NU Online News Service, April 22, 5:16 p.m. – Maine Gov. Angus King Jr., an Independent, has signed H.B. 70, a bill that expands deductibility of long-term care insurance premiums.
Under the old law, Maine provided a tax deduction for individuals who bought long-term care insurance, and an annual tax credit of up to $5,000 for employers that provided long-term care coverage for employees.
But Maine offered the tax breaks only to individuals and employers that bought “tax-qualified” policies, or policies that qualified for special tax treatment by the federal government.
Some long-term care insurance companies and brokers argue that many consumers would be better off with richer benefits packages than the federal LTC tax rules permit.
H.B. 70 helps state residents who buy “non-qualified” LTC insurance policies by making the same tax breaks available to consumers who buy “state-certified” LTC coverage.
Now, insurers can submit their LTC policies to the state superintendent of insurance.
“The superintendent shall certify a policy or contract submitted for review under this section as a long-term care insurance policy if the superintendent finds that the policy or contract complies with all the standards applicable to long-term care policies set forth” in the Maine insurance laws, according to the bill text.
The new law applies retroactively to state-certified LTC coverage purchased since Jan. 1, 2000 as well as LTC coverage purchased during the current tax year.
H.B. 70 was introduced by Rep. Thomas Kane, D-Saco, Maine. The state House and Senate worked on the bill for more than a year before sending it to the governor for his signature, according to the state bill tracking service.
Older versions of the bill and other information is available on the Web, at http://janus.state.me.us/legis/bills/billtexts/LD007901-1.asp