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A04944 Summary:

BILL NOA04944A
 
SAME ASSAME AS S02559-A
 
SPONSORSchimminger
 
COSPNSR
 
MLTSPNSR
 
Amd 190, 210-B, 606 & 1511, Tax L; add 3216-a & 4306-h, Ins L
 
Relates to increasing the tax credit for the purchase of long-term care insurance; requires insurers to provide certain documentation to policyholders.
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A04944 Actions:

BILL NOA04944A
 
02/06/2017referred to ways and means
01/03/2018referred to ways and means
01/29/2018amend and recommit to ways and means
01/29/2018print number 4944a
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A04944 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4944A
 
SPONSOR: Schimminger
  TITLE OF BILL: An act to amend the tax law and the insurance law, in relation to the tax credit for the purchase of long-term care insurance   PURPOSE OF THE BILL: To provide relief from the increased premium costs of long-term care insurance.   SUMMARY OF SPECIFIC PROVISIONS: Section one of this bill amends Tax Law section 190(1) by providing that for taxable years beginning on and after January 1, 2018, the credit for long-term care insurance premiums that are paid during the taxable year shall be 20% of the premium paid unless the premium increased during the taxable year, and then the credit will be 25% of the premium paid during that taxable year. Section two of this bill amends Tax Law section 210-B by providing that for taxable years beginning on and after January 1, 2018, the credit for long-term care insurance premiums that are paid during the taxable year shall be 20% of the premium paid unless the premium increased during the taxable year and then the credit will be 25% of the premium paid during that taxable year. Section three of this bill amends Tax Law section 606(aa)(1) to provide that for taxable years beginning on and after January 1, 2018, taxpayers will be allowed a credit for long-term care insurance premiums paid during the taxable year equaling the applicable percentage of the premi- ums paid. The applicable percentage, which ranges from 50% to 20%, is based upon the insured's age at the time the policy was written. Section four of this bill amends Tax Law section 1511 by providing that for taxable years beginning on and after January 1, 2018, the credit for long-term care insurance premiums that are paid during the taxable year shall be 20% of the premium paid unless the premium increased during the taxable year and then the credit will be 25% of the premium paid during that taxable year. Section five of this bill adds a new section 3216-a to the Insurance Law. This new section prescribes information that must be provided to long-term care insurance policy holders on an annual basis. Section six of this bill adds a new section 4306-h to the Insurance Law. This new section prescribes information that must be provided to long- term care insurance policy holders on an annual basis. Section seven of this bill provides that this act shall take effect immediately.   JUSTIFICATION: In past few years, the Department of Financial Services approved signif- icant increases in premiums for many long-term care insurance policies. The increase for one insurance company was 60% of the current premiums, while another was allowed to increase the premiums by 50%. Upon receiv- ing notification of the premium increase, many New Yorkers, faced a difficult decision; find extra funds to pay the increased premium or reduce the policy's benefits. That is a difficult decision that this bill would help alleviate. By using the age of the insured as the basis for the credit, those who purchased policies when they were in their younger years would receive a larger credit. These individuals acted responsibly and purchased poli- cies when they were young and healthy. Instead of forcing these individ- uals to make a difficult decision after paying premiums for a number of years, this bill will help them in this time of increasing premiums.   PRIOR LEGISLATIVE HISTORY: 2015-2016: A.10088/S.6703.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined.   EFFECTIVE DATE: This act shall take effect immediately.
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A04944 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4944--A
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 6, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  SCHIMMINGER -- read once and referred to the
          Committee on Ways and Means -- recommitted to the  Committee  on  Ways
          and  Means  in  accordance  with  Assembly Rule 3, sec. 2 -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee

        AN ACT to amend the tax law and the insurance law, in  relation  to  the
          tax credit for the purchase of long-term care insurance
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 1 of section 190 of the tax law, as amended  by
     2  section  102  of part A of chapter 59 of the laws of 2014, is amended to
     3  read as follows:
     4    1. General. [A] For taxable years beginning before January first,  two
     5  thousand  eighteen, a taxpayer shall be allowed a credit against the tax
     6  imposed by this article equal to twenty  percent  of  the  premium  paid
     7  during  the  taxable  year for long-term care insurance, and for taxable
     8  years beginning on and after January first,  two  thousand  eighteen,  a
     9  taxpayer shall be allowed a credit against the tax imposed by this arti-
    10  cle  equal to twenty percent of the premium paid during the taxable year
    11  for long-term care insurance  unless  the  premium  for  such  insurance
    12  increased  during  the taxable year and such increase was approved after
    13  application to and by the department of  financial  services,  then  the
    14  amount of credit allowed for such insurance shall be twenty-five percent
    15  of the premium paid during the taxable year for such insurance. In order
    16  to  qualify  for such credit, the taxpayer's premium payment must be for
    17  the purchase of or for continuing coverage under a long-term care insur-
    18  ance policy that qualifies for such credit pursuant to section one thou-
    19  sand one hundred seventeen of the insurance law.
    20    § 2. Paragraph (a) of subdivision 14 of section 210-B of the tax  law,
    21  as  added  by section 17 of part A of chapter 59 of the laws of 2014, is
    22  amended to read as follows:
    23    (a) General. [A] For taxable years beginning before January first, two
    24  thousand eighteen, a taxpayer shall be allowed a credit against the  tax
    25  imposed  by  this  article  equal  to twenty percent of the premium paid
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06027-03-8

        A. 4944--A                          2
 
     1  during the taxable year for long-term care insurance,  and  for  taxable
     2  years  beginning  on  and  after January first, two thousand eighteen, a
     3  taxpayer shall be allowed a credit against the tax imposed by this arti-
     4  cle  equal to twenty percent of the premium paid during the taxable year
     5  for long-term care insurance  unless  the  premium  for  such  insurance
     6  increased  during  the taxable year and such increase was approved after
     7  application to and by the department of  financial  services,  then  the
     8  amount of credit allowed for such insurance shall be twenty-five percent
     9  of  the  premium  paid  during  the taxable year for such insurance.  In
    10  order to qualify for such credit, the taxpayer's premium payment must be
    11  for the purchase of or for continuing coverage under  a  long-term  care
    12  insurance  policy that qualifies for such credit pursuant to section one
    13  thousand one hundred seventeen of the insurance law.
    14    § 3. Paragraph 1 of subsection (aa) of section 606 of the tax law,  as
    15  amended  by  section  1  of part P of chapter 61 of the laws of 2005, is
    16  amended to read as follows:
    17    (1) Residents. [A] For taxable years beginning before  January  first,
    18  two  thousand eighteen, a taxpayer shall be allowed a credit against the
    19  tax imposed by this article equal to twenty percent of the premium  paid
    20  during  the  taxable  year for long-term care insurance, and for taxable
    21  years beginning on and after January first,  two  thousand  eighteen,  a
    22  taxpayer shall be allowed a credit against the tax imposed by this arti-
    23  cle  in an amount equal to the applicable percentage of the premium paid
    24  for such long-term care insurance. The applicable  percentage  shall  be
    25  based  upon  the  taxpayer's  age when he or she purchased the long-term
    26  care insurance policy for which  credit  is  claimed  and  shall  be  as
    27  follows:  (a)  for  policies purchased prior to the age of thirty, fifty
    28  percent, (b) for policies purchased after the  age  of  twenty-nine  but
    29  prior  to  the  age of thirty-five, forty-five percent, (c) for policies
    30  purchased after the age of thirty-four but prior to the  age  of  forty,
    31  forty  percent,  (d) for policies purchased after the age of thirty-nine
    32  but prior to the age of forty-five, thirty-five percent, (e)  for  poli-
    33  cies  purchased  after  the  age  of  forty-four but prior to the age of
    34  fifty, thirty percent, (f) for  policies  purchased  after  the  age  of
    35  forty-nine  but prior to the age of fifty-five, twenty-five percent, and
    36  (g) for policies purchased after the age of fifty-five, twenty  percent.
    37  In order to qualify for such credit, the taxpayer's premium payment must
    38  be for the purchase of or for continuing coverage under a long-term care
    39  insurance  policy that qualifies for such credit pursuant to section one
    40  thousand one hundred seventeen of the insurance law. If  the  amount  of
    41  the  credit  allowable  under this subsection for any taxable year shall
    42  exceed the taxpayer's tax for such year, the excess may be carried  over
    43  to  the  following year or years and may be deducted from the taxpayer's
    44  tax for such year or years.
    45    § 4. Paragraph 1 of subdivision (m) of section 1511 of the tax law, as
    46  amended by section 21 of part B of chapter 58 of the laws  of  2004,  is
    47  amended to read as follows:
    48    (1) [A] For taxable years beginning before January first, two thousand
    49  eighteen,  a  taxpayer shall be allowed a credit against the tax imposed
    50  by this article equal to twenty percent of the premium paid  during  the
    51  taxable  year for long-term care insurance, and for taxable years begin-
    52  ning on and after January first, two thousand eighteen, a taxpayer shall
    53  be allowed a credit against the tax imposed by  this  article  equal  to
    54  twenty percent of the premium paid during the taxable year for long-term
    55  care  insurance  unless  the premium for such insurance increased during
    56  the taxable year and such increase was approved after application to and

        A. 4944--A                          3
 
     1  by the department of financial  services,  then  the  amount  of  credit
     2  allowed  for  such insurance shall be twenty-five percent of the premium
     3  paid during the taxable year for such insurance. In order to qualify for
     4  such  credit, the taxpayer's premium payment must be for the purchase of
     5  or for continuing coverage under a long-term care insurance policy  that
     6  qualifies  for  such credit pursuant to section one thousand one hundred
     7  seventeen of the insurance law.
     8    § 5. The insurance law is amended by adding a new  section  3216-a  to
     9  read as follows:
    10    §  3216-a. Documentation to be provided to long-term care policy hold-
    11  ers. (a) All authorized insurers issuing insurance policies  subject  to
    12  the  provisions  of  section  one thousand one hundred seventeen of this
    13  chapter shall issue to each  policy  holder  an  annual  statement  that
    14  includes the following information:
    15    (1) the date such policy took effect;
    16    (2) the age of the insured on the date that such policy took effect;
    17    (3) the original premium amount for such policy;
    18    (4)  for  each  premium  increase, if any, the date and amount of such
    19  increase;
    20    (5) the total amount of premium paid on such policy for the immediate-
    21  ly prior calendar year; and
    22    (6) the total amount of premium paid since the inception of such poli-
    23  cy.
    24    (b) For purposes of this section, the term "policy holder" shall  mean
    25  any person who was a policy holder at any time during the year for which
    26  the annual statement is issued.
    27    (c)  The  annual  statement prescribed by this section may be combined
    28  with any other statements required to be given to  such  policy  holders
    29  and  shall  be  sent  to  such policy holders by the thirty-first day of
    30  January following the year for which the annual statement is issued.
    31    § 6. The insurance law is amended by adding a new  section  4306-h  to
    32  read as follows:
    33    §  4306-h. Documentation to be provided to long-term care policy hold-
    34  ers. (a) All insurers issuing policies pursuant  to  the  provisions  of
    35  section  four thousand three hundred four of this article and subject to
    36  the provisions of section four thousand three hundred six of this  arti-
    37  cle  that are for or include long-term care benefits shall issue to each
    38  policy holder an annual statement that includes the  following  informa-
    39  tion:
    40    (1) the date such policy took effect;
    41    (2) the age of the insured on the date that such policy took effect;
    42    (3) the original premium amount for such policy;
    43    (4)  for  each  premium  increase, if any, the date and amount of such
    44  increase;
    45    (5) the total amount of premium paid on such policy for the immediate-
    46  ly prior calendar year; and
    47    (6) the total amount of premium paid since the inception of such poli-
    48  cy.
    49    (b) For purposes of this section, the term "policy holder" shall  mean
    50  any person who was a policy holder at any time during the year for which
    51  the annual statement is issued.
    52    (c)  The  annual  statement prescribed by this section may be combined
    53  with any other statements required to be given to  such  policy  holders
    54  and  shall  be  sent  to  such policy holders by the thirty-first day of
    55  January following the year for which the annual statement is issued.
    56    § 7. This act shall take effect immediately.
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