Tax Incentives for Businesses
Since the passage of the Health Care Availability and Affordability Act in 1996, the federal government has shown its intention to encourage the purchase of long-term care insurance. Since that time, other legislation has been implemented to prevent people from shifting assets to avoid paying for care and to further incent individuals to purchase long-term care insurance. In fact, the federal government provides more generous tax incentives to businesses for long-term care insurance than it does for any other insurance product.
- Money paid for coverage for owners or select categories of employees does not count as income to the employee and is tax deductible for the business, depending on its form of organization.
- Benefits, when received, are tax free to the policyholder.
In addition to federal tax incentives, many states offer additional incentives to encourage individuals to purchase coverage. New York, for example, allows a 20 percent state tax credit on the amount of premium paid.
