What you need to know:

California’s goal is to help support its aging population. To accomplish their goal, the state is interested in dedicating a portion of the payroll taxes toward Long Term Care Plan for employees. This would apply to W2 employees.

About the proposed plan:

It is not clear at this time how exemptions would work for those who have a private Long Term Care Plan. The program would limit the amount of benefits the beneficiaries can receive as well. California is also considering creating its own Long Term Care program.

What is a Long-Term Care Plan?

A Long Term Care Plan is a way to protect one’s assets in the future. The Plan allows people to invest their money in a program that they can use to pay for certain care costs. This saves people thousands of dollars and allows them to keep their assets.

What you should consider:

If California moves forward with their program, the state will not be able to provide the same level of service that a private company can provide.

Their proposed cap for how much the beneficiary can use is lower than the rate of most private companies.

The money also comes directly from a person’s payroll.

With a private company, a person can contribute a lump sum of money toward their Plan at any time.

What should you do?

Discuss California’s plan to institute a Long Term Care Plan tax with your loved ones and financial advisor. You may want to consider creating a Long Term Care Plan before California enacts its tax. 

Pink Lemonade can help connect you to the right Hybrid Long Term Care Plan provider. To learn more about Long Term Care Plans (as well as the amazing Hybrid Long Term Care Plans), visit https://pinklemonadeltc.com/hybrid-long-term-care-insurance/.