This is provided by Krause Financial Services. If your clients utilize ELCO Mutual Life and Annuity Company (ELCO) for Medicaid Complaint Annuities, please read this e-mail very carefully, as ELCO has implemented new application procedures for 2016.

Effective Immediately

In the following States – Delaware, Florida, Maine, Montana, Nevada, North Dakota, South Dakota, West Virginia, and Wyoming – the ELCO application process is “business as usual.” Please continue to use Annuity Application Form AIFXB, also known as ELCO’s Cash Commutation Product.

Alternatively, in the following States – Alabama, Arizona, Arkansas, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin – the following application restrictions apply:

• For Medicaid Compliant Annuities that exceed 12 months AND have a premium less than $250,000, please use the Cash Refund Form SPIA 11.
• For Medicaid Compliant Annuities that have a premium greater than $250,000 (regardless of the term), please use the Cash Commutation Application (AIFXB).
• For Medicaid Compliant Annuities that have a period certain between 2-12 months (regardless of premium) always use the Cash Commutation Application (AIFXB).

What’s the difference?
The primary difference between the Cash Refund and Cash Commutation Options is the amount available to the remaining beneficiary/ies should the annuity owner pass during the annuity term. With the Cash Refund product, the designated beneficiary/ies can receive a commuted cash settlement equal to the single premium less benefits paid, or continue to receive the remaining monthly payments. With the Cash Commutation product, the designated beneficiary/ies can receive a commuted cash settlement, or continue to receive the remaining monthly payments. However, the commuted cash settlement feature entails a discounted value.

On a final note, all checks intended for ELCO should be made payable to ELCO Mutual instead of their former name of Employees Life Company (Mutual).

We understand that the content outlined above is confusing. If you have questions, please do not hesitate to contact us – we are here to help!

Krause Financial

1234 Enterprise Drive

De Pere, WI 54115

toll-free (866) 605-7437

info@medicaidannuity.com