Workplace Benefit Programs
Advantages to employers and employees
Employee recruitment and retention
As an employer, offering long-term care insurance is a great way to mark your company as one that cares for its employees by being a leader in employee benefits. According to a 2003 study by Prudential Financial, American workers now rank the importance of long-term care insurance equal to that of group life and disability coverage. It's a dramatic shift in attitude, but not surprising. Most adults have been touched by a family member or friend who has faced difficult financial and lifestyle sacrifices when long-term care assistance became necessary.
Bottom line impact
Spouses and extended family members of employees are encouraged to participate in employer-sponsored long-term care benefit programs. Currently, more than 22 million Americans provide care for a spouse, family member over the age of 50. By the end of the decade, 1 in 10 workers will be a full- or part-time caregiver.
Employees providing long-term care for family members are under a lot of stress. Many are understandably less productive, more frequently absent, less focused, more likely to develop health conditions of their own and more likely to use their health insurance, thus driving up premiums.
When employee productivity is compromised, the profitability of the entire company is compromised. It is good to know that employees with family members requiring long-term care, who also have long-term care insurance, are twice as likely to stay in the workforce.
Employees learn about long-term care
Educational workshops are an important part of every employer sponsored long-term care benefit program. When employees learn the devastating implications the need for long-term care can have on them, and their families, they become very interested to learn what planning options are available to them. Even those who do not purchase coverage benefit as they learn about an issue that will inevitably affect a spouse, parent, friend, or other family member.
Premium discounts and underwriting concessions
Discounts for employer-sponsored plans are available to employees, spouses and extended family members. Simplified medical underwriting is available for employees and can be extended to spouses also.
Favorable tax treatment
Federal legislation was passed in 1996 that includes tax incentives for employers and employees who purchase long-term care insurance. All premiums paid on tax qualified long-term care policies, whether by an employee or employer, are tax deductible on Federal tax returns, and insurance benefits, when collected by a policyholder, are tax free.