If you were a public employee you may be able to pay for your long term care insurance with pre-tax dollars. The Pension Protection Act of 2006 grants eligible retired public employees, such as teachers, police, fireman, state and federal employees an annual federal income tax exclusion of up to $3000 for amounts paid to cover the cost of qualified long term care insurance premiums of behalf of the member, his or her spouse, or dependents. To qualify to be paid pre-tax, the premiums must be paid thru the payroll deduction directly from the member’s pension plan to the long term care insurance company.
Inquire today with your pension department and ask if this feature is currently available, and if not, insist that they set it up to pay your long term care insurance company directly. You can save a tremendous amount of money, for example if you are in the 25% tax bracket, you will save 25% of the cost of the premium.
With the Pension Protection Act, the government wants to encourage Americans to plan ahead for their retirement and purchase needed long term care policies privately with pre-tax dollars. The government thru Medicaid currently pays for approximately 50% of all long term care in America, which is straining our national budget, and by encouraging citizens to privately purchases these long term care policies it will relieve our national deficit.
Remember, not only does the government provide a way for you to pay for these policies with pre-tax dollars, but also provides powerful incentives to save your estate for your loved ones, not become destitute, and not hand over all your hard earned money to a nursing home, with a “dollar-for-dollar” asset disregard or “spend down” protection. Individuals who purchase a Partnership Qualified policy earn one dollar of Medicaid asset disregard (protection) for every dollar the insurance coverage paid on the behalf. For example, if you purchase a policy that has benefits of $300,000 then you would be able to protect $300,000 of your estate assets, dollar for dollar.
Long Term Care USA is familiar with all of the aspects of the Long Term Care Pension Protection Act, so contact us for further questions. Always consult with your Certified Public Accountant in regard to any tax matter and also contact your Pension Department. To receive a quote and further information regarding these topics, please click on the button below to receive no obligation information in the mail.
comparison guide for LTC Policies in the USA today
- Price comparison quotes from all the top insurance companies in the USA, including their financial profile, size, and A. M. Best ratings.
- Easy to understand side-by-side comparisons of each company’s policy features and options.
- We show you the policy similarities and differences.
- Become an expert instantly.
Carriers quoted will vary from state to state.)