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.
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.
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.
