As the work force ages, a growing number of employers are taking the long view when it comes to employee health care. More than 4,700 organizations now offer an (LTC) insurance option to their employees, says the Health Insurance Association of America, and that figure is increasing at a rate of about 18 percent a year.
LTC insurance can be a low-cost way to offer an attractive perk to employees and their family members, since you can pass the full cost of premiums on to them. Another benefit: reducedrelated to employee caregiving duties.
If that doesn't persuade your CEO to look into LTC insurance, offer this little gem: The IRS allows most corporations, sole proprietors and limited-liability companies to deduct 100 percent of the cost of providing a tax-qualified LTC policy to employees and their spouses. In addition, some states offer employer tax credits for sponsoring LTC insurance benefits.
Here are four things to keep in mind when shopping for an LTC plan:
1. Know the legalities. Although it's perfectly legal to offer a paid LTC plan to a selected group of employees, be careful to avoid any potential ADA or age-related discriminatory issues. Also, you must provide LTC insurance separately from cafeteria-style benefit plans.
2. Consider your employee pool. The most favorable LTC insurance rates go to employee groups who are younger and healthier. On the other hand, employees in the 38-to-56-age category are most likely to buy LTC insurance. Most organizations find that 10 percent to 14 percent of their employees sign up for LTC coverage when it's initially offered.
3. Choose an agent and carrier experienced in the LTC insurance market. Although 140 insurers offer some form of LTC coverage, not all have a solid history of providing that product. Look for financially secure carriers with strong ratings from a service like A.M. Best. Because most employees will be new to the idea of LTC insurance, it's also wise to look for an agent and carrier who can provide ongoing information and education.
4. Compare the details. LTC plans differ in the type and duration of long-term care services covered. Policies labeled "comprehensive" usually cover home care services as well as care provided in a skilled nursing facility. Ask for the dollar amount each plan will cover on a daily or monthly basis and determine whether that would cover the cost of care in your area. How long will benefits last? Some policies cover only two years of care, others a lifetime. When will benefits start? Although the most popular option is a 90-day waiting period, some carriers offer longer or shorter waiting periods. Most important: Make sure the plan includes inflation protection so that benefits will maintain their value.
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