March 15, 2005
University Launches New Long-Term Care Benefit
Long-term care insurance covers a wide range of personal care services for people unable to independently care for themselves, either temporarily or permanently.
Typically, medical insurance, Medicare, and Medicaid do not cover expenses associated with personal care, such as assisted care facilities, nursing homes, and non-professional in-home care. In the Washington, DC, area, the cost of a nursing home can easily exceed $200 per day. LTC provides policy holders with the financial means to pay for the care they need, now and in the future.
UNUMProvident, one of the leaders in the LTC insurance field, is underwriting the policies for GW. The University is working with the Todd Benefits Group (TBG), a company solely devoted to LTC, to administer the program. For full information and to select a plan, visit TBG’s Web site at http://www.toddltc.com/gw05 or you can link to it from the Human Resource Services (HRS) Web site at www.gwu.edu/~hrs/benefits.
GW will be holding a series of informational meetings in the coming
Long-term care insurance covers a range of personal care services if you cannot care for yourself due to a temporary or permanent illness or injury. The plan covers costs for in-home care, adult day care, assisted living, Alzheimer’s centers, and care in nursing homes. Purchase of coverage is restricted to people aged 18–80.
How Does Long-Term Care Insurance Work?
Long-term care insurance pays you a daily benefit in the event you become unable to care for yourself. Depending on the type of coverage you select, you may be reimbursed for incurred expenses, such as nursing home care, or you may be eligible for a cash payment regardless of your actual expenses. For example, you may select a policy with a daily benefit of $150 and a benefit period of three years. If you become unable to take care of yourself, you would be eligible to receive the $150 daily benefit until you recover or you have been paid for the entire three-year benefit period elected.
In order to be eligible to receive a benefit you must be unable to perform at least two activities of daily living (ADLs): bathing, dressing, toileting, transferring, eating, or continence. Alternatively, you could qualify if you have a cognitive impairment such as Alzheimer’s or other dementia.
If you are a regular benefit eligible employee scheduled to work at least 14 hours per week, you are eligible to purchase LTC insurance. In addition, you may purchase coverage for your spouse/same sex domestic partner, adult children, parents, and other family members.
You may purchase LTC insurance anytime. However, if you purchase it during the special enrollment period, which runs from March 21 through May 6, 2005, there are advantages as described below.
What are the Advantages of Buying LTC during the Special Enrollment?
1. During the special enrollment period, employees who work at least 20 hours per week and who are age 65 or younger will be eligible to purchase a benefit of up to $200 per day and up to a six-year plan with reduced underwriting. This means that only two health questions will be asked:
If you can answer no to both those questions, then you will be approved for a benefit. You may apply above these limits with full underwriting and completion of the entire medical questionnaire.
2. You are eligible for a 15 percent discount on rates for yourself and a five percent discount on rates for family members.
3. It is more advantageous to purchase coverage when you are younger and the rates are lower.
4. You may develop a medical condition at a later date that will prevent you from buying coverage.
Employees who are over age 65 or employees who work less than 20 hours per week will need to answer medical questions in order to qualify for coverage. You may be denied coverage if you have an underlying medical condition that could lead to you becoming unable to care for yourself. These same underwriting procedures will apply to your family members who wish to purchase coverage.
Because different insurance companies have different underwriting rules, TBG will work with you if UNUMProvident turns you down to see if you can qualify with another company.
You will not receive the reduced underwriting or the higher discounts described above.
Premiums are based on the policyholder’s age at the time the policy is purchased. Premiums remain level and cannot be increased because of a change in your age, health, or claim history. The older the individual is at the time coverage is purchased, the higher the cost. Your premiums will also be impacted by the amount of the benefit, the benefit period selected (e.g. three years, six years, or lifetime), and the elimination period, among other factors.
However, as with all long-term care insurance policies, the insurance company reserves the right to increase premiums for a group of similar policies, but only with the approval of your state’s insurance regulators.
There are various options for payment. If you choose to pay the premiums either monthly or semi-monthly (depending on how often you are paid) you may pay through payroll deductions. For those employees paid biweekly, the deductions will be taken from the first two paychecks of the month. You may also choose to pay on a semi-annual or annual basis. If you choose to pay monthly, your total cost will be slightly higher than if you pay on an annual basis. If you choose to pay the premium annually, semi-annually, or by monthly checking account deduction, you will be billed directly by UNUMProvident.
Faculty members who are paid on a nine-month basis will be billed directly, regardless of the billing cycle selected.
Because this is an individual policy, you own it. Therefore, you can take the policy with you when you are no longer employed at GW and continue to pay the premiums on your own. Discounts are permanent and unless you change the billing frequency, there should be no change in your premium.
Long-term care can be very expensive. In the DC metro area, the cost of a nursing home can be as much as $200 per day and the cost is not generally covered by either medical insurance or Medicare. Although this type of benefit is usually associated with advanced age, the need for long-term care assistance can happen to anyone at any time. Consider what would happen if you suffered a head or spinal cord injury. Unlike long-term disability, which replaces your income if you become disabled, long-term care insurance provides the financial means to pay for your care and coverage continues into retirement.
Todd Benefits Group has developed advanced tools to help you make an informed decision about the plan that is right for you: