Republicans and Democrats have joined in the U.S. Senate to sponsor a bill that would provide an above-the-line deduction for long term care insurance bought through cafeteria plans.
The bill, S. 2337, was introduced Tuesday by Sens. Chuck Grassley, R-Iowa; Blanche Lincoln, D-Ark.; Olympia Snowe, R-Maine; Debbie Stabenow, D-Mich.; and Gordon Smith, R-Ore.
S. 2337 is a companion to H.R. 3363, which was introduced in the House in August by Reps. Earl Pomeroy, D-N.D.; Jim Ramstad, R-Minn.; Allyson Schwartz, D-Pa.; and Kenny Hulshof, R-Mo.
The bill would let workers buy long term care insurance with pre-tax dollars through employer-sponsored cafeteria plans and flexible spending accounts.
Current law permits individuals to deduct LTC insurance premiums only if they itemize and only if health care expenses exceed 7.5% of their adjusted gross income.
S. 2337 also would adopt consumer protection rules similar to those included in an LTC insurance model developed by the National Association of Insurance Commissioners, Kansas City, Mo.
The American Council of Life Insurers, Washington, welcomed introduction of the bill.
“Millions of Americans have used cafeteria plans and FSAs to help protect their families and provide important financial protection,” ACLI President Frank Keating says in a statement. “Including long term care insurance will add an important piece to Americans’ financial security puzzle.”