Market Digest

Crude Oil Production Rose 60,000 Barrels Per Day From January

The Organization of Petroleum Exporting Countries’ (OPEC) crude oil production rose to 29.31 million barrels per day (b/d) in February, an increase of 60,000 (b/d) from an estimated January level of 29.25 million b/d, according to a just-released Platts survey of OPEC and oil industry officials and analysts.

Excluding Iraq, which does not participate in the oil producing group’s production agreements, output from the 11 members bound by quotas (OPEC-11) – under a 24.845 million b/d collective target – dipped by 10,000 b/d to 26.75 million b/d in February.

Increases totalling 170,000 b/d from Angola, Iran, Iraq, Qatar, the United Arab Emirates (UAE) and Venezuela were partly offset by decreases totalling 110,000 b/d from Libya and Nigeria, the latter’s production dropping by 100,000 b/d to 1.98 million b/d in February.

“With the price of oil at what many view to be a sweet spot now in the upper $70 to $80 per barrel range, OPEC has little appetite or need to make any changes at its upcoming March 17 meeting,” said John Kingston, Platts director of news. “The one number that jumps out from the Platts survey is the drop of 100,000 b/d in output from Nigeria, where a fragile peace pact in the Niger Delta appears to be unravelling. After several months of both rising production and rising optimism that the worst was behind the country, the output drop in February looks like a discouraging setback.”

The February estimates leave the OPEC-11 overproducing its ceiling by 1.905 million b/d, slightly increasing its rate of compliance to 54.64% from January’s 54.4%.

Compliance with the 4.2 million b/d of cuts agreed in late 2008 peaked at close to 82% in March last year but has been declining since last April alongside a broad firming of oil prices.

OPEC ministers meet in Vienna on March 17 to review the current production agreement which has been in effect since January 2009.

That agreement has been rubber-stamped at several meetings over the past year and, given remarks made by several ministers in recent weeks, looks set to be renewed yet again at next week’s meeting.

International crude benchmarks are currently trading around the higher end of the $70-$80/barrel (/b) range that Saudi Arabian oil minister Ali Naimi has described as “ideal” and which OPEC appears to have adopted as an unofficial target. For 2010 to date, the group’s basket of crudes has averaged $74.77/b.

Sixth Consecutive Increase; Index is Growing at the Fastest Rate Since 1994

The Conference Board Employment Trends Index(TM) (ETI) rose in February for the sixth consecutive month. The index now stands at 93.5, up from January’s 93.2. During the past six months, the index increased by 13.4 percent (annual rate), the highest six-month growth rate since 1994.

“The continued rise in the ETI suggests that job growth is about to begin,” said Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board. “The past two jobless recoveries in 1991 and 2002 were a result of a continuous decline in manufacturing employment. This time, the strong recovery in manufacturing production has already led to two consecutive monthly increases in manufacturing employment. We are likely to see this trend continue over the next several months, which will contribute to overall job growth.”

This month’s increase in the Employment Trends Index was driven by positive contributions from four out of the eight components. The improving indicators were: Number of Temporary Employees, Job Openings, Industrial Production, and Real Manufacturing and Trade Sales.

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out so-called “noise” to show underlying trends more clearly.

The eight labor-market indicators aggregated into the Employment Trends Index include:

• Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey®)
• Initial Claims for Unemployment Insurance (U.S. Department of Labor)
• Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
• Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
• Part-Time Workers for Economic Reasons (BLS)
• Job Openings (BLS)
• Industrial Production (Federal Reserve Board)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)

The technical notes to this series are available on The Conference Board website: www.conference-board.org/economics/employment.cfm.

Largest State Workers’ Compensation System to Mandate Medical Billing EDI, Electronic / Paper Workflows, PHI Protections and Uniform Bill Data

Jopari Solutions is expanding its offering of eBill processing services in California to assist Payers’ compliance under the state’s new proposed Business Rules for Paper and Electronic Billing, published March 4, 2010. The proposed California rules encourage health care providers to use the ASC X12N 837 bill format, and require Payers to accept electronic and standard format paper bills containing equivalent information and data elements.

Jopari’s eBill services already support the company’s current Payers in California and will provide required expertise to Payers that have no prior exposure to jurisdictional eBill requirements. Jopari currently delivers electronic workers’ compensation medical billing arrangements for Payers under other jurisdictional mandates, providing eBill connectivity with a myriad of health care provider organizations in almost every state.

Under the new proposed California rules, Payers must implement several new bill processing competencies, and enhance existing medical bill workflow. This will include:

• supporting HIPAA ASC X12N Transactions, non-ANSI electronic transactions, and Acknowledgment notifications
• receiving, routing, processing, and storing (per NIST and FIPS guidelines) HIPAA compliant electronic bills and attachments
• performing required eBill pre-adjudication, indexing, edits and data validation
• executing secure EDI transmissions complying with Federal National Institute Standards and Technology (NIST), and Federal Information Processing Standards (FIPS) guidelines
• compliance with contracting requirements and relationship management relating to Trading Partners, Business Associates and/or other third party vendors
• establishing business process automation and health care provider rading partner connectivity strategies
• supporting two-tiered timely payment disbursement time frames (15 day electronic bills / 45 day paper bills)

Stated Don St. Jacques, COO and SVP of Jopari Solutions, “Electronic billing requirements in workers’ compensation generally, and in California particularly due to tightened PHI protections, payment deadlines and uniform bill data elements, obligate a new set of bill cycle competencies. Jopari’s expertise in establishing enterprise-level HIPAA conforming eBill compliance, paperless bill and attachment workflow, and – very important under the California prompt pay rule — payment and remittance processing offers a complete package. We are getting the message out early about the requirements for our existing Payers so they can take advantage of expanding their processing cost efficiency and cost advantage in this market; but also to assist those currently non-automated Payers in establishing a viable solution.”

“California’s proposed workers’ compensation medical bill and attachment workflow requirements signal a more complex transactions environment for the industry going forward,” commented Mr. St. Jacques. “This modern environment entails the capacity to simultaneously and securely process a mix of bill formats and medical document media. By referencing Federal standards and guidelines, in combination with jurisdictional rule sets, data requirements and performance time frames are aligning workers’ comp medical services with the greater health care universe. But this alignment has to respect the distinctive legal obligations attendant to administering work-related medical claims. We believe availability of industry-centric medical EDI technology that fully understands this distinction is essential.”

Summary of proposed California eBill rules and a description of Jopari’s leading eBill Compliance services for workers’ compensation payers are available at www.jopari.com.

The SFN Group Employee Confidence Index decreased by 1.2 points to 48.9 in February. The Index, which measures workers’ confidence in their personal employment situation and optimism in the economic environment, shows that fewer workers are confident in the strength of the economy and in job availability. On the contrary, more workers are optimistic about their job security and the future of their current employer.

“Although our report shows a decline in overall confidence from the previous month, it is still 6.2 points higher than the low point of 40.1 it registered at one year ago,” said Roy Krause, president and CEO of SFN Group, Inc. “In fact, hiring demand is better now than what we experienced a few months ago. We are seeing the demand for temporary work starting to pick-up — generally a sign that full-time hiring is on the horizon. From an employer and candidate perspective, I see this flexible segment becoming a greater percentage of the total workforce as we move forward in a recovery. Many employers continue to be hesitant to add staff on a full-time basis due to the uncertainty of the market. Additionally, the idea of working on different projects seems to be an appealing option for not only younger job seekers, but also all types of professional workers and Baby Boomers. As we talk to more and more candidates, we are finding that more people are looking for greater flexibility, stronger engagement, additional income and/or the opportunity to stay on top of the latest technology trends.”

Confidence in Overall Situation:

The SFN Group Employee Confidence Index decreased by 1.2 points to 48.9 in February. The Index, which measures workers’ confidence in their personal employment situation and optimism in the economic environment, shows that fewer workers are confident in the strength of the economy and in job availability. On the contrary, more workers are optimistic about their job security and the future of their current employer.

Confidence in Macroeconomic Environment:

• Twenty-three percent of U.S. workers believe the economy is getting stronger, down five percentage points from January.
• Sixty-seven percent of workers surveyed believe there are fewer jobs available, jumping five points from the previous month.

Confidence in Personal Employment Situation:

• The number of workers confident in their ability to find a new job decreased by one percentage point to 38 percent in February.

The percentage of workers reporting confidence in the future of their current employers increased by three percentage points to 64 percent,

Job Security:

• Seventy percent of workers say they are unlikely to lose their jobs in the next year, increasing three percentage points from the previous month.

Job Transition:

• Thirty-five percent of workers are likely to look for a new job in the next 12 months, representing an increase of two percentage points from last month’s reading.

Confidence by Gender:

• In February, more men than women believe the economy is getting stronger. Specifically, 27 percent of men and 18 percent of female workers cited this.
• More males than females cited that they are confident in their ability to find a new job, with 45 percent of men and 30 percent of women reporting confidence.
• More women than men reported that they are likely to job search in the next 12 months. In February, 35 percent of women and 34 percent of men reported the likelihood to job search.

Confidence by Age:

• Workers ages 18-24 are the most likely to believe the economy is getting stronger, with 27 percent of workers in this age group believing so.
• According to the latest results, 74 percent of workers ages 45-54 believe there are fewer jobs available, the highest among all age brackets in February.
• Forty-nine percent of workers between the ages of 18-34 report that they are likely to look for a new job in the next year. This is the highest reading for all age brackets. On the contrary, only 21 percent of workers 55+ are likely to make a job transition in the next 12 months.

Confidence by Income:

• Workers earning $75K or greater are the most likely to believe the economy is getting stronger, with 27 percent indicating they believe so compared to 17 percent of those earning less than $35K.
• Workers earning less than $35K are the least confident in the future of their current employer, with 54 percent expressing confidence; while workers earning $75K or more are the most optimistic with 71 percent reporting confidence.
• Forty-two percent of workers earning less than $35K are likely to look for a new job in the next year. This is the highest reading across all income cohorts.

Source: SFN Group

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which took effect February 22, 2010, requires new disclosures on monthly credit card statements. The Financial Services Roundtable and the Center for Responsible Lending have teamed up to explain a few of these new disclosures, which are intended to make the cost of credit clearer to American consumers.

The Disclosures WILL:

• Show you how long it will take to pay off your entire balance if you pay only the minimum payment each month and make no additional purchases or advances.
• Show — if it will take more than three years to pay off a balance at the minimum payment set by the card issuer — how much you would have to pay each month to pay off the entire balance in 3 years. Unlike a minimum payment, which goes down as the balance declines, a faster, 3-year payoff calculation is based on your making the same payment each month for 36 months.
• Show the total cost, including principal and interest, if you make only minimum payments to pay off the balance.
• Show the total cost, including principal and interest, if you make the payments to pay off the balance faster, in three years.
• Show how much more in interest you will pay by making the minimum payments rather than the larger payments to pay off the balance in three years.

The disclosures will NOT:

• Change or extend your monthly due date, which will now be the same date each month.
• Take into account future transactions. If you make new purchases, take out new advances or incur new fees, then the minimum payment, the amount of interest and principal and the length of time to pay off a balance will increase.
• Answer all questions regarding new disclosures. Customers should contact their financial institution directly.

Calculators:

Statements will now provide information under two scenarios — if you make minimum monthly payments or if you make larger monthly payments to pay off a balance in 3 years. Below are two credit card calculators you can use to evaluate other scenarios:

http://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx

http://www.federalreserve.gov/creditcardcalculator

Source: Center for Responsible Lending

Consumer confidence levels rallied this month after taking a tumble in February, according to the RBC CASH (Consumer Attitudes and Spending by Household) Index. Buoyed by consumers’ upbeat evaluations of their current economic condition and their positive outlook for the job market, the RBC Index for March stands at 58.2, an 18.8 point increase from February’s 39.4 reading.

“The volatile results of the RBC Index in recent months underscore just how fragile consumer confidence has been since the recession began,” said RBC Capital Markets U.S. economist Tom Porcelli. “In spite of statistical indicators showing that the recession is over, many consumers do not yet see evidence of a strong recovery in their own lives and are unsure of what to believe. We are unlikely to see a consistent upward trend until consumers are convinced that a solid recovery is in place.”

The RBC Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The Index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index. The Index is benchmarked to a baseline of 100 assigned at its introduction in January 2002. This month’s findings are based on a representative nationwide sample of 1,000 U.S. adults polled from February 26 – March 1, 2010, by survey-based research company Ipsos Public Affairs. The margin of error was +/-3.1 percent.

Highlights of the survey results include:

• Americans’ attitudes about current conditions soared in March, increasing 26.2 points and bringing the RBC Current Conditions Index to 56.7, the highest level since May 2008. Consumers reported renewed optimism in their personal financial situation and their purchasing power. The share of consumers who say that their personal financial situation is strong, rose to 25 percent this month, compared to 21 percent in February.

• The RBC Investment Index increased sharply this month, climbing 24.3 points to 65.1 – the highest mark for the Index since January 2008. The increase in investment confidence stems from respondents’ diminished fears about their ability to save and improved personal financial considerations. Americans who report they feel less confident in their ability to make investments for the future dropped to 52 percent, down from 57 percent in February.

• The RBC Jobs Index also rallied in March, increasing 13.3 points to 68.2, the strongest reading for the Index since November 2008. Americans reporting personal job losses declined significantly, with 61 percent saying that they or someone they know have lost their job as the result of economic conditions (compared to 67 percent in February). Perceptions of job security also improved this month, with 32 percent of consumers reporting more confidence in their job security compared to six months ago (versus February’s 28 percent).

• While significantly brighter than a year ago when the RBC Expectations Index was in negative territory, consumers’ near-term economic outlook continues to be volatile, showing a small upswing in March following considerable changes in January and February. The Index currently stands at 57.3, up 9.3 points from February’s level of 48.0. Currently, one in ten consumers (10 percent) say their personal finances will be weaker in six months, compared to 13 percent in February, and one-third (33 percent) believe their finances will strengthen in the near future. The share of consumers who believe the economy will be weaker six months from now held steady at 16 percent.

The RBC Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.

ID Analytics’ Offers Tips on How to Safeguard Your Identity

ID Analytics recommends consumers follow ten tax time tips to protect their personal information from identity thieves. Tax season is quickly approaching and many Americans have already begun receiving W-2’s and official forms that contain sensitive financial information, including income details, Social Security numbers (SSN) and bank account numbers.

And with new data from Javelin Strategy & Research showing 4.8 percent of Americans became fraud victims in 2009–a projected total of $54 billion in crime–consumers should understand their risk and be proactive about managing their finances this tax season and beyond.

As taxpayers begin to organize their financial documents, prepare tax returns and apply for refunds, Thomas Oscherwitz, chief privacy officer for ID Analytics, Inc. and former U.S. Senate Legislative expert on identity fraud, offers the following precautions to safeguard their identity and assets this tax season.

1. Monitor your mailbox. Keep a lookout for official tax forms, like 1099’s and W-2’s. Missing or lost documents could be a sign of identity theft and should be investigated immediately.

2. Protect your sensitive tax documents. During tax time, many of the forms consumers handle have sensitive information of immense value to identity thieves. Keep your tax documents in a safe, secure place that is out of public view.

3. Beware of scams. Tax time is a prime time for fraudsters to target consumers with phony emails asking for their personal information. Remember that the Internal Revenue Service (IRS) does not initiate communication with taxpayers through email.

4. Track IRS communications carefully. If you receive an unusual notification from the IRS, such as a report of wages from an employer you do not know, be alert to possible identity theft.

5. Review your personal information for misuse. For the 97.5 million Americans expected to file electronically this year, take a few minutes to visit www.MyIDScore.com while online to check your risk of identity theft. MyIDScore.com is a free online service that gives consumers immediate insight into whether their personal identifiable information is being used fraudulently to obtain assets, goods or services.

6. Examine your credit report. Tax season is also a good time to get your free annual credit report from www.annualcreditreport.com. The report is provided by the three national credit bureaus and you can request your report from each bureau once a year.

7. Check your annual income statement from the Social Security Administration. A fraudster can steal your SSN and use it to get a job. The fraudster’s employer would then report the fraudster’s wages under your SSN to the IRS. Check for any discrepancies between the income reported and the wages you received. In addition, be aware that the IRS may then think you have not reported all of your income on your tax return.

8. Pay attention to duplicate returns. If someone steals your identity, they could file a tax return first using your SSN. Then when you file your return, the IRS will think you have already received a refund or that you have filed a second copy or duplicate return. This confusion will cause delays in receiving your refund.

9. Contact the IRS if you are victim. The IRS now has a toll-free number to assist identity theft victims. They will mark affected accounts to resolve identity theft issues more quickly. The phone number for the IRS Identity Protection Specialized Unit is 1(800) 908-4490.

10. Prepare for next year. Begin planning ahead for 2011 by creating a file to organize receipts, official forms and documents on an ongoing basis for peace-of-mind and easy access to reference your important information in the future.

Seeks Flexibility on Operations, Delivery; Possible 2011 Price Increase

Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General John E. Potter today outlined an aggressive plan of cost cutting, increased productivity, and an array of legislative and regulatory changes necessary to maintain a viable United States Postal Service.

“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, stressing that there is no one single answer or quick fix to the crisis.

The Postal Service examined revenue, volume and consumer trends; analyzed revenue and product opportunities employed by foreign posts; and examined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behavior.

“The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public,” Potter said.

Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in First-Class Mail alone. Revenue contributed by First-Class Mail will plummet from 51 percent today to about 35 percent in 2020.

“Ensuring a Viable Postal Service for America,” the Postal Service business plan, addresses these challenges, and describes a flexible, agile Postal Service that can adapt to America’s changing mailing habits and preferences.

If the Postal Service takes no action, it will face a cumulative shortfall of $238 billion by 2020. But Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service’s record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours.

Despite these efforts, an estimated $115 billion shortfall will remain.

The business plan identifies actions to close that gap:

• Restructure retiree health benefits payments to be consistent with what is used by the rest of the federal government and the majority of the private sector and address overpayments to the Postal Service Civil Service Retirement System pension fund.

• Adjust delivery days to better reflect current mail volumes and customer habits.

• Continue to modernize customer access by providing services at locations that are more convenient to customers, such as grocery stores, pharmacies, retail centers, and office supply stores. Increase and enhance customer access through partnerships, self-service kiosks and a world-class Website.

• Establish a more flexible workforce that is better positioned to respond to changing demand patterns, as more than 300,000 employees become eligible to retire in the coming decade.

• Ensure that prices of Market Dominant mailing products are based on demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation.

• A modest exigent price increase will be proposed, effective in 2011.

• Permit the Postal Service to evaluate and introduce more new products consistent with its mission, allowing it to better respond to changing customer needs and compete more effectively in the marketplace.

“Lifestyles and ways of doing business have changed dramatically in the last 40 years, but some of the laws that govern the Postal Service have not. These laws need to be modernized to reflect today’s economic and business challenges and the dramatic impact the Internet has had on American life,” Potter said.

The business plan is a path to the future, the Postmaster General said, a future where the Postal Service remains a vital driver of the American economy, an integral part of every American community and continues to deliver the greatest value of any comparable post in the world.

“If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life,” Potter said.

For more information, fact sheets, soundbites and graphics, visit www.usps.com/strategicplanning/futurepostalservice.

Susan Faulkner to Lead New Deposits and Card Product Organization

Bank of America announced that it is combining the leadership of Global Card Services and Deposits under Susan Faulkner. The combined business will report to Joe Price, president, Bank of America Consumer, Small Business & Card Banking.

“This structure continues the evolution of our Consumer businesses toward a more nimble, responsive customer-focused organization,” Price said. “This enhancement strengthens our operating model and organizes it around our customer segments, how we deliver our capabilities to customers, the service we provide them, and the products we develop for them.”

Ric Struthers, who has led Global Card Services, has decided to leave the company, but will stay on to help with transition. “This is the ideal time to begin the next phase of my career,” he said.

“In his more than 30 years in banking throughout the United States, Canada and Europe, and as one of the principal founders of MBNA, Ric has shown leadership and vision managing the largest credit card portfolio in the world,” Price said. “He and his team navigated our unsecured lending business through the most significant consumer credit crisis in 50 years. In just one year, Ric rapidly repositioned the card business, significantly reducing our exposure to credit losses and simplifying our credit card suite by introducing, easy-to-understand, basic products. He also led the development of a first-of-its-kind Credit Card Clarity Commitment(TM) for 40 million customers. This initiative was complemented by his commitment to helping more customers in need, resulting in modifications to more than 1.4 million consumer and small business credit card customers in need.”

“We believe that Susan is the right executive to operate the combined product unit in a rapidly evolving and challenging environment,” Price continued. “We continue to change the way we offer and price products, emphasizing clarity, choice and control in response to changing customer needs. Integrating the development of our card and deposit products will help create greater value for customers, especially as the way they choose to make payments continues to evolve.”

Faulkner, 47, whose title will be Deposits and Card Product Executive, will have dual offices in Charlotte and in Wilmington, Del., where the card business will continue to be based.

“Because of leaders like Ric Struthers, Delaware has been an incredibly good place to do business that has served Bank of America and our legacy company very well,” said Brian Moynihan, Bank of America president and chief executive officer. “We are pleased to remain one of the state’s top private employers where we continue to base our credit card operation and operate a number of other businesses. We look forward to maintaining our presence in the market.”

Faulkner has been with Bank of America for 25 years. Since 2007, she has served as Bank of America Customer Segments, Deposits and Payments executive, reporting to the president of the consumer bank. Prior to this, Faulkner was Global Consumer & Small Business Sales, Service & Marketing executive.

Faulkner serves on the Board of Directors of the Consumer Bankers Association. She also serves on the Board of Directors of the United Way of the Central Carolinas and is active with the Urban Ministries Center. In 2008, the Charlotte Business Journal named Faulkner to their list of Top 25 Women in Business.

Faulkner received a bachelor’s degree in finance from Georgia Southern University and a master’s degree in business administration from the University of Georgia.

Taxpayers May Overlook Hundreds to Thousands in Combined Federal and State Deductions or Rebates, Industry Leader Advises

Many Americans with long-term care insurance are learning Uncle Sam may give them a hefty deduction for their premiums; but many fail to realize their state may grant an additional deduction or credit. “If you can double your money, so to speak, why not do it,” says Gene Cutler, Manhasset, New York-based agent for LTC Financial Partners LLC (LTCFP), one of the nation’s most experienced long-term care insurance agencies. “More and more states are coming to the same conclusion as the federal government. It makes sense for them to subsidize private long-term care insurance, so they won’t go broke providing public assistance. The taxpayer should take full advantage of these incentives.”

So far 30 of the 50 states have jumped on the tax-incentive bandwagon, according to a 2008 survey by the Kaiser Family Foundation (KFF). Many offer state-tax deductions patterned after the federal deductions described in Section 213 (d)(1)(D) of the federal Internal Revenue Code. Others offer tax credits. These typically range from 10% to 25% of the long-term care insurance premiums paid during the taxable year, usually with a maximum limit per policy or covered individual.

New York, where Cutler maintains his offices, is a good example of a state actively promoting private long-term care insurance through a tax credit. Regardless of one’s income, the amount is a hefty 20% of the sum of premiums paid for a qualified long-term care insurance policy in a given tax year. “I refer to it as a ’subsidy’ from New York, as long as you meet one basic requirement,” says Cutler. “You pay taxes in New York State, period. You don’t even have to live there. An out-of-state resident who works in New York and goes home to New Jersey or Connecticut, etc. gets the 20% credit as well. All this in a state that doesn’t give away ice in the winter.”

Individuals in states that do not offer a credit or deduction may still do well at tax time. “Eventually your state may join the tax-incentive bandwagon,” says Cutler, “but in the meantime, you can take your federal deduction if you qualify, and it can be sizeable.”

For the 2009 tax year, an individual with a qualified policy may be able to deduct up to $3,980, depending on age. For a couple, the maximum amount doubles, to nearly $8,000. According to the Internal Revenue Service, for individuals the amounts of long-term care insurance premiums that are deductible as medical expenses in 2009 can be as high as –

– $3,980 if you’re 70 or over
– $3,180 if you’re over 60 but not over 70
– $1,190 if you’re over 50 but not over 60
– $600 if you’re over 40 but not over 50
– $320 if you’re 40 or under.

“The federal and state incentives are not a one-time thing,” Cutler says. “You can take them year after year.”

LTCFP does not offer tax advice but teams up with accountants and other tax experts to help their clients get all the deductions or other benefits available to them. “We’ve formed strategic alliances with banks, accountants, other financial advisors and tax preparers, and organizations such as the National Association of Estate Planning Attorneys,” says Cutler.

To get all that’s coming to you, “Ask your tax expert to check into every deduction that may apply in your case in your state,” Cutler advises. “And we’ll lend a hand. We have over 500 experienced agents covering all 50 states, and we’re ready to consult with anyone’s accountant, tax attorney, or other advisor.”