Why offer long term care insurance?

A growing number of families are touched by the responsibilities of care giving for aging or disabled loved ones. This care giving burden has an impact at the workplace in terms of worker productivity, absenteeism and stress. By sponsoring a long-term care insurance program that is available to employees and their spouse and parents, an employer can try to lessen the workplace impact of these caregiver demands.


How many employers offer long-term care insurance?

The number of employers offering long-term care insurance to their employees is growing at a rapid pace. America's Health Insurance Plans reports that nearly 4,800 employers offered such plans, as of the end of 2001. This compares to just under 2,000 plans only a few years earlier in 1997. While many of the initial employers who offered long-term care insurance were large employers, the number of smaller firms adding a long-term care benefit is growing rapidly. Today, over 50% of all the employers that offer long-term care insurance have fewer than 100 employees.


Do employers contribute toward the cost of coverage?

While most employers offer long-term care insurance as an employee-pay-all, contributing toward the cost of coverage sends a very strong message to employees that the employer supports the benefit. Plus, employer can deduct these contributions in the same manner in which they deduct for health insurance contributions.


What are the tax benefits of setting up a plan?

Employers can offer long-term care benefits tailor-made for their employees at a relatively low cost. And the federal tax code allows employers to deduct as a business expense both the cost of setting up a long-term care plan for their workers and any contribution they make toward tax-qualified long-term care insurance premiums.


How do employers set up a plan?

An employer may first want to gauge employee interest and raise awareness using a simple e-mail survey. Employers should not assume that if employees aren't asking for the benefit, they don't want it. They may need some education to help them understand this product's importance. If an employer determines that there is sufficient interest, they can begin contacting benefits consultants and insurers to determine specifics.