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The LTC Insurance Value Proposition

1/9/2020

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CLICK HERE for more information!
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IRS Releases 2020 LTC Insurance Tax Guidance

11/7/2019

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The IRS has just released its annual inflation adjustments for tax year 2020. This includes the amount of LTC insurance premiums which are considered deductible health insurance premiums (the "Eligible Premium") and the minimum tax-free benefit amount for "cash benefit" indemnity plan payments - what the IRS calls "per diem" plans.
FOR CLAIMS IN 2020 with a "cash benefit" or indemnity (per diem) policy the minimum tax-free benefit increases to $380 per day ($11,558/month).
(This is a $10/day increase from 2019 which was $370/day.)
​
  • LTC insurance benefits received on an indemnity (per diem) basis are tax-free to the GREATER OF $380/day (2020) 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 $400 per day, then $20 per day (2020) would have to be claimed as taxable income.
    • If the per diem benefit received is $400 per day, but you have $400 or more per day in paid caregiving charges, then it would all be tax-free.
  • ​NOTE that while "reimbursement"-type LTC policies are generally paid tax-free no matter what the benefit amount is, if multiple policies pay for the same charge, then the per diem limit could also apply.  Always check with your tax advisor for personal guidance.*
FOR PREMIUMS PAID IN 2020 the amount of tax-qualified premiums paid based on your age at the end of the tax year (on 12/31/2020) are considered a deductible medical expense up to the following age-based, "Eligible Premium" limits:
Age at end of 2020
Maximum Deductible Premium
40 or less
$  430
41 to 50
$  810
51 to 60
$ 1,630
61 to 70
$ 4,350
71 and older
$ 5,430
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.

BUSINESS OWNERS (and spouses) get to take the age-based, Eligible Premium deduction "above-the-line" on page one of Form 1040 as part of the "Self Employed Health Insurance Deduction" (Line 29).  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.

Read more from the IRS website by clicking here:
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020

​* 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.
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Sample LTC Insurance Premiums Posted

9/11/2019

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For a quick look at average/sample rates for LTC insurance see our new information page by clicking the button below!
Sample LTC Premiums
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WA State Passes State-Run LTC Insurance Plan

5/8/2019

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The state of Washington has passed the first of its kind government-run LTC insurance program for working residents of the state.

The plan will provide $100 per day of benefits which will increase with inflation for a maximum of 365 days (1-year).  Each day of benefits is considered a "unit" of coverage and units can be combined to pay for care services above $100/day, but that would also shorten the total benefit period.  The benefit can be used to pay family members to provide care after they have completed a minimum amount of mandatory training.

Every employee in the state will have a payroll tax withholding to pay for the plan.  The tax is 0.58%, or $0.58 for every $100 in payroll income.  A person earning $4,000 per month would pay $23.20 per month.
INFOGRAPHIC SUMMARY OF WA LTC PLAN
The plan does not cover people already retired or who will retire in the next 6 to 10 years.  It also is not portable if an employee leaves the state of Washington.

Payroll deductions will not begin for 3 years, and no benefits will be paid for at least 3 years after that as the plan requires that employees pay in for a minimum of 3 of the previous 6 years to be eligible.  To be fully "vested" in the plan an employee must pay in for at least 10 years.

"Self employed" people will not be automatically covered, but can opt-into the plan at the same payroll tax rate.

​Employees who have private LTC insurance can opt-out of the tax and coverage.
Read more details by clicking here:
https://www.linkedin.com/pulse/payroll-tax-funded-ltc-plan-revived-wa-state-bill-comfort/
Request a LTC Insurance Quote
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Bill Comfort Featured on New Advisor Website

2/24/2019

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Comfort LTC owner, Bill Comfort, is featured on a new website for insurance agents and financial advisors seeking to learn more about LTC insurance and other care-planning options.

Licensed agents and advisors can access the new NAIFA Center for Limited and Extended Care Funding at: ​https://naifa.lifehappenspro.org
Watch Bill's video promoting the CLTC designation training program here:
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Buy LTCI Before Genetic Testing

8/10/2018

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Good advice from Kaiser Health News: Hold off on genetic testing until AFTER you buy LTC insurance (or life or disability). You must disclose the existence of the testing and any known results on an application and results can be used to deny or limit coverage.
CLICK HERE to read the full article:
https://khn.org/news/how-genetic-tests-muddy-your-odds-of-getting-a-long-term-care-policy/

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LTC Insurance is Not Dead

3/15/2018

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Looking forward, LTC insurance is more secure and reliable than ever.

CLICK HERE to read my new article on why LTC insurance remains a valuable insurance product with a future that should be much more stable than in the past.
https://www.linkedin.com/pulse/ltc-insurance-dead-bill-comfort
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Why the WSJ is wrong about LTC planning

1/22/2018

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Here is a link to an excellent article from Forbes.com that provides valuable, even critical, context to any discussion of long-term care planning and funding your plan with LTC insurance.

In many ways a recent Wall Street Journal article simply re-packages old news in a new emotional wrapper since LTC insurance rate increases have been under way across the industry for more than 10 years.  It also gets a couple of very important things wrong - including the fact that there are many options for dealing with a rate increase other than just walking away from the coverage.
"The WSJ piece essentially falls into the 'bad news sells' category of reporting ... Its “Woe is me!” theme actually pushes people away from doing quality long-term care planning. Instead of lamenting past missteps, the article could have emphasized some of the new techniques for building effective and sustainable solutions to the budding long-term care crisis."
CLICK HERE or on the link below to read the Forbes.com article:
​https://www.forbes.com/sites/jamiehopkins/2018/01/22/why-the-wsj-is-wrong-about-long-term-care-planning/#6197a57b6ba3
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Comfort Quoted in Kaiser Health News

7/27/2017

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"How to Get Long-Term Care at Home Without Busting the Bank"

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“Long-term care, for most people, is a home care problem,” said Bill Comfort, who owns Comfort Long Term Care, a brokerage based in St. Louis and Durham, N.C."
Check out this excellent article on using Partnership LTC insurance to design meaningful and affordable LTC insurance coverage - especially for care at home.  CLICK HERE to read the full article.
http://khn.org/news/how-to-get-long-term-care-at-home-without-busting-the-bank/
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It's Official: PennTreaty LTCI in Liquidaiton

3/6/2017

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Penn Treaty Network America LTC insurance company will now go into liquidation. A Pennsylvania court gave the PA Department of Insurance final approval to liquidate the LTCI company on March 1st.  Benefits will still be payable if premiums continue to be paid on-time, but according to the PA DOI about 50% of policyholders may have their benefits limited.

Liquidation means that the claims liabilities now fall to individual states' insurance "guarantee funds" which most commonly limit total benefits to $300,000.  A few states are slightly higher and a couple - including Missouri - have a cap of only $100,000 for LTC insurance.  Note that in most cases you would be covered by your state of residence at the time of liquidation (March 1, 2017), NOT the state where you bought the policy.

While this insurance company failure is being reported as the largest financially in US history, it's important to note that Penn Treaty's policyholders account for only one-percent (1%) of all LTC insurance policyholders in-force, and that along with grossly under-pricing its overly-liberal policy benefits, Penn Treaty accepted people with health risks that no other insurance company would consider.

My general advice to Penn Treaty policyholders: Keep your coverage, especially if you are older or uninsurable and cannot replace your coverage.  Even if you could qualify for a replacement, you may be better off keeping Penn Treaty on a limited basis.

Contact us for a policy/coverage review.
Read more from the PA DOI by clicking here.
According to the PA DOI, Policyholders with questions about policies, claims, or related to liquidation should call Policyholder Services at:  1-800-362-0700.
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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.
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The information on this website is for general informational and educational purposes only, and it is not intended to be a direct solicitation for the sale of any specific insurance company or policy form.  Not all policy types, options, or riders discussed in general terms on this site are available in every state.  Individual requests for specific company or policy information will be directed to a properly-licensed agent for applicable state of residence.  For complete information about any specific coverage - including limitations and exclusions - refer to a company-specific illustration and Outline of Coverage.
  • TakeCare!
    • LTC Awareness
    • Hybrid LTC Insurance Info
    • Partnership LTC Insurance
    • Tax Guide
    • Claims
    • Glossary
  • LTC Rate Increases
  • News
  • About
    • Bill Comfort
    • TakeCare! Specialists
    • Companies
    • Rinny
  • Contact