Section 405IAC2-8-2. Undue hardship due to Medicaid estate recovery

   (a) The office may waive the enforcement of the state's claim, in whole or in part, if enforcement of the state's claim will result in substantial and undue hardship for the surviving beneficiaries of the decedent's estate. The state's claim is suspended as long as the undue hardship condition continues to exist. This rule is not applicable to undue hardships encountered by Medicaid applicants due to:

(1) the imposition of transfer of property penalties; or

(2) rules related to the availability of trusts.

  (b) For purposes of this section, undue hardship exists only if enforcement of the state's claim would result in one (1) or more of the following conditions:

(1) Causing a beneficiary of the decedent's estate to become eligible for public assistance. As used in this section, "public assistance" means

(A) Aid to Families with Dependent Children;

(B) Medicaid;

(C) food stamps; or

(D) Supplemental Security Income.

(2) Causing a beneficiary of the decedent's estate who is currently eligible for public assistance to remain dependent on that public assistance.

(3) The complete loss of an income-producing asset or assets when the:

(A) beneficiary of the decedent's estate has no other source of income; and

(B) beneficiary's income does not exceed one hundred percent (100%) of the poverty level as determined annually by the U.S. Department of Health and Human Services.

(4) Other compelling circumstances as determined on a case-by-case basis by the office.

Undue hardship does not exist in circumstances where the state's recovery simply results in a loss of a preexisting standard of living.

  (c) To be eligible for consideration for an undue hardship waiver, the beneficiary of the decedent's estate must, with the exception noted in this subsection, be a member of the immediate family of either the deceased recipient or the deceased recipient's spouse. For purposes of this section, "immediate family" means a:

(1) spouse;

(2) child;

(3) grandchild;

(4) great-grandchild;

(5) parent;

(6) grandparent;

(7) brother; or

(8) sister.

In exceptional circumstances, if good cause is shown, a person other than an immediate family member may be eligible for consideration for an undue hardship waiver.

  (d) The office shall notify the executor or personal representative of the deceased Medicaid recipient's estate of the state's claim against the estate and the affected beneficiary's right to apply for an undue hardship waiver. Application for an undue hardship waiver shall:

(1) be submitted to the office on such forms as may be designated by the secretary;

(2) include:

(A) the name of the deceased recipient;

(B) the name of the person filing the application;

(C) the relationship of the applicant to the deceased;

(D) an explanation of the basis for requesting an undue hardship waiver;

(E) documentation of the existence of one (1) or more of the conditions described in subsection (b);

(F) other information as may be deemed necessary by the secretary; and

(G) a statement attesting to the accuracy of the information contained in the application;

(3) be signed by the applicant; and

(4) be filed with the office within ninety (90) calendar days of the date that the executor or personal representative of the deceased's estate receives notification of the state's claim.

  (e) The office shall review and rule on an application for a waiver of the state's claim within forty-five (45) calendar days of the receipt of a properly completed waiver application.

  (f) If the office determines that an undue hardship does not exist, the office shall:

(1) notify the applicant of its decision in writing; and

(2) inform the applicant of his or her right to request an administrative hearing and the procedures for filing an appeal.

An appeal and request for hearing must be filed within thirty (30) days of receipt of the office's decision that an undue hardship waiver has been denied.

  (g) The office may not grant an undue hardship waiver if the granting of the waiver will result in the payment of claims to other creditors with a lower priority standing in accordance with IC 29-1-14-9.

  (h) The office may deny an undue hardship waiver if the granting of the waiver will not result in the abatement of the undue hardship. (Office of the Secretary of Family and Social Services; 405 IAC 2-8-2; filed Feb 15, 1996, 11:20 a.m.: 19 IR 1564; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; readopted filed Sep 19, 2007, 12:16 p.m.: 20071010-IR-405070311RFA; filed Aug 18, 2009, 11:33 a.m.: 20090916-IR-405080325FRA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFA)