1.    In determining eligibility for medical assistance, the department may not consider as an available resource any pre-need funeral service contracts, prepayments, or deposits to a fund which are placed in an irrevocable itemized funeral contract designated by the applicant or recipient to pay for the applicant’s or recipient’s funeral.

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     2.    An applicant or recipient designates a prepayment or deposit for that applicant’s or recipient’s burial by providing funds that must be used for the funeral or burial expenses of the applicant or recipient. If an applicant’s or recipient’s burial is funded by an insurance policy, the amount considered set-aside for burial is the lesser of the cost basis or the face value of the insurance policy. Interest or earnings retained in a funeral fund also may not be considered as an available resource.

3.    A pre-need funeral service contract, prepayment, or deposit designated under this section is not a multiple-party account for purposes of chapter 30.1-31. Any amount in a pre-need funeral service contract, prepayment, or deposit designated under this section which is not used for funeral or burial expenses must be returned to the estate of the medical assistance recipient and is subject to recovery by the department from the medical assistance recipient’s estate. A claim for payment of funeral expenses may not be made against the estate of a deceased medical assistance recipient except to the extent the funds are maintained in accordance with this chapter.