True Group Employer Long Term Care Insurance

Types of Group Long-Term Care Insurance Coverage

Long term care insurance plans continue to evolve to meet the current and future needs of diverse employers and employees.

The largest group plan is the one available to federal government employees. Some 270,000 Americans are covered by this voluntary plan that falls under what we refer to as a 'true group' plan. No longer commonly offered today, small and mid-sized groups (and even many large groups today) tend to utilize individual long-term care insurance policies (bundled together) with a group discount.

To provide as much information as possible, we explore the various types of group long-term care insurance coverage. A knowledgeable group long term care insurance professional can tell you what coverages are currently being offered and which will best help you achieve your objectives.

To request a free, no-obligation benchmark long-term care insurance quote with sample rates for your group, please click here.

Individual LTC Insurance Policies Bundled To Offer Group Discounts (Multi-Life LTCi)

By far, this is the most common approach used today. Many of the nation's leading long term care insurance companies will 'bundle' their individual policies for a group situation. Often people refer to this approach using the term multi-life long-term care insurance.

This approach provides the best of all worlds. It is ideal for small and mid-sized employers. But, with only one insurance company currently offering 'true group' even larger companies with 500 or more employees now use this approach.

Bundling individual long term care insurance policies provides employers with greater choice in terms of selecting a preferred insurer -- based on factors including pricing, ratings and financial stability, name recognition and policy options.

Using bundled individual policies (*multi-life LTCi) gives an employer greater plan flexibility. For example, key employees can be designated to participate in an 'executive carve out' plan where the employer pays all or part of the costs while other employees are offered the ability to enroll in the plan on a voluntary basis.

Employees benefit from discounts that range from 5% to 15%. They also benefit by having the greatest number of options available from which to choose. And, when an employee leaves, they simply pay directly to the insurer.

These groups are medically underwritten on an individual applicant basis. For larger groups, sometimes underwriting concessions are offered.

True Group or Large Group LTC Insurance Plans

Today, only one insurance company offers what is commonly referred to as "true group" long-term care insurance. They require (fill in Genworth requirements in terms of lives or participants) and because there is presently only one carrier offering this form of plan, they tend to be highly selective about which groups they will accept.

True group plans are filed as group plans. That means one policy is filed in one state and those who apply are given certificates, as opposed to individual policies. There are some pluses and minuses to this arrangement.

Traditionally (in the past and with the very largest plans) true group plans typically were guaranteed issue (no disqualifying health questions) for all full-time employees. This was a very attractive benefit because no employee would be excluded even if he or she had a disabling or potential disabling condition. This was reflected in the cost and typically employees who were in good health and married could get better coverage for less money (even from the same insurance company) because individual long-term care insurance policies offered discounts to couples and those who are in relatively good health.

Typically, these plans tended to be voluntary benefits, with employees paying the full cost for whatever coverage they selected.

Beyond the advantageous health underwriting, an advantages of true group plans is that company representatives generally do not have to be licensed agents in every state to represent the plan and enroll participants.

Several disadvantages include higher pricing. Two factors account for this: the need by insurers to guard against adverse selection. Insurers recognize that sick or disabled employees are more likely to enroll which poses a larger future risk of costly claims. Projected administrative costs tend to be higher as a proportion because true group premiums paid tend to be significantly less that that paid by individual policy purchasers. All of this is factored into the formula for setting prices.

By law, true group long term care insurance plans can be converted, at the same prevailing group cost, to an identical individual plan when the employee leaves the group.

Ready To Request Information For Your Business or Group

To request a free, no-obligation benchmark long term care insurance quote with sample rates for your group, please click here. Your information will be shared with just one designated group professional selected by the Association.