What You Need to Know
- Sen. Pat Toomey has proposed an amendment based on his Long-Term Care Affordability Act.
- The bill would let people use up to $2,500 in retirement plan assets per year to pay long-term care insurance premiums.
- Whether the amendment would include the LTCI primer notice provision in S. 2415 is unclear.
The Senate Finance Committee is considering a proposal that would allow people to use retirement plan account assets to pay long-term care insurance premiums.
The committee included a summary of the proposed LTCI premium payment amendment in a master amendments document for the Enhancing American Retirement Now Act bill, or EARN Act bill.
The committee is planning to hold a hearing on the EARN Act bill at 10 a.m. June 22. The committee intends to stream the hearing online and post a video recording of the hearing on its website.
What It Means
Members of Congress are still considering ways to encourage people to buy private LTCI coverage.
Even if the retirement plan LTCI premium amendment fails to pass this year, its existence is proof that the idea is still out there.
The Insured Retirement Institute (IRI), an annuity industry trade group, is tracking the EARN Act bill and amendment proposals.
IRI said in an email alert that the Senate Finance Committee hearing — combined with the recent Senate Health, Education, Labor and Pensions Committee approval of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg Act, or Rise & Shine Act — “demonstrates powerful momentum behind putting a comprehensive retirement security measure on President Biden’s desk this year.”
One of the obstacles facing issuers of private LTCI coverage has been that solid LTCI coverage has typically cost about $100 to $250 per month.
Because most people who file LTCI claims are using their benefits after they have reached 65, some long-term care policy specialists have been suggesting for years that the government should let workers invest retirement plan assets in LTCI coverage.