1030.030.00 Annuities

1030.030.20.10 Annuities That Were Purchased and Began Making Payments on or After August 28, 2007

IM-26 March 15, 2012IM-106 November 8, 2007

The income stream of an annuity from which a MHABD applicant/participant receives regular payments is EXCLUDED as an available resource, if the annuity meets all four of the following requirements:

  1. is actuarially sound as measured against the Period Life table published by the Office of the Chief Actuary of the Social Security Administration based on the life expectance of the annuitant
  2. provides equal or nearly equal payments for the duration of the annuity and excludes balloon-style final payments
  3. names the State of Missouri as primary beneficiary or as secondary or contingent beneficiary after the spouse or minor or disabled child and is named as primary beneficiary if the spouse, minor or disabled child, or a representative of such child disposes of any remainder for less than fair market value to ensure payment up to the total of MO HealthNet expenditures for the individual if the individual predeceases the duration of the annuity, AND
  4. names and pays the MO HealthNet applicant/participant as the annuitant

If all four requirements are not met, the income stream of the annuity is considered as an available resource to the MO HealthNet applicant/participant.

Budgeting of income from the annuity must be evaluated. Use policy in 0815.030.05 Determining Adjusted Gross Income to determine whether or not income should be counted.

EXAMPLE: Emily M bought a $40,000 irrevocable annuity on September 25, 2007. Emily is the owner of the annuity and the annuitant. The annuity is actuarially sound. It provides equal payments and names the State of Missouri as primary beneficiary. Emily applied for MO HealthNet for the Aged, Blind, and Disabled. Because the annuity is irrevocable, it has no CSV. Because the annuity meets the requirements listed above, the income stream from the annuity is not an available resource to Emily. In this situation, the income from the annuity is considered countable unearned income to Emily.