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Sponsors
3 Co-sponsors
History
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Increases from 20% to 40%, the tax credits for premiums paid for long-term care insurance premiums during certain taxable years
In Assembly Committee · Ways And Means · Sponsor Mark Gjonaj
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to increasing the tax credits for premiums paid for long-term care insurance
Purpose or general idea of bill
The purpose of this bill is to provide additional tax credit inducements to encourage individuals to either retain long term care (LTC) insurance coverage or encourage more, currently non-enrolled individuals, to purchase long term care (LTC) insurance.
The LTC insurance market has recently become much more unstable due to: a) significant reductions in the number of individuals that have purchased coverage or who choose to continue to retain such coverage, b) a significant reduction in the number of insurance carriers that offer LTC insurance, and c)the approximately 50% increase in LTC insurance premiums that has been granted in 2015 and the likely possibility of vast increases being imposed in policy years 2016 and beyond.
Read the full memo (845 words)
This enhanced tax credit is available for the next three years and applies retroactively from January 1, 2015 to December 31, 2018 so that New York State will have the sufficient time needed to develop and enact new methodologies to help stabilize the currently unstable and volatile LTC insurance market.
Summary of specific provisions
Section 1: Amends Tax Law section 190 to increase the corporate income tax credit for purchasing long term care insurance from 20% of the premium paid to 40%. This enhanced tax credit shall be applicable for premiums paid from January 1, 2015 to January 1, 2019.
Section 2: Amends Tax Law section 210-B to increase the franchise income tax credit incentive for the computation income tax from 20% to 40% of the premium paid for LTC insurance.
Section 3: Amends Tax Law section 606 to increase the personal income tax credit from 20% to 40% of the cost of premiums paid to purchase LTC insurance.
Section 4: Amends Tax Law section 1511 to add the enhanced income tax credit for insurance franchisees from 20% to 40% of the cost of premiums for LTC insurance.
Justification
The purpose of this bill is to temporarily enhance the current 20% LTC premium income tax credit to 40%, retroactively to January 1, 2015. The underlying goal of this bill is to help to offset recently approved LTC insurance premium rate increases for the next upcoming three years. Some of the recently approved LTC insurance rates increased by over 50%. Many current LTC policy holders are over the age of 55 and cannot afford this drastic premium rate increase. The enhanced tax credit from 20% to 40% will give temporary relief to those that currently have LTC insurance, help to stabilize the market, and encourage younger healthier lives to think about purchasing LTC policies which will help curtail any additional future premium rate increases.
This bill, by increasing the current 20% LTC premium income tax credit to 40%, retroactively, to January 1, 2015, will help to offset most or all of the recently approved LTC insurance rate increases granted to
insurers by the Department of Financial Services (a three year policy period) for the next three years.
This measure's provisions sunset in three years on 12/31/18. The reason for the three year sunset is to give sufficient time for the Legislature and Governor to develop and implement new methodologies to help stabilize the LTC insurance market over the long term. While this bill does double the income tax credit for those premiums paid by insureds, it should not be a significant fiscal hit on the State Budget. This is because with the enactment of this measure, many covered persons will continue to keep their LTC policies. If, however, this measure is not enacted, many LTC policy insureds will let such policies laps and should that occur, any long term care or nursing home care required by such persons would not be financed by private insurance carriers, but by public Medicaid payments that are supplied by State and local governments.
As the general population becomes older, more and more individuals are looking for affordable ways to finance their nursing home and long term care needs. While there are available policies that provide payment for long term care, more products should be authorized under New York law so that consumers will have more types of insurance coverage available to meet their specific needs or the needs of their family and to increase the selection of adult care facilities such insureds may go to.
In addition, encouraging more individuals to finance their own long term care, will help to curtail future expenditures from the State's Medicaid program, which currently finances the lion's share of the provision of long term care in this State.
Prior legislative history
New bill.
Fiscal implications
It is the intent of this bill to stabilize the LTC insurance market so that it can remain an important financing mechanism to finance end of life, home health, and nursing home care. This, in the end, should help to decrease State Medicaid expenditures.
Effective date
This act shall take effect on January 1, 2015.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.