Annuities; Not OSIPM
(1)For the purposes of this rule:
(a)“Actuarially sound” means commercial annuities (see subsection (d) of this section) that pay principal and interest out in equal monthly installments over the actuarial life expectancy of the annuitant, with no deferral and no balloon payments. For purposes of this definition, the actuarial life expectancy is established by the Periodic Life Table of the Office of the Chief Actuary of the Social Security Administration and, for transactions (including the purchase of an annuity) occurring on or after July 1, 2008, the payout period must be within three months of the actuarial life expectancy, measured at the time of purchase.
(b)An annuity does not include benefits that are set up and accrued in a regularly funded retirement account while an individual is working, whether maintained in the original account or used to purchase an annuity, if the Internal Revenue Service recognizes the account as dedicated to retirement or pension purposes. (The treatment of pension and retirement plans is covered in OAR 461-145-0380 (Pension and Retirement Plans).)
(c)“Child” means a biological or adoptive child who is:
(A)Under age 21; or
(B)Any age and meets the Social Security Administration criteria for blindness or disability.
(d)“Commercial annuities” means contracts or agreements (not related to employment) by which an individual receives annuitized payments on an investment for a lifetime or specified number of years.
(e)“All programs” does not include the OSIPM program. See OAR 461-145-0022 (Annuities; OSIPM) for the OSIPM program. This rule does not apply to the OSIPM program.
(2)In all programs except QMB-BAS, QMB-SMB, and QMB-SMF, an annuity is counted as a resource if:
(a)The annuity does not make regular payments for a lifetime or specified number of years; or
(b)The annuity does not qualify for exclusion as a resource under subsection (4)(b)(C) of this rule.
(3)If an annuity is a countable (see OAR 461-001-0000 (Definitions for Chapter 461)) resource under this rule, the cash value is equal to the amount of money used to establish the annuity, plus any additional payments used to fund the annuity, plus any earnings, minus any regular payments already received, minus any early withdrawals, and minus any surrender fees.
(4)Commercial annuities and payments from such annuities are counted as follows:
(a)In all programs except the QMB-DW program, annuity payments are counted as unearned income to the payee.
(b)In the QMB-DW program:
(A)For an annuity purchased prior to January 1, 2006, the annuity is excluded as a resource and payments are counted as unearned income to the payee.
(B)If an individual or the spouse of an individual purchases an annuity on or after January 1, 2006, the annuity is counted as a resource unless it is excluded under paragraph (C) of this subsection.
(C)An annuity described in paragraph (B) of this subsection is excluded as a resource if the criteria in subparagraphs (i), (ii), and (iii) of this paragraph are met, except that if an unmarried individual is the annuitant, the requirements of subparagraph (iv) of this paragraph must also be met and if the spouse of an individual is the annuitant, the requirements of subparagraph (v) of this paragraph must also be met.
(i)The annuity is irrevocable.
(ii)The annuity is actuarially sound (see subsection (1)(a) of this rule).
(iii)The annuity is issued by a business that is licensed and approved to issue commercial annuities by the state in which the annuity is purchased.
(iv)If an unmarried individual is the annuitant, the annuity must specify that upon the death of the individual, the first remainder beneficiary is either of the following:
(I)The Department, for all funds remaining in the annuity up to the amount of medical benefits provided on behalf of the individual.
(II)The child (see subsection (1)(c) of this rule) of the individual, if the Department is the next remainder beneficiary (after this child), up to the amount of medical benefits provided on behalf of the individual, in the event that the child does not survive the individual.
(v)If the spouse of an individual is the annuitant, the annuity must specify that, upon the death of the spouse of the individual, the first remainder beneficiaries are either of the following:
(I)The individual, in the event that the individual survives the spouse; and the Department, in the event that the individual does not survive the spouse, for all funds remaining in the annuity up to the amount of medical benefits provided on behalf of the individual.
(II)A child of the spouse; and the individual in the event that this child does not survive the spouse.
(D)If an annuity is excluded under paragraph (C) of this subsection, annuity payments are counted as unearned income to the payee.
Rule 461-145-0020 — Annuities; Not OSIPM,