Posted by (American Life Insurance Guide Net 08/31/2023 News) Faced with recent appearances on social media"Applying for long-term care insurance can be exempted from payroll taxes", "January 2024, 1 is the deadline"wait for news, The California Department of Insurance recently issued an official document, pointing out that this kind of sales promotion is completely wrong and misleading consumers. The following is the full text of the notice.
What information do I need to know?
The California Department of Insurance has received complaints that someInsurance brokerand insurance companies to mislead consumers about the need to purchase long-term care (LTC) insurance by a stated deadline.
• Legislature has yet to enact a public long-term care insurance program
• Payroll tax not yet implemented
• There is no promulgated date or deadline for purchasing long-term care insurance by the state-mandated deadline
• California law protects consumers from false and misleading statements made by insurance companies and insurance brokers
• Any information claiming that the public long-term care insurance program will be implemented on January 2024, 1 or any other specific date is untrue and is presumed to be knowingly illegal.
Notice section details
The full text of the California Department of Insurance notice states that the long-term care insurance task force responsible for the matter has proposed various possible ways to implement a public long-term care insurance program, including the possibility of different financing mechanisms.
One possible approach is to impose a payroll tax on California employees.
The task force also proposed considering allowing residents with qualified private long-term care policies to opt out of public plans, which would mean such policyholders would not pay payroll taxes.
Possibly only residents who bought a private policy before a certain date would be eligible to opt out of the program.
However, all of these details are speculative at this time.
According to the insurance bureau, the California legislature:
- The final report of the working group has not been received;
- No decision has been made to implement a public long-term care insurance scheme;
- The method of financing the scheme is not specified;
- Undecided on whether to allow consumers to opt out of public programs if they have a private policy;
- Undecided which type of policy is eligible for exit;
- Among other major policy considerations, no deadlines (if any) for purchasing private policies have been set.
In short, the Legislature has made no decision at all on the public long-term care insurance program, has not implemented a payroll tax, and has no current “opt-out” date.
Unfortunately, some insurance companies and insurance brokers who are active on social media selectively mislead consumers and use the psychology of "fear" to persuade consumers to purchase long-term care insurance before January 2024, 1.
Which claims are false and misleading?
The California Department of Insurance stated in the notice,Including a statement that the plan will be enacted on January 2024, 1, the legislature
The claim that this tax has been approved, and the claim that January 2024, 1 is the deadline to buy long-term care insurance to avoid the tax, is not true.
The notice pointed out that if consumers feel that they have been subjected to dishonest or deceptive sales methods, they can request help from the California Insurance Department by phone, mail, or by filling out forms online.
For information on the emergence, controversy, and implementation of long-term care-related bills in U.S. states, the public can visit the American Life Insurance Guide website’s May article on "Long-term care insurance turmoil draws national attention” report article.
For the background, current status and progress of California's long-term care-related bills, the public can visit the California Insurance Bureau "Long Term Care Task Force”English topic page for all relevant information and contact information. (full text)
*"Long Term Care Insurance Task Force", CDI, https://www.insurance.ca.gov/0500-about-us/03-appointments/ltcitf.cfm
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