SF 2195 (LSB 5930SS (2) 84)

SENATE FILE 2195

BY  RIELLY

A BILL FOR

An Act relating to payment of medical assistance debts from certain insurance policy and annuity proceeds.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 249A.3, Code Supplement 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  15.  In determining the eligibility of an individual for medical assistance under this chapter, an insurance policy or annuity purchased to fund a purchase agreement to furnish cemetery merchandise, funeral merchandise, funeral services, or a combination thereof as provided in chapter 523A in which the department is designated as the primary beneficiary of any remaining funds as provided in section 523A.304, shall be excluded as a resource.
    Sec. 2.  Section 523A.301, Code 2011, is amended to read as follows:
   523A.301  Definition.
   As used in sections 523A.302, and 523A.303, and 523A.304, “director” means the director of human services.
    Sec. 3.  Section 523A.303, subsection 1, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   If funds remain in a nonguaranteed
 
an irrevocable burial trust fund or from the proceeds of an insurance policy or annuity made payable or assigned to the seller or a provider after the payment of funeral and burial expenses in accordance with the conditions and terms of the purchase agreement for cemetery merchandise, funeral merchandise, or funeral services, the seller shall comply with all of the following:
    Sec. 4.  NEW SECTION.  523A.304  Disbursement of insurance or annuity proceeds —— medical assistance debts.
   1.  If an insurance policy or annuity is purchased to fund a purchase agreement and the insured or annuitant is or may become a recipient of medical assistance benefits under chapter 249A, unless the primary beneficiary of the policy or annuity is the spouse or disabled child of the insured or annuitant, the insurance policy or annuity shall designate, or shall be amended to designate, the department of human services as the primary beneficiary of any funds that remain from the proceeds of the insurance policy or annuity after payment of funeral and burial expenses in accordance with the conditions and terms of the purchase agreement.
   2.  If the funds remaining from the proceeds of the insurance policy or annuity are disbursed as provided in subsection 1 and as otherwise provided in the insurance policy or annuity, if applicable, the seller, provider, or insurer shall not be liable to the director, the estate of the deceased, a personal representative, or any other interested person for the remaining funds and any lien imposed by the director shall be unenforceable against the seller, provider, or insurer.
   3.  This section is applicable to an insurance policy or annuity issued prior to January 1, 2013, that funds a purchase agreement for an insured or annuitant who receives or may receive medical assistance benefits under chapter 249A, and who dies on or after January 1, 2014.
   4.  This section is applicable to an insurance policy or annuity issued on or after January 1, 2013, to fund a purchase agreement for an insured or annuitant who receives or may receive medical assistance benefits under chapter 249A, and who dies on or after January 1, 2013, and on or after the date of issuance of the insurance policy or annuity.
EXPLANATION
   This bill relates to the payment of medical assistance debts from proceeds remaining from insurance policies and annuities purchased to fund the payment of funeral and burial expenses in accordance with the terms of a purchase agreement for cemetery merchandise, funeral merchandise, or funeral services.
   New Code section 523A.304 provides that if such an insurance policy or annuity is purchased and the insured or annuitant is or may become a recipient of medical assistance benefits under Code chapter 249A, unless the primary beneficiary designated is the spouse or disabled child of the insured or annuitant, the insurance policy or annuity shall designate or be amended to designate the department of human services as the primary beneficiary of any funds remaining from the proceeds of the policy or annuity after payment of funeral and burial expenses. If any funds remaining are disbursed pursuant to such designation and as otherwise provided in the insurance policy or annuity, if applicable, the seller, provider, or insurer of cemetery and funeral merchandise and funeral services shall not be liable to the director of human services, the estate of the deceased, a personal representative, or any other interested person for the remaining funds and any lien imposed by the director for medical assistance debts is not enforceable against such a seller, provider, or insurer.
   The bill deletes a requirement in Code section 523A.303 that a seller, provider, or insurer must provide notice to the director of human services concerning remaining funds from the proceeds of such insurance policies or annuities. The bill also provides that if the primary beneficiary of any remaining funds from the proceeds of such an insurance policy or annuity is designated as required in the bill, the insurance policy or annuity is excluded as a resource in determining eligibility for medical assistance benefits under Code chapter 249A.
   New Code section 523A.304 applies to an insurance policy or annuity issued prior to January 1, 2013, that funds a purchase agreement for cemetery and funeral merchandise and funeral services for an insured or annuitant who receives or may receive medical assistance benefits under Code chapter 249A, and who dies on or after January 1, 2014.
   New Code section 523A.304 also applies to an insurance policy or annuity issued on or after January 1, 2013, to fund such a purchase agreement for an insured or annuitant who receives or may receive medical assistance benefits under Code chapter 249A, and who dies on or after January 1, 2013, and on or after the date of issuance of the insurance policy or annuity.