The Insurance Department has a formal Partnership role
Connecticut Regulations of State Agencies sections 38a-475-1 through 38a-475-6 apply to policy or certificate forms the Insurance Department is asked to precertify under CGS section 38a-475 (Connecticut Partnership LTC insurance regulations). The regulation says no policy may be precertified as Partnership-approved unless it meets the regulatory requirements (Connecticut Partnership LTC insurance regulations). The Connecticut Insurance Department is therefore the state insurance regulator relevant to Partnership form precertification.
The regulation also identifies roles for OPM and DSS alongside the Insurance Department. OPM produces the stated consumer and program publications, while DSS participates in Medicaid-related determinations and records review described by the regulation (Connecticut Partnership LTC insurance regulations). A consumer should distinguish a carrier’s sales materials from a state Partnership approval determination and from a future DSS Medicaid eligibility decision.
Compare policies and keep the right proof
Connecticut’s Partnership page says its purpose is to help people plan for long-term-care needs without depleting all assets, but it does not promise that any particular policy will meet a household’s needs or be available at every price (Connecticut Partnership for Long-Term Care). Benefits, elimination periods, inflation protection, daily or monthly limits, benefit duration, exclusions, premiums, and insurer financial strength are policy-specific. Obtain the full policy and written confirmation of Partnership status before relying on asset protection.
The Partnership’s January–March 2026 update reports current state information for Partnership policyholders, including 2026 tax-qualified premium limits, and directs questions to OPM’s Partnership office (Connecticut 2026 Partnership update). Retain the policy, Partnership approval information, premium notices, benefit-payment statements, and claim records. Those records become important if a later Medicaid application seeks asset protection equal to benefits paid.
Insurance is one funding layer, not a Medicaid substitute
A Connecticut Partnership policy can be an important advance-planning tool, but it does not erase the need for a care assessment, HUSKY C application, income review, transfer review, and accurate resource disclosure. Connecticut’s $1,600 individual LTSS resource figure and five-year review remain relevant to ordinary Medicaid planning (Connecticut DSS HUSKY C overview; DSS Uniform Policy Manual 3029.05). Review a proposed purchase with a licensed insurance professional and a Connecticut elder-law advisor when Medicaid asset protection is an intended part of the plan.
Federal Tax Incentives for LTC Insurance Premiums (2026)
Beyond any state-level benefit, a tax-qualified LTC insurance contract (one meeting IRC § 7702B)
carries several federal tax benefits, and a number of the relevant limits increased for 2026:
- Age-based premium deduction: eligible premiums count as a medical expense on
Schedule A (to the extent total unreimbursed medical expenses exceed 7.5% of AGI), up to 2026 limits
of $500 (age 40 or younger), $930 (41–50), $1,860 (51–60), $4,960 (61–70), and $6,200
(over 70) — all increased from 2025 (IRS Revenue Procedure 2025-32, § 4.27).
- Self-employed and business deductions: self-employed individuals can deduct 100%
of eligible premiums up to the same age-based limits without itemizing, and C-corporations can generally
deduct LTC premiums paid for employees as an ordinary business expense under IRC § 162, uncapped by
the individual age-based limits.
- Tax-free benefits: benefits from a tax-qualified contract are generally excluded
from income under IRC § 7702B(d); per-diem/indemnity contracts are tax-free up to $430/day (about
$13,079/month) for 2026 (IRS Revenue Procedure 2025-32, § 4.62).
- HSA-funded premiums: HSA funds can be withdrawn tax-free to pay eligible LTC
premiums, up to the same age-based limits above.
- New for 2026 — penalty-free retirement withdrawals: SECURE 2.0 Act § 334
lets eligible 401(k), 403(b), and governmental 457(b) participants under 59½ withdraw funds to pay
premiums on a certified LTC contract without the usual 10% early-withdrawal penalty, up to the least of
the actual premium paid, 10% of the vested account balance, or a statutory cap of $2,600 for 2026. The
distribution itself is still fully taxable as ordinary income and is not available from IRAs
(IRS Notice 2026-33).
Connecticut state incentive: Connecticut offers no separate state credit or deduction for LTC insurance premiums beyond the federal incentives above (
Got LTCi, State Tax Incentives).
State tax rules change frequently and the credit/deduction summary above is not exhaustive —
confirm current eligibility, forms, and amounts with your state department of revenue or a tax
professional before relying on any figure here.
Not mutually exclusive. Most families combine two or three funding pillars — this one rarely stands alone.
The
Journey Assessment ranks all ten pillars against your specific situation and
recommends the top three.
