Bill Text: IL HB4979 | 2021-2022 | 102nd General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Insurance Code. Provides that an insured or any other person who may be the owner of rights under a policy of life insurance may make an irrevocable assignment of all or a part of his or her rights under the policy to a funeral home in accordance with a specified provision of the Illinois Funeral or Burial Funds Act. Provides that a policy owner who executes a designation beneficiary form irrevocably waives and cannot exercise certain rights. Amends the Illinois Funeral or Burial Funds Act. In a provision concerning pre-need contracts funded through the purchase of a life insurance policy or tax-deferred annuity contract, provides that nothing shall prohibit the purchaser from irrevocably assigning ownership of the policy or annuity to a person or trust or from irrevocably assigning the benefits of the policy or annuity to a funeral home for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program. Requires the insured or any other person who may be the owner of rights under an existing policy of life insurance to sign a guaranteed pre-need contract with the provider that describes the cost of the funeral goods and services to be provided upon the person's death, up to $7,248, except that any portion of a contract that clearly represents the purchase of burial space, as that term is defined for purposes of the Supplemental Security Income program, is exempt regardless of value. Provides that the form to effectuate the irrevocable assignment and thereby provide for the irrevocable designation of beneficiary of one or more life insurance policies shall be prepared by the Department of Healthcare and Family Services or such form, approved by the Department of Healthcare and Family Services, that has been prepared by an insurance company licensed to operate in the State of Illinois. Contains provisions concerning disclosure statements under pre-need contracts with cash advances; the distribution of proceeds under a life insurance policy upon the death of the insured; and other matters. Amends the Aid to the Aged, Blind or Disabled Article of the Illinois Public Aid Code. Provides that at any time prior to or after submitting an application for medical assistance and before a final determination of eligibility has been made, an applicant may use available resources to purchase one of the prepaid funeral or burial contracts exempted under the Article. Provides that existing life insurance policies are exempt if there has been an irrevocable assignment in compliance with a specified provision under the Illinois Funeral or Burial Funds Act. Requires a person to sign a contract with a funeral home, which is licensed under the Illinois Funeral or Burial Funds Act, that describes the cost of the funeral goods and services to be provided upon the person's death, up to $7,248, except that any portion of a contract that clearly represents the purchase of burial space, as that term is defined for purposes of the Supplemental Security Income program, is exempt regardless of value. Provides that the amount shall be adjusted annually for any increase in the Consumer Price Index. Requires the licensed funeral home to which the life insurance policy benefits have been irrevocably assigned to retain copies for inspection by the Comptroller and to report annually to the Comptroller certain information. Provides that certain provisions under the amendatory Act shall be subject to federal approval. Requires the Department of Healthcare and Family Services to apply for any necessary federal waivers or approvals to implement certain changes made under the amendatory Act. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Passed) 2022-05-27 - Public Act . . . . . . . . . 102-0959 [HB4979 Detail]
Download: Illinois-2021-HB4979-Enrolled.html
Bill Title: Amends the Illinois Insurance Code. Provides that an insured or any other person who may be the owner of rights under a policy of life insurance may make an irrevocable assignment of all or a part of his or her rights under the policy to a funeral home in accordance with a specified provision of the Illinois Funeral or Burial Funds Act. Provides that a policy owner who executes a designation beneficiary form irrevocably waives and cannot exercise certain rights. Amends the Illinois Funeral or Burial Funds Act. In a provision concerning pre-need contracts funded through the purchase of a life insurance policy or tax-deferred annuity contract, provides that nothing shall prohibit the purchaser from irrevocably assigning ownership of the policy or annuity to a person or trust or from irrevocably assigning the benefits of the policy or annuity to a funeral home for the purpose of obtaining favorable consideration for Medicaid, Supplemental Security Income, or another public assistance program. Requires the insured or any other person who may be the owner of rights under an existing policy of life insurance to sign a guaranteed pre-need contract with the provider that describes the cost of the funeral goods and services to be provided upon the person's death, up to $7,248, except that any portion of a contract that clearly represents the purchase of burial space, as that term is defined for purposes of the Supplemental Security Income program, is exempt regardless of value. Provides that the form to effectuate the irrevocable assignment and thereby provide for the irrevocable designation of beneficiary of one or more life insurance policies shall be prepared by the Department of Healthcare and Family Services or such form, approved by the Department of Healthcare and Family Services, that has been prepared by an insurance company licensed to operate in the State of Illinois. Contains provisions concerning disclosure statements under pre-need contracts with cash advances; the distribution of proceeds under a life insurance policy upon the death of the insured; and other matters. Amends the Aid to the Aged, Blind or Disabled Article of the Illinois Public Aid Code. Provides that at any time prior to or after submitting an application for medical assistance and before a final determination of eligibility has been made, an applicant may use available resources to purchase one of the prepaid funeral or burial contracts exempted under the Article. Provides that existing life insurance policies are exempt if there has been an irrevocable assignment in compliance with a specified provision under the Illinois Funeral or Burial Funds Act. Requires a person to sign a contract with a funeral home, which is licensed under the Illinois Funeral or Burial Funds Act, that describes the cost of the funeral goods and services to be provided upon the person's death, up to $7,248, except that any portion of a contract that clearly represents the purchase of burial space, as that term is defined for purposes of the Supplemental Security Income program, is exempt regardless of value. Provides that the amount shall be adjusted annually for any increase in the Consumer Price Index. Requires the licensed funeral home to which the life insurance policy benefits have been irrevocably assigned to retain copies for inspection by the Comptroller and to report annually to the Comptroller certain information. Provides that certain provisions under the amendatory Act shall be subject to federal approval. Requires the Department of Healthcare and Family Services to apply for any necessary federal waivers or approvals to implement certain changes made under the amendatory Act. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Passed) 2022-05-27 - Public Act . . . . . . . . . 102-0959 [HB4979 Detail]
Download: Illinois-2021-HB4979-Enrolled.html
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1 | AN ACT concerning prepaid funeral or burial contracts.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | ||||||
5 | adding Section 245.3 as follows:
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6 | (215 ILCS 5/245.3 new) | ||||||
7 | Sec. 245.3. Irrevocable assignment of life insurance to a | ||||||
8 | funeral home. An insured or any other person who may be the | ||||||
9 | owner of rights under a policy of life insurance may make an | ||||||
10 | irrevocable assignment of all or a part of his or her rights | ||||||
11 | under the policy to a funeral home in accordance with Section | ||||||
12 | 2b of the Illinois Funeral or Burial Funds Act. Subject to the | ||||||
13 | terms of the policy or a contract relating to the policy, | ||||||
14 | including, but not limited to, a prepaid funeral or burial | ||||||
15 | contract, an irrevocable assignment by an insured or other | ||||||
16 | owner of rights under a policy made before or after the | ||||||
17 | effective date of this amendatory Act of the 102nd General | ||||||
18 | Assembly is valid for the purpose of vesting in the assignee, | ||||||
19 | in accordance with the policy or contract as to the time at | ||||||
20 | which it is effective, all rights assigned. That irrevocable | ||||||
21 | assignment is, however, without prejudice to the company on | ||||||
22 | account of any payment it makes. The insurance company shall | ||||||
23 | within 15 business days notify the funeral home and owner of |
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1 | the policy of its receipt of the form. A policy owner who | ||||||
2 | executes a designation of beneficiary form pursuant to Section | ||||||
3 | 2b of the Illinois Funeral or Burial Funds Act also | ||||||
4 | irrevocably waives and cannot exercise the following rights: | ||||||
5 | (1) The right to collect from the insurance company | ||||||
6 | the net proceeds of the policy when it becomes a claim by | ||||||
7 | death. | ||||||
8 | (2) The right to surrender the policy and receive the | ||||||
9 | cash surrender value of the policy. | ||||||
10 | (3) The right to obtain a policy loan. | ||||||
11 | (4) The right to designate as primary beneficiary of | ||||||
12 | the policy anyone other than as provided in that Act. | ||||||
13 | (5) The right to collect or receive income, | ||||||
14 | distributions, or shares of surplus, dividend deposits, | ||||||
15 | refunds of premium, or additions to the policy. | ||||||
16 | This amendatory Act of the 102nd General Assembly | ||||||
17 | acknowledges, declares, and codifies the existing right of | ||||||
18 | assignment of interests under life insurance policies.
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19 | Section 10. The Illinois Funeral or Burial Funds Act is | ||||||
20 | amended by changing Section 2a and by adding Section 2b as | ||||||
21 | follows:
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22 | (225 ILCS 45/2a)
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23 | Sec. 2a. Purchase of insurance or annuity.
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24 | (a) If a purchaser selects the purchase of a life |
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1 | insurance policy or
tax-deferred annuity contract to fund the | ||||||
2 | pre-need contract, the application
and collected premium shall | ||||||
3 | be mailed within 30 days of signing the pre-need
contract.
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4 | (b) If life insurance or an annuity is used to fund a
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5 | pre-need contract,
the seller or provider shall not be named | ||||||
6 | as the owner or beneficiary of the
policy or annuity. No person | ||||||
7 | whose only insurable interest in the insured is
the receipt of | ||||||
8 | proceeds from the policy or in naming who shall receive the
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9 | proceeds nor any trust acting on behalf of such person or | ||||||
10 | seller or provider
shall be named as owner or beneficiary of | ||||||
11 | the policy or annuity.
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12 | (c) Nothing shall prohibit the purchaser from irrevocably | ||||||
13 | assigning
ownership of the policy or annuity used to fund a | ||||||
14 | guaranteed price pre-need
contract to a person or trust or | ||||||
15 | from irrevocably assigning the benefits of the policy or | ||||||
16 | annuity to a funeral home for the purpose of obtaining | ||||||
17 | favorable
consideration for Medicaid, Supplemental Security | ||||||
18 | Income, or another public
assistance program, as permitted | ||||||
19 | under federal law. The seller or contract
provider may be | ||||||
20 | named a
nominal owner of the life insurance policy only for | ||||||
21 | such
time as it takes to immediately transfer the policy into a
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22 | trust. Except for this purpose, neither the
seller nor the | ||||||
23 | contract provider shall be named the owner
or the beneficiary | ||||||
24 | of the policy or annuity.
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25 | (d) If a life insurance policy or annuity contract is used | ||||||
26 | to fund a
pre-need contract, except for guaranteed price |
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1 | contracts permitted in Section
4(a) of this Act, the pre-need | ||||||
2 | contract must be revocable, and any
assignment
provision in | ||||||
3 | the pre-need contract must contain the following disclosure in | ||||||
4 | 12
point bold type:
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5 | THIS ASSIGNMENT MAY BE REVOKED BY THE ASSIGNOR OR | ||||||
6 | ASSIGNOR'S SUCCESSOR OR, IF
THE ASSIGNOR IS ALSO THE INSURED | ||||||
7 | AND DECEASED, BY THE REPRESENTATIVE OF THE
INSURED'S ESTATE | ||||||
8 | BEFORE THE RENDERING TO THE CEMETERY SERVICES OR GOODS OR
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9 | FUNERAL SERVICES OR GOODS. IF THE ASSIGNMENT IS REVOKED, THE | ||||||
10 | DEATH BENEFIT
UNDER THE LIFE INSURANCE POLICY OR ANNUITY | ||||||
11 | CONTRACT SHALL BE PAID IN ACCORDANCE
WITH THE BENEFICIARY | ||||||
12 | DESIGNATION UNDER THE INSURANCE POLICY OR ANNUITY
CONTRACT.
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13 | (e) Sales proceeds shall not be used to purchase life | ||||||
14 | insurance policies
or tax-deferred annuities unless the | ||||||
15 | company issuing the life insurance
policies or tax-deferred | ||||||
16 | annuities is licensed with the Illinois Department of
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17 | Insurance, and the insurance producer or annuity seller is | ||||||
18 | licensed to do
business in the State of Illinois.
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19 | (Source: P.A. 92-419, eff. 1-1-02.)
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20 | (225 ILCS 45/2b new) | ||||||
21 | Sec. 2b. Irrevocable designation of beneficiary of | ||||||
22 | existing life insurance. | ||||||
23 | (a) In accordance with Section 245.3 of the Illinois | ||||||
24 | Insurance Code, an insured or any other person who may be the | ||||||
25 | owner of rights under an existing policy of life insurance may |
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1 | make an irrevocable assignment of all or a part of his or her | ||||||
2 | rights under the policy to a provider in consideration for | ||||||
3 | signing a guaranteed pre-need contract for the purpose of | ||||||
4 | obtaining favorable consideration for Medicaid, Supplemental | ||||||
5 | Security Income, or another public assistance program. The | ||||||
6 | form that shall effectuate the irrevocable assignment and | ||||||
7 | thereby provide for the irrevocable designation of beneficiary | ||||||
8 | of one or more life insurance policies, which shall comply | ||||||
9 | with all applicable federal laws and regulations, shall be | ||||||
10 | prepared by the Department of Healthcare and Family Services | ||||||
11 | under paragraph (4) of subsection (c) of Section 3-1.2 of the | ||||||
12 | Illinois Public Aid Code or such form, approved in advance by | ||||||
13 | the Department of Healthcare and Family Services, that has | ||||||
14 | been prepared by an insurance company licensed to operate in | ||||||
15 | the State of Illinois. The insured or any other person who may | ||||||
16 | be the owner of rights under an existing policy of life | ||||||
17 | insurance shall sign a guaranteed pre-need contract with the | ||||||
18 | provider that describes the cost of the funeral goods and | ||||||
19 | services to be provided upon the person's death, up to $7,248, | ||||||
20 | except that any portion of a contract that clearly represents | ||||||
21 | the purchase of burial space, as that term is defined for | ||||||
22 | purposes of the Supplemental Security Income program, is | ||||||
23 | exempt regardless of value. This amount shall be adjusted | ||||||
24 | annually by the Department of Human Services for any increase | ||||||
25 | in the Consumer Price Index. The guaranteed pre-need contract | ||||||
26 | must provide a complete description and cost of the goods and |
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1 | services and any cash advances. More than one policy may be | ||||||
2 | subject to this Section if the total face value of the policies | ||||||
3 | is necessary to pay the amount described in the guaranteed | ||||||
4 | pre-need contract with the provider. All policies shall be | ||||||
5 | listed on the form. The insured or any other person who may be | ||||||
6 | the owner of rights under an existing policy of life insurance | ||||||
7 | shall be given a copy of the executed form. The licensee shall | ||||||
8 | retain copies for inspection by the Comptroller and shall | ||||||
9 | report annually to the Comptroller the following: the name of | ||||||
10 | the insured, the insurance policy number, the amount of the | ||||||
11 | guaranteed pre-need contract, the current value of the policy | ||||||
12 | or benefits designated, and the name of the insurance company | ||||||
13 | issuing the policy. | ||||||
14 | (b) The insured or any other person who may be the owner of | ||||||
15 | rights under an existing policy of life insurance shall | ||||||
16 | acknowledge that by making this assignment irrevocable, the | ||||||
17 | policy cannot be canceled, although it does not affect the | ||||||
18 | right of the policy owner to cancel the insurance policy | ||||||
19 | within the examination period provided under the policy. | ||||||
20 | (c) No commission may be sought or received in connection | ||||||
21 | with any cash advance allowance included in the guaranteed | ||||||
22 | pre-need contract. | ||||||
23 | (d) For guaranteed pre-need contracts with cash advances, | ||||||
24 | the contract shall include a disclosure, in 12 point bold type | ||||||
25 | and located immediately above such cash advance allowance, | ||||||
26 | that states: "No interment, inurnment, or entombment right has |
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1 | been selected or reserved with this allowance; cash advances | ||||||
2 | are merely an allowance toward the then-current costs for the | ||||||
3 | involved items, to be purchased after death. Burial space | ||||||
4 | allowances may only be excluded from resources under Medicaid | ||||||
5 | if a separate contract is executed for such burial space with a | ||||||
6 | cemetery." | ||||||
7 | (e) Upon the death of the insured, the proceeds of the life | ||||||
8 | insurance policies subject to this Section shall be paid to | ||||||
9 | the provider, who shall apply such proceeds in the following | ||||||
10 | order or priority: | ||||||
11 | (1) first, to the provider in an amount equal to the | ||||||
12 | lesser of: | ||||||
13 | (A) the amount of the guaranteed pre-need contract | ||||||
14 | for payment of all services, goods, and cash advances | ||||||
15 | in the amounts indicated on the pre-need contract; or | ||||||
16 | (B) the actual value of the services, goods, and | ||||||
17 | cash advances, not to exceed the amounts indicated in | ||||||
18 | the pre-need contract; | ||||||
19 | (2) second, to the State of Illinois, up to an amount | ||||||
20 | equal to the total medical assistance paid on behalf of | ||||||
21 | the insured; and | ||||||
22 | (3) third, payment of proceeds to a secondary | ||||||
23 | beneficiary (if any) listed on the policy, or to the | ||||||
24 | estate of the decedent if no secondary beneficiary is | ||||||
25 | named on the policy in the event the proceeds exceed the | ||||||
26 | amount of the pre-need contract for payment of all |
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1 | services, goods and cash advances in the amounts indicated | ||||||
2 | on the pre-need contract and the total medical assistance | ||||||
3 | paid on behalf of the insured. | ||||||
4 | (f) The provider shall receive and disburse these proceeds | ||||||
5 | notwithstanding any other prohibition in law against serving | ||||||
6 | as a trustee. The provider shall promptly deposit these funds | ||||||
7 | into a non-interest bearing checking or share account that has | ||||||
8 | been established to receive proceeds of this type. These | ||||||
9 | proceeds shall not be commingled with any other account of the | ||||||
10 | provider. The account may contain the funds of more than one | ||||||
11 | client. The provider may disburse these funds to itself for | ||||||
12 | goods and services. The provider shall maintain a ledger | ||||||
13 | indicating the amount of proceeds received and the | ||||||
14 | disbursement of those proceeds. A copy of this ledger shall be | ||||||
15 | provided to the Comptroller and the Department of Healthcare | ||||||
16 | and Family Services, and to the estate or heirs of the insured, | ||||||
17 | as applicable, if requested by them. For the purpose of this | ||||||
18 | Section, the providers who receive and disburse these proceeds | ||||||
19 | from life insurance policies shall be funeral homes. | ||||||
20 | (g) Further assignment. The rights and obligations of the | ||||||
21 | provider subject to the irrevocable designation of beneficiary | ||||||
22 | may be assigned to another provider upon the choice of the | ||||||
23 | insured or the approved representative or the power of | ||||||
24 | attorney for property of the insured, or upon the insolvency | ||||||
25 | or bankruptcy of the provider. The assignee provider shall: | ||||||
26 | (i) be bound to the terms of the irrevocable designation of |
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1 | beneficiary and the associated guaranteed pre-need contract; | ||||||
2 | (ii) notify the insurance company or companies of the | ||||||
3 | assignment; (iii) notify the Department of Healthcare and | ||||||
4 | Family Services of the change in provider; and (iv) retain a | ||||||
5 | copy of the assignment for inspection by the Comptroller.
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6 | Section 15. The Illinois Public Aid Code is amended by | ||||||
7 | changing Section 3-1.2 as follows:
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8 | (305 ILCS 5/3-1.2) (from Ch. 23, par. 3-1.2)
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9 | Sec. 3-1.2. Need. | ||||||
10 | (a) Income available to the person, when added to
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11 | contributions in money, substance, or services from other | ||||||
12 | sources,
including contributions from legally responsible | ||||||
13 | relatives, must be
insufficient to equal the grant amount | ||||||
14 | established by Department regulation
for such person. In | ||||||
15 | determining earned income to be taken into account, | ||||||
16 | consideration
shall be given to any expenses reasonably | ||||||
17 | attributable to the earning of
such income. If federal law or | ||||||
18 | regulations permit or require exemption
of earned or other | ||||||
19 | income and resources, the Illinois Department shall
provide by | ||||||
20 | rule and regulation that the amount of income to be
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21 | disregarded be increased (1) to the maximum extent so required | ||||||
22 | and (2)
to the maximum extent permitted by federal law or | ||||||
23 | regulation in effect
as of the date this amendatory Act | ||||||
24 | becomes law. The Illinois Department
may also provide by rule |
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1 | and regulation that the amount of resources to
be disregarded | ||||||
2 | be increased to the maximum extent so permitted or required. | ||||||
3 | (b) Subject to federal approval, resources (for example, | ||||||
4 | land, buildings, equipment, supplies, or tools), including | ||||||
5 | farmland property and personal property used in the | ||||||
6 | income-producing operations related to the farmland (for | ||||||
7 | example, equipment and supplies, motor vehicles, or tools), | ||||||
8 | necessary for self-support, up to $6,000 of the person's | ||||||
9 | equity in the income-producing property, provided that the | ||||||
10 | property produces a net annual income of at least 6% of the | ||||||
11 | excluded equity value of the property, are exempt. Equity | ||||||
12 | value in excess of $6,000 shall not be excluded. If the | ||||||
13 | activity produces income that is less than 6% of the exempt | ||||||
14 | equity due to reasons beyond the person's control (for | ||||||
15 | example, the person's illness or crop failure) and there is a | ||||||
16 | reasonable expectation that the property will again produce | ||||||
17 | income equal to or greater than 6% of the equity value (for | ||||||
18 | example, a medical prognosis that the person is expected to | ||||||
19 | respond to treatment or that drought-resistant corn will be | ||||||
20 | planted), the equity value in the property up to $6,000 is | ||||||
21 | exempt. If the person owns more than one piece of property and | ||||||
22 | each produces income, each piece of property shall be looked | ||||||
23 | at to determine whether the 6% rule is met, and then the | ||||||
24 | amounts of the person's equity in all of those properties | ||||||
25 | shall be totaled to determine whether the total equity is | ||||||
26 | $6,000 or less. The total equity value of all properties that |
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1 | is exempt shall be limited to $6,000.
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2 | (c) In determining the resources of an individual or any | ||||||
3 | dependents, the
Department shall exclude from consideration | ||||||
4 | the value of funeral and burial
spaces, funeral and
burial | ||||||
5 | insurance the proceeds of which can only be used to pay the | ||||||
6 | funeral
and burial expenses of the insured and funds | ||||||
7 | specifically set aside for the
funeral and burial arrangements | ||||||
8 | of the individual or his or her dependents,
including prepaid | ||||||
9 | funeral and burial plans, to the same extent that such
items | ||||||
10 | are excluded from consideration under the federal Supplemental
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11 | Security Income program (SSI). At any time prior to or after | ||||||
12 | submitting an application for medical assistance and before a | ||||||
13 | final determination of eligibility has been made by the | ||||||
14 | Department, an applicant may use available resources to | ||||||
15 | purchase one of the prepaid funeral or burial contracts | ||||||
16 | exempted under this Section. | ||||||
17 | Prepaid funeral or burial contracts are exempt to the | ||||||
18 | following extent:
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19 | (1) Funds in a revocable prepaid funeral or burial | ||||||
20 | contract are exempt up to $1,500, except that any portion | ||||||
21 | of a contract that clearly represents the purchase of | ||||||
22 | burial space, as that term is defined for purposes of the | ||||||
23 | Supplemental Security Income program, is exempt regardless | ||||||
24 | of value. | ||||||
25 | (2) Funds in an irrevocable prepaid funeral or burial | ||||||
26 | contract are exempt up to $7,248 $5,874 , except that any |
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1 | portion of a contract that clearly represents the purchase | ||||||
2 | of burial space, as that term is defined for purposes of | ||||||
3 | the Supplemental Security Income program, is exempt | ||||||
4 | regardless of value. This amount shall be adjusted | ||||||
5 | annually for any increase in the Consumer Price Index. The | ||||||
6 | amount exempted shall be limited to the price of the | ||||||
7 | funeral goods and services to be provided upon death. The | ||||||
8 | contract must provide a complete description of the | ||||||
9 | funeral goods and services to be provided and the price | ||||||
10 | thereof. Any amount in the contract not so specified shall | ||||||
11 | be treated as a transfer of assets for less than fair | ||||||
12 | market value. | ||||||
13 | (3) A prepaid, guaranteed-price funeral or burial | ||||||
14 | contract, funded by an irrevocable assignment of a | ||||||
15 | person's life insurance policy to a trust or a funeral | ||||||
16 | home , is exempt. The amount exempted shall be limited to | ||||||
17 | the amount of the insurance benefit designated for the | ||||||
18 | cost of the funeral goods and services to be provided upon | ||||||
19 | the person's death. The contract must provide a complete | ||||||
20 | description of the funeral goods and services to be | ||||||
21 | provided and the price thereof. Any amount in the contract | ||||||
22 | not so specified shall be treated as a transfer of assets | ||||||
23 | for less than fair market value. The trust must include a | ||||||
24 | statement that, upon the death of the person, the State | ||||||
25 | will receive all amounts remaining in the trust, including | ||||||
26 | any remaining payable proceeds under the insurance policy |
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1 | up to an amount equal to the total medical assistance paid | ||||||
2 | on behalf of the person. The trust is responsible for | ||||||
3 | ensuring that the provider of funeral services under the | ||||||
4 | contract receives the proceeds of the policy when it | ||||||
5 | provides the funeral goods and services specified under | ||||||
6 | the contract. The irrevocable assignment of ownership of | ||||||
7 | the insurance policy must be acknowledged by the insurance | ||||||
8 | company. | ||||||
9 | (4) Existing life insurance policies are exempt if | ||||||
10 | there has been an irrevocable assignment in compliance | ||||||
11 | with Section 2b of the Illinois Funeral or Burial Funds | ||||||
12 | Act. A person shall sign a contract with a funeral home, | ||||||
13 | which is licensed under the Illinois Funeral or Burial | ||||||
14 | Funds Act, that describes the cost of the funeral goods | ||||||
15 | and services to be provided upon the person's death, up to | ||||||
16 | $7,248, except that any portion of a contract that clearly | ||||||
17 | represents the purchase of burial space, as that term is | ||||||
18 | defined for purposes of the Supplemental Security Income | ||||||
19 | program, is exempt regardless of value. This amount shall | ||||||
20 | be adjusted annually for any increase in the Consumer | ||||||
21 | Price Index. The contract must provide a complete | ||||||
22 | description of the goods and services and any cash | ||||||
23 | advances to be provided and the price thereof. The person | ||||||
24 | shall sign an irrevocable designation of beneficiary form | ||||||
25 | declaring that any amounts payable from the policies not | ||||||
26 | used for goods and services and any cash advances as set |
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1 | forth in the contract shall be received by the State, up to | ||||||
2 | an amount equal to the total medical assistance paid on | ||||||
3 | behalf of the person; any funds remaining after payment to | ||||||
4 | the State shall be paid to a secondary beneficiary (if | ||||||
5 | any) listed on the policy, or to the estate of the | ||||||
6 | purchaser if no secondary beneficiary is named on the | ||||||
7 | policy in the event the proceeds exceed the prearranged | ||||||
8 | costs of merchandise and services and any cash advances | ||||||
9 | and the total medical assistance paid on behalf of the | ||||||
10 | insured. More than one policy may be subject to this | ||||||
11 | subsection if the total face value of the policies is | ||||||
12 | necessary to pay the amount described in the contract with | ||||||
13 | the funeral home; policies that are not necessary to pay | ||||||
14 | the amount described in the contract are not exempt. The | ||||||
15 | licensed funeral home to which the life insurance policy | ||||||
16 | benefits have been irrevocably assigned shall retain | ||||||
17 | copies for inspection by the Comptroller and shall report | ||||||
18 | annually to the Comptroller the following: the name of the | ||||||
19 | insured, the name of the insurance company and policy | ||||||
20 | number, an itemized account of the amount of the contract | ||||||
21 | for goods and services and any cash advances provided, and | ||||||
22 | the current value of the policy of benefits designated | ||||||
23 | with a record of all amounts paid back to the State or | ||||||
24 | other beneficiary. The Department of Healthcare and Family | ||||||
25 | Services shall adopt rules and forms to implement this | ||||||
26 | Section. |
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1 | (d) Notwithstanding any other provision of this Code to | ||||||
2 | the contrary, an irrevocable trust containing the resources of | ||||||
3 | a person who is determined to have a disability shall be | ||||||
4 | considered exempt from consideration. A pooled trust must be | ||||||
5 | established and managed by a non-profit association that pools | ||||||
6 | funds but maintains a separate account for each beneficiary. | ||||||
7 | The trust may be established by the person, a parent, | ||||||
8 | grandparent, legal guardian, or court. It must be established | ||||||
9 | for the sole benefit of the person and language contained in | ||||||
10 | the trust shall stipulate that any amount remaining in the | ||||||
11 | trust (up to the amount expended by the Department on medical | ||||||
12 | assistance) that is not retained by the trust for reasonable | ||||||
13 | administrative costs related to wrapping up the affairs of the | ||||||
14 | subaccount shall be paid to the Department upon the death of | ||||||
15 | the person. After a person reaches age 65, any funding by or on | ||||||
16 | behalf of the person to the trust shall be treated as a | ||||||
17 | transfer of assets for less than fair market value unless the | ||||||
18 | person is a ward of a county public guardian or the State | ||||||
19 | Guardian pursuant to Section 13-5 of the Probate Act of 1975 or | ||||||
20 | Section 30 of the Guardianship and Advocacy Act and lives in | ||||||
21 | the community, or the person is a ward of a county public | ||||||
22 | guardian or the State Guardian pursuant to Section 13-5 of the | ||||||
23 | Probate Act of 1975 or Section 30 of the Guardianship and | ||||||
24 | Advocacy Act and a court has found that any expenditures from | ||||||
25 | the trust will maintain or enhance the person's quality of | ||||||
26 | life. If the trust contains proceeds from a personal injury |
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1 | settlement, any Department charge must be satisfied in order | ||||||
2 | for the transfer to the trust to be treated as a transfer for | ||||||
3 | fair market value. | ||||||
4 | (e) The homestead shall be exempt from consideration | ||||||
5 | except to the extent
that it meets the income and shelter needs | ||||||
6 | of the person. "Homestead"
means the dwelling house and | ||||||
7 | contiguous real estate owned and occupied
by the person, | ||||||
8 | regardless of its value. Subject to federal approval, a person | ||||||
9 | shall not be eligible for long-term care services, however, if | ||||||
10 | the person's equity interest in his or her homestead exceeds | ||||||
11 | the minimum home equity as allowed and increased annually | ||||||
12 | under federal law. Subject to federal approval, on and after | ||||||
13 | the effective date of this amendatory Act of the 97th General | ||||||
14 | Assembly, homestead property transferred to a trust shall no | ||||||
15 | longer be considered homestead property.
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16 | (f) Occasional or irregular gifts in cash, goods or | ||||||
17 | services from persons
who are not legally responsible | ||||||
18 | relatives which are of nominal value or
which do not have | ||||||
19 | significant effect in meeting essential requirements
shall be | ||||||
20 | disregarded. | ||||||
21 | (g) The eligibility of any applicant for or recipient
of | ||||||
22 | public aid under this Article is not affected by the payment of | ||||||
23 | any
grant under the "Senior Citizens and Disabled Persons | ||||||
24 | Property Tax
Relief Act" or any distributions or items of
| ||||||
25 | income described under subparagraph (X) of paragraph (2) of | ||||||
26 | subsection (a) of
Section 203 of the Illinois Income Tax Act.
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1 | (h) The Illinois Department may, after appropriate | ||||||
2 | investigation, establish
and implement a consolidated standard | ||||||
3 | to determine need and eligibility
for and amount of benefits | ||||||
4 | under this Article or a uniform cash supplement
to the federal | ||||||
5 | Supplemental Security Income program for all or any part
of | ||||||
6 | the then current recipients under this Article; provided, | ||||||
7 | however, that
the establishment or implementation of such a | ||||||
8 | standard or supplement shall
not result in reductions in | ||||||
9 | benefits under this Article for the then current
recipients of | ||||||
10 | such benefits.
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11 | (i) The provisions under paragraph (4) of subsection (c) | ||||||
12 | are subject to federal approval. The Department of Healthcare | ||||||
13 | and Family Services shall apply for any necessary federal | ||||||
14 | waivers or approvals to implement by January 1, 2023 the | ||||||
15 | changes made to this Section by this amendatory Act of the | ||||||
16 | 102nd General Assembly. | ||||||
17 | (Source: P.A. 97-689, eff. 6-14-12; 98-104, eff. 7-22-13.)
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