Medicaid Policy
Medicaid Policy
Effective Date: January 1, 2014
No Previous Policy
Apply the burial fund exclusion separately to each individual when funds have been set aside and clearly designated for his or her burial.
1. The maximum burial fund exclusion is $1500.
For Aged, Blind and Disabled programs including Medicare Cost-Sharing, exclude from resources up to $1500 each in clearly designated burial funds set aside for the burial expenses of the individual and the individual’s spouse.
For Family Medically Needy programs, exclude from resources up to $1500 in clearly designated burial funds set aside for each eligible household member.
When deeming assets from an ineligible spouse or ineligible parent, exclude burial funds the deeming individual owns that are set aside for the burial expenses of the ineligible spouse, the ineligible parent and spouse, or the eligible individual.
Use the maximum burial fund exclusion when the individual does not have other arrangements to pay burial expenses such as irrevocable burial trusts, irrevocable pre-need funeral contracts or excluded life insurance policies or burial insurance.
If the individual has other arrangements to pay for burial, determine the remaining amount of the burial fund exclusion that would be available for that individual, if any. (See #2 below.) Do not deduct the value of fully-paid burial spaces from the $1500 burial fund exclusion.
2. Available amount of burial fund exclusion
The $1500 burial fund exclusion for each individual must be reduced by other burial resources the individual has that are not burial funds.
a. The available amount of the burial fund exclusion is the difference between the $1500 maximum exclusion amount and:
b. The burial fund exclusion that remains after these deductions can then be applied to designated burial funds of the individual or individual’s spouse, or family member included in a family-related Medicaid household.
3. Exclusion of Interest Accrued on Burial Funds
a. Exclude interest or other increase in value paid on excluded burial funds if the interest is left to accumulate.
b. To be excluded, the interest must be paid while the burial funds are excluded.
c. When an applicant reports burial funds that were designated and separated from non-burial related assets before the date of application, exclude the interest earned on the excluded part of the burial funds. Exclude the interest earned from the date the funds were designated and separated from non-burial related assets.
d. If an individual has non-excluded funds commingled with excluded funds, see 592-6 to decide how much interest to exclude. Interest earned on non-excluded funds is a countable resource and may also count as income. (415-7)