Indiana 2025 Regular Session

Indiana House Bill HB1588 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	HOUSE BILL No. 1588
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 5-28-45; IC 6-3.1; IC 6-8-16.
7	7	Synopsis: Long term care savings accounts. Establishes the primary
8	8	care access revolving fund (fund) for the purpose of making loans to
9	9	primary care medical practices in Indiana. Specifies the purposes for
10	10	which money in the fund may be loaned. Provides that the Indiana
11	11	finance authority shall administer the fund. Requires the Indiana
12	12	economic development corporation (IEDC) to transfer $15,000,000 to
13	13	the fund from the amount appropriated to the IEDC by the general
14	14	assembly in the 2025-2026 state fiscal year. Increases the employee
15	15	threshold for purposes of eligibility for the health reimbursement
16	16	arrangement income tax credit. Increases the maximum amount of tax
17	17	credits that may be granted in a year. Specifies the procedure for
18	18	claiming the credit. Allows an employer to establish a long term care
19	19	savings account program that allows an employee to save with
20	20	favorable tax treatment for services required when the employee's or
21	21	the employee's dependents' functional capacities become chronically
22	22	impaired due to advanced age or other circumstances. Expands the
23	23	physician practice ownership tax credit (tax credit) against state tax
24	24	liability to practicing physicians (instead of only primary care
25	25	physicians) who have an ownership interest in a physician practice and
26	26	meet other eligibility criteria. Requires a taxpayer claiming the tax
27	27	credit to certify that each physician with an ownership interest provides
28	28	health care services to patients. Provides that the total amount of tax
29	29	credits awarded in a state fiscal year may not exceed $20,000,000.
30	30	Effective: January 1, 2025 (retroactive); July 1, 2025.
31	31	Barrett
32	32	January 21, 2025, read first time and referred to Committee on Ways and Means.
33	33	2025 IN 1588—LS 7709/DI 134 Introduced
34	34	First Regular Session of the 124th General Assembly (2025)
35	35	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
36	36	Constitution) is being amended, the text of the existing provision will appear in this style type,
37	37	additions will appear in this style type, and deletions will appear in this style type.
38	38	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
39	39	provision adopted), the text of the new provision will appear in this style type. Also, the
40	40	word NEW will appear in that style type in the introductory clause of each SECTION that adds
41	41	a new provision to the Indiana Code or the Indiana Constitution.
42	42	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
43	43	between statutes enacted by the 2024 Regular Session of the General Assembly.
44	44	HOUSE BILL No. 1588
45	45	A BILL FOR AN ACT to amend the Indiana Code concerning state
46	46	and local administration and to make an appropriation.
47	47	Be it enacted by the General Assembly of the State of Indiana:
48	48	1 SECTION 1. IC 5-28-45 IS ADDED TO THE INDIANA CODE AS
49	49	2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
50	50	3 1, 2025]:
51	51	4 Chapter 45. Primary Care Access Revolving Fund
52	52	5 Sec. 1. As used in this chapter, "fund" refers to the primary
53	53	6 care access revolving fund established by section 5 of this chapter.
54	54	7 Sec. 2. As used in this chapter, "physician" means an individual
55	55	8 who is licensed to practice medicine in Indiana under IC 25-22.5.
56	56	9 Sec. 3. As used in this chapter, "primary care medical practice"
57	57	10 includes:
58	58	11 (1) a physician practicing as a primary care physician;
59	59	12 (2) a hospital providing primary health care services to
60	60	13 patients; and
61	61	14 (3) any other corporation, limited liability company,
62	62	15 partnership, or other legal entity organized and licensed to
63	63	16 provide primary health care services to patients;
64	64	17 in Indiana.
65	65	2025 IN 1588—LS 7709/DI 134 2
66	66	1 Sec. 4. As used in this chapter, "primary care physician" refers
67	67	2 to a physician practicing in one (1) or more of the following:
68	68	3 (1) Family medicine.
69	69	4 (2) General pediatric medicine.
70	70	5 (3) General internal medicine.
71	71	6 (4) The general practice of medicine.
72	72	7 Sec. 5. (a) The primary care access revolving fund is established
73	73	8 for the purpose of making loans to primary care medical practices
74	74	9 as set forth in this chapter. The fund is a nonlapsing, revolving
75	75	10 fund. The Indiana finance authority shall administer the fund. The
76	76	11 fund consists of the following:
77	77	12 (1) Money appropriated by the general assembly.
78	78	13 (2) Money deposited in the fund under subsection (b).
79	79	14 (3) The repayment proceeds of loans made to primary care
80	80	15 medical practices from the fund.
81	81	16 (4) Money received from any other source.
82	82	17 (b) Of the money appropriated by the general assembly to the
83	83	18 Indiana economic development corporation for the state fiscal year
84	84	19 beginning after June 30, 2025, and ending before July 1, 2026,
85	85	20 fifteen million dollars ($15,000,000) of that amount shall be
86	86	21 deposited by the Indiana economic development corporation in the
87	87	22 fund to be used for the purposes of the fund.
88	88	23 Sec. 6. (a) The Indiana finance authority may make loans from
89	89	24 the fund to primary care medical practices in Indiana. A loan
90	90	25 under this section may be made for the following purposes:
91	91	26 (1) To finance facility capital improvements and expansion.
92	92	27 (2) To purchase equipment used in the primary care medical
93	93	28 practice.
94	94	29 (3) To meet the primary care medical practice's working
95	95	30 capital needs.
96	96	31 (4) Any other purpose of a primary care medical practice that
97	97	32 serves to increase local access to primary health care services.
98	98	33 (b) Priority for a loan from the fund may be given to a primary
99	99	34 care medical practice:
100	100	35 (1) that has secured funding from other sources for the
101	101	36 project or purpose for which the loan from the fund is made;
102	102	37 or
103	103	38 (2) that is located in a:
104	104	39 (A) a medically underserved area;
105	105	40 (B) a rural area; or
106	106	41 (C) a health professional shortage area.
107	107	42 Sec. 7. The recipient of a loan under this chapter must enter into
108	108	2025 IN 1588—LS 7709/DI 134 3
109	109	1 a loan agreement with the Indiana finance authority. The loan
110	110	2 agreement must contain the following terms:
111	111	3 (1) A requirement that the loan proceeds be used for specified
112	112	4 purposes consistent with this chapter.
113	113	5 (2) The term of the loan.
114	114	6 (3) The repayment schedule.
115	115	7 (4) The interest rate or rates of the loan, which may include
116	116	8 variations in the rate but may not be less than the amount
117	117	9 necessary to cover all expenses in making the loan.
118	118	10 (5) Any other terms and provisions deemed necessary.
119	119	11 SECTION 2. IC 6-3.1-38-1.5 IS ADDED TO THE INDIANA
120	120	12 CODE AS A NEW SECTION TO READ AS FOLLOWS
121	121	13 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 1.5. As
122	122	14 used in this chapter, "pass through entity" has the meaning set
123	123	15 forth in IC 6-3-1-35.
124	124	16 SECTION 3. IC 6-3.1-38-4, AS ADDED BY P.L.203-2023,
125	125	17 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
126	126	18 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 4. (a) Subject to
127	127	19 subsection (c) and section 7 of this chapter, a qualified taxpayer may
128	128	20 claim a credit against the qualified taxpayer's state tax liability for a
129	129	21 qualified contribution for a qualified taxpayer with less than fifty (50)
130	130	22 seventy-five (75) employees, if the amount provided toward the
131	131	23 health reimbursement arrangement is equal to or greater than
132	132	24 either the level of benefits provided in the previous benefit year, or
133	133	25 if the amount the employer contributes toward the health
134	134	26 reimbursement arrangement equals the same amount contributed
135	135	27 per covered individual toward the employer provided health
136	136	28 insurance plan during the previous benefit year. up to four hundred
137	137	29 dollars ($400) in the first year per covered employee if the amount
138	138	30 provided toward the health reimbursement arrangement is equal to or
139	139	31 greater than either the level of benefits provided in the previous benefit
140	140	32 year, or if the amount the employer contributes toward the health
141	141	33 reimbursement arrangement equals the same amount contributed per
142	142	34 covered individual toward the employer provided health insurance plan
143	143	35 during the previous benefit year. The credit under this section
144	144	36 decreases to two hundred dollars ($200) per covered employee in the
145	145	37 second year.
146	146	38 (b) The amount of the credit is the lesser of:
147	147	39 (1) the amount contributed by the employer toward the health
148	148	40 reimbursement arrangement during the taxable year; or
149	149	41 (2) the following:
150	150	42 (A) For the taxable year in which the employer establishes
151	151	2025 IN 1588—LS 7709/DI 134 4
152	152	1 the health reimbursement arrangement, four hundred
153	153	2 dollars ($400).
154	154	3 (B) For the taxable year that immediately follows the
155	155	4 taxable year in which the employer establishes the health
156	156	5 reimbursement arrangement, two hundred dollars ($200).
157	157	6 (C) For a taxable year following a taxable year described
158	158	7 in clause (A) or (B), zero dollars ($0).
159	159	8 (c) A qualified taxpayer may not claim a credit under this
160	160	9 chapter for a health reimbursement arrangement established in a
161	161	10 taxable year beginning before January 1, 2024.
162	162	11 SECTION 4. IC 6-3.1-38-4.5 IS ADDED TO THE INDIANA
163	163	12 CODE AS A NEW SECTION TO READ AS FOLLOWS
164	164	13 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 4.5. For
165	165	14 a taxable year beginning after December 31, 2024, if a pass through
166	166	15 entity is entitled to a credit under section 4 of this chapter but does
167	167	16 not have state tax liability against which the tax credit may be
168	168	17 applied, a shareholder, partner, or member of the pass through
169	169	18 entity is entitled to a tax credit equal to:
170	170	19 (1) the tax credit determined for the pass through entity for
171	171	20 the taxable year; multiplied by
172	172	21 (2) the percentage of the pass through entity's distributive
173	173	22 income to which the shareholder, partner, or member is
174	174	23 entitled.
175	175	24 SECTION 5. IC 6-3.1-38-6, AS ADDED BY P.L.203-2023,
176	176	25 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
177	177	26 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 6. Subject to section 7
178	178	27 of this chapter, to receive the credit provided by this chapter, a
179	179	28 qualified taxpayer must claim the credit on the qualified taxpayer's
180	180	29 state tax return or returns in the manner prescribed by the department.
181	181	30 SECTION 6. IC 6-3.1-38-7, AS ADDED BY P.L.203-2023,
182	182	31 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
183	183	32 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 7. (a) The amount of tax
184	184	33 credits granted under this chapter may not exceed ten million dollars
185	185	34 ($10,000,000) fifteen million dollars ($15,000,000) in any taxable
186	186	35 state fiscal year.
187	187	36 (b) For state fiscal years ending before July 1, 2025, the
188	188	37 department shall record the time of filing of each return claiming a
189	189	38 credit under section 6 of this chapter and shall approve the claims if
190	190	39 they otherwise qualify for a tax credit under this chapter, in the
191	191	40 chronological order in which the claims are filed in the state fiscal year.
192	192	41 (c) For state fiscal years beginning after June 30, 2025, to claim
193	193	42 the credit, a qualified taxpayer must submit a claim for the credit
194	194	2025 IN 1588—LS 7709/DI 134 5
195	195	1 after the end of the qualified taxpayer's taxable year. The
196	196	2 department shall record the claimant and the amount of allowable
197	197	3 credit in the order in which the department receives the
198	198	4 application from the taxpayer.
199	199	5 (c) (d) The department may not approve a claim for a tax credit after
200	200	6 the date on which the total credits approved under this section equal the
201	201	7 maximum amount allowable in a particular state fiscal year.
202	202	8 SECTION 7. IC 6-3.1-40-1.5 IS ADDED TO THE INDIANA
203	203	9 CODE AS A NEW SECTION TO READ AS FOLLOWS
204	204	10 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 1.5. As
205	205	11 used in this chapter, "pass through entity" has the meaning set
206	206	12 forth in IC 6-3-1-35.
207	207	13 SECTION 8. IC 6-3.1-40-3 IS REPEALED [EFFECTIVE
208	208	14 JANUARY 1, 2025 (RETROACTIVE)]. Sec. 3. As used in this
209	209	15 chapter, "primary care physician" refers to a physician practicing in one
210	210	16 (1) or more of the following:
211	211	17 (1) Family medicine.
212	212	18 (2) General pediatric medicine.
213	213	19 (3) General internal medicine.
214	214	20 (4) The general practice of medicine.
215	215	21 SECTION 9. IC 6-3.1-40-5, AS ADDED BY P.L.203-2023,
216	216	22 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
217	217	23 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 5. As used in this
218	218	24 chapter, "taxpayer" means an individual who:
219	219	25 (1) is a physician practicing as a primary care physician; engaged
220	220	26 in the practice of medicine;
221	221	27 (2) has an ownership interest in a corporation, limited liability
222	222	28 company, partnership, or other legal entity organized to provide
223	223	29 primary health care services as a physician owned entity;
224	224	30 (3) is not employed by a health system (as defined in
225	225	31 IC 16-18-2-168.5); and
226	226	32 (4) has any state income tax liability.
227	227	33 SECTION 10. IC 6-3.1-40-6, AS ADDED BY P.L.203-2023,
228	228	34 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
229	229	35 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 6. If a taxpayer:
230	230	36 (1) has an ownership interest in a physician owned medical
231	231	37 practice described in section 5(2) of this chapter that:
232	232	38 (1) (A) is established as a legal entity under Indiana law after
233	233	39 December 31, 2023;
234	234	40 (2) (B) opens and begins to provide primary health care
235	235	41 services to patients in a particular taxable year beginning after
236	236	42 December 31, 2023; and
237	237	2025 IN 1588—LS 7709/DI 134 6
238	238	1 (3) (C) has billed for health care services described in
239	239	2 subdivision (2) for at least six (6) months of that a taxable
240	240	3 year;
241	241	4 (2) has an ownership interest in the income of the physician
242	242	5 owned medical practice that is at least:
243	243	6 (A) for a physician owned medical practice with not more
244	244	7 than ten (10) owners, five percent (5%) of the physician
245	245	8 owned medical practice's income; and
246	246	9 (B) for a physician owned medical practice with more than
247	247	10 ten (10) owners, fifty percent (50%) of the physician owned
248	248	11 medical practice's income; and
249	249	12 (3) provided health care services in the physician owned
250	250	13 medical practice for at least six (6) months of a taxable year;
251	251	14 the taxpayer may, subject to section sections 7 and 9.5 of this chapter,
252	252	15 claim a credit against the taxpayer's state income tax liability. Subject
253	253	16 to section sections 8 and 11 of this chapter, the amount of the credit
254	254	17 allowed under this chapter for a taxpayer in the particular taxable year
255	255	18 is twenty thousand dollars ($20,000).
256	256	19 SECTION 11. IC 6-3.1-40-7, AS ADDED BY P.L.203-2023,
257	257	20 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
258	258	21 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 7. A taxpayer may claim
259	259	22 a tax credit under this chapter for the a taxable year described in
260	260	23 section 6 of this chapter and the two (2) immediately following taxable
261	261	24 years.
262	262	25 SECTION 12. IC 6-3.1-40-8.5 IS ADDED TO THE INDIANA
263	263	26 CODE AS A NEW SECTION TO READ AS FOLLOWS
264	264	27 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 8.5. If a
265	265	28 pass through entity is entitled to a credit under section 6 of this
266	266	29 chapter but does not have state tax liability against which the tax
267	267	30 credit may be applied, a shareholder, partner, or member of the
268	268	31 pass through entity is entitled to a tax credit equal to:
269	269	32 (1) the tax credit determined for the pass through entity for
270	270	33 the taxable year; multiplied by
271	271	34 (2) the percentage of the pass through entity's distributive
272	272	35 income to which the shareholder, partner, or member is
273	273	36 entitled.
274	274	37 SECTION 13. IC 6-3.1-40-9 IS REPEALED [EFFECTIVE
275	275	38 JANUARY 1, 2025 (RETROACTIVE)]. Sec. 9. To obtain a credit
276	276	39 under this chapter, a taxpayer must claim the credit on the taxpayer's
277	277	40 annual state income tax return in the manner prescribed by the
278	278	41 department. The taxpayer shall submit to the department all
279	279	42 information that the department determines is necessary to verify the
280	280	2025 IN 1588—LS 7709/DI 134 7
281	281	1 taxpayer's eligibility for the credit provided by this chapter.
282	282	2 SECTION 14. IC 6-3.1-40-9.5 IS ADDED TO THE INDIANA
283	283	3 CODE AS A NEW SECTION TO READ AS FOLLOWS
284	284	4 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 9.5. (a) To
285	285	5 receive a credit under this chapter, a taxpayer must:
286	286	6 (1) subject to subsection (d), apply for the department's
287	287	7 approval of the tax credit in the manner prescribed by the
288	288	8 department after June 30 of a calendar year, but not later
289	289	9 than July 1 of the subsequent calendar year;
290	290	10 (2) submit with the application a certified list of each of the
291	291	11 physicians who has an ownership interest in the legal entity
292	292	12 described in section 6 of this chapter and any additional
293	293	13 information that the department determines is necessary for
294	294	14 the calculation of the credit under this chapter;
295	295	15 (3) attach proof of the department's approval of the tax credit
296	296	16 to the taxpayer's state tax return or returns; and
297	297	17 (4) claim the approved tax credit on the taxpayer's state tax
298	298	18 return or returns in the manner prescribed by the
299	299	19 department.
300	300	20 (b) The department shall record the time of filing of each
301	301	21 application for the department's approval of a tax credit and shall,
302	302	22 except as provided in subsection (c), approve granting the credit to
303	303	23 the taxpayer, if the taxpayer otherwise qualifies for a credit under
304	304	24 this chapter, in the chronological order in which the application for
305	305	25 the department's approval is filed in the year.
306	306	26 (c) If the total credits approved under this section equal the
307	307	27 maximum amount allowable in the year, the department may not
308	308	28 approve an application for the credit filed later in that year.
309	309	29 (d) A taxpayer may not file an application for a credit under this
310	310	30 chapter after the due date of the taxpayer's tax return for a taxable
311	311	31 year, or another date specified by the department.
312	312	32 SECTION 15. IC 6-3.1-40-11 IS ADDED TO THE INDIANA
313	313	33 CODE AS A NEW SECTION TO READ AS FOLLOWS
314	314	34 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 11. (a)
315	315	35 Subject to subsection (b), the total amount of tax credits awarded
316	316	36 under this chapter may not exceed twenty million dollars
317	317	37 ($20,000,000) in the state fiscal year beginning July 1, 2025, and
318	318	38 ending June 30, 2026, and in each state fiscal year thereafter.
319	319	39 However, any amounts carried forward under section 8(a) of this
320	320	40 chapter shall first be deducted from the total amount of tax credits
321	321	41 that may be awarded for the succeeding state fiscal year.
322	322	42 (b) For a taxable year beginning after December 31, 2024, and
323	323	2025 IN 1588—LS 7709/DI 134 8
324	324	1 before January 1, 2026, only that part of a taxpayer's tax credit
325	325	2 that is attributable to the period of time beginning after June 30,
326	326	3 2025, and before January 1, 2026, is subject to the maximum
327	327	4 amount provided in subsection (a).
328	328	5 SECTION 16. IC 6-3.1-40-12 IS ADDED TO THE INDIANA
329	329	6 CODE AS A NEW SECTION TO READ AS FOLLOWS
330	330	7 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 12. The
331	331	8 department, on a website used by the department to provide
332	332	9 information to the public, shall provide the following information:
333	333	10 (1) The application for the credit provided in this chapter.
334	334	11 (2) A timeline for receiving the credit provided in this chapter.
335	335	12 (3) The total amount of credits awarded under this chapter
336	336	13 during the current state fiscal year.
337	337	14 SECTION 17. IC 6-8-16 IS ADDED TO THE INDIANA CODE AS
338	338	15 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
339	339	16 1, 2025]:
340	340	17 Chapter 16. Long Term Care Savings Account
341	341	18 Sec. 1. As used in this chapter, "deductible" means the total
342	342	19 deductible for an employee and all dependents of the employee for
343	343	20 a calendar year.
344	344	21 Sec. 2. As used in this chapter, "dependent" means any of the
345	345	22 following:
346	346	23 (1) The spouse of an employee.
347	347	24 (2) An employee's child who is one (1) of the following:
348	348	25 (A) Less than nineteen (19) years of age.
349	349	26 (B) Less than twenty-three (23) years of age and enrolled
350	350	27 as a full-time student at an accredited college or university.
351	351	28 (C) Legally entitled to the provision by the employee of
352	352	29 proper or necessary subsistence, education, medical care,
353	353	30 or other care necessary for the child's health, guidance, or
354	354	31 well-being, and not otherwise emancipated,
355	355	32 self-supporting, married, or a member of the armed forces
356	356	33 of the United States.
357	357	34 (D) Mentally or physically incapacitated to the extent that
358	358	35 the child is not self-sufficient.
359	359	36 Sec. 3. As used in this chapter, "eligible long term care expense"
360	360	37 means an expense paid for the provision of long term care.
361	361	38 Sec. 4. As used in this chapter, "employee" means the
362	362	39 individual:
363	363	40 (1) for whose benefit; or
364	364	41 (2) for the benefit of whose dependents;
365	365	42 a long term care savings account is established.
366	366	2025 IN 1588—LS 7709/DI 134 9
367	367	1 Sec. 5. (a) As used in this chapter, for 2026, "higher deductible"
368	368	2 means a deductible of:
369	369	3 (1) not less than one thousand dollars ($1,000); and
370	370	4 (2) not more than five thousand dollars ($5,000).
371	371	5 (b) For years after 2026, the term means a deductible of:
372	372	6 (1) not less than the amount set forth in subsection (a)(1),
373	373	7 adjusted under subsection (c); and
374	374	8 (2) not more than the amount set forth in subsection (a)(2),
375	375	9 adjusted under subsection (c).
376	376	10 (c) The adjustments referred to in subsection (b)(1) and (b)(2):
377	377	11 (1) may reflect increases in the general level of prices since
378	378	12 2025; and
379	379	13 (2) must be based on:
380	380	14 (A) the Consumer Price Index updated monthly by the
381	381	15 Bureau of Labor Statistics of the United States Department
382	382	16 of Labor; or
383	383	17 (B) other figures issued by the United States government
384	384	18 to indicate increases in the general level of prices in the
385	385	19 United States.
386	386	20 Sec. 6. As used in this chapter, "long term care" means the
387	387	21 provision of the following services in a setting other than an acute
388	388	22 care wing of a hospital to enable individuals whose functional
389	389	23 capacities are chronically impaired due to advanced age or other
390	390	24 circumstances:
391	391	25 (1) Physician's services.
392	392	26 (2) Nursing services.
393	393	27 (3) Diagnostic services.
394	394	28 (4) Therapeutic services, including physical therapy, speech
395	395	29 therapy, and occupational therapy.
396	396	30 (5) Rehabilitative services.
397	397	31 (6) Maintenance services.
398	398	32 (7) Personal care services, including companion services and
399	399	33 assistance in bathing, dressing, and other skills of daily living.
400	400	34 (8) Transportation services.
401	401	35 (9) Day care services.
402	402	36 (10) Home health care services.
403	403	37 (11) Respite care services.
404	404	38 (12) Services provided in a facility licensed under IC 16-28.
405	405	39 (13) Services provided by chiropractors, podiatrists, and
406	406	40 optometrists.
407	407	41 Sec. 7. As used in this chapter, "long term care savings account"
408	408	42 or "account" means an account established in Indiana under a long
409	409	2025 IN 1588—LS 7709/DI 134 10
410	410	1 term care savings account program to pay the eligible long term
411	411	2 care expenses of an employee and dependents of the employee.
412	412	3 Sec. 8. As used in this chapter, "long term care savings account
413	413	4 program" means a program established under this chapter to pay
414	414	5 the eligible long term care expenses of employees and dependents
415	415	6 of employees through long term care savings accounts.
416	416	7 Sec. 9. As used in this chapter, "qualified higher deductible long
417	417	8 term care plan" means a long term care coverage policy,
418	418	9 certificate, or contract that:
419	419	10 (1) provides for the payment of eligible long term care
420	420	11 expenses that exceed a higher deductible;
421	421	12 (2) is purchased by an employer for the benefit of employees
422	422	13 and dependents of employees; and
423	423	14 (3) is part of a long term care savings account program
424	424	15 established under this chapter.
425	425	16 Sec. 10. (a) Except as otherwise provided by statute, contract, or
426	426	17 a collective bargaining agreement, an employer may establish a
427	427	18 long term care savings account program for the employer's
428	428	19 employees.
429	429	20 (b) An employer that establishes a long term care savings
430	430	21 account program under this chapter shall, before making any
431	431	22 contributions to long term care savings accounts under the
432	432	23 program, inform all employees in writing of the federal tax status
433	433	24 of contributions made under this chapter.
434	434	25 (c) Except as provided in sections 18 and 24 of this chapter, the:
435	435	26 (1) principal contributed by an employer to a long term care
436	436	27 savings account;
437	437	28 (2) interest earned on money on deposit in a long term care
438	438	29 savings account; and
439	439	30 (3) money:
440	440	31 (A) paid out of a long term care savings account for eligible
441	441	32 long term care expenses; or
442	442	33 (B) used to reimburse an employee for eligible long term
443	443	34 care expenses;
444	444	35 are exempt from taxation as income of the employee.
445	445	36 Sec. 11. (a) A long term care savings account program
446	446	37 established by an employer under this chapter must include all of
447	447	38 the following:
448	448	39 (1) The purchase by the employer of a qualified higher
449	449	40 deductible long term care plan for the benefit of one (1) or
450	450	41 more employees and dependents of the employees.
451	451	42 (2) The contribution by the employer, and the deposit into the
452	452	2025 IN 1588—LS 7709/DI 134 11
453	453	1 long term care savings account established on behalf of each
454	454	2 employee, of all or part of the difference between:
455	455	3 (A) the cost to the employer of purchasing a qualified
456	456	4 higher deductible long term care plan for the benefit of the
457	457	5 employee; and
458	458	6 (B) the cost previously incurred by the employer to pay the
459	459	7 eligible long term care expenses of the employee through
460	460	8 a long term care coverage policy, certificate, or contract.
461	461	9 (3) The designation of an account administrator to administer
462	462	10 the long term care savings accounts of employees.
463	463	11 (b) Notwithstanding subsection (a)(2), if an employer, before
464	464	12 establishing a long term care savings account program under this
465	465	13 chapter, did not pay the eligible long term care expenses of the
466	466	14 employer's employees through a long term care coverage policy,
467	467	15 certificate, or contract, the employer may contribute all or part of
468	468	16 the deductible of the qualified higher deductible long term care
469	469	17 plan purchased by the employer to establish the long term care
470	470	18 savings account program.
471	471	19 (c) The contribution under subsection (b) must not exceed the
472	472	20 following:
473	473	21 (1) For 2026, five thousand dollars ($5,000).
474	474	22 (2) For years after 2026, the figure set forth in subdivision (1),
475	475	23 adjusted under subsection (d).
476	476	24 (d) The adjustments referred to in subsection (c):
477	477	25 (1) may reflect increases in the general level of prices since
478	478	26 2025; and
479	479	27 (2) must be based on:
480	480	28 (A) the Consumer Price Index updated monthly by the
481	481	29 Bureau of Labor Statistics of the United States Department
482	482	30 of Labor; or
483	483	31 (B) other figures issued by the United States government
484	484	32 to indicate increases in the general level of prices in the
485	485	33 United States.
486	486	34 Sec. 12. (a) A long term care savings account program
487	487	35 established by an employer under this chapter may allow an
488	488	36 employee to contribute money to the long term care savings
489	489	37 account established for the employee. However, an employee may
490	490	38 not contribute an amount larger than necessary to make the
491	491	39 balance in the account equal the deductible.
492	492	40 (b) Notwithstanding sections 18 and 24 of this chapter, if an
493	493	41 employee contributes money to an account under this section:
494	494	42 (1) the money may be withdrawn from the account by the
495	495	2025 IN 1588—LS 7709/DI 134 12
496	496	1 employee at any time and for any purpose without a penalty;
497	497	2 (2) the withdrawal of the money by the employee is not
498	498	3 income to the employee that is subject to taxation under
499	499	4 IC 6-3-1 through IC 6-3-7; and
500	500	5 (3) income earned on the money while it is in the account is
501	501	6 not income to the employee that is subject to taxation under
502	502	7 IC 6-3-1 through IC 6-3-7.
503	503	8 Sec. 12.5. If an employer contributes money to an account under
504	504	9 this chapter after December 31, 2025, for which no exemption
505	505	10 applies under Indiana law and for which no exemption or exclusion
506	506	11 applies under the Internal Revenue Code at the time of
507	507	12 contribution:
508	508	13 (1) the money may be withdrawn from the account by the
509	509	14 employee at any time and for any purpose without a penalty;
510	510	15 and
511	511	16 (2) the withdrawal of the principal amount contributed by the
512	512	17 employer is not income to the employee that is subject to
513	513	18 taxation under IC 6-3-1 through IC 6-3-7.
514	514	19 Sec. 13. The following may be an account administrator under
515	515	20 this chapter:
516	516	21 (1) A federal or state chartered:
517	517	22 (A) bank;
518	518	23 (B) savings association;
519	519	24 (C) savings bank; or
520	520	25 (D) credit union.
521	521	26 (2) A trust company authorized to act as a fiduciary.
522	522	27 (3) An insurance company or a health maintenance
523	523	28 organization authorized to do business in Indiana under
524	524	29 IC 27.
525	525	30 (4) A broker-dealer, an agent, or an investment adviser
526	526	31 registered under IC 23-19.
527	527	32 (5) A person that is licensed as an administrator under
528	528	33 IC 27-1-25.
529	529	34 (6) An employee welfare benefit plan that is governed by the
530	530	35 federal Employee Retirement Income Security Act, 29 U.S.C.
531	531	36 1001 et seq.
532	532	37 Sec. 14. An account administrator shall use the funds held in a
533	533	38 long term care savings account exclusively for the purpose of
534	534	39 paying the eligible long term care expenses of the employee or the
535	535	40 employee's dependents.
536	536	41 Sec. 15. (a) Funds held in a long term care savings account shall
537	537	42 not be used to cover long term care expenses of the employee or the
538	538	2025 IN 1588—LS 7709/DI 134 13
539	539	1 employee's dependents that are otherwise covered.
540	540	2 (b) Long term care expenses that are "otherwise covered", for
541	541	3 purposes of this section, include expenses covered by:
542	542	4 (1) an automobile insurance policy;
543	543	5 (2) a worker's compensation insurance policy or self-insured
544	544	6 plan; or
545	545	7 (3) another long term care coverage policy, certificate, or
546	546	8 contract.
547	547	9 Sec. 16. If an employee submits documentation to the account
548	548	10 administrator concerning eligible long term care expenses that the
549	549	11 employee has incurred and paid for long term care for the
550	550	12 employee or a dependent of the employee, the account
551	551	13 administrator shall reimburse the employee from the employee's
552	552	14 account for the eligible long term care expenses paid by the
553	553	15 employee.
554	554	16 Sec. 17. An employer that makes contributions to a long term
555	555	17 care savings account program on a periodic installment basis may
556	556	18 advance to an employee, interest free, an amount necessary to
557	557	19 cover unpaid eligible long term care expenses that exceed the
558	558	20 amount in the employee's long term care savings account if the
559	559	21 employee agrees to repay the advance:
560	560	22 (1) from future installments; or
561	561	23 (2) when the employee ceases to be an employee of the
562	562	24 employer.
563	563	25 Sec. 18. (a) An employee may, under this section, withdraw
564	564	26 money from the employee's long term care savings account for a
565	565	27 purpose other than the purposes set forth in section 6 of this
566	566	28 chapter.
567	567	29 (b) Except as provided in sections 12(b) and 12.5 of this chapter,
568	568	30 if an employee withdraws money from the employee's long term
569	569	31 care savings account on the last business day of the account
570	570	32 administrator's business year for a purpose not set forth in section
571	571	33 6 of this chapter:
572	572	34 (1) the money withdrawn is income to the individual that is
573	573	35 subject to taxation; but
574	574	36 (2) the withdrawal does not:
575	575	37 (A) subject the employee to a penalty; or
576	576	38 (B) make the interest earned on the account during the tax
577	577	39 year taxable as income of the employee.
578	578	40 (c) Except as provided in sections 12(b) and 12.5 of this chapter,
579	579	41 if an employee withdraws money for a purpose not set forth in
580	580	42 section 6 of this chapter at any time other than the last business
581	581	2025 IN 1588—LS 7709/DI 134 14
582	582	1 day of the account administrator's business year, all of the
583	583	2 following apply:
584	584	3 (1) The amount of the withdrawal is income to the individual
585	585	4 that is subject to taxation.
586	586	5 (2) The administrator shall withhold and, on behalf of the
587	587	6 employee, pay a penalty to the department of state revenue
588	588	7 equal to ten percent (10%) of the amount of the withdrawal.
589	589	8 (3) All interest earned on the balance in the account during
590	590	9 the tax year in which a withdrawal under this subsection is
591	591	10 made is income to the individual that is subject to taxation.
592	592	11 (d) Money paid to the department of state revenue as a penalty
593	593	12 under this section shall be deposited in the local public health fund
594	594	13 established by IC 16-46-10-1.
595	595	14 Sec. 19. (a) For purposes of section 18(b) of this chapter, an
596	596	15 account administrator that begins to administer a long term care
597	597	16 savings account shall, in writing, notify the employee for whose
598	598	17 benefit the account was established of the date of the last business
599	599	18 day of the administrator's business year.
600	600	19 (b) The notice required by this section must be given not more
601	601	20 than thirty (30) days after the account administrator begins to
602	602	21 administer the long term care savings account.
603	603	22 Sec. 20. Money in a long term care savings account established
604	604	23 under this chapter is exempt from execution under IC 34-55-10-2.
605	605	24 Sec. 21. (a) This section applies only to an employee who has no
606	606	25 dependents who are covered under the long term care savings
607	607	26 account established for the benefit of the employee.
608	608	27 (b) Upon the death of the employee for whose benefit a long
609	609	28 term care savings account was established, the account
610	610	29 administrator shall distribute the principal and accumulated
611	611	30 interest of the account to the estate of the employee by mailing a
612	612	31 check to the personal representative of the employee (as defined in
613	613	32 IC 29-1-1-3).
614	614	33 (c) The distribution of the balance in a long term care savings
615	615	34 account under this section is not income to the individual or to the
616	616	35 estate of the individual that is subject to taxation under IC 6-3-1
617	617	36 through IC 6-3-7.
618	618	37 Sec. 22. If an individual:
619	619	38 (1) who was employed by an employer that participated in a
620	620	39 long term care savings account program; and
621	621	40 (2) whose employment was terminated;
622	622	41 becomes employed with a different employer that participates in
623	623	42 a long term care savings account program, the individual may
624	624	2025 IN 1588—LS 7709/DI 134 15
625	625	1 transfer the long term care savings account that was established
626	626	2 for the individual's benefit by the former employer to the account
627	627	3 administrator of the new employer.
628	628	4 Sec. 23. If the employment of an individual by an employer that
629	629	5 participates in a long term care savings account program is
630	630	6 terminated, the money in the individual's long term care savings
631	631	7 account may continue to be used for the benefit of the individual
632	632	8 and the individual's dependents and remains exempt from taxation
633	633	9 as provided under this chapter if, not more than sixty (60) days
634	634	10 after the individual's final day of employment:
635	635	11 (1) the individual transfers the individual's long term care
636	636	12 savings account to a new account administrator; or
637	637	13 (2) the individual requests in writing that the former
638	638	14 employer's account administrator remain the administrator
639	639	15 of the individual's account, and the account administrator
640	640	16 agrees to retain the account.
641	641	17 Sec. 24. (a) This section applies when the employment of an
642	642	18 individual by an employer that participates in a long term care
643	643	19 savings account program is terminated.
644	644	20 (b) If the former employer is not informed, within ninety (90)
645	645	21 days after the former employee's final day of employment, of the
646	646	22 name and address of an account administrator to which the former
647	647	23 employee is transferring the former employee's long term care
648	648	24 savings account under section 22 of this chapter, the former
649	649	25 employer shall pay the money in the former employee's long term
650	650	26 care savings account to the former employee under subsection (d).
651	651	27 (c) If:
652	652	28 (1) the former employee, under section 23(2) of this chapter,
653	653	29 requests in writing that the former employer's account
654	654	30 administrator remain the administrator of the individual's
655	655	31 long term care savings account; and
656	656	32 (2) the account administrator does not agree to retain the
657	657	33 account;
658	658	34 the former employer shall, within ninety (90) days after the former
659	659	35 employee's final day of employment, pay the money in the former
660	660	36 employee's long term care savings account to the former employee
661	661	37 under subsection (d).
662	662	38 (d) An employer that is required under this section to pay the
663	663	39 money in a former employee's long term care savings account to
664	664	40 the former employee shall mail to the former employee, at the
665	665	41 former employee's last known address, a check for the balance in
666	666	42 the account on the ninety-first day after the employee's final day
667	667	2025 IN 1588—LS 7709/DI 134 16
668	668	1 of employment.
669	669	2 (e) Except as provided in sections 12(b) and 12.5 of this chapter,
670	670	3 money that is paid to a former employee under subsection (d):
671	671	4 (1) is subject to taxation under IC 6-3-1 through IC 6-3-7 as
672	672	5 income of the individual; but
673	673	6 (2) is not subject to the penalty referred to in section 18(c)(2)
674	674	7 of this chapter.
675	675	8 Sec. 25. (a) This section applies if an individual:
676	676	9 (1) whose employer participates in a long term care savings
677	677	10 account program; and
678	678	11 (2) who has one (1) or more dependents who are covered
679	679	12 under the account established for the benefit of the individual;
680	680	13 dies.
681	681	14 (b) After the death of an individual described in subsection (a),
682	682	15 the money in the individual's long term care savings account may
683	683	16 continue to be used for the benefit of the individual's dependents
684	684	17 and remains exempt from taxation as provided under this chapter
685	685	18 if, not more than sixty (60) days after the individual's death:
686	686	19 (1) the deceased individual's long term care savings account
687	687	20 is transferred to a new account administrator; or
688	688	21 (2) the dependents of the individual request in writing that the
689	689	22 account administrator of the deceased individual's employer
690	690	23 remain the administrator of the account, and the account
691	691	24 administrator agrees to retain the account.
692	692	25 (c) If the former employer of an individual described in
693	693	26 subsection (a) is not informed, within ninety (90) days after the
694	694	27 individual's death, of the name and address of an account
695	695	28 administrator to which the long term care savings account has
696	696	29 been transferred under subsection (b)(1), the former employer
697	697	30 shall pay the money in the long term care savings account to the
698	698	31 estate of the individual under subsection (e).
699	699	32 (d) If:
700	700	33 (1) the dependents of an individual described in subsection (a),
701	701	34 under subsection (b)(2), request in writing that the former
702	702	35 employer's account administrator remain the administrator
703	703	36 of the individual's long term care savings account; and
704	704	37 (2) the account administrator does not agree to retain the
705	705	38 account;
706	706	39 the former employer shall, within ninety (90) days after the
707	707	40 individual's death, pay the money in the individual's long term care
708	708	41 savings account to the estate of the individual under subsection (e).
709	709	42 (e) Under the circumstances described in subsection (c) or (d),
710	710	2025 IN 1588—LS 7709/DI 134 17
711	711	1 the account administrator shall distribute the principal and
712	712	2 accumulated interest in the account to the estate of the individual
713	713	3 by mailing a check to the personal representative of the individual
714	714	4 (as defined in IC 29-1-1-3).
715	715	5 (f) The distribution of the balance in a long term care savings
716	716	6 account under subsection (e) is not income to the individual or to
717	717	7 the estate of the individual that is subject to taxation under
718	718	8 IC 6-3-1 through IC 6-3-7.
719	719	9 Sec. 26. (a) The insurance commissioner appointed under
720	720	10 IC 27-1-1-2 and the department of state revenue may adopt rules
721	721	11 under IC 4-22-2 necessary to implement this chapter.
722	722	12 (b) The rules adopted under this section must include a
723	723	13 procedure for the adjustment of amounts required by sections 5
724	724	14 and 11 of this chapter.
725	725	15 SECTION 18. [EFFECTIVE JULY 1, 2025] (a) IC 6-8-16, as
726	726	16 added by this act, applies to taxable years beginning after
727	727	17 December 31, 2025.
728	728	18 (b) This SECTION expires June 30, 2028.
729	729	19 SECTION 19. [EFFECTIVE JANUARY 1, 2025
730	730	20 (RETROACTIVE)] (a) IC 6-3.1-40-1.5, IC 6-3.1-40-8.5,
731	731	21 IC 6-3.1-40-9.5, IC 6-3.1-40-11, and IC 6-3.1-40-12, all as added by
732	732	22 this act, apply to taxable years beginning after December 31, 2024.
733	733	23 (b) IC 6-3.1-40-5, IC 6-3.1-40-6, and IC 6-3.1-40-7, all as
734	734	24 amended by this act, apply to taxable years beginning after
735	735	25 December 31, 2024.
736	736	26 (c) The repeal of IC 6-3.1-40-3 and IC 6-3.1-40-9 by this act
737	737	27 applies to taxable years beginning after December 31, 2024.
738	738	28 (d) This SECTION expires July 1, 2028.
739	739	29 SECTION 20. [EFFECTIVE JANUARY 1, 2025
740	740	30 (RETROACTIVE)] (a) IC 6-3.1-38-4, IC 6-3.1-38-6, and
741	741	31 IC 6-3.1-38-7, all as amended by this act, apply to taxable years
742	742	32 beginning after December 31, 2024.
743	743	33 (b) IC 6-3.1-38-1.5 and IC 6-3.1-38-4.5, both as added by this
744	744	34 act, apply to taxable years beginning after December 31, 2024.
745	745	35 (c) This SECTION expires July 1, 2028.
746	746	36 SECTION 21. An emergency is declared for this act.
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