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Use Health Savings Account To Pay Long Term Care Insurance Costs
The 14 million Americans with Health Savings Accounts were urged to sign-up for and use the tax-advantaged benefits to pay some or all of their long term care insurance policy costs.
"Millions of Americans now have high-deductible health insurance coverage which enables them to take advantage of Health Savings Accounts, a tax advantaged medical savings account that can be used for many costs including long-term care insurance," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance http://www.aaltci.org and author of the Guide To Tax-Qualified Long Term Care Protection. "This is a tax advantaged way to obtain protection few are aware of."
Health Savings Accounts were established as part of the Medicare Prescription Drug, Improvement, and Modernization Act that was signed into law by President George W. Bush on December 8, 2003. The primary advantage of the H S A is the ability to make pre-tax contributions prior to the Federal Insurance Contributions Act tax (FICA) and Medicare Tax deduction, which amounts to a savings of 7.65%. "Since everyone is now paying two percent more in withholding than they did last year, the tax advantage is even greater," Slome adds.
For 2013, the contribution limits are $3,250 for a single individual and $6,450 for a family. Those over age 55 can make an additional $1,000 catch-up contribution. "The amount one can contribute to an HSA is going to be more than the cost of long term care insurance," Slome notes. The Association's yearly Price Index revealed that a valuable policy for someone age 55 could be obtained for between $100 and $140-per-month.
"Far too few take advantage of the many tax advantages available to individuals,"
Additional information including the 2012 and 2013 tax deductible limits for long term care insurance can now be accessed on the American Association for Long Term Care Insurance (AALTCI) website http://www.aaltci.org/