Long term care insurance is an important type of coverage that can help individuals offset exorbitant care costs should they suffer from a chronic illness, disability, or cognitive disorder such as Alzheimer’s. Essentially, the policy reimburses you for long term care expenses incurred in your home, or professional facilities such as nursing homes and assisted living centers. This ensures that you have a plan when you enter your golden years and that you can receive a high quality of care without having to constantly worry about cutting costs.
While most long-term care insurance policies are purchased individually, employers can offer group LTC policies to attract and retain employees. A group policy covers your employees for as long as they work at your firm. These policies are highly customizable to ensure that they meet the specific needs of each employer.
Group LTC Insurance: What are the Options
Employers can choose from two different insurance options when it comes to protecting their employees from long term care costs.
True Group Plans
This is a master policy that is issued to the employer and that covers each employee. For many years, this was the only way for employers to provide long term care insurance to their employees. Premiums are designed to remain constant throughout the life of the policy. The most significant advantage of this group insurance option is that it often covers individuals with health issues. These policies typically allow for a census-driven enrollment of employees with payroll deduction of premiums and coverage terms based on the state of the employer. While these policies are still active and already benefiting millions of Americans, most (if not all) group carriers no longer offer this coverage to new employers.
Most long-term care insurance policies sold to employers today are individual contracts referred to ‘multi-life’ LTC. These policies are typically offered on a voluntary employee-pays-all basis. They are very common with midsize and small groups of workers but are also sometimes acquired by larger entities. Discounts (typically ranging between 5 to 10) person are offered to the group of employees (policyholders) as long as there are at least 10 members. By using individual contracts for each enrollee, insurers can manage pricing and underwriting more effectively. These policies have more flexibility in terms of policy benefits. Multi-life policies have become so common today in part because most group carriers already left the market.
Comparing Group LTC Policies
When shopping for group long-term care insurance, it is very important to evaluate the ins and outs of every policy. It often happens that you may be able to get better coverage for less money by selecting the right carrier. Our LTC insurance comparison service can help you select the perfect group LTC insurance for your employees based on their (and your company’s) unique needs and goals.