Long-Term Care Insurance: Employee Education Makes the DifferenceBack
Most Partners of United Benefit Advisors (UBA) and their clients have benefits enrollment down pat. They know what to communicate to employees, and when. Employees, too, are usually familiar with the process. For example, they know what to expect when they start comparing their medical plan options to their 401(k) contributions. But not all benefits are created equally. Some require more communication, understanding, and detail. Long term care insurance (LTCi) is one of those products. More than any other benefit, it calls for well-thought-out employee education.
LTCi education is critical to employees for the following reasons:
- Underwriting concessions are available for a limited time only and an employee’s health determines approval. Employers are able to offer long term care insurance with reduced underwriting, but the employees can only take advantage of this offer during initial enrollment. It will not be available at any other time – including during future open-enrollment periods – so it’s essential that employees understand the advantages of this benefit at a time when they will receive their best opportunity for approval.
- LTCi isn’t just another voluntary benefit, it’s an important component of any employee’s retirement plan. Long-term care can be a huge financial burden for many Americans. Those who buy long term care insurance are doing so to protect their savings and assets down the road. As a result, LTCi becomes a critical aspect of an overall retirement plan. Employees will want guidance on which coverage options best suit their financial needs.
- LTCi is often a one-time purchase and employees may face closed plans and rate increases. Unlike other benefits where providers may change from year-to-year, the majority of LTCi purchasers will hold on to their original plan for life. As the market evolves and carriers develop new products, an employer may be administering multiple LTCi programs to employees. Employees will be curious how their plan stacks up – especially if they have a plan with MetLife, John Hancock, Prudential, or CNA since those carriers no longer offer new LTCi plans. Employees may also be impacted by rate increases with these carriers and will need education-based support on what decisions to make regarding their increased premium. Helping employees compare programs will allow them to make an informed decision about their plan.
What Employees Need to Know
Employees need focused time, separate from other benefits education, to learn about LTCi. It is important to communicate with them, both in writings and through in-person or Web meetings, so that they can learn:
- What long-term care is, how likely it is they will need it, how it’s delivered, and the costs associated with it
- What LTCi covers and how it differs from other benefits
- The risks associated with not having LTCi
- Myths about long-term care coverage (for example, that it’s only needed by the elderly or that it only covers nursing home care)
- An overview of options and an understanding of all possible solutions for long-term care
- Tax incentives available for LTCi
- The right time to buy LTCi and the risks associated with waiting
- Decision-making tools to help select the best coverage levels for their needs
We’ve had a great reception from UBA Partners and clients who are interested in LTCi for their employees. One of the primary themes we continue to hear is that LTCi is on the to-do list for many brokers and employers. When employees have all of this information laid out in an accessible, easy-to-understand way, they will be able to make informed decisions about this valuable benefit.
©Copyright 2016 by Megan Ellis and LTC Solutions, Inc., a UBA Certified Solution. Reproduction permitted with attribution to the author.
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