Wisconsin Legislature: DHS 103.063(3)(c)1.

1. A person shall register each independence account with the county agency. A person shall re-register the independence account with the county agency if the financial institution or other information for the independence account changes.

2. A medicaid purchase plan recipient shall complete an account registration form to register the account as an independence account.

3. The applicant or recipient shall report any changes in personal or financial status that may affect his or her eligibility for medical assistance to the county agency as described in s. DHS 104.02 (6).

4. For all registered independence accounts that are not retirement or pension accounts, the date of account creation may be no earlier than the date a medicaid purchase plan recipient is determined eligible for medical assistance under this section. For all registered independence accounts that are not retirement or pension accounts, the funds in the independence account shall be held separate from a recipient’s non-exempt assets.

History: Cr. Register, February, 1986, No. 362, eff. 3-1-86; am. (1) (d), r. and recr. (1) (e), Register, January, 1987, No. 373, eff. 2-1-87; am. (6), cr. (14), Register, July, 1989, No. 403, eff. 8-1-89; am. (2) (b), cr. (2) (bm), r. and recr. (2) (c), Register, December, 1990, No. 420, eff. 1-1-91; am. (1) (b) 1., r. and recr. (4) (b), Register, March, 1993, No. 447, eff. 4-1-93; cr. (15), Register, November, 2000, No. 539, eff. 12-1-00; correction in (15) (b) 3. made under s. 13.92 (4) (b) 7., Stats., Register December 2008 No. 636; correction in (7) (a) 2. made under s. 13.92 (4) (b) 7., Stats., Register June 2017 No. 738; CR 20-068: am. (2) (c) 1. a. to c. Register December 2021 No. 792, eff. 1-1-22; CR 23-046: am. (15) (a) 2. Register April 2024 No. 820, eff. 5-1-24.

DHS 103.063 Divestment prior to August 9, 1989.

(1) Applicability. This section applies to all applicants for MA and recipients of MA who disposed of a resource at less than fair market value prior to August 9, 1989 and to all inter-spousal transfers occurring before October 1, 1989. Section DHS 103.065 applies to all institutionalized applicants and recipients who divest on or after August 9, 1989, except for inter-spousal transfers occurring before October 1, 1989.

(1m) Purpose. This section implements s. 49.45 (17), 1987 Stats., which makes an applicant for or recipient of MA ineligible when the applicant or recipient disposed of a resource at less than fair market value within 2 years before or at any time after his or her most recent application for MA or any review of eligibility for MA. Section 49.45 (17) (d), 1987 Stats., is specifically concerned with an applicant for or recipient of MA who resides as an inpatient in a skilled nursing facility (SNF), intermediate care facility (ICF) or inpatient psychiatric facility and who disposed of homestead property at any time during or after the 2 year period prior to the date of the most recent application or any review of eligibility.

(2) Divestment of non-homestead property.

(a) Amount of divestment. For any person who disposed of a resource, except a homestead or other exempt resource, at less than fair market value within 2 years before or at any time after his or her most recent application for MA, or any review of eligibility, the agency shall determine the amount of the divestment in the following manner:

1. If the compensation received is less than net market value, the difference between the compensation received and the net market value is the divested amount and shall be considered an asset.

2. If the divested amount plus other nonexempt assets are equal to or less than the appropriate assets limit, the divestment shall not be considered a bar to eligibility.

3. If the divested amount plus the other nonexempt assets are greater than the appropriate assets limit, the excess over this limit shall be the amount of divestment to be expended for maintenance needs and medical care.

(b) Divestment as a barrier to eligibility.

1. Divestment by any person within 2 years before or at any time after his or her most recent application for MA or any review of eligibility shall, unless shown to the contrary, be presumed to have been made in contemplation of receiving MA. Divestment bars eligibility for MA except as provided in subds. 2. and 3. and par. (c).

2. To rebut the presumption that divestment was made in contemplation of seeking aid, the applicant shall furnish convincing evidence to establish that the transaction was exclusively for some other purpose. For example, the applicant may rebut the presumption that the divestment was done in contemplation of receiving aid by showing by convincing evidence that at the time of divesting the applicant had provided for future maintenance needs and medical care.

3. Divestment shall only be considered a barrier to eligibility when the net market value of all the resources disposed of exceeds the medically needy asset levels in s. 49.47 (4) (b) 3., Stats.

4. Division of resources as part of a divorce or separation action, the loss of a resource due to foreclosure or the repossession of a resource due to failure to meet payments is not divestment.

1. Divestment is no longer a barrier to MA eligibility for persons who are determined to have divested non-homestead property:

a. If the divested amount is $12,000 or less, when the sum of the divestment has been expended for maintenance needs and medical care of the applicant or recipient or when 2 years have elapsed since the date of divestment, whichever occurs first; or,

b. If the divested amount exceeds $12,000, when the entire sum of the divestment has been expended for maintenance needs and medical care of the applicant or recipient.

2. The amount expended for maintenance needs and medical care of the applicant or recipient shall be calculated monthly, as follows:

a. For a non-institutionalized person, the expended amount is the medical care expenses for the person plus the appropriate medically needy income limit for either AFDC or SSI, depending upon which program the person would be eligible for under MA, were it not for the divestment; and

b. For a person institutionalized in a SNF, ICF or inpatient psychiatric facility, the expended amount is the total cost of the institutional care.

(3) Divestment of homestead property.

(a) Applicability. Divestment by any person of his or her homestead property is a barrier to eligibility only if he or she is a resident of an SNF, ICF or inpatient psychiatric facility.

(b) Amount of divestment. A person who is a resident of an SNF, ICF or inpatient psychiatric facility who disposed of his or her homestead for less than fair market value on or after July 2, 1983, but within 2 years before or at any time after his or her most recent application for MA or any review of his or her eligibility for MA, shall have the amount of divestment determined in the same manner as in sub. (2) (a).

1. Divestment of a homestead by any person residing as an inpatient in an SNF, ICF or inpatient psychiatric facility within 2 years prior to the date of his or her most recent application for MA or any review of his or her eligibility for MA, shall, unless shown to the contrary, be presumed to have been made in contemplation of receiving MA. Divestment bars eligibility for MA except as provided in subds. 2. and 3. and par. (d).

2. To rebut the presumption that divestment was made in contemplation of receiving aid, the applicant shall furnish convincing evidence to establish that the transaction was exclusively for some other purpose. For example, the applicant may rebut the presumption that the divestment was done in contemplation of receiving aid by showing by convincing evidence that, at the time of divesting, the applicant had provided for his or her future maintenance needs and medical care.

3. Divestment shall only be considered a barrier to eligibility when the net market value of all the resources disposed of exceeds the medically needy asset levels in s. 49.47 (4) (b) 3., Stats.

4. Divestment does not occur in cases of division of resources as part of a divorce or separation action, the loss of a resource due to foreclosure or the repossession of a resource due to failure to meet payments.

(d) Removing divestment as a barrier to eligibility.

1. Divestment of a homestead is no longer a barrier to eligibility for institutionalized persons:

a. If the amount of divestment to be expended for maintenance needs and medical care is less than the average MA expenditures for 24 months of care in an SNF, when the entire amount of the divestment is expended for this care, or 2 years has elapsed since the date of the divestment, whichever occurs first; or

b. If the amount of divestment to be expended for maintenance needs and medical care is greater than the average MA expenditure for 24 months of care in an SNF, when the entire amount of the divestment has been expended.

2. Expended amounts shall be determined, as long as the person is institutionalized, by using the average monthly MA expenditure, statewide, for care provided in an SNF.

3. An individual who is an inpatient in a SNF, ICF or inpatient psychiatric facility who has been determined to have divested a homestead, may be found eligible if:

a. It is shown to the satisfaction of the department that the individual can reasonably be expected to be discharged from the medical institution and return to that homestead;

b. The title to the homestead was transferred to the individual’s spouse or child who is under age 21 or is blind or totally and permanently disabled according to a determination made by the department’s bureau of social security disability insurance;

c. It is shown to the satisfaction of the department that the individual intended to dispose of the homestead either at fair market value or for other valuable consideration; or

d. It is determined by the department that the denial of eligibility would work undue hardship on the individual.

History: Cr. Register, February, 1986, No. 362, eff. 3-1-86; renum. from HSS 103.02 and am., cr. (1), Register, April, 1990, No. 412, eff. 5-1-90.

DHS 103.065 Divestment on or after August 9, 1989.

(1) Applicability. This section applies to all institutionalized applicants for and recipients of MA who dispose of resources at less than fair market value on or after August 9, 1989, except for inter-spousal transfers occurring before October 1, 1989, and to all institutionalized applicants for and recipients of MA whose spouse disposes of resources at less than fair market value on or after July 1, 1990. Section DHS 103.063 applies to all applicants and recipients who divested before August 9, 1989 and to inter-spousal transfers occurring before October 1, 1989.

(2) Purpose. This section implements s. 49.453, Stats., which provides for a period of restricted MA coverage when an individual who is institutionalized or becomes institutionalized, or the individual’s spouse, disposes of resources at less than fair market value.

(3) Definitions. In this section:

(a) “Annuity” means a written contract under which, in return for payment of a premium or premiums, an individual or individuals have the right to receive fixed, periodic payments for life or up to a fixed point in time.

(b) “Community spouse” means a person who is legally married as recognized under state law to an institutionalized individual but is not himself or herself an institutionalized individual.

(c) “Expected value of the benefit” means the amount that an irrevocable annuity will pay to a primary annuitant or to joint annuitants during his or her expected lifetime.

(d) “Institutionalized individual” means an applicant or recipient who is an inpatient in an SNF or ICF, an inpatient in a medical institution and with respect to whom payment is made based on a level of care provided in an SNF or ICF, or receiving home and community-based care MA services under ss. 49.46 and 49.47, Stats.

(e) “Joint annuitants” means the institutionalized individual and his or her spouse named as the payees under an annuity.

(f) “Medical assistance” or “MA” means payment for services provided to a resident of an SNF or ICF under s. DHS 107.09 (2) and (4) (a), payment to a medical institution as defined under 42 CFR 435.1009 for care based on a level of care provided in an SNF or ICF, or payment for services provided under a home and community-based care waiver program authorized under 42 USC 1396n (c).

(g) “Medical assistance card services” means the services covered under ch. DHS 107, except for services reimbursed as institutional care, as defined by s. DHS 107.09 (2) and (4) (a), services received in an SNF or ICF or a medical institution and services reimbursed under a home and community-based care waiver program authorized under 42 USC 1396n (c).

(h) “MA eligibility handbook” means the medical assistance program handbook issued by the department’s division of economic support for use by agencies in determining eligibility for MA.

(i) “Primary annuitant” means the first individual, which may be either the institutionalized individual or his or her spouse, to receive payment from an annuity.

(j) “Resource” has the meaning given in 42 USC 1382b, except that the home, as defined in s. DHS 101.03 (75), is a nonexempt resource.

(4) Divestment.

(a) Divestment resulting in ineligibility. An institutionalized individual or someone acting on behalf of that individual who disposes of resources at less than fair market value within 30 months immediately before or at any time after the individual becomes institutionalized if the individual is receiving MA on the date he or she becomes institutionalized or, if the individual is not receiving MA on that date, within 30 months immediately before or at any time after the date the individual applies for MA while institutionalized, shall be determined to have divested. A divestment results in ineligibility for MA for the institutionalized individual unless made to an exempt party under par. (b) or (c) or when one of the circumstances in par. (d) exist. An institutionalized individual may also be determined ineligible for MA if his or her spouse disposes of resources at less than fair market value on or after July 1, 1990. In this paragraph, “receiving” means entitled to receive as well as actually receiving, in the same way that “recipient” as defined in s. DHS 101.03 (150) means a person who is entitled to receive benefits under MA as defined under s. DHS 101.03 (95).

Note: The department advises that when the transfer for less than fair market value has been made by the spouse of the institutionalized applicant or recipient, the determination of whether or not the transfer will be treated as a divestment will be made pursuant to both the divestment provisions under s. 49.453, Stats., and the spousal impoverishment prevention provisions under s. 49.455, Stats.

(am) Transfer of resources within same month. In determining the amount of the divestment to be satisfied, the agency shall consider all transfers by either the institutionalized individual or his or her community spouse at less than fair market value that occur within a calendar month as one divestment.

(at) Transfer of resources to an irrevocable annuity on or after October 1, 1993.

1. Whenever an institutionalized individual or his or her spouse, or another person acting on behalf of the institutionalized individual or his or her spouse, transfers funds on or after October 1, 1993, to an irrevocable annuity in an amount that exceeds the expected value of the benefit, the institutionalized individual or his or her spouse shall be determined to have divested.

2. The agency shall determine the amount of the divestment under subd. 1. by:

a. Determining the life expectancy of the primary annuitant or joint annuitants using the life expectancy tables included in the MA eligibility handbook. Table I shows the age at which the male or female institutionalized individual chose the settlement option for annuitization, life expectancy for an individual of that age, and estimated remaining years of life based on the age at which the institutionalized individual chose the settlement option. Table II shows the ages at which both the male and female joint annuitants chose the settlement option for annuitization, life expectancy for each individual of that individual’s age, and estimated remaining years of life based on the ages at which the joint annuitants chose this settlement option; and

b. Adding together the amount of all the payments from the irrevocable annuity scheduled to be made after the month in which the primary annuitant’s age or joint annuitants’ ages exceed the estimated remaining years of life. The divested amount is the sum of all the payments to be made from the irrevocable annuity after the month in which the primary annuitant’s age or joint annuitants’ ages exceed the estimated remaining years of life.

Note: For a copy of the life expectancy tables included in the MA eligibility handbook, write the Bureau of Health Information Policy, Division of Public Health, P.O. Box 2659, Madison, WI 53701-2659.

3. If the agency receives a physician’s statement which states that the primary annuitant or joint annuitant had a diagnosed medical condition which would shorten his or her life expectancy and that the medical condition was diagnosed before the institutionalized individual, his or her spouse, or someone acting on behalf of the institutionalized individual or his or her spouse transferred funds to an irrevocable annuity, the agency shall determine the expected value of the benefits based upon the physician’s statement instead of using a life expectancy table as provided under subd. 2.

(b) Permitted divestment to an exempt party — homestead property. Transfer of homestead property at less than fair market value is not divestment resulting in ineligibility under this section if the individual transferred title to the homestead property to:

1. The spouse of the institutionalized individual on or after October 1, 1989;

2. A child of the institutionalized individual who is under age 21 or who meets the SSI definition of total and permanent disability or blindness under 42 USC 1382c;

3. A sibling of the institutionalized individual who has an equity interest in the homestead and who was residing in the institutionalized individual’s home for at least one year immediately before the date the individual became an institutionalized individual. In this subdivision, “equity interest” means ownership interest in a homestead by one or more persons who pay or have paid all or a portion of mortgage or land contract payments, expenses for upkeep and repair or payment of real estate taxes. The institutionalized individual shall provide documentation to verify the sibling’s equity interest in the homestead; or

4. The child, other than a child described in subd. 2., of the institutionalized individual who was residing in the institutionalized individual’s home for a period of at least 2 years immediately before the date the individual became an institutionalized individual and who provided care to the institutionalized individual which permitted him or her to reside at home rather than in an SNF, ICF or medical institution which receives payment based on a level of care provided in an SNF or ICF. The institutionalized individual shall provide a notarized statement to the agency from his or her physician or another person or persons who have personal knowledge of the living circumstances of the institutionalized individual stating that the individual was able to remain in his or her home because of the care provided by the child. A notarized statement only from the child does not satisfy the requirements of this subdivision.

(c) Permitted divestment on or after August 9, 1989, but before July 1, 1990, to an exempt party — non-homestead property. For transfers that occurred on or after August 9, 1989, but before July 1, 1990, transfer of a non-homestead resource at less than fair market value is not divestment resulting in ineligibility under this section if the individual transferred the resource to one of the following individuals:

1. Beginning October 1, 1989, to the community spouse or to another individual for the sole benefit of the community spouse after the individual became an institutionalized individual;

2. To a minor or adult child of the institutionalized individual who meets the SSI definition of total and permanent disability or blindness under 42 USC 1382c; or

3. Beginning October 1, 1989, to the individual’s spouse or to another person for the sole benefit of the individual’s spouse before the individual became an institutionalized individual. Such a transfer is not considered divestment resulting in ineligibility for as long as the individual’s spouse does not transfer the resource to another person other than his or her spouse at less than fair market value. The individual’s spouse shall report any transfer of the resource to the agency within 10 days after the transfer is made as required under s. 49.455, Stats. Failure of the institutionalized individual’s spouse to report the transfer may be fraud under s. 946.91 (2) (c), Stats.

(cm) Permitted divestment on or after July 1, 1990, to an exempt party — non-homestead property. Transfer of a non-homestead resource at less than fair market value on or after July 1, 1990, is not divestment resulting in ineligibility under this section to the extent that the resource was transferred:

1. To or from the individual’s spouse or to another individual for the sole benefit of the spouse; or

2. To a minor or adult child of the institutionalized individual who meets the SSI definition of total and permanent disability or blindness under 42 USC 1382c.

(d) Circumstances under which divestment is not a barrier to eligibility. An institutionalized individual who has been determined to have made a prohibited divestment under this section shall be found ineligible for MA as defined under s. DHS 101.03 (95) unless:

1. The transfer of property occurred as the result of a division of resources as part of a divorce or separation action, the loss of a resource due to foreclosure or the repossession of a resource due to failure to meet payments; or

2. It is shown to the satisfaction of the department that one of the following occurred:

a. The individual intended to dispose of the resource either at fair market value or for other valuable consideration;

b. The resource was transferred exclusively for some purpose other than to become eligible for MA;

c. The ownership of the divested property was returned to the individual who originally disposed of it; or

d. The denial or termination of eligibility would work an undue hardship. In this subparagraph, “undue hardship” means that a serious impairment to the institutionalized individual’s immediate health status exists.

(5) Determining the period of ineligibility. An institutionalized individual who has made a prohibited divestment under this section resulting in ineligibility or whose spouse has made a divestment under this section resulting in ineligibility on or after July 1, 1990, as determined by the agency, without a condition under sub. (4) (d) existing, shall be ineligible for MA as defined in this section for, beginning with the month of divestment, the lesser of: