Long-term care policies now available to groups

|tab|

It has been said that there are three givens in life: birth, death and taxes. This article doesn't relate to the first, but does to the latter two in regard to the hottest new insurance product to come on the market: long-term care insurance.|ret||ret||tab|

Recent tax incentives and innovative group coverages have made this type of insurance more practical and affordable. With the government reducing entitlement programs and providing new tax incentives, it is obvious that in the coming years there will be more emphasis on individual responsibility for financing long-term care.|ret||ret||tab|

This insurance is designed to pay the costs associated with long-term care that traditional medical plans and Medicare supplements exclude, the primary difference being that a long-term care plan covers nonskilled care.|ret||ret||tab|

People are interested in long-term care plans for many reasons. Protecting assets, maintaining independence, not being a burden to family and friends, access to quality care and general peace of mind are mentioned most frequently. Of particular interest to the employer is the added value of maintaining a good employee/employer relationship.|ret||ret||tab|

So, how did all this come about? The ever-increasing number of older citizens, modern technology, the changing family structure, the normal aging process with its medical problems, as well as misconceptions and lack of knowledge all contribute to this huge health care and retirement dilemma.|ret||ret||tab|

It doesn't take long for long-term care expenses to completely deplete a lifetime of savings.|ret||ret||tab|

For those who need long-term care, the average length of time to need care is 2 1/2 years at a cost of more than $40,000 per year. Statistically for women there is a 1-in-2 chance of requiring this type of care and a 1-in-3 chance for men.|ret||ret||tab|

And family members caring for seniors at home face pressures on their careers and earning ability. Elder care is rapidly replacing child care as the No. 1 dependent-care issue. More than 25 million people are now providing this type of care for someone. Families may have two or more loved ones who require this special care at some point.|ret||ret||tab|

The financial, emotional and physical strain involved with providing this type of care is enormous. Caregivers have many time-consuming daily obligations.|ret||ret||tab|

Long-term care insurance is expected to become the most sought-after employee benefit in the next decade. Today many employers invest significantly in benefit plans that assist employees in meeting medical needs and retirement goals, but many fail to provide long-term care to help protect the nest egg they encourage their employees to build. |ret||ret||tab|

The ongoing demands associated with long-term care are just beginning to take their toll in the workplace. Businesses now experience the financial impact of the rising costs and demands of long-term care. Employers are realizing how these changes affect employee productivity and job performance. Long-term care insurance can help solve these problems.|ret||ret||tab|

Many insurance companies offer innovative long-term care plans with similar benefits. The companies vary in eligibility, underwriting, inflation options and payment options.|ret||ret||tab|

The business- or association-sponsored group long-term care plans are also available to spouses, extended family members of employees and retirees. Participation is totally voluntary by the employee. All policies issued are individual to the employee, and are guaranteed renewable and portable should the employee leave the group.|ret||ret||tab|

As with individual policies of health insurance, insurance companies are selective in the applications they approve for individual coverage. Group long-term care plans can provide coverage for eligible employees and their family members who might otherwise be declined for individual coverage. Besides spousal and preferred health discounts available with individual policies, additional premium discounts are available through group coverages.|ret||ret||tab|

The employer may pay for all, none or any portion of the premium. Executive "carve-outs" are available with this type of group coverage. Premium payments may be through payroll deduction, list billing or direct billing. Many companies offer fully paid up policies with a single premium payment, 10 payments or "pay-to-age-65" payments.|ret||ret||tab|

Recent tax incentives for long-term care make the benefits tax-free and the premiums tax-deductible within limitations. C corporations can deduct 100 percent of the premiums paid for an employee and spouse. Subchapter S corporations, limited liability companies, partnerships and the self-employed can now deduct 60 percent to certain limits, and the deduction will increase to 100 percent in 2003.|ret||ret||tab|

|bold_on|(Cathy Powell is a senior health care specialist with Ollis & Company Insurors.)|ret||ret||tab|

[[In-content Ad]]