Medical Students – WisMed Assure

Hidden Tax Benefits of Long-term Care Planning

March 12, 2025March 12, 2025

By Tom Strangstalien, Insurance Advisor

We’re well into the tax season, filing our returns for 2024 and planning for the 2025 tax year, and this is a perfect time to explore the hidden tax advantages offered by diligent long-term care planning.

Some things to consider:

Did you know tax-qualified long-term care policies are tax deductible?
Do you have funds accumulated in your Health Savings Account that you’re not sure what to do with?
Did you know that you can pay premiums for a tax-qualified long-term care insurance policy with your HSA funds?
Did you know that any benefits paid out by a qualified long-term care insurance policy are not taxable as income?
Are you looking for more tax deductions?

Tax-qualified long-term care insurance premiums can be combined with other medical expenses and be deductible for those who itemize their returns. The sum of medical expenses must exceed 7.5% of one’s adjustable gross income to be deductible. If this is not the case, the premiums alone can be deductible. There are limits on the amount of the premiums that are deductible, based on a taxpayer’s age and adjustable gross income. For this tax year (2024), anyone over the age of 70 can deduct up to $5,880 on their federal tax return. A taxpayer can deduct premiums as medical expenses OR deduct the premiums alone – not both.

To be considered qualified, these policies must adhere to the guidelines established by the Health Insurance Portability and Accountability Act (HIPAA) of 1996. This means they must provide coverage for medically necessary care for individuals who are chronically ill and unable to perform at least two activities of daily living such as bathing, dressing, or eating, or who require supervision due to cognitive impairments.

Long-term care insurance premiums can also be deducted on your state tax return. Each state varies with the qualifications and limits that are deductible, so you should consult a financial advisor or tax professional in your state.

If you have accumulated funds in your health savings account, purchasing long-term care protection can be a smart place to use these funds. Not only are you purchasing long-term care insurance with “pre-tax” dollars, any benefits received by the policy will be tax free! It is important to know that if HSA funds are used to pay premiums, these premiums are not eligible to be deductible on your federal or state tax return as mentioned above.

Benefits received by a qualified long-term care policy are not taxable as income. This can also be the case with the increasingly popular “hybrid life insurance policies” that contain long-term care insurance benefits. These hybrid policies can be viewed as a win-win-win and there are many plans available. These policies offer a life insurance amount that is income tax free upon death, an accelerated long-term care benefit where benefits are not taxed as income (subject to the IRS 2025 per diem daily benefit of $420), and a cash value component where cash value amounts of the contract accumulate on a tax deferred basis.

I’m a big fan of the hybrid life insurance policies that offer long-term care benefits. In many cases where I have assisted in long-term care insurance planning, we have utilized an “indexed universal life” policy. Let’s consider the purchase of a $1,000,000 contract. One of three things can happen. If the policy is used for long- term care expenses, most of the policy amount can be used to pay the expenses tax free. When the policyholder passes away, the designated beneficiary will receive the unused portion of the $1,000,000 on an income tax free basis. Lastly, you can choose to access the cash value of the contract if needed in the form of a withdrawal or loan (tax treatment will vary based on many factors). The return on the funds in the cash value account is contingent on the performance of selected stock market indexes. A better alternative to self-funding long-term care? In many cases a resounding yes!

There are numerous tools and options available for long-term care planning. If you want to explore your personal long-term care plan to determine your best course of action, do not hesitate to reach out to the WisMed Assure team at insurance@wismedassure.org, or call 608.442.3810.

Tom Strangstalien

Insurance Advisor

Reach out to me to learn more. You can contact me at tom.strangstalien@wismedassure.org or 608.442.3730.

Send me an email!

Tom Strangstalien

Insurance Advisor

Reach out to me to learn more. You can contact me at tom.strangstalien@wismedassure.org or 608.442.3730.

Send me an email!

Note: This article is for informational purposes only and should not be considered as insurance advice related to your specific policy or situation. Please consult with a qualified insurance advisor or professional before making any policy decisions. Full disclaimer and contact information.

Last-Minute Money Moves for 2024 Taxes

March 10, 2025March 13, 2025

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

As the April 15 tax deadline approaches, physicians still have opportunities to adjust and improve their 2024 tax returns.

Contribute to a Health Savings Account

If you have a high-deductible health plan (HDHP), you may be eligible to contribute to a Health Savings Account (HSA). For 2024, the contribution limits are $4,150 for individuals and $8,300 for families. Contributions can be made until the tax filing deadline. Just remember to reduce your contribution by the amount your employer contributed. HSA contributions are tax-deductible, growth is tax deferred, and withdrawals used for qualified medical expenses are tax-free. This triple tax advantage makes HSAs a powerful tool for health care costs and reducing your tax burden. As a bonus, after age 65 you can use the HSA penalty free for non-health care spending too; you’ll just pay income tax on the withdrawals.

Max Out Your IRA Contributions

The IRS allows you to make contributions to your Individual Retirement Account (IRA) for the 2024 tax year until the filing deadline (April 15, 2025). If you haven’t hit the maximum contribution limits yet ($7,000 for those under 50 and $8,000 for those 50 and older or your earned income if less), this is a great way to reduce your taxable income while boosting your retirement savings. However, most physicians with access to employer retirement plans will find they cannot deduct the IRA contribution if their modified adjusted gross income (MAGI) exceeds $77,000 single or $123,000 married filing joint. If that’s your case, use the next strategy: the backdoor Roth IRA instead.

Backdoor Roth IRA Contributions

For higher-income earners, consider one of the most beneficial tax strategies: the backdoor Roth contribution. You can contribute to a traditional IRA by April 15 for 2024 (whether deductible or not) and then convert those funds to a Roth IRA. This move allows you to get money into a Roth IRA where your earnings will grow tax-free in the future. See the full Backdoor Roth IRA article for more.

Self-Employed Income? Max Your Retirement Contributions

If you’re self-employed or have 1099 income, you still have time to contribute to a SEP IRA or individual 401(k) for 2024. These plans allow for higher contribution limits compared to other retirement plans, and contributions are tax-deductible. You can contribute up to 25% of your income or $66,000 (whichever is less) into either plan, and the deadline to set up and contribute is the same as your tax filing deadline, including any extensions.

Contribute to a Wisconsin Edvest 529 Plan

Wisconsin taxpayers can deduct Edvest contributions up to $5,000 per beneficiary from their state income tax return. If you make the contribution for 2024 by April 15, 2025, be sure to request that Edvest code for last year. Tip! The tax deduction is per beneficiary and the beneficiary can be anyone in the family. Savvy savers open multiple accounts and name each member of the family as a beneficiary, including parents, to maximize the tax deduction. When the child is ready for college, simply change the beneficiary.

These last-minute moves, before filing your 2024 tax return, can help you reduce your tax bill and position yourself for financial success in the coming year. For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.

PAYE & ICR Plans Reopening for Student Loan Borrowers

December 16, 2024December 18, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

The Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will reopen in mid-December under an Interim Final Rule. For borrowers forced into forbearance under the Saving on a Valuable Education (SAVE) repayment plan, should you switch plans? Let’s find out.

Focusing on SAVE vs. PAYE only

ICR is typically only used by parent borrowers with Parent Plus loans or consolidated Parent Plus loans. Income Based Repayment (IBR) is also available for borrowers, but the payment amount and treatment of interest are equal to or substandard to PAYE and SAVE plans. Therefore, this article will focus on SAVE vs. PAYE.

Problems with SAVE

As of this writing, borrowers in the SAVE plan have been placed in forbearance with no interest, no payment, and no progress toward loan forgiveness. It’s anticipated this forbearance will last well into 2025.

Making progress toward loan forgiveness

There are two options currently.

Switch from SAVE to a different payment plan, like PAYE, with required payments and progress toward loan forgiveness.

Anticipate using the PSLF Buyback program later to complete the 120 payments needed for forgiveness (assuming this program can be used to buyback months for the current forbearance.)

Comparing SAVE vs PAYE

Payment: Monthly payment under SAVE is typically lower than PAYE. The exception is at high income levels. The PAYE payment rises with higher income, but it is capped at the 10-year standard payment. The SAVE payment rises with higher income uncapped.

Interest: For those with relatively low income compared to their debt, the SAVE plan is often better than PAYE. The SAVE plan prevents interest from accruing when the monthly payment does not cover the interest. In contrast, unpaid interest accrues under the PAYE plan until it accumulates to 10% of the loan amount.

Length of Repayment: Loan forgiveness for borrowers that don’t qualify for Public Service Loan Forgiveness (PSLF) takes 20 years under PAYE. Under SAVE, forgiveness takes 20 years for undergrad loans, 25 years for graduate loans, or 10 years if the original amount borrowed was $12,000 or less.

Should you switch?

Everyone needs to run their own calculation to see what makes sense for their situation. Many borrowers will benefit by sticking with the SAVE plan if they are working for a government or 501(c)3 non-profit organization, assuming the PSLF Buyback program can be used to gain credit for the current forbearance later. For those with high income and/or their employer doesn’t qualify them for PSLF, switching to PAYE might be worthwhile.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Don’t Wait for Disability Protection: A True Story

December 16, 2024December 17, 2024

By Tom Strangstalien, Insurance Advisor

When you’re in your twenties and thirties, you can feel invincible. Despite the extraordinary odds of a disability, you might think, “why not wait until later in my career when my income increases?” After all, disability insurance can be expensive and impact your budget. Avoid the mistake of taking your health for granted – as resident and fellow physicians, you witness this every single day. To put it simply, life happens!

Did you know that you can get disability protection with an increasing benefit for as little as $25 to $50 per month? Put disability protection in place as early on in residency or fellowship as you can at as much as your budget allows. Also include a “future increase benefit” that allows you to increase your coverage as your income increases with no medical underwriting to protect your income throughout your entire career. Doing so protects you from the risk of financial ruin.

At WisMed Assure we are experts at designing these plans and work with physicians every single day to place this valuable protection for them. With permission, I’m sharing a story from one of our resident physicians verbatim.

“Hi Tom – this is quite a delay in my response, but I’ve unfortunately had some medical issues pop up in the past few months. I’m still very interested in disability insurance, but these medical things might have changed my situation, and I’ll let you be the judge. I’ll outline the events below. Please feel free to use my story as an example of why residents should do this as soon as possible during residency.

I woke up on a Sunday in mid-April with significant hearing loss in my right ear. I was diagnosed by an ENT provider with sudden-onset sensorineural hearing loss due to a viral infection. I took steroids for two weeks, and my hearing has returned to normal. From a long-term standpoint, there isn’t any increased risk of long-term hearing loss as a result of the condition, and I’m doing well!

As a part of the medical work-up, however, we obtained a brain MRI to ensure that an acoustic neuroma wasn’t causing my symptoms. Thankfully, that wasn’t seen. However, the MRI did find two incidental white matter lesions in my deep right parietal lobe. I don’t have any neurological symptoms and am feeling fine. I just saw a neuroimmunologist at Froedtert in late July, and thankfully, it isn’t likely to be anything clinically significant. These types of spots are typically associated with dementia in elderly patients, but they’re being found in younger patients (as MRI scans are being used more frequently in younger populations) and aren’t associated with any long-term issues. We will get a repeat MRI in one year to make sure it’s stable, and then I won’t require any additional monitoring.

So, QUITE a change in my health status. I’m feeling fine, and I’m not taking any medications at the moment. I also didn’t miss any time with these conditions. Otherwise, my answers to your initial list of questions haven’t changed. It wouldn’t take a genius to guess this would increase my monthly cost for disability insurance. Do you have any other insights or recommendations? Could you get some quotes again?”

Life truly does happen, and we don’t know what our future holds. I encourage all of you to obtain individual disability protection as soon as possible. Do not wait until it’s too late. My team and I are here to help and will passionately search for you and design a plan that is suitable for you. We exist for your benefit and it’s what we do.

For help with your insurance planning, contact Tom Strangstalien at 608.442.3730 or the WisMed Assure team at insurance@wismedassure.org, or call 608.442.3810.

Tom Strangstalien

Insurance Advisor

Reach out to me to learn more. You can contact me at tom.strangstalien@wismedassure.org or 608.442.3730.

Send me an email!

Tom Strangstalien

Insurance Advisor

Reach out to me to learn more. You can contact me at tom.strangstalien@wismedassure.org or 608.442.3730.

Send me an email!

Peace of mind this holiday season

December 11, 2023December 11, 2023

By Martin Hurst, Insurance Service Representative

The agents here at WisMed Assure do not focus solely on revenue, our agents go that extra mile to address individual and specific concerns and provide coverage within each customer’s budgetary needs. By putting clients’ needs first, our agents demonstrate their commitment to providing excellent service and building trust with physicians. Their expertise and attention to detail enables them to guide physicians through the complex world of insurance, explaining terms, conditions and benefits clearly and transparently. Ultimately, our agents strive to empower physicians with the knowledge and coverage necessary to protect their health and peace of mind.

As I navigate my first year here at WisMed Assure, the agency has prioritized providing me with direct training with our agents. Tom Strangstalien is one of the agents I have had the opportunity to sit down with to discuss Life and Disability policies. Recently, Tom and I reviewed disability quotes for a physician. Tom carefully considered the physician’s lifestyle, occupational practice and potential risks to tailor the policy to their unique needs.

Additionally, he broke down the various policy options, highlighting the specific benefits and limitations of each. He focused on the importance of comprehensive coverage that would provide adequate support if the physician ever faced a disability, without worry of the financial burden. After reviewing the quotes for this physician, he noted that the physician was concerned the monthly premium was exceeding their budget. This was to be expected as their initial meeting was to create the “ideal policy” without worrying about the premium cost. With this concern in mind Tom navigated to the riders page with the cost for each listed next to the rider and asked what I would keep or remove from the policy to reduce the overall cost. We went back and forth on keeping or removing certain riders, we looked at 90- or 180-day elimination periods, possibly decreasing the time covered in relation to retirement age of 65 or 67, to see the impact this would have on premiums. At the end of our meeting, we were able to give this physician several options that had the potential of saving them $4,000 in monthly premiums. This is an example of what each agent does here daily and is the reason I am grateful to work alongside so many unique and caring individuals.

As you’ll see in this edition of the Antidote, the WisMed Assure and WisMed Financial team is focused on building and maintaining relationships with clients, and always keeping the best interest of the client at the center of all we do. These real client stories help illustrate the WisMed difference. Contact us at 608.442.3810 or insurance@wismedassure.org.