HAR §17-1725.1-57. Determining a penalty period

(a) A penalty period shall be calculated by dividing the total uncompensated value of the asset transferred, by the statewide average monthly cost of nursing facility services assessed to a private patient at the time the individual requests and is determined eligible for the coverage of long-term care services. (b) A penalty period that results in a partial month penalty shall not be rounded down or disregarded. (c) A penalty period established for an asset that was transferred, shall be applied as follows: (1) The value of all non-exempt transfers during the applicable look-back period specified in subsection 17-1725.1-51(a) shall be combined and a single penalty period shall be determined. (2) A separate penalty period shall be determined for non-exempt transfers which occurred while a penalty is being applied for a previous transfer by an individual determined eligible for coverage of long- term care services. (3) The penalty period shall commence the later of: (A) The date of request for long-term care services; (B) The date the individual would be eligible for coverage of long-term care services but a penalty is being imposed under this subchapter; or UNOFFICIAL 1725.1-44 (C) The date a negative action can be taken in situations when timely notice of adverse action is required for the individual currently receiving coverage of long-term care services. (4) A penalty period that would commence within the term of another penalty period shall commence at the end of the prior penalty period. (d) An established penalty period shall continue to run, regardless of whether the penalized individual no longer is eligible for medical assistance, or is not receiving long-term care services. (e) The department shall send a denial notice to an individual requesting coverage of long-term care services, or an adverse action notice to an individual who is receiving coverage for long-term care services when imposing a penalty period. The notices shall meet the requirements of chapter 17-1713.1, and must inform the individual of: (1) The type and amount of the transferred asset used to determine the penalty period; (2) The length of the penalty period; (3) The start and end date of the penalty period; (4) The authority under the Hawaii administrative rules to impose the negative action; and (5) The individual’s right to request a hardship waiver of the penalty period. (f) If the spouse of a penalized individual becomes eligible for coverage of long-term care services, the remaining penalty period may be allocated between both spouses. (g) If one of the spouses should die before completing the allocated penalty period, the remaining spouse shall be allocated the balance remaining for the deceased spouse. [Eff 09/30/13] (Auth: HRS §346-14; 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) (Imp: 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) UNOFFICIAL 1725.1-45 §17-1725.1-58 Waiver of a transfer of asset penalty period due to undue hardship. (a) A penalty period may be waived if the department determines that the imposition of the penalty will cause undue hardship for the individual. (b) Undue hardship exists if the application of a penalty period would deprive the individual of: (1) Medical care such that the individual’s life or health would be endangered; or (2) Food, clothing, shelter, or other necessities of life. (c) A waiver of a penalty period due to undue hardship may be granted if the individual provides satisfactory evidence to the department that the asset transferred: (1) Has been depleted below the resource standard specified in section 17-1725.1-43; (2) Has been converted to another asset that is not liquid or redeemable; (3) The return of the transferred assets would put the receiving party in serious deprivation such that the loss of income or the asset would qualify the receiving party for medical assistance; (4) The receiving party cannot be located by the individual or another including but not limited to the individual’s spouse, other family member, representative, or an agent of the nursing facility, after all attempts to locate the receiving party have been exhausted; or (5) The asset was transferred due to theft, fraud, or financial exploitation upon the individual or their community spouse. (d) The process for requesting and reviewing a waiver of a penalty period imposed for a transfer of asset due to undue hardship is as follows: (1) The department shall send the individual a notice of denial or a notice of adverse action according to the requirements of chapter 17-1713.1 to inform the individual of the establishment of the penalty period UNOFFICIAL 1725.1-46 and the individual’s right to request a hardship waiver. (2) The individual shall have twenty calendar days from the mailing of the notice of denial or adverse action as specified in paragraph (1) to request a hardship waiver and provide all documentation to support the basis of a hardship waiver request. (3) The department shall make a determination to grant a hardship waiver within ten business days after receiving the waiver request and supporting documentation. (4) An individual who is denied a hardship waiver shall be informed of the enforcement date of the penalty period and the right to request a fair hearing under chapter 17- 1703.1. (e) Nursing facilities may request a hardship waiver on behalf of their resident with the written consent of the resident or the resident’s personal representative and may represent the resident or the resident’s personal representative throughout the appeals process. [Eff 09/30/13] (Auth: HRS §346- 14; 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) (Imp: 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) §17-1725.1-59 Individual with substantive equity in a home property. (a) An individual shall not be eligible for coverage of long-term care services if the individual’s home equity interest exceeds $750,000. (b) The individual’s home equity interest shall be determined by the fair market value less encumbrances. (c) The provisions of this subsection do not apply if the individual’s spouse, a child under age twenty-one years, a blind child, or a disabled child is residing in the individual’s home. (d) An individual affected by the provisions of this subsection is allowed to reduce their equity in UNOFFICIAL 1725.1-47 the home property through the use of a reverse mortgage or a home equity loan without penalty. (e) An individual affected by this subsection has the right to file for a waiver due to demonstrated hardship by which the individual is legally barred from taking action to access the equity in the property. (f) Effective 2011, the amount of the equity interest shall be subject to increase each calendar year based on the percentage increase in the consumer price index for all urban consumers, rounded to the nearest $1,000. [Eff 09/30/13] (Auth: HRS §346-14; 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) (Imp: 42 U.S.C. §1396p(c)) §17-1725.1-60 Waiver of excess home equity due to undue hardship. (a) The denial for the coverage of long-term care services may be waived if the department determined that the imposition of ineligibility will cause the individual undue hardship. (b) Undue hardship exists if the denial of coverage of long-term care services would deprive the individual of: (1) Medical care such that the individual’s life or health would be endangered; or (2) Food, clothing, shelter, or other necessities of life. (c) Undue hardship may be granted if the individual provides a written statement with satisfactory evidence to the department of the legal inaccessibility of the excess home equity through any means provided by the individual, spouse, legal representative or authorized representative from the nursing facility. (d) The process for requesting and reviewing a waiver of ineligibility due to excess home equity is as follows: (1) The department shall send the individual a notice of denial or a notice of adverse action according to the requirements of UNOFFICIAL 1725.1-48 chapter 17-1713.1 to inform the individual of ineligibility due to excess home equity and of the individual’s right to request a hardship waiver. (2) The individual shall have twenty calendar days from the mailing of the denial or adverse notice as specified under paragraph (1) to request a hardship waiver and provide all documentation to support the basis of the hardship waiver request. (3) The department shall make a determination of whether to grant a hardship waiver within ten business days after receiving the waiver request and supporting documentation. (4) An individual who is denied a hardship waiver shall be informed of the right to request a fair hearing under chapter 17- 1703.1. (e) Nursing facilities may request a hardship waiver on behalf of their resident with specific written consent of the resident or the resident’s personal representative and may represent the resident or the resident’s personal representative throughout the appeals process. [Eff 09/30/13] (Auth: HRS §346-14; 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) (Imp: 42 C.F.R. §431.10; 42 U.S.C. §1396p(c)) §