Group Long Term Care Insurance - An Introduction

Long term care insurance provides a daily benefit in case the insured needs custodial care for a chronic medical condition. This is incredibly important, because neither major medical plans, nor Medicare, provides significant benefits for this kind of care.

For example: Suppose you or one of your workers suffered a stroke. The workplace major medical plan would cover hospitalization costs, and possibly prescriptions and durable medical
goods, depending on your policy.

But once a disabled stroke victim leaves the hospital, but still needs help handling the basic activities of daily living (ADLs), the major medical insurance doesn't cover that. If you or your worker needs help with things like feeding, toileting, transferring, eating, drinking or dressing, that's got to come out of pocket - or out of a long-term care insurance policy.

Disability insurance doesn't cover long term care. All disability insurance does is replace a fraction of the victim's income prior to being disabled. So the insured may have some income coming in, but it's not generally sufficient to cover the costs of long-term care, which can range up to $200 per day and more, in some markets, for full-time nursing home care.

By making long term care available in the workplace, you are helping your employees with a valuable benefit that they may not have thought to get on their own. In some cases, carriers will simplify the application process for group long term care plans.

In addition, your business can also qualify for a tax deduction: Generally, long term care insurance premiums you incur to begin and sustain a group long term care insurance plan are deductible as an ordinary business expense. However, some special rules may apply, depending on whether you are an S-corporation, C-corporation or LLC.

Improved morale and retention.

Differentiation from other employers. Long term care is not as commonly offered as other benefits. Productivity. If you extend coverage to include family members, and an employee has a loved one who needs long term care, your valued employee may have to take time off work to provide it. If coverage is in place, your employee can direct care for that loved one, and not have to provide it herself. This keeps her on the job and productive.

This also applies to your family members, as well. If you have your spouse covered, you won’t need to be providing care yourself. You can hire someone to handle the day-to-day care, leaving you free to run your business. Likewise, your spouse won’t have to be the one providing all the day to day care for you.

Wealth Protection.

Long term care is vital for business owners as well. If you own an ongoing business, chances are good you will not qualify for Medicaid. That results in a potential long term care cost of $80,000 or more every year that must come out of your pocket. You may have to sell your business assets in a fire sale to raise money to pay long term care costs. Long term care insurance coverage protects your business and your retirement savings from being rerouted to pay for care.