Voluntary LTC

Voluntary Long Term Care plans are individually owned and controlled, but offered through your employer, and solve the problem of caring for yourself rather than depending on government policy or vanishing entitlement schemes. Nursing home costs can range from $80,000 to $120,00 a year. This is the largest out-of-pocket medical expense faced by older Americans. With federal policy having shifted the burden for care to the individual, the solution to securing the funds needed to pay for long-term care is to purchase insurance.

Group voluntary LTC insurance is one of the most attractive supplemental group insurance programs available. Long a staple of union, government, and academic benefit programs, voluntary LTC insurance has now filtered down to smaller employers looking for ways to extend their benefits and provide more to their employees. Voluntary LTC policies are employee-pay-all, and paid through payroll deduction. These plans provide for a wide mix of coverage's, including nursing home benefits and home health care, or community based services at the skilled, intermediate, and custodial level of service. With many plans there are case management services, caregiver training benefits and a provision for return of premium.

Policies will trigger benefits based on 6 recognized Activities of Daily Living ( ADL's). Using the list for tax-qualified plans
2 of 6 ADLs will trigger policy benefits. Medical necessity is not used as a benefit trigger.
LTC policies usually pay a set dollar amount, and provide for coverage's up to a certain length of time, after a waiting period.
Eligibility for these plans include employees and spouses, parents, parents-in-law, even grandparents.
While employees are typically enrolled with simplified-issue underwriting, family members are often medically underwritten.
Rate guarantees can vary, so a careful survey of carriers and benefits should be done prior to placing any coverage.
In most cases, employees can continue their LTC coverage after their employment terminates with no change in benefits or costs.
Similarly, family members who lose their eligibility through divorce or other qualified event can remain in the employers' plan.

Many employers are not familiar with LTC as a benefit or do not fully understand the advantages of sponsoring a group plan. One reason for the decision to offer LTC group coverage is its good fit with the employers workforce - the average age of enrollment in employer-sponsored LTC plans is the early 40s. This is a significantly lower age of enrollment than is typical in the individual market. Thus, group policies can be an efficient and effective vehicle for raising awareness and providing LTC coverage to younger enrollees, when the premium is most affordable. The portability feature of voluntary LTC insurance means potential job changes are not an issue when choosing coverage. Group LTC is convenient, as the employer has done the technical work of screening policies for best value, and employees can apply for the coverage conveniently. This makes employer-sponsored coverage a better fit for many employees than individual policies.

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