Expanding the scope of commercial health insurance eligible for individual income tax benefits
The State Administration for Financial Regulation recently issued a notice on matters related to the application of personal income tax preferential policies for commercial health insurance products, expanding the scope of commercial health insurance products subject to personal income tax preferential policies to the main types of commercial health insurance, including medical insurance, long-term care insurance, and disease insurance, providing the people with more choices. Expand the insured group of the product, where the policyholder can insure themselves, as well as their spouse, children, and parents.
The relevant person in charge of the State Administration for Financial Supervision and Administration stated that in response to the current situation of insufficient protection for people with past illnesses, it is required to include them in the scope of medical insurance coverage, allow life insurance companies to set different protection plans for people with past illnesses, and develop products with higher protection limits and richer responsibilities based on their own business capabilities and market needs. Encourage the development of long-term care insurance and disease insurance products targeting specific populations such as those with past illnesses and the elderly.
The person in charge said that an information account will be established for policyholders through a unified commercial health insurance information platform in the industry, recording all commercial health insurance information applicable to personal income tax preferential policies that they have purchased. This will facilitate consumers to make tax deductions according to relevant regulations even if they purchase products from different companies.
The report of the 20th National Congress of the Communist Party of China clearly proposes to promote the orderly connection of multi-level medical insurance, establish a long-term nursing insurance system, and actively develop commercial medical insurance. It is reported that commercial health insurance, which is subject to personal income tax preferential policies, began its pilot program in May 2015 and was promoted nationwide in July 2017. Purchasing commercial health insurance that is eligible for personal income tax preferential policies allows for pre tax deductions when calculating taxable income in the current year, with a limit of 2400 yuan per year. After years of practice, the policy has shown initial effectiveness. Next, the State Administration for Financial Supervision and Administration will guide life insurance companies to launch relevant products as soon as possible, urge them to improve their professional capabilities, increase investment in talent teams, information system construction and other resources, and ensure the healthy development of commercial health insurance business that is subject to personal income tax preferential policies. Strengthen supervision, maintain a high-pressure situation against illegal and irregular behaviors, and effectively protect the legitimate rights and interests of insurance consumers.