When you’re working with a client in a Medicaid crisis situation, speed and strategy matter. Once you’ve helped your client decide that a Medicaid Compliant Annuity (MCA) is the right solution, the next step is making sure the funds get to the carrier quickly and correctly.
The good news? There are several flexible options available for funding an MCA, and knowing what’s available can help you guide your client through the process with confidence.
Read More: The Role of Medicaid Planning in Asset Preservation
Here’s a breakdown of the most common funding methods you’ll see when purchasing an MCA:
1. Cashier’s Check
This has long been the traditional way to fund an MCA. With a cashier’s check, funds are pulled from your client’s account right away, which can be important when timing Medicaid eligibility. We also accept personal checks, but we can’t guarantee when the funds will be drawn from the account.
Tip for Agents: If your client wants to ensure their spend-down happens within the current month, a cashier’s check is a great option because the money leaves their account as soon as the check is issued.
2. Wire Transfer
Wire transfers are another fast and secure way for clients to fund their annuity. This option requires the client to visit their bank and pay a small fee, but it offers a quick turnaround.
Tip for Agents: Make sure your client has the carrier’s wire instructions ready and double-check all account numbers to ensure accuracy and avoid delays.
3. ACH (Automated Clearing House) Transfer
ACH transfers are becoming a popular funding option because they’re convenient, quick, and typically free of charge. With ACH, both Krause’s service fee and the annuity premium can be drafted directly from your client’s bank account. Currently, ACH funding for the MCA premium is available with ELCO and UFL.
Here’s how the process works:
- The client completes an ACH authorization form with the MCA application.
- Krause drafts their service fee via ACH.
- The annuity carrier initiates an ACH draft for the premium amount.
Tip for Agents: ACH offers a smooth, no-hassle funding experience, which is perfect for clients who want to avoid a trip to the bank.
4. Transfer of an Existing IRA or Annuity
In some cases, your client may want to fund their MCA by transferring assets from an IRA or existing non-qualified annuity. This can be a tax-friendly strategy and a smart way to avoid liquidating these accounts and reposition funds that would otherwise prevent Medicaid eligibility.
Tip for Agents: This option involves extra paperwork and processing time, so it’s best to start early if your client needs to transfer these accounts.
Guiding Your Client Through the MCA Funding Process
Choosing the right funding method depends on your client’s situation, including where their assets are held, how quickly they need Medicaid eligibility, and their comfort level with different processes. As their agent, you play a key role in helping them understand their options and setting expectations for the next steps.
Need help navigating a case or have questions about funding an MCA? Our team is here to help! Book a call with us, and we’ll walk through the options and support you every step of the way.