Employers taking interest in long-term-care insurance

SYRACUSE - People are living longer, but also requiring more care as they grow older, which is opening up new benefit options to address long-term-care planning.

One such option is long-term-care (LTC) insurance, which employers can offer to their workers.

Currently, only a small number

of employers are providing such insurance to employees among the host of benefits available, but "the awareness is certainly being heightened," says John Hobika, Jr., regional insurance coordinator and assistant vice president for M&T Investment Group, a subsidiary of Buffalo-based M&T Bank. Hobika's office serves all of Central New York, including Utica and Syracuse.

"Long-term-care insurance is basically a very comprehensive insurance package that pays for all facets of longterm care," he says. Long-term care is when people requite assistance with daily-living activities for a significant period of time whether at home, at an assisted-living facility, or at a nursing home, he says.

LTC insurance will cover the cost of that care up to the amount of benefit, which is typically set by the employer. If the amount of benefit is $200 a day, and the cost of care is $250 a day, the LTC insurance would cover $200 and the patient would be responsible for the balance, Hobika says.

Coverage lasts for as long as the benefit period outlined in the policy, which, again, is often set by the employer. "The benefit period can vary from two years to unlimited," Hobika says.

"From an employer's standpoint, there are a couple different aspects" that make LTC insurance an attractive option, he says.

One is that it can cut down on absenteeism for employees who need to take time off to care for an elderly-parent or spouse, he says.

"There are also some tax incentives [employers] can take advantage of," he adds. If an employer pays the premium costs, those costs can be deducted as a health-care expense.

For employees, the benefits are just as good, Hobika says. LTC insurance gives employees peace of mind that expenses will be covered if they ever need such care.

He expects that in the future, planning for long-term-care needs will be just as common as planning for retirement. "People, if appropriate, should really look into it," he says.

Generally, people do a good job of accumulating wealth and planning for retirement. What they often fail to do, he says, is factor in what happens if there is a catastrophic health-care change.

Money set aside for retirement can easily be used up to care for someone who is injured or ill, he says.

The average nursing-home stay in America is 2.8 years at a cost of $70,000 to $75,000 a year, Hobika says.

"It's important for people to look into this," he says of LTC insurance.

Such a benefit is typically portable, meaning employees can continue the coverage even if they move to a new employer They simply take over paying the premium costs if it was an employer-paid plan.

Employers can also offer the plan on a voluntary basis where employees pay the entire cost, which is typically less than the cost of health insurance.

LTC insurance can also be offered to select employees, making it a useful recruiting tool, Hobika says. One example is offering LTC insurance to executive management or the board of directors.