Grassley Measure Reintroduces call for long-term care tax

 

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18 February 2009 Wednesday 04:00 PM EST

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Grassley Measure Reintroduces call for long-term care tax

Raymond J Lehmann

WASHINGTON



The top Republican on the Senate leader of the editorial board of the tax is introducing legislation that would allow individuals to take over the line of the federal tax deduction for long-term care insurance premiums.

Under the Act entitled to the house, organized by Ranking Member of the Finance Committee Charles Grassley, R-Iowa, employers who, for the first time, be allowed to offer qualified long-term care insurance for employees as an option in the cafeteria and plans through tax free flexible spending accounts.

Grassley, who is co-sponsoring the bill with Senator John Kerry, D-Mass., Said he would address long-term demographic challenges and price trends in the nursing home market . He noted the population of persons aged 85 will increase by 300% by 2050, the annual cost of a private room in a nursing home is expected to almost double over the next 20 years.

"One way to prepare for these challenges by encouraging more Americans to obtain long-term care insurance," Grassley told the Senate. "To date, only 10% of seniors have long-term care life insurance, and only 7% of all private sector employees are offered long-term care insurance as a voluntary benefit. "

The FSA and the cafeteria provisions allow employees to purchase long-term care coverage on a pre-tax basis, similar to group life, health and disability insurance. The person selected would allow taxpayers to reduce their gross income an amount equivalent to the cost of long-term care insurance premiums.

"This tax benefit for long-term care insurance should encourage more people to purchase these policies," said Grassley. "It certainly makes a policy more affordable, particularly for youth. This would allow a taxpayer in middle age to start planning for the future. "

The measure also provides a tax credit for caregivers of a maximum of $ 3,000 per person and implements requires insurers to submit to a number of new protections for consumers. It was referred to the Finance Committee.

(By RJ Lehmann, director of the Washington office: raymond.lehmann @ ambest.com)

19 February 2009

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