It is critical that employees plan during their working years when insurance is affordable. Furthermore, they are looking for confirmation and encouragement to begin the planning process from their employers — the same trusted resource that is helping them plan for retirement.
Employer-based long term care insurance is an essential part of a comprehensive benefits package. From the federal government to the majority of S&P 500 companies, many firms are now offering long term care insurance to their employees.
GROUP LONG TERM CARE
It helps protect a retirement plan. Well-informed and financially savvy people understand the dangers that a long term care episode can present to their financial portfolios. In fact, paying for a long term care stay out-of-pocket can be a large contributor to the depletion of assets throughout the retiree population.
It gives people a choice about care. Although Medicare and Medicaid pay for long term care costs, coverage may be limited. Long term care insurance policies make it possible to receive care where people want and need it most. Some policies will also pay benefits internationally.
It eases the burden on family members. Providing care can place an extreme physical, emotional and financial burden on loved ones. Long term care insurance allows family members to be involved in the care-giving process without being the primary provider.
THE VALUE OF GROUP LONG TERM CARE
Long term care insurance assists families cover the cost of care received at home, in the community, or in a nursing home. But there are additional benefits for employers and employees.
For Employers:
Long term care insurance programs can assist in providing:
- Retention of valued employees
- Attractive incentive when hiring new employees
- Reduction in productivity losses
- Alternative to increasing salaries
- Competitive edge
- Ease of implementation
For Employees:
Long term care insurance programs can assist in providing:
- Individual plans of care
- Training for caregivers
- Care providers
- Wellness programs
- Claim filing assistance
- Less expensive group rates
ELIGIBILITY
Eligible participants in a group long term care plan receive group rates based on age and chosen options: and certain insurance companies offer premium discounts for couples. For programs paid by the employer, the contribution is typically limited only to the employee. If employment ends the coverage is fully portable.
Coverage can be made available to:
- Full-time employees
- Part-time employees
- Spouses
- Mothers & fathers
- Grandparents
- Sons & daughters
- Brothers & sisters
- Domestic Partners
- In-laws
- Retirees
TAX ADVANTAGES
No matter what the structure of your company, there are significant tax advantages to purchasing long term care insurance through an employer setting.* Here are some examples:
Self Employed, S Corporation, Partnership, LLC. Greater than 2 percent of these firms’ owners may deduct 100 percent of the annual premium for themselves and a spouse, subject to certain limits based on their age. However, for employees there are no premium deduction limits and the full premium may be deducted as reasonable compensation with no income attributed to the employee.
C Corporations. When a C corporation purchases long term care insurance for employees and spouses of the C Corp., the entire amount is deductible by the corporation and is not taxed as income to the insured.
Benefits Received Tax Free. Benefits from tax-qualified long term care insurance plans are received tax-free by the policyholder.
HSA Ready. Funds in Health Savings Accounts can be used to purchase long term care insurance, subject to certain limits based on their age.
Not Subject to nondiscrimination rules. Long Term Care Insurance can be purchased for a select group of employees.
IMPLEMENTING A GROUP LONG TERM CARE PROGRAM
Long term care insurance is a complex financial planning product and it is critical that an employer partner with a qualified advisor who can guide them through the implementation process.
The Basic Steps of a Successful Long Term Care Program Enrollment:
- Determine whether a plan will be put in place for a select group of employees or for all employees.
- Decide the level of employer contribution for the plan:
- Purely voluntary
- Partially funded
- Base plan with a buy-up option
- Fully funded
- Select a carrier based on experience and commitment to long term care insurance, financial ratings, worksite program and value of contract.
- Design a four to six week schedule of communication to employees, including e-mail communications, newsletter articles, website education centers and more.
- Send a letter to the home of each employee fully endorsing the plan, explaining the need for long term care insurance and what to expect in the upcoming enrollment.
- Conduct group information seminars.
- Allow employees to access archived teleconferences and web conferences about the plan.
- Schedule one-on-one consultations with a financial professional to customize plans and enroll employees and spouses.
- Conduct annual reviews of programs and re-enrollments.
- Utilize a professional and credentialed call center to answer questions about the plans.
Group long term care can be a valuable benefit for any employer and their employees. To learn more about how a group long term care insurance plan could benefit your company please call us at (877) 402-2235 or request a long term care insurance quote.
