KIRKLAND, Wash. (CitizenWire) — A new employee benefit is coming for millions of American employees: access to affordable long-term care insurance (LTCI). So says Dan Cahn, an industry expert. LTCI provides funds for in-home or nursing-home care in case of longer-lasting illnesses or disabilities not covered by regular health insurance. Cahn is Senior Vice President of Business Development for LTC Financial Partners, LLC (LTCFP), one of the nation’s largest long-term care insurance agencies.
Why will employers offer this benefit? “Uncle Sam,” says Cahn. This coming January 1, 2011, the CLASS Act (Community Living Assistance Services and Supports) goes into effect. It’s the part of health reform that provides an employer-administered “public option” for long-term care insurance. “This new reality will raise the issue of private alternatives,” says Cahn. “So I believe employers of all sizes will soon be presenting their employees with the full range of options, private as well as public.”
There’s a compelling reason for companies to do so. “Millions of employees are already caregivers to loved ones and aren’t aware of what options they have for their own long-term care. In addition many of their employers who participate in the CLASS Act will automatically be enrolling them in the public plan, with payroll deductions, unless they opt out,” says Cahn. “That’s what the law mandates. So employees will be ticked off if they haven’t been educated about all their options.” For example, the average private plan has a 90-day waiting period before one can collect benefits, but with the CLASS Act there’s a five-year waiting period. “Employees will expect to be told this sort of thing,” Cahn says.
Today only a small percentage of companies include long-term care insurance as an employee benefit. “This will change as a consequence of all the attention brought by the CLASS Act,” Cahn predicts. “LTCI will become the new big thing in benefit packages.”
It’s about time for this new focus, Cahn asserts. “According to the U.S. Department of Health and Human Services, at least 70 percent of people over age 65 will require some long-term care services at some point in their lives. And according a survey by MetLife, the average cost of a private room in a nursing home is now about $80,000 per year, and rising. With this kind of risk — compared to things like dental and vision insurance — LTCI warrants a much more prominent place in benefits packages.”
But there’s a catch for companies. “Long-term care insurance is more complex and requires more time to understand than vision, dental, and even health insurance,” says Cahn. “Few companies are prepared to explain the complexities so employees can make the best choice — not only between the CLASS Act and private options, but the best choice among the many, many private options.”
That’s where Cahn’s organization comes in. As January 1 draws near, LTCFP is ramping up to help employers not only revamp their benefits programs but also educate their employees. “It’s a crash effort to get everyone up to speed,” he says. LTCFP has also teamed with employee benefits consultants to help companies decide whether to implement a Group or Multi-Life long-term care programs.
In a Group program, the employer receives a master contract from a long-term care insurance carrier and can enroll through a Web site. In a Multi-Life program, each employee and their spouse can meet with a long-term care insurance specialist and receive an individually-owned policy if appropriate. An LTC insurance policy is appropriate if transferring some or all of the risk is deemed the best option for one or both of the marriage partners. In addition the employee can extend the discounts and free educational resources to any family member anywhere in the country.
LTCFP has hundreds of agents trained to help individuals as well as organizations decide between the CLASS Act and private long-term care alternatives.
Cahn’s views appear in the October issue of Voluntary Benefits Magazine, in an article titled “Health Care Reform and The CLASS ACT: Is Long-Term Care Insurance No Longer an Ancillary Employee Benefit?” More information — including a free “Worksite Guide for Long-Term Care Insurance” — is available from Dan.Cahn @ ltcfp.com or 425-284-4824 extension 1118.
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