Treatment of Annuities Purchased prior to 2/8/2006

Treatment of Annuities Purchased prior to 2/8/2006. A. An annuity purchased before February 8, 2006, by or for an individual using that individual’s assets will be considered a transfer of assets unless both of the following are met: 1. The annuity produces a net annual return of at least 6% of its equity value; and 2. Pays out principal and interest in equal monthly installments (no balloon payments) to the individual in sufficient amounts that the principal is paid out within the actuarial life expectancy of the individual seeking long term care services, including HCBS services. B. An annuity that meets the criteria above will be excluded as a resource and the income paid by the annuity counted as income to the annuitant. C. An annuity that does not meet the required conditions is a transfer of assets if purchased during the look back period. The income produced by the annuity counts as income to the annuitant during the transfer penalty period and the full payment period of the annuity.