What is a Tax-Qualified Policy?

Policies that are tax-qualified meet certain standards as set forth in the Health Insurance Portability Act, commonly referred to as “HIPAA,” which Congress passed in 1996. HIPAA ensures that benefits paid from policies that meet its standards are not considered taxable income and that qualified premiums may be deductible as medical expenses if certain thresholds are met. Almost half of all states offer tax incentives for long term care insurance premiums.