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Who's using long term care insurance as an employee benefit? Please sh


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Guest Advantage Benefits

Dave, even though this topic is getting a lot of publicity, I have only seen very few organizations actually install the plan.

Our experience has seen some professional law firms, and universities. Typically, your smaller manufacturing companies do not provide something like this.

Hope this helps.

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We're rolling this out as a benefit 2nd quarter 2000. I'm seeing a lot of insurance and financial services companies beginning to offer this; it's an integral part of wealth preservation strategies.

There's a tremendous variety of products out there, both group and individual. Group products seem to have somewhat less flexibility in terms of design but prices are much better and you can get guaranteed issue (no underwriting) for employees. The downside of group plans is that the carriers seem to want a significant employee base for a group product - 3-5,000 ees.

The real upside to this is that it can be fully voluntary (though not pre-tax yet), you can offer it not only to employees and spouses, but parents and grandparents and retirees as well. Our model will be guaranteed issue and payroll deduction for employees, underwriting and direct bill from the carrier for anyone else. The benefit is fully portable, and level, age-based premium.

We're offering it because it's part of our overall strategy, being an insurance and financial services company. We don't have a product of our own, so we'll be shopping it out. The biggest part of this is the educational process for employees - and the understanding that it's not for everyone.

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  • 4 weeks later...

We have been offering LTC insurnace for about three years. Participation is very low even though as a Medical School we have many highly compensated employees. We use UNUM and offer GI to employee and spouse if they enroll within 30 days of eligiblity. Parents, grandparents and in-laws are eligible on an underwritten basis. The plan is portable and is payroll deducted.

------------------

Dana Molonguet

Employee Benefits Manager

LSU Health Sciences Center

New Orleans

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  • 1 month later...

Our University offered an after tax plan which I looked at in some detail....it was a poor plan because it did not have automatic inflation protection, typically 5% . I finally took out a policy on my wife and myself with a large company. Here is a little of my experience: Two large companies turned us down for health reasons...by-pass and carotid artery surgery for one of us. We then applied to a third company and they approved us....The policy starts at $90 per day 100% home care and 5%compound inflation increase a year. After we were offered the policy by this company one of the other large companies that had turned us down came back and offered us a very similar policy with a premimum of $1 less. The policy is for unlimited coverage and is about $2500/year for two and we are 58 and 60 ...one of got the good health benefit and we got the spouse discount......the policies from the largest companies have similar features....here are three things to think about.......5% compound inflattion protection.....unlimited or limited years(typically 3 or 5 years) of coverage......starting amount of coverage....Some of the people selling these policies are mainly insurance sales people and don't know the many of the details of this coverage....we were lucky to find a person that does only this insurance and was very knowledgable......she had sold on the order of 1000 policies...........good luck

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Guest Hillary P

No, you're correct -- IRC 125(f) prohibits a cafeteria plan from offering long-term care insurance as one of its qualified benefits.

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Guest Carolyn Kates

As others have noted, long term care insurance, as of today, is not a frequently offered employee benefit and if offered it is usually a voluntary benefit. However, the aging of our workforce and the growing need to plan for workers and their aging parents, has made LTC a workplace issue as well as a societal and family one.

Research into employer LTC insurance is clearly needed, as there is a dearth of recent or in-depth data on this area. The Health and Human Services Dept. has commissioned a large survey that is currently being done by the Lewin Group, which will offer better qualitative data on employer-sponsored LTC coverage.

However, all the current literature that I have read indicates that the expansion of employer-sponsored LTC insurance is the best way to make good coverage more affordable because of the ability of individuals to enroll at a younger age and more accessible to employees and retirees because those plan generally are 15-30% less expensive than individual plans. Hope this information helps. Good luck!

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  • 2 months later...
Guest Carolyn Kates

Dave,

Just wanted to give you an update on Long Term Care Insurance for your business.

Recent changes in the federal tax code allows business owners to deduct tax-qualified long term care insurance premiums. The American Association for Long Term Care Insurance has just released a new booklet called "Business Owner's Guide to Long Term Care Insurance Protection" offers the specifics on how, first the time, it is possible to use pre-tax dollars to purchase long term care insurance.

If you or anyone else would like a copy of the booklet, please let me know/e-mail me. Hope this info. helps.

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  • 1 month later...
Guest victoria davis

Dave - Just put LTC in at a client with 17,000 lives. As others have said, participation was low, despite guaranteed issue on a policy with excellent coverage (including home health care) for only $8 something per month at age 35. And once you buy, your premium does not increase as you age. What a deal! I wish I could work for this company and take advantage of their voluntary benefits. I will never understand why employees don't understand the value of this type of coverage (or disability buy ups either).

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