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Overview of Group Long-Term Care Benefits
Presented to:
Name/Title/Company
Presented by:
CBIZName/Title
©2013. ALL RIGHTS RESERVED.LTCI Partners, LLC
LTCi
Personal Care ADLs
Location Who
Personal care or supervision needed
for an extended period of time
Care may be provided in the home, community setting or
nursing facility
Coverage triggered when insured cannot
perform 2 or more activities of daily living
Normally older ages but can affect anyone due to an accident or
medical condition
What is Long-Term Care Insurance?
The Impact of Long-Term Care
Of family caregivers are women2
Source: AARP Blog (Caregiving in America, 12/12).
Percentage of applicants denied coverage when applying for an individual policy.
Age 80 or over
Ages 70-79
25%Ages 60-69
44%
70%
Insurance may not be accessible if the
employee waits until after retirement to
purchase
6
Part of a Comprehensive Risk Management Strategy
Health Insurance
Health Family and Wealth
Life & Disability
Insurance
Home
Homeowner’s Insurance
Retirement Lifestyle
LTC Insurance
Car
Auto Insurance
LTCi can help protect the retirement lifestyle that your employees have worked their entire lives to create.
Why Offer Long-Term Care Insurance?
• Retain and attract valuable employees• Improve productivity and minimize absenteeism for employee
caregivers (many plans extend benefits to parents and other family members)
• Receive potential tax advantages
•Provides employees with a way to help protect:
• Retirement savings and assets
• Family from the burden of care giving
• Their choices on where and how care is provided
• Insurability
Group Options
$3,000 to $5,000 annually per executive
$1,200 to $1,500 annually per employee
Employer Funded Executive Carve-outs
Voluntary Plans
Employer Funded Base Plans with Buy-ups
Employer Sponsored Strategies
$600 to $1,200 annually per employee
Strategies Sample Rates
Tax Treatment & Incentives
IRS CODE SECTIONS:
7702B – defined Qualified LTC (accident & health insurance / tax-free benefits)
162 – ability to deduct accident & health insurance (c-corp owners are treated as employees)
213 – age-based deductibility for pass-through entities (s-corps, LLCs or LLPs)
106 – premium is not included /counted as imputed income
Treasury Regulation 1.105-5 – employer can create a class of select employees to offer this coverage to (ability to carve-out or “discriminate”)
IRS Notice 2004-50, Q and A41 (HSAs) – tax-qualified LTCI premiums are a qualified medical expense. As a result, an individual may withdraw money tax-free from their HSA to pay tax-qualified LTCI premiums
Plan Design Considerations
Care provided can be defined as custodial or skilled
Includes healthcare advocacy component with access to healthcare professionals who can help implement a plan for care giving
Benefit triggers are either the loss of 2 of 6 activities of daily living (ADLs) or a severe cognitive impairment
Policyholders are usually reimbursed their actual expenses incurred (up to the daily/monthly benefit amount selected) to pay for long-term care services
Coverage is typically offered to employees and their adult family members
Guaranteed or simplified issue may be available for full-time employees (during open enrollment period)
Program can be customized for highly compensated employees (executive carve-outs)
Payroll deduction may be available (for groups of 50+)
Plans are fully portable
Ideal Buyer Profile
Age > 45 Income > $65,000 Tenure > 5 years Married
Benefit Consideration
Carriers & Programs AvailableLTC Carrier Product Discounted Rates Underwriting
ConcessionsNotes
Genworth Group Product is only available to employer groups and rates are state filed.
Modified Guaranteed Issue
Underwriting would include “knock-out” health questions and a height and weight question
John Hancock Individual Yes Full Underwriting
Same product available in the individual market with a Sponsored Group Discount (5%). Full Underwriting is required
LifeSecure Individual
(Multi-life)
Product is only available to employer groups and rates are state filed.
Simplified Underwriting
Simplified underwriting includes “knock-out” health questions. Discounted rates available for employer groups. Plan not available in NY, NJ, CT, MA, VT, NH and ME
Transamerica Individual
(Multi-life)
Product is only available to employer groups and rates are state filed.
Simplified Underwriting
Same product available in the individual market with an 5% Multi-life discount. Simplified underwriting includes “knock-out” health questions.
Sample Implementation Timeline1. Implementation Meeting2. Pre-enrollment Communications
3. Open Enrollment Begins
Awareness1 – 2 Weeks
Interest1 – 2 Weeks
Education1 – 2 Weeks
Decision4 – 8 Weeks
Review Plan Design Obtain/Confirm Contact Information Review Enrollment Materials & Customer Support Review Enrollment Strategy Review Billing
Announcement EmailEducational meetingsWebinar
Enrollment period BEGINSWebsite launchesAnnouncementRate quote letterWebinar
Education brochure & letter
Reminder postcard Educational meetingWebinar
Enrollment period ENDSEducational meetingWebinarReminder EmailUnderwritingBilling Certificates issuedCoverage effective