As employers attempt to attract a highly skilled work force and retain talented employees, it is essential they offer a well-rounded benefits package. Long-term care insurance plans are increasingly becoming part of the employer-sponsored benefit landscape.
Long-term care is required when an individual needs regular assistance with day-to-day functions such as bathing, eating or dressing, or supervision due to an illness, injury or cognitive impairment. Illness and injury could be due to aging, but could also strike a younger person due to a chronic progressive disease such as multiple sclerosis or Parkinson's.
With a long-term care insurance plan, consumers choose where their care is received, whether at home, in an assisted living facility, adult day care center, nursing home or hospice.
Business case for long-term care insurance
In most cases, medical insurance does not reimburse consumers for long-term care. As a result, people spend their own money to get needed care for themselves or for a loved one.
In the majority of instances, family members and close friends act as informal caregivers. According to Kiplinger's, 25 percent of American employees are providing some kind of care for an elderly relative, and half of these caregivers also work full time.
Employees who are balancing work and caregiving are less productive due to the emotional and financial stresses of providing long-term care. For employers, it's a big problem that's getting bigger.
The National Council on Aging estimates that 20 million to 25 million U.S. citizens are providing informal care, accounting for 80 percent of the care to the chronically ill. And according to Gary Applebaum, M.D., author of "Eldercare: Corporate America's Silent Crisis," employees' caregiving responsibilities lead to lost productivity, which costs U.S. companies more than $11 billion a year.
A piece of the puzzle
While the looming long-term care crisis is complex, employers do have options for helping employees be better prepared for their own (or a family member's) long-term care needs.
An employer can offer a group long-term care insurance plan on either an employer- or employee-paid basis. In most cases, a group long-term care plan is a hassle-free way to demonstrate your company's commitment to the well-being of its employees.
Employers interested in offering a group long-term care insurance plan should look for a few key features when choosing a plan.
1. Ask about case management services and whether there is a dedicated staff of case managers who can help people manage the wide range of changing emotional, financial and medical issues associated with long-term care.
2. Look for a plan that offers an information and referral service that helps people find care resources for a loved one. Not only is this more convenient for the employee, it also cuts down on lost productivity, since employees will often try to squeeze this critical research into their work day.
3. Make sure the long-term care insurance provider offers useful educational tools and opportunities to explain the types of resources available to employees and details of how the plans work.
Benefiting your bottom line
As the American population ages and the informal caregiving responsibilities of employees continue, industry experts believe that costs to employers will skyrocket. Lost productivity and increased absenteeism are just two of the inevitable results of this trend.
Employers who have the foresight to begin educating their employees about adding long-term care insurance to their personal financial plans are taking two important steps -- helping employees be better prepared for the future and building protection for their own bottom line down the road. Robert Mendonsa (MendonsaRK@aetna.com) is general manager for Aetna's North Central Region, covering 16 states. He has responsibility for the customer segment representing all employers with 300 to 3,000 employees. He is a past president of the Board of the Illinois Association of Health Plans and a member of Chicago's Economic Club. He also serves as president of the board of yrustees of CommunityHealth, a free clinic staffed with volunteers, which provides more than 10,000 free patient visits each year to Chicago's uninsured. Reach him at (312) 928-3035.