Long-term care needs increasingly are on the minds of U.S. employees. Some studies estimate that as many as one in four workers assists in the care of an elderly loved one. Having experienced caregiving firsthand and marching toward their senior years, more and more employees are likely to be thinking about what their long-term care needs may someday be, who will provide this needed care, and how they will pay for it.
Of course, it’s not only seniors who need assistance with the activities of daily living, as illness or injury can render one in need of assistance at any age. In any case, when employees become preoccupied with meeting a loved one’s long-term care needs—or when thinking about their own—their productivity in the workplace can suffer. This reality makes long-term care an issue for employers as well, and the case for adding long-term care insurance to a company’s employee benefits offerings persuasive.
If you decide to shop for a long-term care plan to add to your company’s employee benefits package, the most important decision is which carrier to choose. While financial stability and commitment to the product are important in choosing a carrier for any type of insurance, these are particularly important considerations for long-term care insurance, since the industry—though still relatively young—has seen the entry, and then exit, of numerous vendors. Since long-term care is an insurance product that most employees won’t use for many years after they first purchase it, it is critical that they trust the carrier will still be around when they claim benefits under the plan. Research a carrier’s track record in the long-term care market and try to get a handle on whether it seems committed to stay in the market in the future. Of course, an insurer’s overall financial stability is critically important, too, and for this consult the insurance rating services. But don’t be drawn to a carrier based on its overall ratings alone; try to assess its strengths specifically as a long-term care insurance carrier.
When assessing carriers, also look for those with good communications tools and a willingness to do what it takes to help employees understand the long-term care insurance product. Most employees will not be familiar with how long-term care insurance works, may not understand how it differs from medical coverage, and may not think they have a need for it, incorrectly presuming that Medicare pays for all nursing home and home health care needs. Therefore, the skill of the carrier in communicating the product will be critical to employees signing up for the coverage.
Long-term care plan designs can vary, making this another decision when shopping for a plan. Basic variables include the amount of the daily benefit (for nursing home care, home health care and adult day care), the length of time for which the benefit will be paid, the elimination period, and inflation protection. Many companies that offer a long-term care benefit will offer employees a range of plan choices that differ on these various design elements.
Though typically a standalone plan, long-term care also can be a rider to a life or disability plan. A company can offer it on a voluntary basis, or pay some or all of the cost of the plan. Some companies open a long-term care plan to all employees, while others offer it as an executive carve-out. These choices illustrate the potential flexibility of a long-term care insurance plan. Thus, a company’s choice of long-term care plan can be a strategic and financial decision based on its benefits budget and goal in implementing the plan.
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