HIPAA
Up HIPAA Tax Qualified Federal State

 

HIPPA

The Health Insurance Portability & Accountability Act (HIPAA) of 1996 (also known as the Kennedy-Kassebaum Bill), successfully addressed three items that affect long-term care insurance. These included the following:

1) Tightening up Medicaid eligibility requirements

2) Setting state standards on long-term care insurance

3) Offering incentives for those persons who purchased long-term care insurance

HIPAA designated two types of long-term care insurance policies: tax-qualified (TQ) and non-tax qualified policies (NTQ). The tax-qualified policies are the ones that adhere to HIPAA criteria that standardized long-term care policies and offer tax incentives. The differences of the two are described in detail in the TQ vs. NTQ section.

Long-term care insurance policies that were purchased before January 1, 1997 (when HIPAA was implemented) were grand fathered in and are considered tax-qualified (TQ) for federal purposes. They will remain tax-qualified if there are no material changes made to them.