Corporate Advantages to Offering a Long-Term Care Program
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Discrimination Testing – this benefit is not subject to discrimination testing, therefore, allowing an employer to set up a defined class of employees (including themselves and themselves only).
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Taxation – premiums can be 100% tax deductible to the business. Premiums also may not be includable in the employee's income and the benefits still received on a tax-free basis.
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Pricing Leverage & Underwriting – we may be able to secure discounted coverage rates and a much more relaxed underwriting process than an individual would receive in the open market.
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Recruit, Retain, Reward – Long-term care insurance can serve as a very powerful key employee benefit. Essentially offering a plan provides a fairly low-cost executive benefit with a very high perceived value.
The Implementation Models
EXECUTIVE CARVE-OUT PLANS
Long-term care insurance has quickly become one of the most valued employee benefits. Federal legislation passed in 1996 (HIPAA) gives employers tax incentives for providing long-term care insurance for their employees. The legislation allows an employer to pay the premiums for an employee and their dependents, the premiums are not included in the employee’s income but they are fully deductible to the employer as a business expense. Furthermore, the legislation made room for discrimination as employers may carve-out groups of employees by class. A carve-out plan has quickly become a cost-effective and significantly valued benefit for key employees.
VOLUNTARY EMPLOYEE PAID PLANS
Many employers today recognize the need to educate their employees about Long-Term Care Planning but are not able to fund the premiums. Employers may sponsor a plan which allows employees to purchase discounted insurance not otherwise available to them through the business. Additionally, an employer may or may not enhance the program by offering payroll deduction. Discounts will extend to family members - adding a “family” benefit to this valuable benefits package addition.
EMPLOYER- PAID PLANS
Some employers have a desire to fund a program for all employees as a fully paid employee benefit. This significant employer commitment enhances employee retention and their ability to attract higher quality employees.
"CORE" EMPLOYER-PAID PLAN WITH EMPLOYEE BUY-UP PLAN
Some employers are willing to pay a portion of the premium for each employee but will limit that commitment to a designated benefit design or dollar amount. This type of plan encourages the employee to buy-up benefits to meet their personal needs. The employer contribution encourages awareness of the long-term care problem while offering a significant addition to the overall benefits package. Buy-ups are optional but will offer the same discounts available in a voluntary program.
YOUR EMPLOYEES ARE LIVING IT
According to a study by the MetLife Mature Market Institute 50% of caregivers are full-time employees. They also estimate caregiving issues (from work calls to absences) cost American businesses up to $29 billion annually in lost productivity.
YOUR EMPLOYEES ARE LOOKING FOR ADVICE
Employees commonly list the threat of long-term care having a catastrophic impact on their families and retirement assets, as their second biggest concern, only to outliving their savings.
COMPLEMENTS EXISTING BENEFITS
Long-Term Care Planning is the perfect complement to the disability and retirement platforms you are already offering your employees. Problem is your existing broker probably isn’t equipped to talk about it.
FLEXIBILITY IN DESIGN
We can build a variety of programs ranging from educational only to all employee core plans. Our programs are typically driven from the top-down rather than the bottom-up. We often refer to the opportunity as – “Long-Term Care Planning for Business Owners (and maybe their businesses)”
Let's Chat
Our Corporate Solutions Team works with businesses from one owner to 16,000 employees. We encourage you to reach out today for more information on how we are businesses build customized programs. Whether you are in HR, a senior executive, or a business owner – we can promise you a little education will go a long way. We often hear from our clients – how come no one ever told me that?
Since we began our company we have been partnering with financial advisors and insurance professionals all over the country. These partnerships provide advisors with the ability to bring a best-in-class experience to their clients in an area that often is not their expertise.