The long term care market continues to be in turmoil for group benefits and voluntary producers. You probably noticed the federal government couldn’t figure it out and has punted as of a recent announcement by HHS Secretary Kathleen Sebelius. “Health officials said that after 19 months of analysis, they could not come up with a model for the so-called CLASS Act that keeps it voluntary and budget-neutral.”
The group insurance carriers haven’t been able to figure it out either. The number of carriers that offer workplace group LTC insurance coverage has significantly diminished. Some would say has been eliminated. If you’re thinking, “They haven’t had time to figure it out? Not hardly, I made my first group long term care presentation in to a large employer in 1987. The industry has had plenty of time to build credible data and to price and/or create a stable market.
Interestingly, the research reflects that benefits professionals want to provide LTC for the employees. The documented difficulties for delivering a simple LTC benefit or solution are many. So . . . what do we do and how do we help our clients understand the alternatives?
The last few years the trend has been for group or voluntary life insurance carriers to couple voluntary life with LTC. Some are calling these “combo” products. With these products the life insurance death benefit can be used either for LTC or death. Voluntary permanent (cash value) life insurance (one carrier that uses term to age 121) with premiums collected through payroll deductions have simply added LTC riders to their offerings. The popularity and success among traditional voluntary benefit specialist is strong and established. If you are looking for a solution to this question: ”How can we provide a LTC benefit to the average working American that is an hourly employee?” this could be a profitable opportunity for you.
Most carriers have developed rider’s that provides 4% of the death benefit each month for qualified LTC expenses for up to 25 months, or a total of a 100% of the death benefit. Depending on the carrier, the coverage can be used for any form of LTC, be it nursing home, home care or assisted daily care.
With employees receiving either a death benefit or long term care, or both, this solution is a new proven winner during an enrollment . . . employees like it and so does the company HR or benefits team. It’s also a nice way to let your clients know you are staying current in the benefits marketplace and bringing them unique new ideas and benefit options. Add the combination of possible guaranteed issue with potentially high coverage amounts and the difficulties of marketing LTC in the benefits arena may finally be alleviated.
Kelly is chief executive of Nashville, Tenn.-based Voluntary Employee Benefit Advisors. He can be reached at Tkelly@VEBA1.com.
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