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05/01/2017

Arthritis: Long Term Pain May Require Long Term Care
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05/01/2017

Americans with Osteoporosis Face an Increased Risk of Needing Long Term Care
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04/01/2017

Retirement: What's Your Plan?
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What Does It Mean to Be "Tax-Qualified"?

What Does It Mean to Be "Tax-Qualified"?

Congress passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996 to ensure that long term care insurance policies that meet certain standards receive favorable tax benefits.

For these tax-qualified long term care insurance plans, benefits you receive are not considered taxable income and you can deduct long term care insurance premiums as medical expenses to the extent that your total qualified medical expenses exceed 10% of your annual adjusted gross income or 7.5% if you are age 65 or older. Due to changes to the itemized deduction for 2013 medical expenses, the 7.5% limitation is a temporary exemption, from January 1, 2013, to December 31, 2016, for individuals who are age 65 and older.

The amount of long term care insurance premiums that you can include in your total medical expenses is subject to Internal Revenue Service (IRS) limits by age. Here are the current published IRS limits by age:

Your age in years,
attained before the
close of the taxable year		 Maximum long term care insurance premiums you
can include: tax year 2014		 Maximum long term care insurance premiums you
can include: tax year 2015
Age 40 or younger $370 $380
Age 41 to 50 $700 $710
Age 51 to 60 $1,400 $1,430
Age 61 to 70 $3,720 $3,800
Age 71 or over $4,660 $4,750

Under a tax-qualified plan, benefits are payable when a licensed health care practitioner certifies that you are unable to perform at least two activities of daily living without substantial assistance for a period expected to last at least 90 days.

You are also eligible for benefits if you require substantial supervision to protect yourself due to a severe cognitive impairment such as Alzheimer's disease.

The Federal Long Term Care Insurance Program (FLTCIP) is designed to be Federally tax-qualified and is also tax-qualified in many states. For more information, see our Tax Benefits FAQs.

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Apply Today!

Federal family members can apply for coverage anytime—you do not have to wait for the next open season. Premiums are based on your age and the premium rates in effect at the time we receive your application—the younger you are when you apply, the lower your premium will be.

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