The Health Insurance Portability & Accountability Act of 1996 also known as the Kennedy-Kassebaum Bill addressed three items: Long-term care financing, standards for long-term care insurance and Medicaid eligibility.
"Tax-qualified" long-term care insurance policies were given minimum standards by the federal government. The tax clarification means that up to certain limits, the premiums paid for long-term care insurance are deductible, and the benefits (up to $175 per day) would be received tax-free to the insured. Long-term care insurance premiums can now be added along with eligible medical expenses on Schedule A and to the extent they exceed 7 ½ % of the insured's adjusted gross income, they are deductible.
Policies must be guaranteed renewable.
All insurers must offer third-party lapse notification protections.
Post-claims underwriting is prohibited.
Policies cannot unreasonably limit or exclude benefits.
If you replace one policy with another policy, the new insurer must waive any pre-existing conditions.
Benefits cannot duplicate those available from Medicare.
Benefit triggers to be eligible for benefits under a "tax-qualified" policy are specified too. When a doctor or a licensed health care practitioner says an insured is unable to perform 2 of 5 or 6 (in California) activities of daily living, "without substantial assistance from another individual" and certifies that the expected need is for longer than 90 days the policy will go into benefit or an insured will "require substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment."
Bathing
Dressing
Continence
Toileting
Transferring
Eating
Guaranteed Renewable or Non-cancelable Protection
Continuation or Conversion Coverage (from group policy)
30-day Free Look
Agents in California are required to provide:
Outline of Coverage
Long-term Care Insurance Personal Worksheet
If selling a tax-qualified policy the agent must show you a standardized side-by-side comparison of both the tax qualified policy and policies using the California eligibility standards.
The Mission of the California Partnership for Long-Term Care is to Increase the Number of Middle Income Californians Who Have Quality, Long-Term Care Insurance Coverage that Protects Them from Impoverishment.
You can receive brochures titled "Asset Protection; A Special Benefit Created for Californians and Inflation Protection: Why is it so important?" by mail from the California Partnership for Long-term Care, P.O. Box 942732, Sacramento, CA 94234-7320 or Email your name and address to sandra@insurance-california.com
Do you see yourself being one of two people who will eventually need long-term care at home or in a facility sometime in the future?
Are your assets sufficient to pay for 2,3,4,5 or more years of care at $50,000 now or $100,000 per year 15 years from now?
Allianz Life Insurance Company of North America
Prudential Insurance
Lincoln Benefit Life
To determine eligibility for an LTC policy, submit the following information: