Exemptions to the Individual Mandate
There are some cases where there is no penalty to not having coverage.
In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA), which amends the Internal Revenue Code and provides for favorable tax treatment for “qualified” long-term care plans. Policies sold after Dec. 31, 1996, must meet new standards to be considered “tax qualified.”
If you have a tax-qualified plan:
To claim a tax deduction for your long-term care premium, all of your medical expenses must be more than 10% of your adjusted gross income. Check with your tax adviser to find if you qualify for a deduction, and if so, how much.
All companies selling long-term care policies sold after Jan. 1, 1997, must clearly identify the tax status of the policy. If the policy is tax qualified, the statement will normally be on the face page of the policy.
If you purchase a nontax-qualified plan after Jan. 1, 1997, you will not be able to deduct any portion of the premium, and any benefits paid may be considered taxable income to you.
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