Long-term care (LTC) insurance is an option employers can include with their group health plan to provide additional benefits for their employees, which helps both employers and their workforce.
What Does LTC Insurance Cover?
Long-term care (LTC) insurance is different from traditional health insurance in that it covers long-term services and support. This coverage provides policy holders with a reimbursement for services that assist with daily living activities, such as eating, dressing, bathing, moving around, and/or getting in and out of bed. Most LTC policies that are available today are comprehensive and pay for long-term care in various settings, including:
- Adult day service centers
- Alzheimer’s care facilities
- Assisted living facilities (also known as residential care facilities or alternate care facilities)
- Nursing homes
- Hospice care
- Respite care
- Skilled nursing care
- Necessary therapy (i.e. occupational, speech, physical, and/or rehabilitation)
- Assistance with personal care, such as bathing and dressing
Who Needs LTC Insurance?
Contrary to popular belief, LTC insurance isn’t just for the elderly. It provides coverage that traditional medical plans do not provide for long-term care needs arising from accident, illness, and aging. The need for long-term care obviously increases with age, but an accident or illness can occur at any time, so all individuals can benefit from having LTC insurance.
How is the Premium Calculated?The cost of LTC insurance depends on several factors, including:
- Whether the policy is purchased on an individual basis or as part of a group plan offered by an employer
- The care options and benefits that are included in the policy
- The age of the policy holder when they purchase the policy
- The maximum amount the policy will pay per day
- The maximum number of days or years the policy will pay benefits
Group Benefit Plans and LTC Insurance
Individuals can purchase LTC insurance on their own or, if available, through the group benefits plan at their workplace. Both the employee and the employer will realize several benefits of having LTC insurance part of the group benefits plan.
Benefits for Employees
When employees purchase LTC insurance through their group health plan, they will be able to take advantage of pricing discounts and simplified underwriting only available on a group basis. In addition, a LTC policy does the following:
- Enables employees to safeguard their retirement savings.
- If the need arises for long-term care, they can pay for this care through the LTC insurance rather than with their retirement savings.
- Gives employees the ability to control their long-term health care decisions rather than relying on family or government for financial support.
- Provides peace of mind by providing coverage for needs that are not covered by other medical benefits.
Benefits for Employers
When employers offer LTC insurance for their employees, they can choose to pay all, part, or none of the premium for employees who opt in for the coverage. Regardless of which option employers choose, they and their employees will still enjoy benefits of making this type of insurance available.
- Discounts on the policy premium. Even if employers choose to simply offer the coverage as a voluntary benefit where the employee pays 100 percent of the premium, the policy will be available at a group-discounted rate.
- Health underwriting concessions. Generally insurers require individuals to meet certain health standards to qualify for long-term care insurance, but when the policy is offered on a group basis the medical qualifications are often simplified.
- Improve recruitment and retention of key employee talent with enhanced benefit packages that include LTC insurance.
- Improve employee productivity. When an employee is dealing with a long-term care situation, either for themselves or a dependent, it can be time consuming and stressful. This can cut into employee productivity. Having access to long-term care solutions can help eliminate this problem.
- Tax incentives. Contributions to long-term care premiums are tax deductible expenses. For tax details, visit http://www.aaltci.org/long-term-care-insurance/learning-center/tax-for-business.php
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