It's official - starting this year the Federal Government will offer a voluntary (employee-paid) long-term care insurance program for its employees, their spouses and their retirees. While critics of the plan think the Feds should pay for the coverage, it is the largest LTC insurance offering of its kind.
This new program, which had been legislated as part of the Health Insurance Portability and Accountability Act of 1996, coupled with the corporate and individual tax incentives also enacted under HIPAA, has generated interest amongst employers and HR professionals. The message is certainly clear - the Federal government wants the costs of long-term care to be financed through private insurance.
So now the question becomes: should you offer LTC insurance to your employees, their spouses and their parents? Let us look at the some of the considerations.
• A voluntary long-term-care insurance offering is a no-cost way to expand benefits for employees, with little or no administrative involvement.
• Employees with insured parents lose less time out of work providing or coordinating their parents' care.
• Covered employees cause less strain on the firms' resources.
• Like most insurance coverage, the younger you are, the lower the premium.
LTC insurance is the fastest-growing employee benefit. Sooner or later you will probably be offering it.
• There are many companies out there; how do you ensure selecting a high-quality plan?
• Will this offering further strain the human-resources department?
• How do we know our employees are choosing the right benefits?
• What are the potential participation requirements?
The fact is that if you are dealing with an agency that specializes in LTC insurance, most of these questions can be a non-issue.
LTC insurance now enjoys the same tax treatment as typical health insurance, so employers that chose to contribute to plans can write off the contribution.
Some corporations can write off 100 percent of the premium for "selected" employees (i.e., partners) and their spouses with no taxable "event" to the employee. There are no ERISA requirements or top-heavy testing. Firms can actually select whose coverage will be company-paid.
Finally, the benefits received from the policies for reimbursements of long-term-care expenses are tax-free.
The Massachusetts Bar Association offers long-term-care insurance for individuals and groups with discounts and underwriting concessions through one of the Transamerica Companies - Monumental Life Insurance Company. For more information call Mort Potoff at (800) 749-2118.