S.F. 2195 Section 1. Section 249A.3, Code Supplement 2011, is amended 1 by adding the following new subsection: 2 NEW SUBSECTION . 15. In determining the eligibility of 3 an individual for medical assistance under this chapter, an 4 insurance policy or annuity purchased to fund a purchase 5 agreement to furnish cemetery merchandise, funeral merchandise, 6 funeral services, or a combination thereof as provided in 7 chapter 523A in which the department is designated as the 8 primary beneficiary of any remaining funds as provided in 9 section 523A.304, shall be excluded as a resource. 10 Sec. 2. Section 523A.301, Code 2011, is amended to read as 11 follows: 12 523A.301 Definition. 13 As used in sections 523A.302 , and 523A.303 , and 523A.304 , 14 “director” means the director of human services. 15 Sec. 3. Section 523A.303, subsection 1, unnumbered 16 paragraph 1, Code 2011, is amended to read as follows: 17 If funds remain in a nonguaranteed an irrevocable burial 18 trust fund or from the proceeds of an insurance policy or 19 annuity made payable or assigned to the seller or a provider 20 after the payment of funeral and burial expenses in accordance 21 with the conditions and terms of the purchase agreement for 22 cemetery merchandise, funeral merchandise, or funeral services, 23 the seller shall comply with all of the following: 24 Sec. 4. NEW SECTION . 523A.304 Disbursement of insurance or 25 annuity proceeds —— medical assistance debts. 26 1. If an insurance policy or annuity is purchased to fund 27 a purchase agreement and the insured or annuitant is or may 28 become a recipient of medical assistance benefits under chapter 29 249A, unless the primary beneficiary of the policy or annuity 30 is the spouse or disabled child of the insured or annuitant, 31 the insurance policy or annuity shall designate, or shall be 32 amended to designate, the department of human services as the 33 primary beneficiary of any funds that remain from the proceeds 34 of the insurance policy or annuity after payment of funeral and 35 -1- LSB 5930SS (2) 84 av/nh 1/ 3

S.F. 2195 burial expenses in accordance with the conditions and terms of 1 the purchase agreement. 2 2. If the funds remaining from the proceeds of the insurance 3 policy or annuity are disbursed as provided in subsection 1 4 and as otherwise provided in the insurance policy or annuity, 5 if applicable, the seller, provider, or insurer shall not 6 be liable to the director, the estate of the deceased, a 7 personal representative, or any other interested person for the 8 remaining funds and any lien imposed by the director shall be 9 unenforceable against the seller, provider, or insurer. 10 3. This section is applicable to an insurance policy or 11 annuity issued prior to January 1, 2013, that funds a purchase 12 agreement for an insured or annuitant who receives or may 13 receive medical assistance benefits under chapter 249A, and who 14 dies on or after January 1, 2014. 15 4. This section is applicable to an insurance policy or 16 annuity issued on or after January 1, 2013, to fund a purchase 17 agreement for an insured or annuitant who receives or may 18 receive medical assistance benefits under chapter 249A, and who 19 dies on or after January 1, 2013, and on or after the date of 20 issuance of the insurance policy or annuity. 21 EXPLANATION 22 This bill relates to the payment of medical assistance debts 23 from proceeds remaining from insurance policies and annuities 24 purchased to fund the payment of funeral and burial expenses in 25 accordance with the terms of a purchase agreement for cemetery 26 merchandise, funeral merchandise, or funeral services. 27 New Code section 523A.304 provides that if such an insurance 28 policy or annuity is purchased and the insured or annuitant is 29 or may become a recipient of medical assistance benefits under 30 Code chapter 249A, unless the primary beneficiary designated 31 is the spouse or disabled child of the insured or annuitant, 32 the insurance policy or annuity shall designate or be amended 33 to designate the department of human services as the primary 34 beneficiary of any funds remaining from the proceeds of the 35 -2- LSB 5930SS (2) 84 av/nh 2/ 3

S.F. 2195 policy or annuity after payment of funeral and burial expenses. 1 If any funds remaining are disbursed pursuant to such 2 designation and as otherwise provided in the insurance policy 3 or annuity, if applicable, the seller, provider, or insurer of 4 cemetery and funeral merchandise and funeral services shall 5 not be liable to the director of human services, the estate 6 of the deceased, a personal representative, or any other 7 interested person for the remaining funds and any lien imposed 8 by the director for medical assistance debts is not enforceable 9 against such a seller, provider, or insurer. 10 The bill deletes a requirement in Code section 523A.303 11 that a seller, provider, or insurer must provide notice to the 12 director of human services concerning remaining funds from the 13 proceeds of such insurance policies or annuities. The bill 14 also provides that if the primary beneficiary of any remaining 15 funds from the proceeds of such an insurance policy or annuity 16 is designated as required in the bill, the insurance policy or 17 annuity is excluded as a resource in determining eligibility 18 for medical assistance benefits under Code chapter 249A. 19 New Code section 523A.304 applies to an insurance policy or 20 annuity issued prior to January 1, 2013, that funds a purchase 21 agreement for cemetery and funeral merchandise and funeral 22 services for an insured or annuitant who receives or may 23 receive medical assistance benefits under Code chapter 249A, 24 and who dies on or after January 1, 2014. 25 New Code section 523A.304 also applies to an insurance 26 policy or annuity issued on or after January 1, 2013, to fund 27 such a purchase agreement for an insured or annuitant who 28 receives or may receive medical assistance benefits under Code 29 chapter 249A, and who dies on or after January 1, 2013, and 30 on or after the date of issuance of the insurance policy or 31 annuity. 32 -3- LSB 5930SS (2) 84 av/nh 3/ 3