, you determine the look-
back period. The look back period is 60 months prior to the baseline
date for all transfers made after February 8, 2006 and 36 or 60 months
(depending on the type of resource transferred) prior to the baseline
date for transfers made on or before February 8, 2006; see Medicaid
Trusts in BEM 401.
Entire Period Transfers that occur on or after a client’s baseline date must be consid-
ered for divestment. In addition, transfers that occurred within the 60
month look-back period must be considered for divestment.
Penalty Situation A divestment determination is not required unless, sometime during the
month being tested, the client was in a penalty situation. To be in a pen-
alty situation, the client must be eligible for MA (other than QDWI) and
be one of the following:

• In an LTC facility.
• APPROVED FOR THE WAIVER; see BEM 106.
• Eligible for Home Help.
• Eligible for Home Health.
Baseline Date A person’s baseline date is the first date that the client was eligible for
Medicaid and one of the following:
• In LTC.
• APPROVED FOR THE WAIVER; see BEM 106.
• Eligible for Home Health services.
• Eligible for Home Help services
A client’s baseline date does not change even if one of the following
happens:
• The client leaves LTC.
• The client is no longer APPROVED FOR THE WAIVER; see BEM

106.
• The client no longer needs Home Help.
• The client no longer needs Home Health.
LESS THAN FAIR

MARKET VALUE Less than fair market value means the compensation received in return
for a resource was worth less than the fair market value of the
resource.That is, the amount received for the resource was less than
what would have been received if the resource was offered in the open
market.
Note: Also see Annuity Not Actuarially Sound above.
Compensation must have tangible form and intrinsic value.
Relatives can be paid for providing services; however, assume services

were provided for free when no payment was made at the time services
were provided. A client can rebut this presumption by providing tangible
evidence that a payment obligation existed at the time the service was
provided (for example a written agreement signed at the time services
were first provided). The policy in BAM 130 allowing use of best avail-
able information or your best judgment as verification does not apply.
Value of When a person gives up his right to receive income, the fair market
Transferring Right value is the total amount of income the person could have expected to
to Income receive.
Use EXHIBIT I - LIFE EXPECTANCY TABLE - FEMALE or EXHIBIT II

- LIFE EXPECTANCY TABLE - MALE to compute the fair market value

of a lifetime income source such as a pension. Base the calculation on

the person's sex and age on the date of transfer.
Home Caretaker & A contract/agreement that pays prospectively for expenses such as
Personal Care repairs, maintenance, property taxes, homeowner’s insurance, heat
Contracts and utilities for real property/homestead or that provides for monitoring
health care, securing hospitalization, medical treatment, visitation,
entertainment, travel and/or transportation, financial management or
shopping, etc. would be considered a divestment. Consider all pay-
ments for care and services which the client made during the look back
period as divestment.
Note: The preceding are examples and should not be considered an all
inclusive or exhaustive list.
Relatives who provide assistance or services are presumed to do so for

love and affection, and compensation for past assistance or services
shall create a rebuttable presumption of a transfer for less than fair mar-
ket value. A relative is anyone related to the client by blood, marriage or
adoption.
Such contracts/agreements shall be considered a transfer for less than

fair market value unless the compensation is in accordance with all of
the following:
• The services must be performed after a written legal contract/

agreement has been executed between the client and provider.
The services are not paid for until the services have been pro-
vided. The contract/agreement must be dated and the signatures
must be notarized; and
• At the time of the receipt of the services, the client is not residing in
a nursing facility, adult foster care home, institution for mental dis-
eases, inpatient hospital, intermediate care facility for mentally
retarded or eligible for home and community based waiver, home
health or home help; and
• At the time services are received, the services must have been
recommended in writing and signed by the client’s physician as
necessary to prevent the transfer of the client to a residential care
or nursing facility. Such services cannot include the provision of
companionship; and
• DHS will verify the contract/agreement by reviewing the written

instrument between the client and the provider which must show
the type, frequency and duration of such services being provided
to the client and the amount of consideration (money or property)
being received by the provider, or In accordance with a service
plan approved by DHS. If the amount paid for services is above

fair market value, then the client will be considered to have trans-
ferred the asset for less than fair market value. If in question, fair
market value of the services may be determined by consultation
with an area business which provides such services; and
• The contract/agreement must be signed by the client or legally

authorized representative, such as an agent under a power of
attorney, guardian, or conservator. If the agreement is signed by a
representative, that representative cannot be the provider or bene-
ficiary of the contract/agreement.
Assets transferred in exchange for a contract/agreement for personal

services/assistance or expenses of real property/homestead provided
by another person after the date of application are considered available
and countable assets.
Transferring Non- Transfers of resources that are excluded or not countable assets under
countable or SSI-related MA policy may be divestment.
Excluded
Resources Transfer of the following may be divestment:
• Homestead of L/H and waiver client or the L/H and waiver client’s
spouse even if the transfer occurred before the client was institu-
tionalized or approved for the waiver; see BEM 106.
• Assets that were not countable because they were unavailable or

not salable.
TRANSFERS THAT
ARE NOT
DIVESTMENT
Transferring Transferring income that is not countable income for SSI-related MA

Excluded Income according to BEM 500 is not divestment.
Transfers Involving It is not divestment to transfer resources from the client to:
Spouse
• The client’s spouse.
• Another SOLELY FOR THE BENEFIT OF the client’s spouse.
Transfers from the client’s spouse to another SOLELY FOR THE BEN-
EFIT OF the client’s spouse are not divestment.
Transfers Involving Transfers to the client’s blind or disabled child, regardless of the child’s
Child age or marital status, are not divestment. This includes transfers to a
trust established SOLELY FOR THE BENEFIT OF the child ; see BEM
260.

Transfer to Funeral See Life Insurance Funded Funeral in BEM 400 when a person has
Plan irrevocably transferred ownership in life insurance or a similar device
designated for funeral expenses.
Transfer to Trust Transfers to a trust established SOLELY FOR THE BENEFIT OF a dis-
abled (see BEM 260) person under age 65 are not divestment.
Purchase of Placing money in an irrevocable prepaid funeral contract (see BAM

Funeral Contract 805) is not divestment.
Asset Conversion Converting an asset from one form to another of equal value is not
divestment even if the new asset is exempt. Most purchases are con-
versions.
Example: Using $5,000 from savings to buy a used car priced at

$5,000 is conversion for equal value.
Example: Trading a boat worth about $8,000 for a car worth about
$8,000 is conversion for equal value.
Payment of expenses such as one's own taxes or utility bills is also not
divestment.
Transferring It is not divestment to transfer a homestead to the client's:

Homestead to
Family • Spouse; see Transfers Involving Spouse above.
• Blind or disabled child; see Transfers Involving Child above.
• Child under age 21.
• Child age 21 or over who:
•• Lived in the homestead for at least two years immediately

before the client’s admission to LTC or BEM 106 waiver
approval, and
•• Provided care that would otherwise have required LTC or

BEM 106 waiver services, as documented by a physician's
(M.D. or D.O.) statement.
• Brother or sister who:
•• Is part owner of the homestead, and

•• Lived in the homestead for at least one year immediately
before the client’s admission to LTC or BEM 106 waiver
approval.
Transfers for As explained below, transfers exclusively for a purpose other than to
Another Purpose qualify or remain eligible for MA are not divestment.

Assume transfers for less than fair market value were for eligibility pur-
poses until the client or spouse provides convincing evidence that they
had no reason to believe LTC or waiver services might be needed.
Example: Mr. Smith, age 40, was in good health when he gave his
vacation cottage to his nephew. The next day Mr. Smith was in an auto-
mobile accident. His injuries require long-term care. The transfer was
not divestment because Mr. Smith could not anticipate his need for
LTC services.
Exception:
• Preservation of an estate for heirs or to avoid probate court is not

acceptable as another purpose.
• That the asset or income is not counted for Medicaid does not
make its transfer for another purpose.
Trustee Fees Trusts which designate a business as trustee (for example a bank) usu-
ally must compensate the trustee. Reasonable compensation is not
divestment. Reasonable compensation means compensation within the
prevailing rate for the community. For example, banks usually base
their fee on a percentage of the value of the principal. There may be a
basic charge in addition to the percentage or the percentage may vary
based on the value of the trust.
SOLELY FOR THE

BENEFIT OF All of the following conditions must be met for a transfer or for a trust to
be solely for the benefit of a person.
• The arrangement must be in writing and legally binding on the par-

ties.
• The arrangement must ensure that none of the resources can be

used for someone else during the person's lifetime, except for
“Trustee Fees.”
• The arrangement must require that the resources be spent for the
person on a actuarially sound basis. This means that spending
must be at a rate that will use up all the resources during the per-
son's lifetime. Life expectancies are in Exhibit I - FEMALE OR
EXHIBIT II- MALE.
Exception: Trusts meeting the criteria for Exception A or Exception B

in BEM 401 do not have to spend resources on an actuarially sound
basis.

PENALTY PERIOD
No Maximum There is no maximum limit on the penalty period for divestment under
Penalty this new policy. There is no minimum amount of resource transfer
before incurring a penalty, determine a penalty on any amount of
resources that are transferred and meet the definition of a divestment
even if the penalty is for one day. Divestment is a type of transfer not an
amount of transfer.
Any penalty period established under previous policy continues until it

ends.
Apply the penalty policy in place at the time of transfer for any transfers
made before February 8, 2006.
Computing Penalty The penalty period is computed on the total Uncompensated Value of
Period all resources divested.
Determine the Uncompensated Value for each resource transferred and

combine into a total Uncompensated Value.
Divide the total Uncompensated Value by the average monthly private

LTC Cost in Michigan for the client’s Baseline Date. This gives the num-
ber of full months for the penalty period. Multiply the fraction remaining
by 30 to determine the number of days for the penalty period in the
remaining partial month.
Apply the total penalty months and days. Apply a penalty even if the
total amount of the penalty is for only a partial month.
The penalty is applied to the months (or days) an individual is eligible

for Medicaid and actually in LTC, Home Health, Home Help, or the
MIChoice Waiver. The divestment penalty period cannot be applied to a
period when the individual is not eligible for Medicaid for any reason
(that is the case closes for any reason or is eligible for Medicaid but is
not in LTC, Home Help, Home Health, or the MIChoice Waiver. Restart
the penalty when the individual is again eligible for Medicaid and in
LTC, Home Help, Home Health, or MIChoice Waiver. When a medical
provider is paid by the individual, or by a a third party on behalf of the
individual, for medical services received, the individual is not eligible for
Medicaid in that month and the month is not a penalty month. That
month cannot be counted as part of the penalty period.
Note: An individual is not eligible for MA in a month they have pre-paid

for LTC.
A group 2 deductible eligible individual is not eligible for Medicaid until

the deductible is met. Apply the penalty only to the days of the month
after the deductible is met.

The 1st day the client is eligible to receive MA coverage for LTC,
MIChoice, home help, or home health services is the 1st day after the
penalty period ends.
Baseline Date In LTC

Calendar Yea Cost
2011 $6816
20109 $63626618
2008 $6191
2007 $5938
2006 $5549
2005 $5367
2004 $5250
2003 $5043
2002 $4703
2001 $4518
2000 $4331
1999 $3981
1998 $3711
1997 $3507
Before January 1997 $3441
The penalty period starts on the date which the individual is eligible for
Medicaid and would otherwise be receiving institutional level care (LTC,
MIChoice waiver, or home help or home health services), and is not
already part of a penalty period. When a medical provider is paid by the
individual, or by a a third party on behalf of the individual, for medical
services received, the individual is not eligible for Medicaid in that
month and the month is not a penalty month. That month cannot be
counted as part of the penalty period.
Note: If a past unreported divestment is discovered or an agency error

is made which should result in a penalty, a penalty must be determined
under the policy in place at the time of discovery. If a penalty is deter-
mined for an unreported transfer in the past, apply the penalty from the
first day after timely notice is given; see Recipient Exception in this
item.
Recipient Timely notice must be given to LTC recipients and (BEM 106) waiver
Exception recipients before actually applying the penalty. Adequate notice must be
given to new applicants.

Uncompensated The uncompensated value of a divested resource is

Value
• The resource's cash or equity value.
• Minus any compensation received.
• The uncompensated value of a promissory note, loan, or mortgage
is the outstanding balance due on the “Baseline Date”
Spouses Sharing a A client can be penalized if he or his spouse divests. The penalty is
Penalty imposed on whichever spouse is in a Penalty Situation; see BEM 211,
MA Group Compostion. If both spouses are in a penalty situation, the
penalty period (or any remaining part) must be divided between them.
Example: Mr. and Mrs. Brown divested themselves of assets prior to

Mr. Brown entering a LTC facility and applying for Medicaid. Mr. Brown
is in LTC and under a divestment penalty for 24 months. When Mrs.
Brown enters the facility 6 months later, the remaining 18 months of Mr.
Brown’s penalty are divided between them, giving Mr.and Mrs. Brown
each 9 months of the penalty still to complete. If either Mr. or Mrs.
Brown die before they complete their penalty the remainder of their
penalty is transferred to their spouse.
Example: Mr. Brown enters a LTC facility and applies for Medicaid. He
is found eligible for Medicaid. During the presumed asset eligibility
period Mrs. Brown transfers Mr. Brown’s assets to herself and then
transfers the assets to her children (the first transaction is permitted the
second transaction is divestment). Mrs. Brown then enters the LTC
facility. Mrs. Brown incurs the investment penalty.
Resources Cancel a divestment penalty if either of the following occur before the
Returned penalty is in effect:
• All the transferred resources are returned and retained by the indi-
vidual.
• Fair market value is paid for the resources.
Recalculate the penalty period if either of the following occurs while the
penalty is in effect:
• All the transferred resources are returned.

• Full compensation is paid for the resources.
Use the same per diem rate originally used to calculate the penalty
period.
Once a divestment penalty is in effect, return of, or payment for,

resources cannot eliminate any portion of the penalty period already
past. However, you must recalculate the penalty period. The divestment
penalty ends on the later of the following:

• The end date of the new penalty period.

• The date the client notified you that the resources were returned or
paid for.
UNDUE HARDSHIP Waive the penalty if it creates undue hardship. Assume there is no
undue hardship unless you have evidence to the contrary.
Undue hardship exists when the client’s physician (M.D. or D.O.) says:
• Necessary medical care is not being provided, and

• The client needs treatment for an emergency condition.
A medical emergency exists when a delay in treatment may result in the

person's death or permanent impairment of the person's health.
A psychiatric emergency exists when immediate treatment is required

to prevent serious injury to the person or others.
See BEM 100, Policy Exception Request Procedure.
VERIFICATION
REQUIREMENTS Verification is not required when the client states he and his spouse
have not transferred resources unless:
• The client’s statement is unclear, inconsistent or conflicts with

known facts, or
• Existing information in the case record indicates divestment may

have occurred.
Verify the following to document divestment:
• Date of transfer.
• Fair market value or cash value.
• Uncompensated value.
Obtain a statement from the LTC or waiver client’s physician (M.D. or

D.O.) to verify:
• Undue hardship, or
• The client’s non-disabled child age 21 or older provided care that
would otherwise have required LTC or waiver services.
Verify the child's length of residence if a homestead was transferred to

a nondisabled child age 21 or older.
Verify the sibling's ownership interest and length of residence in the

homestead if a homestead was transferred to a sibling.
Verify disability and blindness according to BEM 260.

Verification Sources to verify transfers and the reasons for them include, but
Sources are not limited to, the following:
• Legal documents.
• Payment or tax records.
• Bills of sale.
• Court or attorney records.
• Correspondence regarding the transaction.
• Bank books or statements.
Sources to verify ownership interest in a homestead include, but

are not limited to:
• Deeds.
• Mortgages.
• Purchase agreements.
• Contracts.
• Other court or county records.
Sources to verify length of residence in a homestead include, but

are not limited to:
• Driver's license or State I.D.

• Income tax returns.
• Voter registration.
• Cancelled mail.
• Other type of I.D. which has both name and address.
• Written statement from one of the following who has knowledge of
length of residence in the homestead:
•• Physician.
•• Clergy.
•• Other professional.
LEVEL OF CARE
CODE LC code 56 indicates a divestment penalty.
EXHIBIT I - LIFE
EXPECTANCY
TABLE - FEMALE
FEMALE LIFE EXPECTENCY TABLE

Life Life Life
Age Expectancy Age Expectancy Age Expectancy
0 80.21 40 41.70 80 9.33
1 79.70 41 40.76 81 8.76
2 78.73 42 39.82 82 8.21
3 77.75 43 38.89 83 7.68

FEMALE LIFE EXPECTENCY TABLE

4 76.77 44 37.96 84 7.17
5 75.78 45 37.04 85 6.68
6 74.79 46 36.12 86 6.22
7 73.80 47 35.21 87 5.78
8 72.81 48 34.30 88 5.37
9 71.82 49 33.39 89 4.98
10 70.82 50 32.49 90 4.62
11 69.83 51 31.60 91 4.28
12 68.84 52 30.71 92 3.98
13 67.85 53 29.83 93 3.69
14 66.86 54 28.94 94 3.44
15 65.87 55 28.07 95 3.20
16 64.89 56 27.20 96 3.00
17 63.91 57 26.33 97 2.81
18 62.93 58 25.47 98 2.65
19 61.96 59 24.62 99 2.49
20 60.99 60 23.78 100 2.35
21 60.01 61 22.95 101 2.20
22 59.04 62 22.13 102 2.07
23 58.07 63 21.32 103 1.94
24 57.10 64 20.52 104 1.82
25 56.13 65 19.72 105 1.70
26 55.16 66 18.94 106 1.59
27 54.19 67 18.16 107 1.48
28 53.22 68 17.40 108 1.38
29 52.25 69 16.64 109 1.28
30 51.28 70 15.90 110 1.19
31 50.32 71 15.18 111 1.10
32 49.35 72 14.47 112 1.02
33 48.39 73 13.78 113 0.94
34 47.42 74 13.10 114 0.86
35 46.46 75 1243 115 0.79
36 45.50 76 11.78 116 0.72
37 44.55 77 11.14 117 0.66
38 43.59 78 10.52 118 0.61
39 42.65 79 9.92 119 0.56
Example: In January 2004, Mrs. Jay established a Medicaid trust and ordered her $500 per
month pension paid to the trust. She was 78 years old. The trustee cannot use the pension for
Mrs. Jay. Mrs. Jay transferred $63,120 ($500 X 12 months X 10.52 years).

EXHIBIT II - LIFE
EXPECTANCY
TABLE - MALE
MALE LIFE EXPECTANCY TABLE
Life Life Life
Age Expectancy Age Expectancy Age Expectancy
0 75.10 40 37.28 80 7.62
1 74.66 41 36.69 81 7.30
2 73.69 42 35.79 82 6.84
3 72.72 43 34.89 83 6.39
4 71.74 44 34.00 84 5.79
5 70.75 45 33.11 85 5.56
6 69.76 46 32.23 86 5.18
7 68.77 47 31.35 87 4.81
8 67.79 48 30.49 88 4.46
9 66.79 49 29.63 89 4.14
10 65.80 50 28.78 90 3.84
11 64.81 51 27.97 91 3.56
12 63.81 52 27.11 92 3.30
13 62.82 53 36.29 93 3.07
14 61.84 54 25.48 94 2.86
15 60.86 55 24.66 95 2.67
16 59.90 56 23.86 96 2.51
17 58.94 57 23.06 97 2.36
18 58.00 58 22.26 98 2.24
19 57.06 59 21.48 99 2.12
20 56.13 60 20.70 100 2.01
21 55.20 61 19.94 101 1.90
22 54.28 62 19.19 102 1.80
23 53.37 63 18.45 103 1.70
24 52.45 64 17.72 104 1.60
25 51.53 65 17.00 105 1.51
26 50.61 66 16.28 106 1.42
27 49.68 67 15.58 107 1.34
28 48.75 68 14.89 108 1.26
29 47.82 69 14.22 109 1.18
30 46.89 70 13.55 110 1.11
31 45.96 71 12.91 111 1.03
32 45.02 72 12.27 112 0.97
33 44.09 73 11.65 113 0.90
34 43.16 74 11.05 114 0.84
35 42.23 75 10.46 115 0.78
36 41.30 76 9.89 116 0.72
37 40.37 77 9.34 117 0.66

MALE LIFE EXPECTANCY TABLE

38 39.44 78 8.80 118 0.61
39 38.52 79 8.29 119 0.56
Example: In January 2004, Mr. Jay established a Medicaid trust and ordered his $500 per
month pension paid to the trust. He was 78 years old. The trustee cannot use the pension for
Mr. Jay. Mr. Jay transferred $52,800 ($500 X 12 months X 8.80 years).
LEGAL BASE MA
Social Security Act, Sections 1902(a)(18), 1917
JOINT POLICY
DEVELOPMENT
Medicaid, Adult Medical Program (AMP), Transitional Medical Assistance (TMA/TMA-Plus), and
Maternity Outpatient Medical Services (MOMS) policy has been developed jointly by the
Department of Community Health (DCH) and the Department of Human Services (DHS).

BEM 704 1 of 15 CDC PROVIDERS
PARENTAL CHOICE Clients have the right to choose the type of child care provider they wish
to use.
Individuals Who Clients are not eligible for CDC services for care provided by any of the
May Not Receive following persons:
Payment For Care
• A member of the CDC program group.
• The applicant/client.
• The applicant/client’s spouse who lives in the home.
• The parent of the child(ren) or a legal guardian who is not a mem-

ber of the CDC program group.
• A home help provider who is also providinges adult home help to

any CDC program group member, the CDC applicant or the CDC
applicant’s spouse forat the same periodtime in which child care is
being provided.
• Individuals on central registry determined to be responsible for the

neglect or abuse of a child(ren) or convicted of a crime listed in the
crime codes exhibit.
• A CDC program group member, applicant or applicant’s spouse

who owns in whole or part the child care center, group or family
child care home where the child care is provided.
INFORMATION
SHARED WITH
PROVIDERS Bridges sends a DHS-198, Child Development and Care Provider Cer-
tificate/Notice of Authorization, to the provider when:
• CDC services are authorized.

• An authorization changes.
• An authorization ends.
You may also share with the provider any of the basic information listed
below.
• A CDC application is:

• Filed.
• Withdrawn.
• Denied.
• The CDC case closed.
The DHS-1171, Assistance Application and the DHS-4583, Child Devel-

opment and Care (CDC) Application includes a release of information
allowing DHS to provide this information. All other provider concerns
should be directed to the client.

ELIGIBLE
PROVIDERS Care must be provided in Michigan by an eligible provider. Eligible pro-
viders are those monitored by DHS, Bureau of Children and Adult
Licensing (BCAL), or enrolled by DHS. Those monitored by the BCAL
are:
• Child care centers.

• Group child care homes.
• Family child care homes.
Another group of providers recognized by the department are unli-

censed providers (aides and relatives). These providers are enrolled by
DHS and are not required to be registered or licensed by BCAL.
Child Care Centers A child care center must be licensed by BCAL to be eligible to receive
payment from the department.
Group and Family A group child care home must be licensed by BCAL to be eligible to
Homes receive department payment.
A family child care home must be registered by BCAL to be eligible to

receive department payment.
Centers and Certain child care centers and homes which provide child care do not
Homes Exempt require licensure under 1973 PA 116. They are:
from Licensure
• Child care facilities where all parents are on site and readily avail-
able.
• Child care centers, group child care homes and family child care
homes located on federal land.
These centers and homes will not be enrolled automatically on Provider

Management unless they apply for a license and are registered or
licensed. If exempt centers or homes are not licensed, the local office
may enroll them on Provider Management after receiving appropriate
documentation from the facility or home.
Facilities With If the parents of all the children in care are on site and available during
Parents On-Site the complete time period that their children are in care at the facility, a
and Available DHS-2032B, Application for Provider ID Number for Child Care Facili-
ties with Parents On Site and Available, is to be sent to the child care
center or given to the client to take to the provider, unless the facility is
licensed by BCAL. The DHS-2032B is to be completed and signed by
the child care facility owner or administrator and returned to the special-
ist.
Centers and If the facility is a child care center, group child care home or family child
Homes On Federal care home located on federal land, for example a military installation or
Land Indian reservation, a DHS-2032A, Application for Provider ID Number

for Child Care Centers and Homes Located on Federal Land, is to be

sent to the facility or home or given to the client to take to the provider,
unless the facility is licensed by BCAL. The DHS-2032A is to be com-
pleted and signed by the military base commander or the head of the
Indian tribe and returned to the specialist.
DHS-2032A and Once the completed DHS-2032A or DHS-2032B is returned to the spe-
DHS-2032B cialist and the information is reviewed and completed, the provider may
be enrolled on Provider Management using the DHS-2351(X) see Pro-
vider Management. The effective date of enrollment should be the date
care began or the date the client became eligible for CDC, whichever is
latest. If it is questionable as to whether or not the facilities are indeed
exempt from licensure, they should be referred to BCAL at 517-373-
8300, for a determination.
To be eligible to receive DHS payment, child care centers and homes

who meet the above criteria to be exempt from licensure must:
• Complete a DHS-2032A or DHS-2032B.

• Have a valid tax ID or Social Security number.
• Be enrolled by the department.
A CDC provider inquiry is used to determine the status of these exempt

centers and homes. The service end date should be blank when the
provider is active in Provider Management.
Unlicensed There are two types of unlicensed providers.

Providers
• Aides:
• A person who is at least 18 years old and provides child care

in the home where the child lives. This would include an indi-
vidual who meets the relationship below.
• Relatives:
• Individuals who are at least 18 years old and provide the care
in their home, not the home of the child, and are related to the
child needing care by blood, marriage or adoption as a:
•• Grandparent/great-grandparent.
•• Aunt/great-aunt.
•• Uncle/great-uncle.
•• Sibling.
A divorce severs/terminates a relationship gained through marriage.
Note: Unlicensed providers (aide/relative) who are also licensed or

registered by BCAL as family or group child care homes, should be paid
as family or group child care homes, not as an unlicensed provider.

To determine if a provider is eligible for payment, use Bridges Inquiry. A

provider may be searched by provider number, name, service type or
license number. Bridges will display the provider begin and end dates.
Providers are active and eligible for payment if there is no end date
entry.
Unlicensed (Aide/ To begin the enrollment process, unlicensed aide and relative providers
Relative) Provider must: complete the DHS-220, Child Development and Care Unlicensed
Enrollment Provider Application. If the application is not completely filled out, it
Process must be returned to the specialist for completion prior to beginning the
enrollment process. The application certifies that the provider applicant
meets all of the requirements listed on the application.
Complete the DHS-220, Child Development and Care Unlicensed Pro-

vider Application, certifying that y the providermeet all of the require-
ments listed on the application. The provider applicant must provide t
The following verifications must be provided within 10 workdays of the

application receipt date:
• Proof of identity. Acceptable verifications are:
• Current valid driver’s license with a photo of the individual.
• Federal, state or local government issued identification card

with the same information included on a driver’s license.
• School-issued identification with a photograph.
• U.S. military card or draft record.
• Benefit award letter or other document indicating an individ-

ual’s receipt of benefits under a program that requires verifi-
cation of identity, for example, SSI, RSDI.
• A cross match with a federal or state governmental, public

assistance, law enforcement, or correction agency’s data
system, for example, the SSA cross match in Bridges.
• A U.S. passport.
• A Certification of Naturalization (Department of Homeland

Security, Forms N-550 or N-570).
• A Certificate of U.S. Citizenship (Forms N-560 or N-561).
• Military dependent’s identification card.
• Certificate of Degree of Indian Blood, or other U.S. American/

Indian/Alaska Native tribal document.

• U.S. Coast Guard Merchant Mariner card.
• Three or more corroborating documents such as marriage

licenses, divorce decrees, high school diplomas, college
degrees or employer ID cards.
• Proof of age.
• A copy of a valid Social Security card. If the Social Security card

states that it is not valid for employment, the unlicensed provider
applicant may not be enrolled.
Note: Once enrolled, a provider’s Social Security number can only be

changed by CDC Policy in central office. Local offices are able to make
provider name and address changes or corrections.
• Proof of residence and/or mailing address (at application). Accept-

able verifications are:
• Driver's license.
• Other ID which provides a name and address.
• Mortgage or rent receipt.
• Utility bill.
All required verifications must match the provider’s name listed on the
application and must be copied and maintained in the provider file.
Note: The DHS-4025, Child Care Provider Verification is not required

prior to an unlicensed provider’s enrollment. The completed form is
required prior to entering assignments for a particular provider and child
in Bridges.
Within 10 workdays of receiving the DHS-220 and all required verifica-

tions, the local office must:
• Review the provider application to determine if the provider appli-

cant has self reported a crime.
• Complete all background clearances (central registry, ICHAT,

OTIS, PSOR, NSOPR, FIL) on the provider and all adult house-
hold members at the provider’s address, regardless of where the
care is provided. Record results on the DHS-4661-P, Child Care
(CDC) Request For Criminal History and Central Registry Clear-
ance.
• Determine eligibility of the provider applicant.
• Enroll the provider in Provider Management; see the DHS Net for
the Provider Management training.

•• If the provider is eligible to be enrolled, Bridges will send a

DHS-4481-D, CDC Unlicensed Provider Confirmation, to the
provider. Once the provider is authorized to provide care,
Bridges will send the DHS-198 Child Development and Care
Provider Certificate/Notice of Authorization to the provider.
The client will receive a DHS-198-C, Child Development and
Care Client Certificate/Notice of Authorization.
Note: Providers are eligible for payment starting with the pay period
that holds the training date. Payments for any care provided prior to the
training date can not be authorized or paid.
•• If the provider is not eligible, Bridges will send the DHS-4807,

Notice of Child Development and Care Provider Ineligibility,
listing the appropriate closure reason. The local office will
need to manually generate a DHS-4807-C, Client Notice of
Child Development and Care Provider Ineligibility, from
Bridges to send to the client. The appropriate closure reason
should be entered on the DHS-4807-C.
If all required verifications are not received by the 10th workday from
the application receipt date:
• Enroll provider using the current date as the service begin and end
date.
• Enter the closure reason Failure to provide required verifica-

tions.
• Bridges will send the DHS-4807 to the provider.
• Manually generate a DHS-4807-C to notify the client.
• File the DHS-220 in the provider file.
If the client has questions about the denial of the provider applicant’s
enrollment, the client should be told to discuss the issue with the pro-
vider.
Service Begin Date If approved, the service begin date for an unlicensed eligible provider
(Effective Date of who is 18, would be the date of the client or provider application,
Enrollment) whichever is received first. If a provider’s service begin date needs to
be corrected, for example, he or she is providing care on a foster care
case, fax the client application and the DHS-220 to CDC Policy at 517-
241-8679 to have the service begin date modified. Include a cover
sheet with the specialist’s name and phone number.
Exception: If the unlicensed provider has been denied as a result of a

household member and the household member leaves the home, the

service begin date cannot be before the date the new DHS-220 is
received.
Background Before enrolling an unlicensed provider, complete a central registry

Clearances clearance and criminal history background clearances on the provider
and household members, age 18 and over, listed on the DHS-220. All
names used by the applicant/provider and adult members, such as
maiden or alias names as listed on the provider’s application, must be
cleared.
If a provider or household member has an out of state ID, a central reg-

istry clearance should be requested from the state where the ID was
issued.
Background clearances must also be completed whenever DHS

becomes aware that a new household member, age 18 and over, has
moved into the unlicensed provider’s home or when information is pro-
vided that an adult household member, age 18 and over, is on central
registry as a perpetrator, has a criminal conviction or pending criminal
charge.
Use the DHS-4661-P, Child Care (CDC) Request For Criminal History
and Central Registry Clearance to complete the following required
background clearances. File the completed form in the provider’s file.
• Central registry.
• ICHAT (Internet Criminal Access Tool).
• OTIS (Offender Tracking Information Service).
• PSOR (Public Sex Offender Registry).
• NSOPR (National Sex Offender Public Registry).
• FIL (Federal Inmate Locator).
Central Registry Complete a central registry check first. If a valid match is found, no fur-
(CR) Check At ther clearances (ICHAT, OTIS, PSOR, NSOPR, FIL) need to be com-
Provider pleted.
Application
Central Registry Deny the unlicensed provider’s enrollment if the central registry clear-
Match ance indicates a valid match.
• Complete the DHS-4661-P. File in the provider file.
• Destroy any other related information. Central registry information

is confidential and can not be released.
• Enroll the provider in Provider Management.
• Enter the current date as the service begin and end date.

• Enter the closure reason Revoked for payments - see BEM 704,
if the match is on the provider or Revoked, match on Household
Member - see BEM 704, if the match is on a household member.
• Bridges will send the DHS-4807 to the provider with the appropri-
ate information. A DHS-4807-C must be manually generated and
mailed to the client.
• File the DHS-220 in the provider file.
Notice to CPS If the central registry clearance indicates that due process has not been
given, send the DHS-835, Central Registry Clearance-No Perpetrator
Record Notice, to the Children’s Protective Service (CPS) supervisor in
the county where the CPS case is located or was substantiated. The
CPS unit will notify the person who the match was on, if notification has
not been given in the past. This notification will also include information
regarding the person’s due process rights.
The DHS-835 contains confidential information. Do not retain a copy of

the form.
Central Registry If a terminated provider is expunged from central registry, fax athe
Expungement request along with the new DHS-220, completed after the expungement
date, and all required enrollment verifications to CDC Policy in central
office at 517-241-8679. All background clearances will be completed
and if the provider is eligible, a service begin date will be entered the
first day of the pay period after the expungement date. The DHS-4481-
D, CDC Unlicensed Provider Confirmation, will serve as notification that
the provider is eligible. No other notices need to be mailed.
If the local office does not have a new DHS-220, completed after the
expungement date, the central registry to remove the closure reason
will remain in Provider Management until a new DHS-220 is received.
No notification will be sent. Include the provider’s name, ID number, the
reason for the request and a DHS-220 completed after the expunge-
ment date. If eligible, CDC Policy will remove the closure reason, run
the background clearances and enroll the provider with a service begin
date the first day of the pay period beginning after the expungement
date. The provider is not eligible to receive payments prior to this date.
No Central Complete all other background clearances if no match is found on cen-

Registry Match tral registry.
Criminal History Links have been added to the DHS-Net and OLM News & Tips Quick
Clearances Info Links for easy access to the criminal clearance sites.
• ICHAT: http://apps.michigan.gov/ICHAT. There is a $10.00 access

fee for the general public, however the fee is waived for govern-
ment departments.

• OTIS: http://www.state.mi.us/mdoc/asp/otis2.html. Click All in the

offender status box.
• PSOR: http://www.mipsor.state.mi.us
• NSOPR: http://www.nsopr.gov/ select national search.
• FIL: http://www.bop.gtov/iloc2/LocateInmate.jsp.
Note: When matching against the Federal Inmate Locator (FIL), no

crime codes will be listed. If there is an exact match on the name and
age, deny enrollment.
Finding Codes On the DHS Net, select Tools and then Quick Information Links to
External Web sites. The Crime Codes Exhibit can be located under
Criminal Information and Tracking. Enter the crime code. Be sure to
include the decimal point in the code, for example, 750.177.
No Criminal If no matches are found on any of the five registries and all other enroll-
History Match ment requirements are met, enroll the provider in Provider Manage-
ment. File the completed DHS-4661-P, the DHS-220 and all other
provider information in the provider file.
Criminal History If the provider/applicant self-discloses that he/she or a household mem-

Disclosure at ber, age 18 and over, has been convicted of a crime that is comparable
Application to a crime code in the exhibit, deny the enrollment. Follow the steps
listed under Criminal History Match.
Criminal History If a match is found on any of the clearances, compare the crime code
Match number of the conviction or pending criminal charge to the crime codes
exhibit. If the code is listed, the provider enrollment must be denied or
terminated.
• Deny the provider application or terminate the enrollment.
• Enroll provider in Provider Management. Use the current date as

the service begin and end date. Enter the appropriate closure rea-
son.
• Bridges will send the provider/applicant a DHS-4807 and a DHS-

759, Request for Administrative Review of the Denial or Termina-
tion of Provider Enrollment. The local office must manually gener-
ate a DHS-4807-C to send to the client.
• File the DHS-220, the DHS-4661-P, and the criminal history match
or matches in the provider file.
Note: If a match is received on a crime code that is not listed and it is

believed the crime could impact the health and safety of a child, email

the Policy-CDC-DHS Policy-CDC mailbox with all pertinent information.

A decision will be made as to whether this is a terminable crime.
If an unlicensed provider’s enrollment is denied or terminated as a

result of a criminal conviction or pending criminal charge on an adult
household member, and it is reported the adult no longer resides in the
home of the provider:
• Obtain a new DHS-220.
• Request verification such as a lease, ID, utility bill, etc., showing

the household member has a new address.
• Fax the DHS-220 and verifications to CDC Policy at 517-241-8679

with a cover sheet listing the specialist’s contact information and
fax number.
If it is determined that the provider is eligible for enrollment, CDC Policy

will remove the closure reason and contact the local office.
Prior to re-enrollment, the local office must complete the central registry
and criminal clearances; see Unlicensed (Aide/Relative) Provider
Enrollment Process.
The service begin date cannot be before the date of the new DHS-220.
No care can be authorized prior to the provider’s service begin date.
If the above conditions are not met, the provider is not eligible to receive
department payment and care must not be authorized.
ADMINISTRATIVE
REVIEW PROCESS Provider/provider applicants who have been denied or terminated as a
result of a criminal conviction, pending crime, or for failure to disclose a
charge or conviction by the local office, may request an administrative
review. The DHS-759 instructs providers to send all documentation to
the local DHS office where the denial or termination took place.
When a request for administrative review is received, the local office

should:
• Give the administrative review request to the local office person

who maintains the provider files.
• The provider file should be pulled and any information regarding

the provider’s denial or termination, such as the DHS-220, back-
ground clearances, provider identification, etc. should be attached
to the administrative review material.
• All administrative review material must either be faxed to CDC Pol-

icy in central office at 517-241-8679 or sent by ID mail to:

Child Development and Care

Central Office, Grand Tower
235 S. Grand Ave. Suite 1512
Lansing, MI
Central office will make a determination as to whether to approve or

deny the request.
CDC Policy will:
• Notify the provider/applicant of the approval or denial.

• Remove the closure reason, if approved.
The local office must obtain a new DHS-220. All background clearances
must also be completed. Prior to the local office assigning the provider
to a CDC case, a completed DHS-4025 must be obtained. The service
begin date to re-open the provider should be the day after the closure
date.
Note: Neither child care providers or CDC recipients are entitled to

DHS administrative hearings based on provider/applicant termination or
denial.
PROVIDER
MANAGEMENT All child care providers must be enrolled in Provider Management in
order to receive payment from the department.
Before enrolling a provider, complete a provider inquiry to see if the pro-

vider is already enrolled; see Provider Management training.
• If the provider is already enrolled as an active provider, use the

assigned provider ID number. Check to be sure that all household
information is correct by comparing the information on the DHS-
220 with the information on the Provider Associated Household
People screen in Provider Management. Be sure to update the
screen with any new household members.
• If the provider has an ID number, but is not currently active, re-

enroll the provider using that ID number.
• If the provider has never been enrolled, proceed with the new
enrollment.
Licensed child care centers, family and group child care homes are
enrolled on Bridges automatically at the time they are assigned a
license number. The local office cannot enroll these providers.
In instances where the local office identifies a licensed child care center,
family or group child care home that does not have a provider ID num-
ber, and one is needed in order to authorize payments to that provider,

the local office must send a fax to CDC Policy in central office at 517-
241-8679. Faxed requests must include the provider’s name and
license number and the specialist’s signature and phone number.
Unlicensed providers and centers and homes exempt from licensure

are enrolled by the local office.
Enrolled providers are assigned an ID number. This number is different

from the provider's tax ID or license number.
The provider ID number is used to authorize CDC payments. It is also

used by providers to bill for care provided to DHS-funded children.
To enroll a provider:
• Complete all required forms.

• Forward to the designated person for entry.
Automated Central For determining continued eligibility, automated clearances are done on
Office Background providers. The automated process does not replace or eliminate
Clearances the policy requirement to complete all required background clear-
ances prior to provider enrollment and at all other required times.
Central Registry This automated daily process matches central registry to all provider-
sand household members over the age of 18, who are on central regis-
try as perpetrators confirmed by CPS.
For confirmed matches, CDC Policy will:
• Close the provider and enter the closure reason Revoked for pay-
ments-see BEM 704., if the match is on the provider or Revoked,
match on Household Member-see BEM 704, if the match is on a
household member. Bridges will send a DHS-4807, Notice of Child
Development and Care Provider Ineligibility, to the provider, if the
provider is active and a DHS-4807-C, Client Notice of Child Devel-
opment and Care Provider Ineligibility to the client, if the provider
is associated with a CDC case.
• Send a completed DHS-835,Central Registry Clearance - No Per-

petrator Notification Record Notice, to the CPS supervisor in the
county where the CPS case was opened, if central registry does
not show that due process was given. CPS will then notify the pro-
vider of his/her due process rights regarding central registry
expungement.
Authorizations are automatically ended when the provider is closed.

The automated process will issue notices to the client and the provider
regarding the authorization end date.

The closure reason entered in Provider Management will prevent the

re-enrolling of providers closed by this process.
ICHAT, OTIS These monthly automated processes match providers and household
PSOR members over the age of 18. These are monthly processes.
For confirmed matches CDC Policy will:
• Verify the information is correct.
• Close the provider and enter the appropriate closure reason.
• If the provider is active, Bridges will send the DHS-4807 and the
DHS-759 to the provider and the 4807-C to the client, if the pro-
vider is associated with a CDC case. For ICHAT matches, a notice
that includes the state identification number (SID) will also be sent
to the provider.
• Specialists should help affected families make new child care

arrangements. If clients need assistance in locating a licensed or
registered child care provider, they should be referred to the Great
Start Regional Child Care Resource Center serving their county.
Clients can use the 1-877-614-7328 number to reach the resource
centers.
Denial/Termination The department must deny or terminate the enrollment of an unli-

Of Unlicensed censed (aide/relative) provider if:
(Aide/Relative)
Providers • The provider misrepresents, falsifies or fails to abide by the condi-
tions as stated on the DHS-220, the DHS-4025 or in the Child
Development and Care (CDC) Handbook.
• The provider answers No to the question regarding convictions or

pending criminal charges on the DHS-220-A/R and it is deter-
mined that there is a match, regardless of whether the conviction
or charge is listed in the crime codes exhibit, on themselves or an
adult household member. (Follow the process in Criminal History
Match). Enter the closure reason CDC not eligible due to failure
to disclose criminal background on provider, if the match is on
the provider or CDC not eligible due to failure to disclose crim-
inal background on household member, if match is on a house-
hold member.
• Required verifications are not received within 10 workdays of the

application receipt date. Enter the closure reason Failure to pro-
vide required verifications.
Provider Closures An unlicensed provider’s service is ended in Provider Management if:

• The unlicensed provider has not received a payment for four con-
secutive months. Closure reason will read No activity/payments
for this provider service type.
• The unlicensed provider has not completed the basic training

requirement with four months. Closure reason will read Failure to
complete basic training requirement. The provider does not
comply with a request by the Central Reconciliation Unit for time
and attendance records. Closure reason will read Failed to
respond to CRU. Call CRU at 866-990-3227 with questions.The
provider does not maintain time and attendance records as deter-
mined by the Central Reconciliation Unit. Closure reason will read
Failed to maintain Time and Attendance records. Call CRU at
866-990-3227.
• Undeliverable mail is received. A closure reason Unable to locate

provider will be entered in Provider Management.
Note: Undeliverable mail for regulated providers will be forwarded

to BCAL for processing. This process should also be followed
when undeliverable provider mail is received in the local office and
a new address has not been reported.
• Provider fails to submit records requested by the Office of Inspec-

tor General. A closure reason CDC not eligible due to Office of
Inspector General review will be entered in Provider Manage-
ment.
Note: These closure reasons will not prevent local offices from re-
enrolling a provider, however the provider will be required to complete a
new DHS-220, and all background clearances must be completed prior
to enrollment. A new DHS-4025 is required prior to establishing pro-
vider assignments.
Provider Address It is critical that provider address changes be made promptly to avoid
Changes unnecessary closures and disruptions in child care services. When
local offices receive a request for an address change from an aide or
relative provider, follow policy in BAM 220 regarding acting on changes.
Notification of When a provider’s enrollment is terminated, Bridges will automatically

Termination send the DHS-4807 to the provider and the DHS-4807-C to the client, (if
there is an active assignment) listing the reason for termination.
Suspected Child In instances where there is reasonable cause to suspect child abuse or
Abuse or Neglect neglect in a child care setting, make a referral to CPS. CPS will make a
determination of whether the CDC children are at risk, as well as the
child care provider’s own children. If substantiated, Bridges will send

the DHS-4807/DHS-4807-C to notify the provider and the client of ter-

mination.
If the client has questions about the termination of the aide/relative’s

enrollment, he/she should be told to discuss the issue with the provider.
Reopening an To reopen an unlicensed provider follow the process in Service Begin

Unlicensed Date (Effective Date of Enrollment)., Use the provider’s previous pro-
Provider vider ID number when reopening a provider enrollment.
Note: If the provider is terminated in error, do not require new forms.
Great Start Clients who request assistance in finding a licensed or registered pro-
Connect vider should be referred to Great Start Connect, the online Web-based
early learning resource site. The Web address for Great Start Connect
is www.greatstartconnect.com. All active licensed and registered pro-
viders are searchable. If additional assistance is needed, clients can be
referred to 1-877-614-7328, to reach the Great Start Regional Child
Care Resource Center serving their county. Resource centers can pro-
vide personal consultation to families in need of child care.
LEGAL BASE Child Care and Development Block Grant of 1990, PL 101-508, 42 USC
9858 et. seq.
45 CFR Parts 98 and 99
Social Security Act, as amended.Title IVA (42 USC 601 et seq.); Title
IVE (42 USC 670 et seq.); Title XX (42 USC 1397 et seq.)
Child Care Organizations Act, 1973 PA 116, as amended, MCL 722.111
et seq.
R400.5001 - 400.5015, MAC


Michigan Final Department Clearance Review (FDR) For April 2011 Bridges Medicaid Policy

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Michigan Final Department Clearance Review (FDR) For April 2011 Bridges Medicaid Policy

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DEPARTMENTAL CLEARANCE/FINAL DEPARTMENTAL REVIEW Author: Bridget Heffron & Fidelia Notman

Michigan Department of Human Services

THIS SECTION COMPLETED BY RECEIVER

DHS-311 (Rev. 5-09) Previous editions obsolete. MS Word

EFFECTIVE April 1, 2011.

Subject(s) 1. Medicaid (MA).

1) MEDICAID BEM 124, Plan First! Family Planning Program

An ex parte review is not required before Medicaid closures when there

Reason: Not part of lawsuit settlement.

BEM 174, Freedom to Work (FTW)

FTW clients requiring a disability determination from MRT must be

Reason: This language had been removed during the transition to

BEM 220, Residence

Residency continues for an individual who is temporarily absent from

Reason: Clarification for local offices.

BEM 400, Assets

Jointly owned real property is only excludable if it creates a hardship for

In SSI related MA a divestment has occurred if joint owners are added

Reason: To bring policy in line with federal guidelines.

Life Insurance Value for SSI-Related MA

A life insurance policy is an asset if it can generate a cash surrender

Issued: STATE OF MICHIGAN

Reason: Clarification of current policy as well as updates on new types

BEM 401, Trusts - MA

A trust is not a Medicaid trust if it contains the resources of a person

Reason: To bring policy in line with federal law.

BEM 405, MA Divestment

Full implementation of the Deficit Reduction Act (DRA) now creates a

Reason: DRA is now in full force for MA divestment policy.

2) CDC BEM 704, CDC Providers

Individuals Who May Not Receive Payment For Care

Unlicensed (AIDE/Relative) Provider Enrollment Process

Central Registry Expungement

The procedure for a central registry expungement has been revised.

The automated daily central registry clearances do not include house-

Individuals Who May Not Receive Payment For Care

The applicant/client has been added.

Reason: Policy clarification.

The Plan First! Family Planning Program is a health coverage program

Plan First! will enable DCH to provide family planning services to

• 19-44 years of age, and

• Not currently covered by Medicaid, including deductible cases, or

• Not covered by any other comprehensive health insurance.

• Have family income at or below 185% of the federal poverty level,

• Residents of Michigan, meet residency requirements, and

• Meet Medicaid citizenship requirements.

MSA-1582’s received in the local office should be forwarded to the Plan

Applications for Plan First! may be submitted to:

Applications may be faxed to Plan First! at 517-324-0710.

Applications are also accepted online at Healthcare4mi.com.

BRIDGES ELIGIBILITY MANUAL STATE OF MICHIGAN

QUESTIONS Refer questions regarding Plan First! to 1-800-642-3195. For persons

The Plan First! Unit is responsible for:

• Completing a Bridges clearance to determine if the client has a

• Issuing a denial letter and sending a new Plan First! application to

• Evaluating the applicant for other Medicaid programs based on the

• Registering the application in Bridges and completing an eligibility

• Sending a DHS-3503, Verification Checklist, when additional infor-

• Sending notices to the client regarding her eligibility.

• Maintaining the case record, including processing an address

BRIDGES ELIGIBILITY MANUAL STATE OF MICHIGAN

Age The woman must be age 19 through 44.

Persons whose alien status limits them to emergency services Medicaid