Treatment of qualified long-term care insurance

For purposes of this title— For purposes of this title— The term “qualified long-term care insurance contract” means any insurance contract if— such contract does not provide for a cash surrender value or other money that can be— A contract shall not fail to be described in subparagraph (A) or (B) of paragraph (1) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate. Paragraph (1)(E) shall not apply to any refund on the death of the insured, or on a complete surrender or cancellation of the contract, which cannot exceed the aggregate premiums paid under the contract. Any refund on a complete surrender or cancellation of the contract shall be includible in gross income to the extent that any deduction or exclusion was allowable with respect to the premiums. For purposes of this section— The term “qualified long-term care services” means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, which— The term “chronically ill individual” means any individual who has been certified by a licensed health care practitioner as— For purposes of subparagraph (A), each of the following is an activity of daily living: The term “maintenance or personal care services” means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment). The term “licensed health care practitioner” means any physician (as defined in section 1861(r)(1) of the Social Security Act) and any registered professional nurse, licensed social worker, or other individual who meets such requirements as may be prescribed by the Secretary. If the aggregate of— For purposes of paragraph (1), the per diem limitation for any period is an amount equal to the excess (if any) of— the greater of— For purposes of this subsection— The dollar amount in effect under this subsection shall be $175 per day (or the equivalent amount in the case of payments on another periodic basis). In the case of a calendar year after 1997, the dollar amount contained in paragraph (4) shall be increased at the same time and in the same manner as amounts are increased pursuant to section 213(d)(10). For purposes of this subsection, the term “periodic payment” means any payment (whether on a periodic basis or otherwise) made without regard to the extent of the costs incurred by the payee for qualified long-term care services. Except as otherwise provided in regulations prescribed by the Secretary, in the case of any long-term care insurance coverage (whether or not qualified) provided by a rider on or as part of a life insurance contract or an annuity contract— This title shall apply as if the portion of the contract providing such coverage is a separate contract. No deduction shall be allowed under section 213(a) for any payment made for coverage under a qualified long-term care insurance contract if such payment is made as a charge against the cash surrender value of a life insurance contract or the cash value of an annuity contract. For purposes of this subsection, the term “portion” means only the terms and benefits under a life insurance contract or annuity contract that are in addition to the terms and benefits under the contract without regard to long-term care insurance coverage. For purposes of this subsection, none of the following shall be treated as an annuity contract: A contract— If— For purposes of paragraph (1), the term “State long-term care plan” means any plan— under which such coverage is provided only to— The requirements of this subsection are met with respect to any contract if the contract meets— The requirements of this paragraph are met with respect to any contract if such contract meets— The following requirements of the model regulation: The following requirements of the model Act: For purposes of this paragraph— The terms “model regulation” and “model Act” mean the long-term care insurance model regulation, and the long-term care insurance model Act, respectively, promulgated by the National Association of Insurance Commissioners (as adopted as of January 1993). Any provision of the model regulation or model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated as including any other provision of such regulation or Act necessary to implement the provision. For purposes of this section and section 4980C, the determination of whether any requirement of a model regulation or the model Act has been met shall be made by the Secretary. The requirement of this paragraph is met with respect to any contract if such contract meets the requirements of section 4980C(d). The requirements of this paragraph are met with respect to any level premium contract, if the issuer of such contract offers to the policyholder, including any group policyholder, a nonforfeiture provision meeting the requirements of subparagraph (B). The nonforfeiture provision required under subparagraph (A) shall meet the following requirements: The nonforfeiture provision shall provide at least one of the following: For coordination of the requirements of this subsection with State requirements, see section 4980C(f).