Considering Long-Term Care as a Benefit Option?

Mary M. Orlando credits her company, Dun & Bradstreet Corp., with having the foresight to offer long-term care (LTC) benefits to its 12,500 worldwide employees last year. At the time, few other companies offered it, though she and her colleagues found that about 20 percent of the companies whose benefits they looked at did offer LTC programs.

"It's a growing benefit, and more and more employees are interested in it," Orlando observes. In particular, she says, there have been lots of radio spots talking about the need for long-term care, and employees are hearing more and more about how Medicare doesn't cover it. "It was really odd that as we were communicating this benefit to our employees, it was a topic that was suddenly being communicated to the population at large."

Dun & Bradstreet started looking at long-term care protection as it reviewed its overall benefits back in 1997.

"We introduced adoption benefits, birth control coverage, infertility treatments, and domestic-partner benefits," says Orlando. "And what all these programs did was to really address different constituents within our employee population. Long-term care, we felt, was a benefit that would address the breadth of the population - those who might have an aging parent or spouse to deal with or might, themselves, be approaching retirement or thinking about their own need for long-term care." A misunderstood benefit According to Orlando, offering LTC care completes a company's financial planning suite, particularly for those companies that offer 401(k) plans, retirement plans, and all of the other health and welfare benefits. Often, LTC represents the last gap in coverage - and is one of the most misunderstood benefits.

"Most HR professionals know that employees don't understand benefits until they need them. Long-term care can be extremely expensive, and a lot of our associates are under the impression that Medicare or their medical insurance will take care of that expense," she says. Educating employees about the realities of LTC was a primary focus for the company.

"We wanted our associates to understand their benefits before it was too late. This was a gap in their coverage that we wanted to allow them to fill by offering the program." The benefit is an employee-paid, voluntary benefit, and coverage is available not only for the employees, but for their spouses and parents as well. The company's retiree population (around 8,000) was also given the opportunity to purchase coverage, though Orlando admits that retirees have not been as receptive to the plan as the company had hoped. She explains, "The pick up on the retiree population is probably under 5 percent, but the reason for that is because the bulk of our retirement population is over 65, and the premiums are higher the older you are," she says.

"They lock in the premiums once you buy the coverage, but it's based on how old you are when you enroll." Choice of options The long-term care plan the company chose pays a daily benefit for up to three years once someone has been limited in two out of the six daily activities of life: bathing, continence, dressing, eating, toilet, and traveling. Assisted-living facilities and nursing home care are both provided for, but the plan will also pay for someone to come into the home to take care of the person or for the insured to use adult day care or even foster care.

"That's one of the more unique components of the plan," notes Orlando. "If you don't have family members to take care of you, and you need someone because of your limitations, the plan would pay a daily benefit for adult foster care." The plan also contains a benefit account option giving those employees who choose it a benefit even if they have stopped paying premiums.

"If someone decides, after they have been in the plan for three years, that they can no longer afford it anymore-maybe they have children in college or some such reason-and they stop paying into the program, the benefit account would then pay benefits to that person, if needed, at some point in the future for up to 30 days," Orlando says. "The amount, of course, would depend on how much had originally been paid into the account." Orlando says that offering LTC coverage to employees was "the most painless benefit I have ever offered. Communications was the biggest challenge, but our carrier already had all the communications developed, so all we had to do was to put our brand around the design and presentation."

Best of all, for Orlando, was knowing that her employees had the type of coverage and financial security they needed. Some tips - for you and employees Educate younger employees about the importance of buying it now, as opposed to waiting until they are older, when the coverage will be more expensive. When it comes to selecting a vendor, do the following: Go for a competitive bid from at least four or five companies. Ask these questions: How many activities of daily living must be affected? Do they offer benefits for hospice or adult day care? Do they provide a referral service for providers? Can they help you develop a program? How much is the plan? What is the company's financial stability?