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Regulation and Compliance > State Regulation

New York State LTCI Bill Stays in Committee

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A long-term care insurance (LTCI) tax break bill is stuck in the New York state Senate Investigations and Government Operations Committee.

The committee decided last week to hold the bill, S228A-2011, in the committee.

The bill would help New York state residents pay for LTCI coverage by creating a new state personal income tax exemption. Holders of individual retirement accounts and individual retirement annuities could use retirement arrangement distributions to buy LTCI policies without paying income taxes on the distributions.

The bill was introduced by state Sen. George Maziarz, R-Wheatfield, N.Y.

New York state lawmakers considered similar bills during the 2007-2008 and 2009-2010 legislative sessions.

“Planning for future long-term care needs is a goal that New York state continues to support as a way to save Medicaid  and as a way for individuals to be able to manage their own care and improve outcomes,” according to an explanatory memo written by bill supporters. “This legislation provides one more tool for individuals to accomplish this goal.”

New York state ony approved a law that lets New York residents  use the proceeds of an accelerated death benefit to pay for nursing home costs about two years ago.

Federal law now lets life and annuity holders exchange those products for LTCI products. The new Section 1035 exchange rules were years in the making.


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