Group Long Term Care Insurance Plans

Long-term care is a benefit that is not included in most insurance plans since it is not an essential benefit under the new health care law, whether you call it Obamacare or the PPACA. Likewise, long-term care is not part of the health benefit exchanges offered by states. This being the case, providing long-term care insurance to employees is a great way to stand out from other businesses and attract the best employees in your industry. Unfortunately, many businesses continue to exclude long-term care from their group benefit offerings despite the obvious advantages.

A group insurance is also called employee health insurance. It is a kind of  large group insurance plan that covers a set of people who are working together in an organization. Usually, the cost of group long term care insurance is a little less than an individual insurance plan. Often, employers extend the coverage to the employee’s family members. It offers financial assistance to employees and employers can get a tax deduction. Hence, long term care insurance is beneficial for employers, as well as employees.

Like with most employer-sponsored benefits, there are tax incentives designed to encourage businesses to offer long-term care insurance to employees. For the most part, these tax breaks are available when an employer pays for a portion of the premium, of which 100% is deductible (for employees and dependents). The amount paid toward premiums for LTCI plans are tax deductible for both employers and employees.

What is a Group Health Insurance Policy: In Detail

A group long-term care insurance will offer employees insurance coverage. The insurance covers the medical bills if the employees suffer any medical emergency and provide them financial relief from high medical expense.

Here are the common features of a group LTC insurance coverage-

  • The coverage can only be purchased by premium on behalf of the employees and other registered groups, such as trade unions, clubs, etc.
  • An employer can pay the insurance premium on behalf of the employees or the employee pays the premium all by themselves to the insurance agent.
  • To avail of the coverage, the business needs to have the minimum number of eligible employees. But there is no limit on the maximum number of employees that come under this plan.
  • The long term care insurance coverage is issued for a year and following that it has to be renewed to get continuous coverage.
  • If there is a claim from an employee or their family member, the insurance company will settle it. But the coverage for the other employees is going to remain unaffected.
  • The premiums paid are shared by the insurance company and the employer. This long term care insurance coverage can depend on the income level, age, or hierarchy in the organization of the employees.

Benefits of Group Long Term Care Insurance Plans for Employers

There are many advantages of group long term care insurance plans provided by an employer.

Increases Employees’ Productivity

An employee’s productivity depends on important factors, such as financial security, work culture, job security, and long term care protection. So, if an employee is protected under a group health protection plan, it will protect them against unexpected health conditions and expenses. Thus, most employees feel more appreciated and valued. You, on the other hand, will enjoy the advantage of a productive workforce.

Saves Money

Instead of purchasing individual coverage options for every employee, premium group insurance is more affordable. An insurance provider can offer coverage at a lower rate as the overall risk borne by the company is distributed among the group member. Thus, it helps in reducing the insurer’s liabilities for coverage amounts and the organization getting this long term care insurance for their employees can enjoy a lower premium rate. All employer groups can get premium discounts for long term care policies from the insurance agent.

Employee Retention

Group insurance long-term care insurance plays a significant role for a business as it helps in retaining employees by providing them health protection and individual policies. The long term care insurance shows that you care for the well-being of your employees, mentally and physically. Hence, employees tend to hesitate shifting to some other company when they get an offer.

Creates a Good Reputation

When you are running a business, long-term relationships with your customers can prove to be very useful. In case your business conducts Corporate Social Responsibility activity, it will create brand loyalty by valuable customers. Hence, it helps in creating a good brand reputation.

Likewise, if you offer group long-term care insurance to your employees, it reflects your goodwill. This will eventually be reflected in their work. It creates a sense of group loyalty toward the company if you buy coverage for them. However, it also offers the added benefit of retaining new employees.

Secures Your Position in the Game

If an employee has to choose between two organizations having similar working environments, incentives, and salaries, the goodwill you create in the industry can be the driving factor. Your employees will help in securing your position in the competition.

You can go the extra mile to extend the insurance coverage to include their family members. Thus, the group long-term care policy will protect domestic partners, children, and also parents within the same policy.

Offers Tax Benefits

One of the primary benefits of group long term care insurance is the tax incentives you can enjoy. The LTC premiums you pay as an employer are tax deductibles. You can qualify to receive a credit back on the taxes as a tax incentive and get repaid for the long term care premiums paid. You can always consult the tax status and tax treatment with your financial planner.

Improved Claim Settlement Process

One of the primary aspects of a long term care insurance policy is the claim settlement process. Under this, the claims are all settled by a dedicated team of professionals. Thus, the process is smooth, simple, and comes with limited restrictions. You even get zero day elimination period for residential care facilities, assisted living facilities, and nursing facility which generally has a 3 months waiting period in the insurance industry.

No Need of Pre-Requisites

When it comes to buying the group long term care insurance plan, there are zero formalities to fulfill. Usually, an insurance agent asks for prerequisites, such as heavy paperwork, mandatory medical test, etc. However, these aren’t required with this group long term care insurance.

Effective Management

Since a group of employees will be covered under one group plan, it becomes easier for the organization to handle their data as an employer. All the premiums paid are managed easily and the insured person enjoys the benefits of long term care insurance.

Benefits of Group Long Term Care Insurance Plans for Employees

Group policies make it more affordable for the employees and their family members to get the LTC benefits. For a business, the greatest asset is its employee. If you use a group health plan, you can keep your employees productive and happy. This, in turn, will help in improving your business.

Here are some of the LTC benefits that you can enjoy as an employee.

Employee Pays Affordable Premium Rates

In comparison to individual health policies or family health policies, employee long term care insurance comes with a cheaper premium for group coverage. Hence, the group coverage plan can be more budget-friendly since the total amount is shared between many employees.

Health Coverage for Family Members

Handling insurance within the family from different providers can be difficult. Rather a group LTC insurance for you and your family ensures that everything is included within a single plan. Hence, eligible employees can take care of their own and their family member’s medical expenses at any hospital, nursing home, or residential care facilities.

The long term care insurance coverage amount and claim might vary with group policies. However, the common options, such as maternity, in home care, day care, medicines, and more are going to be covered. This is how organizations offer financial support to their employees and provide protection to their family members.

Affordable Plans

Group long term care insurance plans might cover maternity benefits and also OPD benefits for employee preventive care. OPD primarily focuses on pre-existing illnesses. Hence, along with additional benefits, such as wellness and health sessions, groups plans are worth every penny. You can also opt for inflation protection options and death benefit for a person.

Easy Claiming Process

One of the primary benefits of group long term care insurance is the hassle-free claim settlement process. Often, an individual policyholder will have to go through a long process to produce documents, upfront cash transactions, wait for elimination period to end, and many more. But that is not the case with group long term care insurance. Usually, they just have to submit the bills from the nursing homes or hospitals to the employer to get a reimbursement.

Covers Pre-Existing Health Issues without Waiting Period

When you are getting individual health coverage, you have to encounter a longer waiting time before you file a claim for pre-existing disease. The elimination period is one of the biggest disadvantages of any insurance coverage.

But you don’t have to worry about when you buy insurance for group long term care. You can easily file a claim for a broader range of pre-existing illnesses. Hence, you don’t have to worry about the waiting period for the coverage of pre-existing conditions as you get this in simplified underwriting in the master policy.

Should You Get Personal Insurance Even When You have Group LTC Insurance?

You can get personal insurance even if you have group long term care insurance. This is because the group health policy might not be the right choice. Such situations are-

  1. A limitation on the coverage features for informal care and custodial care
  2. The high claim amount increases the renewal premium cost to be paid to the insurance company
  3. Not beneficial for retirement plans and thus greater risk
  4. Loss for an employee when they leave the organization to join some other organization
  5. Everyone is paying the same amount to the insurance company, regardless of whether they have good health conditions or not

Challenges of Group Long Term Care Insurance

Before you choose group LTC insurance for your employees, you should also know about the challenges of long term care insurance.

It can be a Loss When Employees Leave the Organization

If an employee chooses to leave the organization, they will not be covered under the long term care insurance policy. So, they will not be able to claim their bills, and the previous years premium paid to the insurance company will be of no use. It is one of the primary disadvantages of group health policies.

An employee will only be able to claim the policy until his/her last working day in the company. So, once they leave the organization, they might have to buy a separate health policy. To cover up the losses, an employee will have to convert the group long term care insurance policy to an individual policy.

Lack of Control

Since the group long term care insurance plan is under the employer’s control, you as the policyholder will not have much freedom to personalize the benefits plan as per your liking. Even if you are given the freedom, you might have to put in some additional effort. For instance, if you have to increase the coverage, you might have to the pay high cost premium from your own pocket and the LTC remain level for you.

Not the Right Choice for Small-Scale Industries

The employees and employers need to contribute to the purchase plan in the small-scale industries. An insurance company might not be able to offer a reasonable premium price for an organization that has a smaller number of employees who earns less for their daily living.

The subsidy for the employer is going to be very less in comparison to the large-scale industry. Moreover, if they do not have enough experience, they might not be able to get a good discount on the premium. Hence, it is not a good choice for small-scale industries.

The Premium is the Same for All Employees

Even if someone is fit, they will have to pay the whole amount for the premium, while a person with a major health risk will pay the same as per the simplified underwriting terms. Thus, a person with more risk is benefitted from a major claim and less premium, while a person who is healthy contributes to the other employees.

It is an advantage for the person who is not healthy and a loss for someone who isn’t using the insurance. Thus, when they buy an individual policy, they might benefit more from it. Insurance companies don’t provide discounts to individual members in a long term care insurance.

Family Protection is Dependent on the Employer

You may or may not get the benefit of protecting your dependents. This is because the policy might vary from one employer to the other. You might not have any critical health problems but your dependent might be facing a serious health issue. This can leave you in a financial crisis and also deprive you from the death benefit offered by few employer groups.

Claims Might Not Always Be Easy

Most employees tend to be concerned about the time taken to settle any insurance claim. It is a feeling, which can be amplified in terms of Employee Group Insurance since you aren’t the one who has selected the health coverage from the new groups. The claim settlement process might be a little troublesome unless the insurance company covering you provides a hassle-free way to claim.

Unclear Personal Financial Planning

Health insurance coverages can be critical when it comes to financial management. Because of the already mentioned disadvantages, a group long term care insurance provided by an organization can be unreliable. For instance, if the policy doesn’t provide continuous coverage against inflation protection, it might be difficult to include it in the annual financial plan. You might have as much control as you have over an individual plan. Consult your tax advisor or domestic partners for such long term care insurance plans.

Factors to Consider Before Buying Group LTC Insurance

Even one visit to a nursing home might cost a fortune for someone who belongs to a middle-class family. There are various factors an employer needs to take into account before getting a group LTC insurance. Let’s check them out.

Amount to be Insured

When you, as an employer, are buying long term care insurance, you should always opt for a higher coverage amount. Even spending one day in a nursing home can cost a lot. In case the employer is providing proper long term care insurance coverage for helping the employee to take care of their hospital expenses, an employer needs to consider a coverage amount. Medical inflation is increasing and the cost of medical bills is increasing. If you want to make your employees happy and retain them, choose a bigger amount that has an inflation protection option.

Requirements of Your Employees

When it comes to group LTC insurance, there is no one-size-fits-all approach. Every corporate company has its own needs. For instance, some companies might have employees who are young, unmarried, and like to travel a lot. So, they might require an accident cover or cognitive impairment cover. But there are companies that might have middle-aged employees and have a family. In that case, you will have to provide maternity benefits and long term multi life cover plans. There might be some aged employees in your company who will require assisted living facility after they retire and might need critical illness cover. So, check what your employee requires before getting the long term care insurance.

Hospital Network

It is one of the most crucial factors to consider before you get LTC coverage. Check the network of hospitals when you are buying group LTC insurance. At times, when your employee goes out of town for an important meeting, they can get medical coverage if the hospital network provided under the plan, you adopted can offer a hospital in the same town. This will protect the employees, as well your savings as they are visiting the town to conduct a meeting on behalf of your company.

Claim Settlement Ratio

The amount of claim, which is settled by the insurer out of the number of claims that are received is called the claim settlement ratio. In case the ratio is above 90, it can be taken to be a good claim settlement ratio. However, the claim settlement process of the insurer also has to be fast to make sure that you’re a seamless experience.

Wellness Benefits

After the onset of the COVID-19 pandemic, mental health and well-being has come to focus. Employers need to look for long term care insurance plans that offer preventive and wellness features. Many insurance companies are providing benefits through wellness programs where they are offered reward points to the policy if they stay in good health. Also, they track the wellness of employees, such as their sleep patterns, step count, etc. through smartphone applications and wearables. Insurers provide profitable discounts on the renewal amount as a reward to the long term care policyholders.

Co-Payments and Sub-Limits

There are many plans that limit the amount insured and things like room rent or the kind of procedure performed when a person is hospitalized. This is known as the sublimit. While other policies require the policyholders to pay some amount of the hospital bills as a part of the insurance’s co-payment clause. Hence, before you finalize the plan for the employers, you as an employer need to check the clauses. Also, check the long term care insurance policies that don’t have these restrictions.

Hidden Clauses and Coverage Exclusions

Group long term care insurance might come with coverage exclusions where the public policy doesn’t cover the medical expenses. Hence, you need to check the exclusion list to get an idea about the scope of the policy coverage. Moreover, it is crucial to find out if the group insurance policy has any hidden clauses. For instance, some policies might not cover their employees and their family members after a certain age. Get to know the clauses before you get the long term care insurance coverage.

Who is Eligible for Group Long Term Care Insurance?

Usually, group long term care insurance is provided by an employer to an employee. But the non-employer to employee groups is also eligible.

No matter you are a large-scale organization or a small business owner, or a group with similar interests. The people who cater to the following group health plan requisites are eligible for group long term care insurance.

The Minimum Number of Employees

A minimum of 7 or more employees has to be present in an enterprise or organization to apply for the group LTC insurance. These employees can also be family members, such as a family business. However, there has to be an employer-to-employee relationship to get the long term care insurance benefits.

Registered Businesses

You have to register the business in your state. For this, you need proper paperwork.

Usually, group long term care insurance is inexpensive. Thus, you can’t form a business or group to buy the insurance. If you try to breach this, it might lead to a refusal by the insurance company. A business needs to be engaged in economic activities at all times and not start their work after they have inquired about the group LTC insurance.

Who is Not Eligible for Group Long Term Care Insurance?

Like other insurance policies, employee group long term care insurance coverage also comes with certain limitations. In case your business falls under any of the following categories, you won’t be eligible for health coverage.

Family Business

If the family business is made up of both non-members and members of the family, your spouse will be eligible for the group cover. But if the business group only has family members, the spouse will not be covered.

Single Entrepreneur

In case you are a single entrepreneur without full-time equivalent employees, you won’t be eligible for long term care insurance. But you can always apply for individual insurance to make sure you are protected.

Tips to Buy the Best Group Long Term Care Insurance Policy for Your Employees

A happy employee can be the biggest asset to your company. Thus, if you are a business owner, you should be straightforward to unlock higher growth to make sure your employees are happy.

Thus, here are some tips that will help you get the best group long term care insurance for your employees.

Learn About Your Budget and Basic Requirements

You can go about this in two different ways. Firstly, you need to the employees health requirements and then decide on a budget. When you have set a budget, you have to outline the requirements within the set budget.

When you are choosing health LTC insurance, there are many nuances to it. Here are some key questions that you need to answer.

  • What will be the coverage limit for long term care insurance?
  • What type of diseases and medical issues will the long term care insurance policy cover?
  • Will the long term care insurance policy include vision and dental care?
  • Which hospital networks will come under the policy?
  • Will the policy only include the employees or their family members, too?

Check the Industry Standards

Before you buy the long term care insurance policy, you should do some industry-wide research to find out the type of health plans your competitors are providing to their employees.

You should provide benefits as per industry standards. Thereafter, you can take a step or two to make sure your team enjoys more long term care insurance benefits. What’s better is if you outdo the industry standards.

Ask Them the Type of Plan They Prefer

You are getting the group LTC insurance for your employees. Hence, you should ask them the type of long term care plan they would prefer. One of the common mistakes that businesses tend to make is to get a group LTC insurance plan as an obligation. They might ignore all the benefits that it brings for the employers and the employees. Hence, they make the decision based on what they like. Avoid being the same.

You should discuss the type of LTC insurance plan you should get with your employees. No that doesn’t mean you have to listen to whatever they demand as you might not have much resources. But you can always ask for their opinions to understand what they need. It can help in choosing the best long term care plan for them.

Consult an Expert

There is only so much you can know by reading and watching. The insurance world can be complicated as there are many terms and conditions that have to be taken care of. Having an expert by your side can help. They will help you to choose the right long term care insurance policy and personalize it as per your requirements.

With an expert on your side, you will get to learn more about the group LTC insurance and the type of plan you need. For your employees, the group long term care insurance policy depicts the affordable way to get health insurance coverage. But for the employers, the policy is a way of promoting loyalty and efficiency among employees. It goes a long way in retaining employees. By paying the premiums, a business can easily reduce its tax liabilities. So, a group LTC coverage can be beneficial for the employer, as well as the employee.

Give a call to Taylor Benefits Insurance Agency and share your requirements. Ask questions and get your answers for recommendations and advice.

For employees, one of the big advantages of an employer-sponsored long-term care insurance plan is that it is significantly cheaper than an individual plan (as with most group plans). Since the premium is based on the group as a whole, and not each employee individually, the overall cost per person is reduced to a much more manageable price.

Get a FREE estimate for group long-term insurance plans by calling us at the number at the top of the page or completing the short online request form! All estimates and consultations are given FREE OF CHARGE and require no obligation on your part!

We’re ready to help! Call today: 800-903-6066