You insure your home against fire, floods, storms, and earthquakes.

You insure your apartment belongings against theft.

You insure your car against collision damage, accidents, and bodily harm.

Why then does nearly half our population fail to insure their own lives?

It’s a head-scratcher. The right life insurance policy protects family dependents against financial decline should the primary income-earner pass away.

We all love our families. We hope they’ll survive our passing and thrive.

What happens to the surviving family members with no life insurance in place?  How do they carry the burden of your lost income?

Sell the family home?  Move in with relatives?  Give up college plans to work instead. What if lack of income forces some family members onto public assistance?

Arguably, this gap affects every taxpayer.

As a nation, we need to do better. Imagine if life insurance were mandatory like auto insurance?

The Life Insurance Market Research Association (LIMRA) says that 70 percent of U.S. households with children under 18 would have trouble meeting everyday living expenses within a few months if a primary wage earner were to die today.

We’re leaving children unprotected. A 2015 Bankrate.com survey found that “one-third of the parents who do have insurance, have no more than $100,000 of protection.”

One Issue of Many

Admittedly, our country faces other pressing issues today. Stagnant wages. Tight labor market. Immigration. Education.

So, life insurance may be down the priority list. But it is my passion, expertise and responsibility to do what I can to protect the lives of others.

Of course, the decision to buy a life insurance policy is not an easy one. Premiums can be costly, depending on age and health. When surveyed, most people make the mistake of thinking life insurance costs three times more than it does.

And, certainly, understanding how life insurance works can baffle the most intelligent of us.

LendEDU conducted a life insurance-focused survey of 1,000 adult Americans and learned that:

• ​54% of respondents own a life insurance policy
• 83% believe it’s worth the cost
• But 33% claim they do not fully understand how their policy works 
• Among those without life insurance, 53% said they plan to buy one in the future
• But 18% do not plan to buy a policy and 29% were not sure

This blur of percentages can confuse. Not my intention at all.

In fact, the purpose of this post is to lay down a foundation for understanding the immense value life insurance brings to your life and the lives of those you love.

What About the Underinsured?

There’s another issue to consider.

Many who do own life insurance policies are underinsured and don’t know it.

Most employees own life insurance through work benefits but they assume it’s all they need. Group life insurance provides only basic coverage, grows in cost significantly after age 50, and is not portable when you leave your employer.

Ask yourself these questions:

Can I replace a lifetime of lost earnings for my family if I die unexpectedly?

Can my family pay for my final expenses?

Can they pay off the mortgage?  Stay in our home?  Wipe out debts?

Can my partner retire comfortably without me?  

Even the more well-off individual with higher net worth should ask these questions. Or sit down with an expert in life insurance to calculate present and future needs for coverage. If the face amount on your current death benefit falls short of these calculations, increase your coverage as soon as possible.

Because circumstances change throughout life.

Quick Tutorial on Life Insurance

Life insurance is a contract between you and the carrier. In exchange for paying regular premiums, the insurance carrier pays your death benefit to your beneficiaries when you die.

Most people buy life insurance to protect family members who depend on their income. Others find it an effective vehicle to build cash value to borrow against, income tax-free, to augment retirement income. Life insurance offers so many useful applications beyond these two basics, we’ll cover more in upcoming posts.

Think of life insurance in two forms—term and cash value (also referred to as permanent). The cost of your premiums will depend on your age, gender, health, family history, driving record, whether you engage in dangerous activities, say spelunking, or frequent travel to questionable destinations.

Term life is a bare bones solution and most affordable because it pays your beneficiaries only if you die while the policy is in force. The “term” may extend from five to 30 years. Ten or 20 years is most common. As you age, premiums may rise. As your health changes, premiums may also rise. However, many variables affect premium cost and benefits paid.

Cash value/permanent life policies permit you to accumulate cash value within the policy which grows tax-free. You enjoy the flexibility to borrow tax-free, as well, from the accumulated cash, depending on policy design. However, this convenience comes at a higher price than a term policy.

To keep this tutorial simple, three basic types of cash-value life insurance policies exist:

1. Whole Life provides lifetime protection with locked-in, guaranteed premiums, death benefit and cash values making it the most expensive type of permanent life insurance.
2. Universal Life offers the same fixed-investment performance as whole life, only with added flexibility on premium payments, guaranteed death benefit, and accumulation of cash value.
3. Variable Universal Life (aka adjustable life) allows you to invest cash-value in the policy into stock or bond funds, money market funds or other vehicles which hold more growth potential. This potential gain is offset by greater investment risk than fixed accounts.

If already a client of The Henehan Company, your policies will be reevaluated regularly, and the need for additional coverage addressed.

Unless you’re encountering changes in your life that you’ve not yet shared with us, you should be well covered with life insurance protection.

If not a client and you’re searching for the right insurance team to help you through life insurance analysis, we stand ready to answer the simplest to most complex questions.

To your life well-lived,

Joe

Joseph E. Henehan, president and chief executive officer

The Henehan Company

If you have accumulated assets, you need to plan for their disposition when you pass. The good news? The process doesn’t have to be complicated.

While some clients do maintain complex estate plans, all clients need to establish a secure estate plan to manage the life changes that occur in our lives—marriages, births, divorces, deaths, illnesses, or financial windfalls or downfalls.

Even if you only set up a basic will and name a beneficiary for your 401(k) plan, you are better off than two-thirds of Americans.

If you don’t plan for it, however, you cause unnecessary harm to the loved ones you leave behind. Probate or creditors, lawsuits or lawyers, one will eat up your assets; death taxes may take the rest.

72% of Americans do not have an updated will.

 63% have no will; 9% have out-of-date wills.¹

¹ Google Consumer survey by USLegalWills.com.

Let’s look at this void in planning more closely:

• Only half of Americans over the age of 65 have up-to-date wills in place.
• One in six Americans over the age of 65 have a will that is out of date.
• Wealthy Americans are no more likely to have written their will.
• Wealthy Americans are more likely to have an out-of-date will.

While these figures are hard to believe, perhaps, the real culprits are these individuals’ financial advisors who failed to advise them properly if they used financial advisors at all.

Business owners are particularly vulnerable because they work hard and, often, do not find the time to do the basic housekeeping of their financial lives.

This is why I wish to provide you in this post a mini-tutorial on estate planning.

Critical To-Do Actions

I want to keep this simple for you, so here is a quick list of information you need to prepare:

• Lists all your assets and liabilities
• Discuss with the family who becomes the guardian for your children
• Double-check or update beneficiaries for life insurance, IRAs et al
• Review the current federal estate tax-exemption limits
• Decide how to distribute your assets upon death— family, charities, institutions
• Record your desired funeral arrangements in writing and communicate to family
• Seek out the help of a certified estate-planning attorney (we offer recommendations)

Must-Prepare Documents

Prepare a series of estate-affirming documents carefully and with consistent wording:

• Will, Living Will or Trust (trusts can limit 40% in estate taxes or even legal challenges)
• Durable Power of Attorney (to transact business on your behalf)
• Durable Power of Attorney for Healthcare (to make decisions for you, if incapacitated)
• Beneficiary Designations (some assets may pass to heirs outside of a will)
• Guardianship Designations (critical to your children’s future)
• Letter of Intent (for an executor or beneficiary to carry out your wishes)

Estate Tax Burdens

Federal gift/estate/GST exemptions increased in 2022 to $12.06 million per person (up from $11.7M per person in 2021).  So, an individual can leave $12.06 million to heirs and pay no federal estate or gift tax. The gift tax annual exclusion per year increased in 2022 to $16,000 per donee per year (formerly $15,000 per donee per year).

Strategies to Preserve Your Estate

Think about the strategies available to shield your assets from the corrosive tax-effect:

1. Use trusts to avoid probate and to maximize your estate tax exclusion.
2. Make charitable donations to reduce your estate.
3. Pay tax-deductible, family medical, and educational expenses from your estate.
4. Loan assets to family members to minimize your estate.
5. Buy and use life insurance to help pay estate taxes.
6. Do annual gifting to reduce taxes and to leave your loved ones more.

Breathe Easily:  Your Affairs Are In Order

With your estate plan behind you, find peace of mind knowing your financial house is in order.

You can glance back at your wife or husband and know they’re taken care of.

Look your children in the eyes, and know you’ve given them a jumpstart in life.

Relax in the knowledge your chosen charities will benefit from your hard work.

Leave a legacy.

Five Life-Worthy Reasons to Leave a Legacy

The late Jim Rohn, business philosopher, personal development writer, and teacher asked, “Why is leaving a legacy important? Here’s what he believed your legacy represents:

1. “It is part of the ongoing foundation of life.
2. It has the raw power for good and for bad.
3. It is an act of responsibility to leave a legacy.
4. It breaks the downward pull of selfishness that can be inherent in all of us.
5. It keeps us focused on the big picture.”

Let us know how we can help.

To protecting your well-being at work and in life,

Joe

Joseph E. Henehan, president and chief executive officer

The Henehan Company

Of the 30.7 million businesses in America with fewer than 500 employees, approximately one-third plan to sell or close their businesses over the next 10-15 years, most to fund their retirement. With the arrival of the COVID pandemic, that one-third figure is probably far higher today.

Experts claim that nearly 80 percent of these business owners plan to fund 60 to 100 percent of their retirement by selling their business.

But they are blinded to one damaging risk factor.

Forty-eight percent of those who want to sell have no exit plan, explains Small Business Trends in a February 2018 article, “48% of Business Owners Who Want to Sell Have No Exit Strategy.”

Of the remaining, it is estimated only half put a strategy in place, and the other half are working on a plan.

Where do you stand as a small business owner?

Small Business Trends, 2/18/2020

Don’t Underestimate the Urgency

You’re always busy running your business. Who has the time for advanced planning? However, without an exit plan, you risk losing or devaluing what may be your largest asset.

And it’s worse than that. Business owners are blindsided by a lack of knowledge: some 75 percent of owners believe they can sell their business in a year or less, cites Small Business Trends. Worse yet, 58 percent have never had their business formally appraised.

Selling closely held businesses can affect the 58.9 million people employed by them, which makes up 47.5 percent of the country’s total employee workforce, cites Fundera.

As I write, more than 52 million people are out of work, and small business represents 99.9 percent of all business in America. This situation is an alarm for economic foreboding.

In a recent article in Forbes, contributing writer Brent Beshore rang the alarm:

“We are in the beginning of a transition within the American economy where more than half of all businesses with employees will need to sell, restructure, or close their doors. The numbers are finite and inescapable. Mortality is a real thing. Liquidity issues and estate taxes don’t take care of themselves. Without a plan, the likely result is a legacy of chaos and confusion.

Whether begrudgingly or willingly, every Baby Boomer owner must confront this question: What will my company look like without me involved, and what process needs to take place to ensure my family’s financial health and the company’s prosperous future?”

Business Exit Planning Process

Exit planning creates and executes a strategy to enable owners to leave their business interests in their own time and on their own terms.

An established process with a written roadmap, exit planning involves a team of professionals, led by an exit planning advisor who guides the owner to results he or she seeks. Experts say you should begin planning for your exit the day you open.

But one day, you know you’re ready. You want something different out of life, less stressful, perhaps, more meaningful. You simply want to stop grinding it out every day.

Even if selling your business seems a long way off, at some point, every business owner faces a causative factor such as retirement, health issues, premature death, or loss of a critical partner.

Exit planning may take as little as six months to as many as five years to adequately plan and implement an exit strategy. On average, prepare to invest several years to do it right.

You need the right people and systems in place for a smooth transition. Your selling price may depend on keeping your core success team in place. And, naturally, solid financials are essential to attract a viable buyer.

We often see a purchase price calculated on an earn-out formula requiring the owner to stay on for a few years. If the business can run without you, it will be more valuable to a buyer.

Four Steps and the Questions to Ask Yourself *

Exit Objectives

Have you determined your primary planning objectives in leaving the business, such as:

Is the business ready to sell?  Is the market right?

Your desired departure date?

The income you need to achieve financial security?

To whom do you sell or leave the business?

How is a buyer going to value my business?

How you plan to treat valued employees once you exit?

Valuation and Cash Flow

It’s important to understand how businesses in your industry value themselves and determine price.

Do you know what your business is worth?

Do you know what the business’s future cash flow is likely to be after you leave it?

How do buyers determine price in your industry?

Enhancing Business Value

Know how to find hidden business value; account for it in the plan.

Do you know how to increase the value of your ownership interest?

Do you know where the hidden value is in your company?

Do you know how to pull value out of the business before the sale?

Sale or Transfer to Third Parties

Who should be on your team when you sell?

Is your buyer a strategic or financial buyer? Employees or family members?

Can your business survive without you or a key customer?

Are you willing to stay on?

What are the deal breakers?

Would you consider alternatives to an outright sale?

^*Some questions are drawn from Entrepreneur Magazine, March 6, 2013, “10 Questions to Ask Before Selling Your Business,” by Lisa Girard.

Open Your Eyes

Even if you do not have an exit strategy yet, here’s what you can do right now to put yourself in an improved position—four main steps will help you get started.

1. Improve Your Financials
2. Analyze Your Market
3. Improve Your Operations
4. Determine Your Business Worth

***

If you’re ready to do a business exit plan, contact us.

We’ll do the worry and work, so you don’t have to.

To protecting your well-being at work and in life,

Joe

Joseph E. Henehan, president and chief executive officer

The Henehan Company

If you are fortunate to live to 83,

you will have lived 30,000 days on this beautiful blue planet.

The first 10,000 days, you grew from a child, dependent on parents, to an adult, striving for an education. The next 10,000 days, you worked hard to create a professional career, marriage, family, and community ties. The last 10,000 days are for you to fulfill heartfelt dreams; to master new goals; to protect your health;    to reflect on gratitude.

In the present moment, we often put aside concerns for future health.

Here’s an early warning:  Whether you’re the head a company or you’re a member of the C-suite, you could fall through a gaping hole in your executive benefit program those last 10,000 days unless you secure the safety nets available to you now.

An employer-paid benefit, executive long-term care insurance (LTCi) attracts, rewards, and strengthens retention of select executives for their contribution and loyalty to the business. If you don’t offer LTCi to your executives, we ask that you reconsider.

Executives play a crucial role in the larger corporate structure. Typically, their responsibilities are more demanding than those of the average employee. Also, the pressures on them are greater from innovating new products and expanding revenue to controlling costs and managing human capital. When companies fail to acknowledge these facts, they can lose coveted talent to other employers.

Self-insuring for long-term care demands a financial sacrifice many executives are unwilling to make. Consequently, an LTCi policy may be the only option available for executives to manage their lives after accidental injury or sudden health complications. Without LTC coverage, one misses a critical link to security in later life.

Look at the facts:

• One out of every two people (52.3%) turning 65 will experience a long-term care need during their lifetime.
• Those in the highest income quintile (22%) face a long-term care need of two years or longer.
• Median annual nursing-home cost for a semi-private to private room, $82,125 – $92, 378; however, if you’re a Manhattanite, you’ll need to pull together a whopping $164,250 per year in 2016 dollars.

What’s more, you need coverage to help you conserve assets for personal use; preserve an estate for children; ensure against becoming a burden to them; and, to minimize physical and emotional strain on a caregiver spouse

Without a robust LTCi policy, you will face other challenges.

Challenge Escalates

At least 15 percent of individuals turning 65 between 2015 and 2019 will spend more than $250,000 on long-term care, absent a policy. Can you save and set aside a quarter of a million dollars in time?

Without an LTC policy or substantial savings, your family is severely exposed in a long-term care event. Your spouse will be allowed to retain only $120,900 in assets for you to be eligible for long-term care benefits provided by Medicaid.

More than seven million Americans own long-term care insurance policies. As recently as 2002, a thousand or so insurers offered the product, Ray Farmer, director of South Carolina’s Department of Insurance explained in a CBS News interview. “Now there are probably a dozen left,” he said, due to the rising cost of care and claims.

So, you need it. Your executives need it. And soon.

Clearing the Hurdles

No doubt, we’ll all agree that executive turnover can be brutal on a small, mid-sized or major company. The cost of losing one key executive causes untold lost productivity. To replace the executive can cost the employer 2.5 times of the departing executive’s annual salary. One effective way to secure the executive ranks is the provision of a robust benefits program, the best of which include LTC coverage.

The employer buys a long-term care insurance policy for each member of the executive group. Let’s say a company employs 500 people, and a small group of executives directly drive the strategic growth of the business. Can an employer risk discrimination against the entire workforce if it only covers a small group of executives?  Isn’t LTCi prohibitively expensive? What about full medical underwriting?

We’ll answer these and other important questions in this post, the third in our services of executive benefits.

In our first post, we discussed the importance of disability insurance, when you cannot work due to an unexpected health setback. Then, we addressed the need for executive carve-out life insurance with death benefits commensurate with the highly compensated executive lifestyle.

Similarly, LTC coverage can be offered to a select few (an executive carve-out) with non-taxable premiums for the employer; job portability and control for the executive.

Unfortunately, few people are prepared to handle the costs of long-term care. On average, it costs

$46,000 a year for nursing home care in the United States.  In some regions, this figure can soar to

$100,000 and more. Further, costs will continue to rise.

As a result, 70 percent of all single employees who require long-term care can be wiped out financially within a year.  Half or more of married couples can face bankruptcy if one spouse enters a nursing facility for a year as their existing assets must be spent down to fund the care—without LTCi coverage.

Long-Term Care Defined

LTCi is business insurance that allows employers to insure a select group of their workers for the long term. With the increasing costs of semi-private and private rooms in nursing homes, protection from such long-term care costs makes good financial sense for both employers and executives.

Simply put, a long-term care policy makes it possible to deliver care in the home or in a facility (semi-private or private room) to individuals who need assistance with the activities of daily living such as feeding, bathing, dressing, or handling personal hygiene, defined as toileting, transferring, and incontinence.  

Specifically, you meet the definition of long-term care when the individual is unable to perform any two of these six activities. What’s more, if the person suffers severe cognitive impairment as in Alzheimer’s disease, he or she is a candidate for long-term care.

Apart from nursing home care, alternatives are limited to an adult day care center; home health care; an assisted living facility, which enable people to live in an apartment-like setting; or hospice care, which is purely for the terminally ill.  

Compared to traditional medical care, long-term care is designed to assist someone to live as comfortably as possible, although it may not help improve or correct underlying medical problems. Long-term care may also include care management services that evaluate a person’s needs while coordinating or monitoring the delivery of services.

An employer-sponsored LTCi group plan can provide significant advantages like discounts and streamlined health underwriting and remain 100 percent voluntary with the employee paying the whole premium. But you need a better package for executives. And, importantly for employers, coverage can pinpoint select employee groups, the arena for an executive carve-out plan, and offered to spouses, partners, parents and parents-in-law, retirees and even spouses of retirees.

Employers—Don’t Look Away

Unfortunately, many employers overlook the need for LTCi coverage, believing their executive benefit plans adequate to cover retirement goals, making little or no provision for long-term care.

This oversight surprises me because employers conscientiously invest in benefit plans designed to assist highly compensated executives meet retirement goals yet stop short of protecting that retirement against the erosive nature of long-term care costs.

These costs can devastate a person’s lifetime savings and cost corporate America double-digit billions in lost time, lost executive talent, and lost productivity.

Of the 30.2 million small businesses in the U.S., most with fewer than 100 employees, and the 18,500 corporations with 500 or more employees, only about 25,000 (LIMRA 2010) offer long-term care to their employees. This tiny fraction indicates the true width of the needs gap.

Further exacerbating the situation, we cannot depend on the government to help cover long-term care cost; it is the largest unfunded liability facing Americans today. Neither Medicare nor Medicaid is set up to cover long-term care.

Employer Options for Executive Carve-Outs

As the employer, you are not required to offer coverage to lower-level employees because long-term care insurance is not subject to “discrimination testing.” An employer can “carve out” selected key executives for LTCi from the pool covered under the group plan and still confer the group cost-savings to the executive. Premiums for group coverage typically are lower than premiums for individual policies.

What’s more, underwriting is more lenient when policies cover more than 15 executives. Insurance providers lower adverse selection risks when more are covered, and lapse rates are lower because employers pay the premiums.

Of course, if your employer does not offer any form on LTCi, you can (and should) buy an individual policy.

Here’s a brief discussion on the preferred policy features available for these immensely valuable plans:

Preferred Policy Features

As you study the LTCi options, look for policy features to complement your personal situation and include them in your or your executives’ carve-out policy:

Front-end underwriting

If you’re in good health, you should get coverage. Try to avoid back-end underwriting because the insurer may subject your application to more scrutiny before a claim approval.

Guaranteed Issuance and Renewal
Need help here Joe. Is there guaranteed issuance and renewability with an exec carve-out?

ADL Benefits Trigger

Consider a policy that triggers benefits based on the insured’s inability to perform two of six activities of daily living (ADL).

Elimination Period

The time a policyholder must wait before becoming eligible for benefits matters. Best to select between 0, 30 or 90 days.

Daily Benefit Rider

Daily benefit amounts vary. Be sure to understand the full daily cost of care for a nursing home, assisted living facility, or home and community-based care in your state. One easy way to calculate a daily benefit: Take the average cost of care where you live (or likely to live when need care) and subtract from that your daily income. For instance, nursing homes cost $300 a day, and your income is $3,000 a month, or $100 a day, then your daily benefit should be $200 a day.

COL Adjustments
Cost-of-living adjustments built into your policy can keep pace with the rising cost of nursing home care.

Return-of-Premium Rider

If you end up not using your policy, your premium amounts return to you. This benefit can cost you about half or more of a non-return policy.

Fully Paid-Up Coverage

Employers can purchase coverage that becomes fully paid in ten years, an attractive benefit for executives given policy portability. New policy riders let the insured expand the total dollar amount coverage if long-term care is necessary early in life. 

Other options include premium payment (typically made on an annual, semiannual and quarterly basis); choice in waiver of premium, professional services, home care services, respite care, alternative plan of care, restoration of benefits, and more. These complex choices warrant your working with a long-term care expert who can assist in key decisions with sound analysis.

Kimberly Lankford, author of The Insurance Maze: How You Can Save Money on Insurance-and Still Get the Coverage You Need suggests anyone interested in LTCi should do their homework:

“Examine waiting periods in relation to cost. The longer the waiting period before coverage kicks in, the lower the premium. A 60-day waiting period, she says, typically is the best balance.

Consider the length of the benefit period. The shorter the period, the lower the cost. The average nursing home stay is about two and a half years . . . coverage can be purchased for several years or for a lifetime. Most, she says, select the three-year period.

Buy coverage while the insured is in his or her 40s or 50s, when premiums are lower. A policy with a $200-a-day benefit and five percent annual inflation protection may cost a 45 year-old $1,824 per year. At age 55, that cost jumps to $2,227. At age 65, the cost becomes $3,427.

Stick with a large insurer that has a history of not raising premiums. Long-term care insurance premiums may rise over the years based on the claims paid on the block of people that are insured.”

LTCi Tax Advantages to Both Employer and Executive

Under the Health Insurance Portability and Accountability Act of 1996, LTCi policies that meet certain requirements may be eligible for federal income tax advantages, known as “qualified” LTC insurance. Those that do not meet these requirements are “non-qualified” LTCi policies. When deciding whether to purchase a qualified or non-qualified policy, tax consequences should be one of many factors you consider.

In an executive carve-out policy, employers can deduct the cost of an executive’s LTCi premiums. A C- corporation can deduct 100 percent of the executive’s premiums. For Subchapter S corporations, limited liability partnerships and partnerships, however, the IRS rules limit income tax deductions, based on the insured’s age.

These policies are “tax-qualified.” Benefits are not considered taxable income to the insured. Executives pay no income tax on employer-paid premiums. Even though some companies prefer to let employees purchase policies themselves, executives can still receive a premium discount if the company offers the policy.

If an employer offers coverage and the employee pays premiums, the policy is tax-qualified (policyholders won’t pay taxes on their benefits). Also, employees with medical expenses, including dental, exceeding 7.5 percent of their adjusted gross incomes, can deduct long-term care premiums. A person’s age determines the deductible amount.

The LTCi contract must also meet the requirement of Consumer Protection Provisions. A contract may be considered a qualified LTCi contract even if benefit payments are made on a per diem or other periodic basis, and even if the expenses happen during the period to which the payments relate.  Non-tax-

qualified LTCi policies exist. However, the premiums are not eligible for the favored tax treatment that tax-

qualified policies receive. If your tax situation calls for a qualified LTCi plan, consider these requirements:

1. only protection provided in the contract must be qualified long-term care services
2. contractdoes not pay for expenses covered by Medicare
3. contractis guaranteed renewable
4. contractdoes not provide for a cash surrender value or other money pledged, assigned, or borrowed

From a tax standpoint, participants in an employer-paid LTCi plan for a C-corporation may exclude from income any premiums the employer pays (IRC Sec. 106).  Employer expenses for LTCi premiums paid on behalf of employees, their spouses, retirees, and their spouses are deductible as a business expense.

Even if the plan is discriminatory in favor of highly compensated employees, the employee’s exclusion of the premium paid by the employer, and the employer’s deduction for such premiums, are permitted. The IRS allows you to deduct qualified medical expenses that exceed 7.5 percent of your adjusted gross income for 2018.

Other essential tax issues apply specifically to partnerships, S-corporations, and limited liability companies. Review these different issues with a benefits consultant or tax accountant.

Will you be the one out of every two people who need long-term care in your lifetime?

Can you afford the risk of no insurance?

I cannot overstate the value of an experienced and knowledgeable professional to guide you through the complexities of planning a suitable long-term care benefit plan. By planning for this life stage now, you will determine the level of comfort you will enjoy in Act Three of your life’s play.

To your well-being in health, wealth, and life

Joe

Joseph E. Henehan, president and chief executive officer

The Henehan Company