MetLife completed a spin-off of Brighthouse Financial, their US retail life insurance and annuity business.This important news must be considered for Medicaid spend down calculations for anyone applying for Medicaid benefits. You probably know that stocks are counted as a resource. Stock spin offs may increase the number of stocks in a client’s portfolio. Therefore, the value of the portfolio will increase, and you must determine if this causes you or your resident/client to exceed the applicable limit.
MetLife’s press release indicates that MetLife shareholders received one share of Brighthouse Financial common stock for every 11 shares of MetLife common stock they owned as of the close of business (5 PM Eastern time) on July 19. The shares of Brighthouse were distributed on August 4th.Shareholders of MetLife who owned less than 11 shares of common stock, or others with a fractional share of common stock received cash.
Someone who had MetLife in their portfolio have the same number of MetLife shares after the spin-off, but now they will have received either Brighthouse shares or a cash payment.
The ratio is 1 Brighthouse share for every 11 MetLife shares. All fractional shares are cashed out, and clients received checks that were calculated using $58.707848 as the cash-in-lieu rate.
A client had 81 shares of MetLife as of August 4, 2017.
81 shares of MetLife ÷ 11 = entitles them to 7.363636 shares of Brighthouse.
The 7 Brighthouse shares were added to the client’s portfolio, leaving them with a .363636 fractional share.
This client’s reimbursement for their fractional share is calculated as follows:
.363636 fractional share x $58.707848 cash-in-lieu rate = $21.35 reimbursement amount
Your client should have received a check for $21.35 on August 10, 2017.
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