According to the Department of Health and Human Services, 70% of people who reach age 65 will need some form of long term care in their lifetime. It is a scary fact, but what may be scarier is finding ways to pay for your long term care insurance. You may be interested to learn how to save on long term care using your health spending account (HSA).
For those who may struggle to fit paying for long term care insurance into their budget, the good news is you may pay for premiums with your HSA. It must be a ‘tax-qualified’ policy (which most are) and the amount you can withdraw tax-free for these premiums depends on your age.
In 2015, you can use up to $380 tax-free from your HSA for long term care insurance premiums if you’re 40 or younger, $710 if you’re 41 to 50, $1,430 if you’re 51 to 60, $3,800 if you’re 61 to 70 and $4,750 if you’re over 70. This amount increases each year to account for inflation growth.
If you chose not to use your HSA money to pay for a portion of your premiums, you may also be able to count those premiums as tax-deductible medical expenses. You would need to follow the guidelines outlined in our 2015 Tax Guide.
LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.