101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5158

 

Introduced , by Rep. Natalie A. Manley

 

SYNOPSIS AS INTRODUCED:
 
305 ILCS 5/3-1.2  from Ch. 23, par. 3-1.2
305 ILCS 5/5-2.1d

    Amends the Aid to the Aged, Blind or Disabled Article of the Illinois Public Aid Code. In a provision that requires the Department of Human Services to exclude from consideration, when determining a person's eligibility for aid, a prepaid, guaranteed-price funeral or burial contract, funded by an irrevocable assignment of a person's life insurance policy to a trust, provides that the insurance company must acknowledge the irrevocable assignment of benefits under the insurance policy within 30 business days after the insurance company receives the irrevocable assignment form. In a provision concerning retroactive eligibility under the medical assistance program, provides that an applicant with a life insurance policy may still be able to irrevocably assign funeral goods and services or purchase a pre-paid funeral or burial contract after applying for medical assistance until a final determination of eligibility has been made by the Department of Healthcare and Family Services.


LRB101 18219 KTG 67661 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5158LRB101 18219 KTG 67661 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Sections 3-1.2 and 5-2.1d as follows:
 
6    (305 ILCS 5/3-1.2)  (from Ch. 23, par. 3-1.2)
7    Sec. 3-1.2. Need. Income available to the person, when
8added to contributions in money, substance, or services from
9other sources, including contributions from legally
10responsible relatives, must be insufficient to equal the grant
11amount established by Department regulation for such person.
12    In determining earned income to be taken into account,
13consideration shall be given to any expenses reasonably
14attributable to the earning of such income. If federal law or
15regulations permit or require exemption of earned or other
16income and resources, the Illinois Department shall provide by
17rule and regulation that the amount of income to be disregarded
18be increased (1) to the maximum extent so required and (2) to
19the maximum extent permitted by federal law or regulation in
20effect as of the date this amendatory Act becomes law. The
21Illinois Department may also provide by rule and regulation
22that the amount of resources to be disregarded be increased to
23the maximum extent so permitted or required. Subject to federal

 

 

HB5158- 2 -LRB101 18219 KTG 67661 b

1approval, resources (for example, land, buildings, equipment,
2supplies, or tools), including farmland property and personal
3property used in the income-producing operations related to the
4farmland (for example, equipment and supplies, motor vehicles,
5or tools), necessary for self-support, up to $6,000 of the
6person's equity in the income-producing property, provided
7that the property produces a net annual income of at least 6%
8of the excluded equity value of the property, are exempt.
9Equity value in excess of $6,000 shall not be excluded. If the
10activity produces income that is less than 6% of the exempt
11equity due to reasons beyond the person's control (for example,
12the person's illness or crop failure) and there is a reasonable
13expectation that the property will again produce income equal
14to or greater than 6% of the equity value (for example, a
15medical prognosis that the person is expected to respond to
16treatment or that drought-resistant corn will be planted), the
17equity value in the property up to $6,000 is exempt. If the
18person owns more than one piece of property and each produces
19income, each piece of property shall be looked at to determine
20whether the 6% rule is met, and then the amounts of the
21person's equity in all of those properties shall be totaled to
22determine whether the total equity is $6,000 or less. The total
23equity value of all properties that is exempt shall be limited
24to $6,000.
25    In determining the resources of an individual or any
26dependents, the Department shall exclude from consideration

 

 

HB5158- 3 -LRB101 18219 KTG 67661 b

1the value of funeral and burial spaces, funeral and burial
2insurance the proceeds of which can only be used to pay the
3funeral and burial expenses of the insured and funds
4specifically set aside for the funeral and burial arrangements
5of the individual or his or her dependents, including prepaid
6funeral and burial plans, to the same extent that such items
7are excluded from consideration under the federal Supplemental
8Security Income program (SSI).
9    Prepaid funeral or burial contracts are exempt to the
10following extent:
11        (1) Funds in a revocable prepaid funeral or burial
12    contract are exempt up to $1,500, except that any portion
13    of a contract that clearly represents the purchase of
14    burial space, as that term is defined for purposes of the
15    Supplemental Security Income program, is exempt regardless
16    of value.
17        (2) Funds in an irrevocable prepaid funeral or burial
18    contract are exempt up to $5,874, except that any portion
19    of a contract that clearly represents the purchase of
20    burial space, as that term is defined for purposes of the
21    Supplemental Security Income program, is exempt regardless
22    of value. This amount shall be adjusted annually for any
23    increase in the Consumer Price Index. The amount exempted
24    shall be limited to the price of the funeral goods and
25    services to be provided upon death. The contract must
26    provide a complete description of the funeral goods and

 

 

HB5158- 4 -LRB101 18219 KTG 67661 b

1    services to be provided and the price thereof. Any amount
2    in the contract not so specified shall be treated as a
3    transfer of assets for less than fair market value.
4        (3) A prepaid, guaranteed-price funeral or burial
5    contract, funded by an irrevocable assignment of a person's
6    life insurance policy to a trust, is exempt. The amount
7    exempted shall be limited to the amount of the insurance
8    benefit designated for the cost of the funeral goods and
9    services to be provided upon the person's death. The
10    contract must provide a complete description of the funeral
11    goods and services to be provided and the price thereof.
12    Any amount in the contract not so specified shall be
13    treated as a transfer of assets for less than fair market
14    value. The trust must include a statement that, upon the
15    death of the person, the State will receive all amounts
16    remaining in the trust, including any remaining payable
17    proceeds under the insurance policy up to an amount equal
18    to the total medical assistance paid on behalf of the
19    person. The trust is responsible for ensuring that the
20    provider of funeral services under the contract receives
21    the proceeds of the policy when it provides the funeral
22    goods and services specified under the contract. An
23    insurance company doing business in Illinois must
24    acknowledge the The irrevocable assignment of benefits
25    under ownership of the insurance policy within 30 business
26    days after the date the insurance company receives the

 

 

HB5158- 5 -LRB101 18219 KTG 67661 b

1    irrevocable assignment form must be acknowledged by the
2    insurance company.
3    Notwithstanding any other provision of this Code to the
4contrary, an irrevocable trust containing the resources of a
5person who is determined to have a disability shall be
6considered exempt from consideration. A pooled trust must be
7established and managed by a non-profit association that pools
8funds but maintains a separate account for each beneficiary.
9The trust may be established by the person, a parent,
10grandparent, legal guardian, or court. It must be established
11for the sole benefit of the person and language contained in
12the trust shall stipulate that any amount remaining in the
13trust (up to the amount expended by the Department on medical
14assistance) that is not retained by the trust for reasonable
15administrative costs related to wrapping up the affairs of the
16subaccount shall be paid to the Department upon the death of
17the person. After a person reaches age 65, any funding by or on
18behalf of the person to the trust shall be treated as a
19transfer of assets for less than fair market value unless the
20person is a ward of a county public guardian or the State
21Guardian pursuant to Section 13-5 of the Probate Act of 1975 or
22Section 30 of the Guardianship and Advocacy Act and lives in
23the community, or the person is a ward of a county public
24guardian or the State Guardian pursuant to Section 13-5 of the
25Probate Act of 1975 or Section 30 of the Guardianship and
26Advocacy Act and a court has found that any expenditures from

 

 

HB5158- 6 -LRB101 18219 KTG 67661 b

1the trust will maintain or enhance the person's quality of
2life. If the trust contains proceeds from a personal injury
3settlement, any Department charge must be satisfied in order
4for the transfer to the trust to be treated as a transfer for
5fair market value.
6    The homestead shall be exempt from consideration except to
7the extent that it meets the income and shelter needs of the
8person. "Homestead" means the dwelling house and contiguous
9real estate owned and occupied by the person, regardless of its
10value. Subject to federal approval, a person shall not be
11eligible for long-term care services, however, if the person's
12equity interest in his or her homestead exceeds the minimum
13home equity as allowed and increased annually under federal
14law. Subject to federal approval, on and after the effective
15date of this amendatory Act of the 97th General Assembly,
16homestead property transferred to a trust shall no longer be
17considered homestead property.
18    Occasional or irregular gifts in cash, goods or services
19from persons who are not legally responsible relatives which
20are of nominal value or which do not have significant effect in
21meeting essential requirements shall be disregarded. The
22eligibility of any applicant for or recipient of public aid
23under this Article is not affected by the payment of any grant
24under the "Senior Citizens and Disabled Persons Property Tax
25Relief Act" or any distributions or items of income described
26under subparagraph (X) of paragraph (2) of subsection (a) of

 

 

HB5158- 7 -LRB101 18219 KTG 67661 b

1Section 203 of the Illinois Income Tax Act.
2    The Illinois Department may, after appropriate
3investigation, establish and implement a consolidated standard
4to determine need and eligibility for and amount of benefits
5under this Article or a uniform cash supplement to the federal
6Supplemental Security Income program for all or any part of the
7then current recipients under this Article; provided, however,
8that the establishment or implementation of such a standard or
9supplement shall not result in reductions in benefits under
10this Article for the then current recipients of such benefits.
11(Source: P.A. 97-689, eff. 6-14-12; 98-104, eff. 7-22-13.)
 
12    (305 ILCS 5/5-2.1d)
13    Sec. 5-2.1d. Retroactive eligibility. An applicant for
14medical assistance may be eligible for up to 3 months prior to
15the date of application if the person would have been eligible
16for medical assistance at the time he or she received the
17services if he or she had applied, regardless of whether the
18individual is alive when the application for medical assistance
19is made. In determining financial eligibility for medical
20assistance for retroactive months, the Department shall
21consider the amount of income and resources and exemptions
22available to a person as of the first day of each of the
23backdated months for which eligibility is sought. An applicant
24with a life insurance policy may still be able to irrevocably
25assign funeral goods and services or purchase a pre-paid

 

 

HB5158- 8 -LRB101 18219 KTG 67661 b

1funeral or burial contract as described in Section 3-l.2 after
2applying for medical assistance until a final determination of
3eligibility has been made by the Department.
4(Source: P.A. 97-689, eff. 6-14-12.)