See Quick Facts section for more detailed information.
| Q: | What is a Nebraska Long-Term Care Savings Plan (LTCSP) account? |
| A: | An LTCSP is a state-tax-sheltered savings or investment account opened by a consumer at a participating bank, savings bank, credit union or other financial institution or a subsidiary. |
| Q: | Who can open a LTCSP account? |
| A: | Any individual can open a LTCSP account in their name from a qualified participating institution. |
| Q: | Why should I open a Nebraska Long-Term Care Savings Plan account? |
| A: | As the population ages, we will become less and less assured that funds are available for the care of elderly Americans through Social Security and Medicare. This cost-effective plan is a way to save for your own care. In addition to assuring that the money will be there when you need it, the plan also gives you more control over your health care options. Without a private long-term care plan, the options for care may be restricted to what family or government is able to provide. |
| Q: | How much can be contributed to one of these accounts? |
| A: | An individual may contribute as much as $170,000 (indexed for inflation) to a Long-Term Care Savings Plan account during the individual's lifetime. |
| Q: | What are the tax advantages of establishing a Long-Term Care Savings Plan account? |
| A: | A Nebraska income tax deduction is available for contributions of up to $1,000 per person ($2,000 per joint return) per year. In addition, all the earnings of the account can generally be excluded from adjusted gross income for Nebraska income tax purposes. (NOTE: Nebraska legislators hope to increase the tax deduction in future years for consumers who open accounts now or anytime in the future. Also, it is expected that federal tax benefits could be added sometime in the future as more states adopt similar plans. Contributions and earnings currently are NOT excluded from adjusted gross income for federal income tax purposes.) |
| Q: | When can money be withdrawn from a Long-Term Care Savings Plan account? |
| A: | Funds can be withdrawn without penalty under the following circumstances:
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| Q: | What if the money is needed for something other than long-term care? |
| A: | Funds may be withdrawn by the account owner for any purpose other than long-term care or long-term care insurance, but a 10% penalty is imposed on the amount withdrawn. |
| Q: | What "long-term care expenses" are eligible to be paid from a LTCSP account? |
| A: | Long-term care expenses include licensed nursing or assisted living facility, in-home assistance, basic therapeutic care, health maintenance activities, home health services, qualified home modifications, assistive technology, adult day care, rehabilitation treatments, respite and hospice care. |
| Q: | What "long-term care insurance premiums" are eligible to be paid from a LTCSP account? |
| A: | Any long-term care insurance policy issued in the state of Nebraska that offers coverage to the individual or their spouse. |
ADDITIONAL QUESTIONS FINANCIAL INSTITUTIONS MIGHT HAVE:
| Q: | Why should Nebraska's financial institutions offer the Long-Term Care Savings Plan? |
| A: | As the population ages, more and more financial consumers will demand options for long-term care savings. This plan offers a smart way to expand relationships with current customers and offer additional options to potential customers. In some cases, because the plan money is transferable, it might help a financial institution retain the business of a customer's spouse or other family member. It's also a way for Nebraska's financial institutions to help families plan for the future, as well as proactively influence change at the federal level to solve the pressing problem of long-term care for all Americans. |
| Q: | Are there restrictions on what type of account the LTCSP must be? |
| A: | Originally, the accounts were required to be FDIC insured. The rules were changed, and they can now be any kind of savings or investment vehicle. |
| Q: | Will this plan require extensive computer system programming to implement it in my institution? |
| A: | Many institutions are adding the LTCSP as an additional product in existing programs, which reduces programming time to as little as three or four hours. |
| Q: | What other costs are involved for financial institutions? |
| A: | Financial institutions are required to follow a simple reporting process very similar to college savings plans. This will result in minimal personnel costs. (NOTE: This requirement has been changed from original requirements which asked for more extensive reporting. Initial provider participants asked us to reduce requirements and we were able to comply with their wishes.) Other costs might include purchasing customized marketing materials to hand out to customers-standard materials are free from the state. Order them at: |
| Q: | How will we get answers to questions our customers might have about this plan? |
| A: | The Nebraska State Treasurer's Office assigned a dedicated director to manage this plan. Trent Fellers and his staff are available during normal business hours to answer questions and help manage any issues that might come up. See Contact section. |