Question

Which of the following acts provides federal income tax advantages to individuals who buy certain long-term care insurance policies?

A. Patient Self-Determination Act
B. Health Insurance Portability and Accountability Act
C. Clinical Laboratory Improvement Act
D. Health Maintenance Organization Act
E. Uniform Anatomical Gift Act

Answer 1

The Health Insurance Portability and Accountability Act (HIPAA) provides federal income tax advantages to individuals who buy certain long-term care insurance policies.

Step-by-step explanation:

The federal income tax advantages for individuals who buy certain long-term care insurance policies are provided by the Health Insurance Portability and Accountability Act (HIPAA). HIPAA allows individuals to deduct a portion of their premiums from their federal income taxes.

Here is an example to illustrate this:

1. Let's say a person purchases a long-term care insurance policy with an annual premium of $2,000.
2. Under HIPAA, this person may be eligible to deduct a portion of this premium from their federal income taxes. The exact amount that can be deducted depends on the person's age and the year in which the premium was paid.
3. The tax deduction reduces the person's taxable income and can result in a lower tax liability.