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Long-Term Care Insurance – A growing trend in group health plans

Long-term care insurance is the new “star” of group health plans and is widely being used by employers to help attract and retain top performers. In fact, according to a recent study, 45% of companies are now offering long-term care to their employees in addition to their group health plan. Let’s face it, on the plus side, we are living longer and working longer. But, with that longevity comes some health risks that could require long-term care.


We are often asked what long-term care insurance is and how it differs from disability insurance. Long-term care covers a wide array of items, such as medical care, and personal assistance for a long period of time after an illness, accident or other debilitating event. It’s true that long-term care insurance evolved from income disability insurance. But, major medical insurance (or disability insurance) does not protect in the same way.

For instance, a group health plan may cover 30 days of recuperation time. A long-term plan will cover two years or more. Another difference is that disability insurance replaces only the salary at the time of the injury, not the cost of care. This means that without a long-term care policy in place, the employee would have to pay for all ongoing medical care that resulted from the injury. Medicare is not a viable option for these expenses as it only reimburses for a maximum of 100 days, with the average repayment lasting only 28 days.

Long-term care insurance was designed to combat the high costs of long-term care and is available in two different types of policies – individual and group. Individual policies are usually purchased when an employee’s company doesn’t offer long-term care insurance. What types of services do long-term care group plans cover? The most common services covered are:

–          Nursing homes

–          Assisted living facilities

–          Adult day care centers

–          Home health care

–          Personal care

In general, the premiums are usually determined by the benefits provided and the employee’s age at the time of enrollment in the plan. Most group health plans will pay a maximum daily benefit and a lifetime benefit whose amounts are chosen at the time the policy is purchased. Other things to consider when choosing your company’s long-term health care policy are the types of inflation protection available, such as:

–          Automatic inflation protection. With this type of policy, benefits increase at a fixed percentage without changing the premium.

–          Special offer inflation protection. Here the purchasers can periodically choose to increase the benefits. In this case, the premiums increase as the benefits increase.

As a business owner, you have invested time and money in your employees. More and more, qualified workers are looking at company benefits as a prime reason to either join or stay with an organization. If you don’t offer long-term care insurance in your group health plans, contact your independent insurance agent to discuss your options. Keep your top-notch employees happy and attract new potential employees at the same time!