Comfort Long Term Care - Comfort LTC News

IRS Announces 2024 Long-Term Care Premium & Tax-Free Benefit Limits

11/9/2023

BREAKING NEWS!

The 2024 IRS LTC Insurance numbers are out. And, strangely, all the numbers are going DOWN for 2024. Still higher than 2022, but likely a result of the Eligible premiums and Per Diem limit now being calculated as a "chained" CPI - I have no idea how that works, but it's created a see-saw effect on the numbers the last few years.

The 2024 "Per Diem" limit - the guaranteed minimum tax-free benefit payment amount for indemnity/cash benefit policies - is going down to $410 per day (from $420/day in 2023).

The 2024 age-based medical-expense "Eligible" LTC premiums are dropping slightly for attained ages as of 12/31 in the tax year:

Age 40 or less: $470 (down from $480 in 2023)
Ages 41 - 50: $880 (down from $880)
Ages 51 - 60: $1,760 (down from $1,790)
Ages 61 - 70: $4,710 (down from $4,770)
Ages 71+: $5,880 (down from $5,960)

CLICK HERE to link to to Revenue Procedure 2023-34 - see Sections 28. & 62.

Want more information about LTC insurance tax issues? Please click here to visit our Tax Guide in the LTC Learning Center.

Medicare NEVER Covers "Long-Term" Care!

10/26/2022

As we enter Medicare open enrollment season remember: Medicare NEVER pays for LONG-term care! It may pay for SHORT-term care, but only IF it is skilled & rehabilitative.

Medicare - in any form or with a supplement - should NEVER be relied on as a funding source for true, long-term, custodial, extended care needs!

100-days in a nursing home is still SHORT-term care! (And Medicare only pays about 21 days on average - 100 days are the MAXIMUM possible, but not guaranteed.) For home HEALTH care (requiring skilled/rehabilitative services), Medicare only covers ONE-hour "visits" and no more than about 3 times per week! The practical limit is just one or two months.

Medicare is health insurance, NOT long-term care coverage. Just like during working years health insurance does not provide disability income replacement!

Absolutely, review your Medicare coverage options this open enrollment season! But if you don't have a plan for long-term, custodial, extended care, let me know, I'd love to help you design and implement LTC insurance coverage for you! CLICK HERE to contact me for more information or to request a LTC insurance quote.

IRS Releases 2023 LTC Insurance Tax Guidance

10/26/2022

IRS has released its annual inflation adjustments for tax year 2023. (Revenue Procedure 2022-38)

This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.

FOR CLAIMS IN 2023 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $420 per day ($12,775/month).
(This is a $30/day increase from 2022 which was $390/day.)

LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $420/day (2023) OR your actual expenses paid for care if greater.
- For example, a LTCI cash benefit payment of $9,000 per month ($300/day) is tax free no matter what was spent on care, even if less, since $300/day is less than the IRS per diem limit.
- If the per diem benefit received is $450 per day, then $30 per day (2023) would have to be claimed as taxable income.
- If the per diem benefit received is $430 per day, but you have $430 or more per day in paid caregiving charges, then it would all be tax-free.

FOR PREMIUMS PAID IN 2023 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2023) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:
Age at end of 2023 Maximum Deductible Premium
40 or younger $480
41 to 50 $890
51 to 60 $1,790
61 to 70 $4,770
71 or older $5,960

NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 7.5% of your Adjusted Gross Income (AGI), and only the amount above the 7.5% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums UP TO the age-based, Eligible Premium amount shown above for yourself and a spouse.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)

CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2022 LTC TAX GUIDELINES FOR 2022 TAX RETURNS AND AS COMPARED TO THE NEW NUMBERS FOR 2023.

* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.

IRS Releases 2022 LTC Insurance Tax Guidance

12/22/2021

The IRS has released its annual inflation adjustments for tax year 2022. (Revenue Procedure 2021-45)

This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.

FOR CLAIMS IN 2022 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit DECREASES to $390 per day ($11,862/month).
(This is a $10/day DECREASE from 2021 which was $400/day.)

LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $390/day (2022) OR your actual expenses paid for care if greater.
- For example, a LTCI cash benefit payment of $9,000 per month ($300/day) is tax free no matter what was spent on care, even if less, since $300/day is less than the IRS per diem limit.
- If the per diem benefit received is $430 per day, then $40 per day (2022) would have to be claimed as taxable income.
- If the per diem benefit received is $430 per day, but you have $430 or more per day in paid caregiving charges, then it would all be tax-free.

FOR PREMIUMS PAID IN 2022 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2022) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:
Age at end of 2022 Maximum Deductible Premium
40 or younger $450
41 to 50 $850
51 to 60 $1,690
61 to 70 $4,510
71 or older $5,640

NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 7.5% of your Adjusted Gross Income (AGI), and only the amount above the 7.5% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums UP TO the age-based, Eligible Premium amount shown above for yourself and a spouse.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)

CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2021 LTC TAX GUIDELINES FOR 2021 TAX RETURNS AND AS COMPARED TO THE NEW NUMBERS FOR 2022.

* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.

Bill Comfort Quoted in the Wall Street Journal

2/4/2021

"LTC Insurance: First, You Should Find an Agent"

As part of its WealthAdvisor section, the Wall Street Journal published a column today featuring LTC specialist Bill Comfort's advice for how to find an independent, qualified LTC insurance specialist.

CLICK HERE to link to the article - it may require a subscription to read the full article.

From the article:
"Long-term-care insurance, as you’re probably aware, is a ridiculously complicated product, one that comes in many shapes and sizes. As such, an independent agent—one who sells policies from multiple carriers and who specializes in long-term-care planning and insurance—can help you navigate these waters.

"What you don’t want, says Bill Comfort, a long-term-care insurance specialist in Durham, N.C., is someone who jumps immediately into policy features and premiums. Rather, you’re looking for an adviser who, first, takes time to understand your situation and needs and, second, can explain how various types of coverage might help."

That's us!

CLICK HERE to Read our
"5 Tips for Choosing a LTC Specialist"
as mentioned in the Wall Street Journal

Do NOT Fall for the "Use It or Lose It" LTC Scam!

12/22/2020

I don't know about you, but if you're a 50-something like me you may be getting bombarded with social media "sponsored" posts about LTC insurance and how the "NEW KIND" of policy is so much better than the "tired, old, broken-down LTC insurance" because if you never need care, you won't "waste" your premiums.

It's NOT true! Don't fall for a clever and misleading marketing pitch to get you to over-pay for benefits you don't need!

Before you buy any LTC insurance,
CLICK HERE TO read out UPDATED report:
"The Use It or Lose It Fallacy"!

IRS Releases 2021 LTC Insurance Tax Guidance

10/26/2020

The IRS just released its annual inflation adjustments for tax year 2021. (Revenue Procedure 2020-45)

This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.

FOR CLAIMS IN 2021 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $400 per day ($12,167/month).
(This is a $20/day increase from 2020 which was $380/day.)

LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $400/day (2021) OR your actual expenses paid for care if greater.
- For example, a LTCI cash benefit payment of $9,000 per month ($300/day) is tax free no matter what was spent on care, even if less, since $300/day is less than the IRS per diem limit.
- If the per diem benefit received is $430 per day, then $30 per day (2021) would have to be claimed as taxable income.
- If the per diem benefit received is $430 per day, but you have $430 or more per day in paid caregiving charges, then it would all be tax-free.

FOR PREMIUMS PAID IN 2021 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2021) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:

Age at end of 2021	Maximum Deductible Premium
40 or younger	$450
41 to 50	$850
51 to 60	$1,690
61 to 70	$4,520
71 or older	$5,640

NOTE that most taxpayers will not be able to realize any deduction as you must first be able to itemize deductions on Schedule A, have total un-reimbursed medical expenses including the LTC Eligible Premium that exceed 10% of your Adjusted Gross Income (AGI), and only the amount above the 10% threshold is deductible.

HOWEVER, if you have funds in a Health Savings Account (HSA) - or an employer-funded Health Reimbursement Account (HRA) - you CAN use those tax-free dollars to pay tax-qualified LTC insurance premiums up to the age-based, Eligible Premium amount shown above for yourself and a spouse.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on Form 1040, as part of the "Self Employed Health Insurance Deduction" (Form 1040, Schedule 1, Line 16). This applies to owners of business incorporated or taxes as: Sole Proprietorships, Partnerships, or S-Corporations. (Shareholder/Employees of a "regular" C-Corporation can have the entire premium deducted - without limit - if paid as an employee benefit by the corporation.)

CLICK HERE TO LEARN MORE ABOUT BUSINESS DEDUCTIONS FOR LTCI AND TO SEE THE 2020 LTC TAX GUIDELIENS COMPARED TO 2021.

* The tax information presented here is for general information only and should not be used nor relied upon as specific tax advice. Taxpayers should consult with their CPA or qualified tax professional for advice regarding their own tax situation and the tax status of LTC premiums and benefits.

Beware of "Chronic Illness" Riders

8/5/2020

"Chronic Illness" riders on life insurance are NOT the same as real LTC insurance. There is an explosion of these "living benefit" riders being added to life insurance policies with NO standardization as to what "Chronic Illness" means or how the benefits get paid.

Some of these "Chronic Illness" riders may look a lot like real LTC insurance - an agent may even tell you, "It's just the same as LTC insurance." But it is not.

If you're goal is planning for extended, long-term care needs and an agent only shows you one of these riders you must find another agent!

CLICK HERE to read an outstanding article on some of the problems with "Chronic Illness" riders by my colleague, Kerry Peabody.

"If you need a plan to pay for LTC, you’re better off with a policy specifically designed to do that. When you’re actually planning to meet your LTC needs, a Chronic Illness rider isn’t a plan, it’s an afterthought."
- Kerry Peabody

https://www.linkedin.com/pulse/why-chronic-illness-riders-chronically-fall-short-peabody-clu-cltc/

Free Consumer Guide to LTC Insurance

6/30/2020

Request a copy of our updated 2020 Consumer Guide to LTC Insurance

ComfortLTC.com Expands Hybrid LTC Info

5/11/2020

The Hybrid LTC Information Center

ComfortLTC.com has added a new resource for consumers and financial advisors regarding "hybrid" or "linked-benefit" LTC insurance. Articles include:

As a truly independent brokerage agency specializing in extended care planning and LTC insurance, Comfort LTC fairly represents ALL types of LTC insurance - Traditional LTC and all the many different Hybrid LTC variations.

Do not ever buy LTC insurance from an agent or advisor who only sells one type of coverage (or represents only one or two companies) - they cannot represent your best interests. CLICK HERE for our guide to finding a truly independent LTC specialist.

CLICK HERE to download the updated NAIC "Shopper’s Guide to LTC Insurance"

Comfort Long Term Care is an independent insurance brokerage agency specializing exclusively in LTC insurance. Agency owner, Bill Comfort, The LTCpro® is a LTC specialist celebrating 30+ years of experience since 1991! We are based in the Raleigh, Durham, Chapel Hill, North Carolina Triangle region, but we serve clients throughout NC and across the country. We also have an office in St. Louis, Missouri.
Click here to learn more about us!

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