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SB 116

AN ACT ESTABLISHING A TAX CREDIT FOR PREMIUM PAYMENTS FOR CERTAIN LONG-TERM CARE INSURANCE POLICIES.

2025 Regular Session Introduced by Rob Sampson

Connecticut tax credit for long-term care insurance premiums aims to reduce costs and encourage coverage while managing state Medicaid expenses.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
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Bill Summary · SB 116

Legislative bill overview

SB 116 would establish a state tax credit for Connecticut residents who pay premiums on qualified long-term care insurance policies. The credit would reduce state income tax liability for eligible policyholders, effectively subsidizing the cost of long-term care insurance through the tax code.

Why is this important

Long-term care—nursing homes, assisted living, and in-home care—can cost $100,000+ annually and poses significant financial risk to individuals and families. By making insurance more affordable through tax credits, the bill aims to encourage residents to plan for future care needs, potentially reducing reliance on Medicaid (which costs taxpayers significantly). This addresses Connecticut's aging population and the growing long-term care funding challenge.

Potential points of contention

  • Cost to the state: Tax credits reduce revenue; fiscal impact depends on credit size, eligibility thresholds, and participation rates—potentially significant if broadly utilized
  • Equity concerns: Tax credits primarily benefit higher-income residents who can afford premiums and have tax liability to offset; lower-income residents may gain little benefit
  • Insurance market dynamics: The credit may primarily subsidize existing insurance purchases rather than expanding the insured population if premiums remain unaffordable to those without coverage
  • Definition of "certain" policies: The bill's language limits coverage to qualifying policies; unclear standards could create administrative complexity and disputes

Compiled from official sources — confirm details with the bill’s official record.

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