To amend the Internal Revenue Code of 1986 and the Social Security Act to provide tax benefits with respect to long-term care insurance contracts that satisfy certain requirements.

Summary

TABLE OF CONTENTS: Title I: Tax Treatment of Long-Term Care Insurance and Services Title II: Federal Standards for Private Long-Term Care Insurance Contracts Title I: Tax Treatment of Long-Term Care Insurance and Services - Amends the Internal Revenue Code to provide for the treatment of qualified long-term care insurance or plans as accident and health insurance or plans. Revises the computation of reserves for purposes of determining insurance company income. Prohibits provision of long-term care insurance under cafeteria plans. Includes in an employee's gross income employer-provided coverage for long-term care services to the extent such coverage is provided by a flexible spending arrangement. Makes inapplicable, with respect to coverage under a long-term care insurance contract, the excise tax imposed on group health plans for failure to provide continuation coverage. Makes amounts paid to relatives for long-term care services (unless they are licensed professionals with respect to such services) ineligible for the income tax deduction for medical expenses. (Sec. 103) Includes amounts paid for qualified long-term care services as medical expenses deductible from gross income. (Sec. 104) Provides for nonrecognition of gain on the exchange of a life insurance contract or an endowment or annuity contract for a long-term care insurance contract. (Sec. 105) Excludes from gross income certain amounts withdrawn from individual retirement accounts and certain employer cash or deferred arrangements to pay long-term care premiums. (Sec. 106) Excludes from gross income long-term care benefits received by terminally ill individuals. Excludes such benefits received by chronically ill individuals above a certain amount. (Sec. 107) Requires returns to be made by persons who pay long-term care benefits and statements to be supplied to persons with respect to whom information is provided. Title II: Federal Standards for Private Long-Term Care Insurance Contracts - Amends the Social Security Act to add a new title XXI, establishing Federal standards for long-term care insurance contracts. Requires the Secretary of Health and Human Services to review and approve State programs that certify compliance with these standards. Requires the Secretary to promulgate regulations, in consultation with the National Association of Insurance Commissioners (NAIC) to standardize long-term care insurance contracts and facilitate the provision of consumer information regarding public and private long-term care coverage. Requires insurers to use in contracts uniform terminology, definitions, and formats and to furnish an outline of coverage for each contract that includes at a minimum: (1) a description of benefits and exclusions; (2) conditions for cancellation; (3) a premium statement; and (4) a cost-value comparison. Prohibits contracts from imposing certain conditions on benefits. Prohibits certain limits on benefits for home care, community-based, or nursing facility services. Requires a contract to provide for treatment of mental impairments (including Alzheimer's disease) and HIV infection or AIDS that is not different from the treatment of any other medical condition for purposes of determining thresholds or amounts of benefits. Requires the Secretary, in consultation with NAIC, to promulgate regulations regarding: (1) inflation adjustments of benefits; (2) nonforfeiture benefits; and (3) procedures for renewal, replacement, conversion, and cancellation of contracts.

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• Introduced in House (text)

  Introduced in House · EN · 6 April 1995

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• Introduced in House (PDF)

  Introduced in House · EN · 6 April 1995

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• Introduced in House

  summary · EN · 6 April 1995

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