LONG TERM CARE 5
Able to sell you a Partnership policy and to advise you as
to whether the Partnership program works for you. Be sure
to confirm that your agent has this special certification
to sell Partnership policies. Each Partnership-approved policy
includes high quality insurance benefits to cover the care
you may need and automatic inflation protection to ensure
that the benefits keep pace with the rising cost of care.
Partnership policies also include a unique state guaranteed
asset protection feature that protects you against impoverishment
due to the costs of long-term care, even if you use up all
the benefits of your policy.
The unique Medi-Cal asset protection feature of a Partnership-approved
insurance policy allows you to keep a dollar of assets for
every dollar your policy pays out in benefits. If you still
need long-term care after you use up your policy benefits,
you can apply to Medi-Cal and Medi-Cal will allow you to keep
assets, above what Medi-Cal normally allows, equal to the
amount of benefits the Partnership policy paid out for your
care. This protected amount of assets will not be counted
in your application for Medi- Cal benefits. These assets are
also protected as part of your estate so your loved ones will
receive them.
Only a Partnership-approved insurance policy can provide you
with both the benefits you may need and guaranteed lifetime
asset protection so you will not be forced to spend everything
you have worked for on long-term care.
Partnership policies
also have other important features that are not required in
other long-term care insurance policies. To learn more
about these policies and the companies that are approved to
sell them, call the Partnership for free brochures at 800-CARE445
(800-227-3445).
What Is A Tax Qualified Long-Term Care Policy?
Congress passed legislation effective in 1997 that
established the tax treatment of premiums paid for and the
benefits paid by long-term care insurance policies that met
certain federal standards. This legislation is called the
Health Insurance Portability and Accountability Act or HIPAA.
Long-term care policies that use the federal standards to
pay benefits are labeled as “Federally Tax Qualified”. Some
or all of the premiums for these federally tax qualified policies
may be deductible as a medical expense on your federal and
California income tax returns (depending on your age and the
amount of annual premium). In additional, the benefit payments
are excluded from income.
Note:
Premiums paid for a tax-qualified policy, qualify as
a medical expense. People who itemize medical expenses on
their federal tax return and have total medical expenses greater
than 7.5 percent of their adjusted gross income may be able
to deduct all or some portion of the premiums paid for one
of these policies.
The benefits received from
a tax-qualified long-term care policy are not taxable income
on both Federal and California tax returns.Employers
who provide tax-qualified long-term care insurance for their
employees may deduct the premiums they pay as they do for
other accident and health insurance policies. This employer
contribution would not be considered income to the employees.
California Department of Insurance
Protecting California Consumers
Toll Free 800-927-HELP
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