Rorick v. Ohio Dept. of Job & Family Servs.Rorick v. Ohio Dept. of Job & Family Servs.
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: November 19, 2010
Richard Cordray, Ohio Attorney General, Mark W. Fowler, and William C. Greene, Assistant Attorneys General, for Defendant-Appellant,
Donald C. Brey and Elizabeth J. Watters, for Plaintiff-Appellee.
Please note: This case has been removed from the accelerated calendar.
D E C I S I O N.
{¶1} Defendant-appellant Ohio Department of Job and Family Services (“ODJFS”) appeals from the judgment of the Hamilton County Court of Common Pleas reversing ODJFS’s December 23, 2008, decision that plaintiff-appellee, Paul Rorick (“Rorick”), had improperly transferred community resources to his wife, Betty Rorick (“Betty”), in violation of the Ohio Administrative Code, for the primary purpose of becoming Medicaid-eligible and obtaining state funds for his nursing-home care. Finding no merit to ODJFS’s challenges, we affirm the judgment of the trial court.
I. Statement of Facts and Procedural Posture
{¶2} Rorick was admitted to a nursing home on May 29, 2008, the “date of institutionalization.” Betty was not institutionalized and remained living in the community.1 At the time of his institutionalization, the combined resources of Rorick and Betty were approximately $74,224.61.2 On July 21, 2008, Betty purchased for $14,562.55 an annuity that produced a monthly income for her benefit. On August 22, 2008, the “date of application,” Rorick applied for Medicaid assistance for his nursing-home payments.
{¶3} At the time the Medicaid application was filed, the Hamilton County Department of Job and Family Services (“the County”) conducted a “resource assessment” for the Rorick household to determine whether Rorick was entitled to Medicaid assistance. When a Medicaid applicant has a spouse living in the community, as Betty was, a resource assessment is conducted to determine the
{¶4} The County determined that the CSRA allocated to Betty was $37,137.30. The County further determined that Rorick was eligible for Medicaid assistance because the financial resources allocated to him were below the $1,500 limit needed to establish Medicaid eligibility.5 But the County also determined that Betty’s July 21, 2008, annuity purchase, paid for after the date of Rorick’s institutionalization, constituted an “improper transfer of assets” made by the Roricks to reach the Medicaid eligibility limit.6 Put another way, the County determined that Betty’s purchase of the annuity for $14,562.55 was over and above her CSRA allocation of $37,137.30 and was made solely to reduce the collective assets of the Roricks that would typically be set aside for Rorick’s nursing-home care. As a result, the County instituted a period of restricted coverage7 and suspended Medicaid payments for Rorick’s nursing-home care for a period of two and one-half months.
{¶5} Rorick appealed the County’s suspension of Medicaid payments to the ODJFS’s Bureau of State Hearings. On November 28, 2008, after a state hearing, an
{¶6} Pursuant to
{¶7}
{¶8} As a preliminary matter, we first address ODJFS’s April 13, 2010, motion to remand. In its motion, ODJFS alleges that Rorick died on March 4, 2009. In a subsequent supplemental motion, ODJFS has submitted what appears to be Rorick’s death certificate, which verifies the March 4, 2009, date of death. We note that Rorick’s death took place over two months prior to the May 19, 2009, filing of the brief in his appeal in the trial court. A review of the record indicates that there was no notification of death filed on behalf of Rorick, and no substitution of parties was made in the trial court. Because Rorick allegedly died prior to the disposition of the administrative appeal, and because no party was substituted for him, ODJFS argues that the trial court lacked jurisdiction to decide the appeal before it as of March 4, 2009.
{¶9} It is well established that a deceased individual cannot be a party to an action.9 However, it is also well established that our review of a trial court’s proceedings is limited to the record before the trial court, and materials submitted directly to the appellate court cannot be added to the record on appeal.10 The record before us contains no mention of Rorick’s death. Therefore, ODJFS’s motion to vacate and remand is denied.11
III. Betty’s Annuity Purchase and State Law
{¶10} In its first assignment of error, ODJFS alleges that the trial court erred in interpreting
{¶11} The annuity purchased by Betty was a “single premium immediate annuity” from the Shenandoah Life Insurance Company. The purchase contract provided a monthly payment to Betty of $136.22 for 120 months. Rorick was the primary beneficiary and the state of Ohio was the irrevocable secondary beneficiary. The annuity policy was not eligible for surrender or assignment, and the amount and frequency of the payments were fixed. With the exception of ODJFS’s argument that the Annuity Rule does not apply to community spouses, both parties concede that the annuity purchased by Betty complied with the provisions of
{¶12} The facts of this case and Vieth are quite similar. In Vieth, the institutionalized spouse was admitted to a medical institution, and two months later the community spouse purchased two annuities. These annuities, like Betty’s
{¶13} The Tenth Appellate District reversed the decision of the trial court, holding that the purchase of the two annuities did not constitute an improper transfer of assets.14 The appellate court determined that the annuities in question fully complied with the provisions of
{¶14} ODJFS attempts to distinguish Vieth by citing McNamara v. Ohio Dept. of Human Servs.16 In McNamara, the institutionalized spouse entered a medical-care facility on October 5, 1997. Before applying for Medicaid benefits, the community spouse created an irrevocable trust, transferring a substantial portion of the couple’s assets into the trust. The community spouse was to receive monthly income from the trust, as well as five annual payments from the trust’s corpus. The institutionalized spouse was to receive no benefit from the trust. After the creation of the trust, the institutionalized spouse applied for Medicaid benefits.
{¶16} We find the reasoning in Vieth to be applicable in this case. We hold that the annuity purchased by Betty was not an improper transfer of assets. Just as in Vieth, it is not disputed here that the annuity Betty purchased complied with
IV. Betty’s Annuity Purchase and Federal Law
{¶17} In its second assignment of error, ODJFS argues that the trial court erred when it found that ODJFS’s imposition of restricted coverage violated federal law. Specifically, ODJFS asserts that the Ohio Administrative Code provisions mirror federal Medicaid law regarding spousal resource allocation, calculation of the CSRA, and limitation of transfers above the CSRA limit. ODJFS also argues that the federal rules regarding annuities, like Ohio’s Annuity Rule, do not apply to the community spouse.
{¶18} By way of background, in 1988 Congress enacted
{¶19} In addition, on February 8, 2006, as part of the “Deficit Reduction Act of 2005” (“DRA”), Congress enacted
{¶20} In our analysis, we are primarily guided by two federal court cases, James v. Richman23 and Weatherbee v. Richman.24
{¶21} In James the community spouse purchased an irrevocable and nonassignable commercial annuity for $250,000. The payment period was for eight years, with monthly payments to the community spouse of $2,937.71. The purchase was made after the institutionalized spouse had been admitted to a health-care facility, but prior to the institutionalized spouse applying for Medicaid benefits. The state rejected the applicant’s request for benefits, determining that the resource allocation was above the predetermined limit.
{¶23} In Weatherbee, the community spouse purchased an irrevocable and nonassignable commercial annuity for $387,756.06. The payment period was for 107 months, with monthly payments to the community spouse of $4,423.47. Like the annuity purchased in James, the purchase was made after the institutionalized spouse had been admitted to a health-care facility, but prior to the institutionalized spouse applying for Medicaid benefits. The state rejected the institutionalized spouse’s request for benefits, determining that the annuity and the income stream it produced were available resources.28
{¶24} In Weatherbee, the federal district court relied primarily on the analysis in James and determined that treating the annuity and its income stream as a countable resource would contravene the MCCA.29 The court then held that the institutionalized spouse had incorrectly been denied benefits based upon the annuity
{¶25} We hold that the trial court did not err when it found that ODJFS’s treatment of Betty’s annuity purchase violated the MCCA and federal Medicaid law. Based on the holdings in James and Weatherbee, we are convinced that the annuity Betty purchased fully complied with federal Medicaid laws in that it was irrevocable, nonassignable, and actuarially sound with payments distributed in equal monthly amounts. Betty’s annuity was purchased with retirement and/or IRA funds, and it named the state as either the primary or the remainder beneficiary. In other words, it fully complied with the federal Annuity Rule as set forth in
V. Conclusion
{¶26} Finally, we note that the trial court specifically found that ODJFS had treated the annuity purchased by Betty as a countable resource. However, we have reviewed the ODJFS decisions on November 28, 2008, and December 23, 2008, and
{¶27} We affirm the judgment of the trial court.
Judgment affirmed.
HILDEBRANDT, J., concurs.
CUNNINGHAM, P.J., concurs in judgment only.
Please Note:
The court has recorded its own entry this date.