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LCO No. 1644 1 of 5
General Assembly Raised Bill No. 432
February Session, 2026 LCO No. 1644
Referred to Committee on HUMAN SERVICES
Introduced by:
(HS)
AN ACT DISREGARDING THE CASH VALUE OF LIFE INSURANCE
POLICIES IN ELIGIBILITY DETERMINATIONS FOR CERTAIN PUBLIC
ASSISTANCE PROGRAMS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subsection (h) of section 17b-261 of the 2026 supplement to 1
the general statutes is repealed and the following is substituted in lieu 2
thereof (Effective July 1, 2026): 3
(h) To the extent permissible under federal law, an institutionalized 4
individual, as defined in Section 1917 of the Social Security Act, 42 USC 5
1396p(h)(3), shall not be determined ineligible for Medicaid solely on 6
the basis of the cash value of a life insurance policy. [worth less than ten 7
thousand dollars provided the individual is pursuing the surrender of 8
the policy.] 9
Sec. 2. Subsection (c) of section 17b-191 of the 2026 supplement to the 10
general statutes is repealed and the following is substituted in lieu 11
thereof (Effective July 1, 2026): 12
(c) To be eligible for cash assistance under the program, a person shall 13
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(1) be (A) eighteen years of age or older; (B) a minor found by a court to 14
be emancipated pursuant to section 46b-150; or (C) under eighteen years 15
of age and the commissioner determines good cause for such person's 16
eligibility, and (2) not have assets exceeding five hundred dollars or, if 17
such person is married, such person and his or her spouse shall not have 18
assets exceeding one thousand dollars. In determining eligibility, the 19
commissioner shall disregard from income (A) all United States 20
Department of Veterans Affairs -administered non -service-connected 21
pension benefits, Aid and Attendance pension benefits and 22
Housebound pension benefits that are granted to a veteran, as defined 23
in section 27-103, or the surviving spouse of such veteran; [and] (B) any 24
tax refund or advance payment with respect to a refundable credit to 25
the same extent such refund or advance payment would be disregarded 26
under 26 USC 6409 in any federal program or state or local program 27
financed in whole or in part with federal funds ; and (C) the cash value 28
of a life insurance policy . No person who is a substance abuser and 29
refuses or fails to enter available, appropriate treatment shall be eligible 30
for cash assistance under the program until such person enters 31
treatment. No person whose benefits from the temporary family 32
assistance program have terminated as a result of time -limited benefits 33
or for failure to comply with a program requirement shall be eligible for 34
cash assistance under the program. 35
Sec. 3. Subdivision (1) of subsection (d) of section 17b-112 of the 2026 36
supplement to the general statutes is repealed and the following is 37
substituted in lieu thereof (Effective July 1, 2026): 38
(d) (1) Under said program, no family shall be eligible that has total 39
gross earnings exceeding the federal poverty level, however, in the 40
calculation of the benefit amount for eligible families and previously 41
eligible families that become ineligible temporarily because of receipt of 42
workers' compensation benefits by a family member who subsequently 43
returns to work immediately after the period of receipt of such benefits, 44
earned income shall be disregarded up to the federal poverty level. 45
When calculating the earnings of a family with income from self -46
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employment, the commissioner shall apply a standard deduction 47
equivalent to fifty -one per cent of the total monthly income derived 48
from such self -employment, provided the family verifies at least one 49
allowable expense directly related to earning such income. A family 50
may instead deduct all allowable monthly expenses directly related to 51
the self-employment earnings if such expenses are verified and, in the 52
aggregate, exceed the amount of the standard deduction. On and after 53
October 1, 2023, the commissioner shall not deny a family assistance 54
under said program on the basis of such family's assets unless such 55
assets exceed six thousand dollars. To the extent permissible under 56
federal law governing the program, the commissioner shall disregard 57
the cash value of a life insurance policy when calculating a family's 58
assets. Except when determining eligibility for a six-month extension of 59
benefits pursuant to subsection (c) of this section, the commissioner 60
shall disregard the first fifty dollars per month of income attributable to 61
current child support that a family receives in determining eligibility 62
and benefit levels for temporary family assistance. Any current child 63
support in excess of fifty dollars per month collected by the department 64
on behalf of an eligible child shall be considered in determining 65
eligibility but shall not be considered when calculating benefits and 66
shall be taken as reimbursement for assistance paid under this section, 67
except that when the current child support collected exceeds the family's 68
monthly award of temporary family assistance benefits plus fifty 69
dollars, the current child support shall be paid to the family and shall be 70
considered when calculating benefits. 71
Sec. 4. Section 17b -91 of the general statutes is repealed and the 72
following is substituted in lieu thereof (Effective July 1, 2026): 73
(a) The commissioner shall exclude, in the determination of eligibility 74
for the state supplement program and the temporary family assistance 75
program, burial funds in an amount not to exceed the maximum amount 76
provided in section 17b -84. Such funds may be in the form of funeral 77
service contracts as described in section 42 -200, irrevocable funeral 78
service contracts or the face value of life insurance policies if the cash 79
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surrender value is excluded through the irrevocable transfer of the 80
ownership of the policy to a trust, or any combination thereof, not to 81
exceed the maximum amount provided in said section 17b-84. 82
(b) The commissioner shall exclude, in the determination of eligibility 83
for the state supplement program and for the temporary family 84
assistance program, the value of a burial plot not to exceed one exclusion 85
per individual. 86
(c) The commissioner shall exclude from consideration as an asset, in 87
the determination of eligibility for the state supplement program and 88
for the temporary family assistance program, (1) the value of an 89
irrevocable funeral contract except that the value of such contract shall 90
be considered towards the amount excluded in subsection (a) of this 91
section, and (2) the cash value of a life insurance policy not subject to the 92
provisions of subsection (a) of this section. 93
(d) Nothing in this section shall prevent the commissioner from 94
excluding from consideration as an asset in the determination of 95
eligibility for the state supplement program, or the temporary family 96
assistance program other personal or real property as he determines is 97
necessary for the effective administration of such programs. 98
(e) Where federal law or regulations governing the state supplement 99
program, the temporary family assistance program, or the medical 100
assistance program conflict with the provisions of this section, such law 101
or regulations shall prevail. 102
(f) The exclusion for the burial fund amount in subsection (a) of this 103
section, the exclusion for the burial plot value in subsection (b) of this 104
section and the exclusion for the irrevocable funeral contract value and 105
cash value of a life insurance policy in subsection (c) of this section shall 106
be applied by the commissioner uniformly throughout the state. For 107
purposes of this section, "burial plot" means a purchase of a grave site, 108
opening and closing of a grave site, cremation urn, casket, outer burial 109
container and a headstone or marker. 110
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This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2026 17b-261(h)
Sec. 2 July 1, 2026 17b-191(c)
Sec. 3 July 1, 2026 17b-112(d)(1)
Sec. 4 July 1, 2026 17b-91
Statement of Purpose:
To disregard the cash value of life insurance policies in eligibility
determinations for Medicaid, temporary family assistance, the state
supplement program and the state -administered general assistance
program.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]