Overview of Group Long-Term Care Benefits Presented to: Name/Title/Company Presented by: CBIZ Name/Title.

Overview of Group Long-Term Care Benefits

Presented to:

Name/Title/Company

Presented by:

CBIZName/Title

©2013. ALL RIGHTS RESERVED.LTCI Partners, LLC

LTCi

Personal Care ADLs

Location Who

Personal care or supervision needed

for an extended period of time

Care may be provided in the home, community setting or

nursing facility

Coverage triggered when insured cannot

perform 2 or more activities of daily living

Normally older ages but can affect anyone due to an accident or

medical condition

What is Long-Term Care Insurance?

The Impact of Long-Term Care

Of family caregivers are women2

Source: AARP Blog (Caregiving in America, 12/12).

Percentage of applicants denied coverage when applying for an individual policy.

Age 80 or over

Ages 70-79

25%Ages 60-69

44%

70%

Insurance may not be accessible if the

employee waits until after retirement to

purchase

6

Part of a Comprehensive Risk Management Strategy

Health Insurance

Health Family and Wealth

Life & Disability

Insurance

Home

Homeowner’s Insurance

Retirement Lifestyle

LTC Insurance

Car

Auto Insurance

LTCi can help protect the retirement lifestyle that your employees have worked their entire lives to create.

Why Offer Long-Term Care Insurance?

• Retain and attract valuable employees• Improve productivity and minimize absenteeism for employee

caregivers (many plans extend benefits to parents and other family members)

• Receive potential tax advantages

•Provides employees with a way to help protect:

• Retirement savings and assets

• Family from the burden of care giving

• Their choices on where and how care is provided

• Insurability

Group Options

$3,000 to $5,000 annually per executive

$1,200 to $1,500 annually per employee

Employer Funded Executive Carve-outs

Voluntary Plans

Employer Funded Base Plans with Buy-ups

Employer Sponsored Strategies

$600 to $1,200 annually per employee

Strategies Sample Rates

Tax Treatment & Incentives

IRS CODE SECTIONS:

7702B – defined Qualified LTC (accident & health insurance / tax-free benefits)

162 – ability to deduct accident & health insurance (c-corp owners are treated as employees)

213 – age-based deductibility for pass-through entities (s-corps, LLCs or LLPs)

106 – premium is not included /counted as imputed income  

Treasury Regulation 1.105-5 – employer can create a class of select employees to offer this coverage to (ability to carve-out or “discriminate”)

IRS Notice 2004-50, Q and A41 (HSAs) – tax-qualified LTCI premiums are a qualified medical expense. As a result, an individual may withdraw money tax-free from their HSA to pay tax-qualified LTCI premiums

Plan Design Considerations

Care provided can be defined as custodial or skilled

Includes healthcare advocacy component with access to healthcare professionals who can help implement a plan for care giving

Benefit triggers are either the loss of 2 of 6 activities of daily living (ADLs) or a severe cognitive impairment

Policyholders are usually reimbursed their actual expenses incurred (up to the daily/monthly benefit amount selected) to pay for long-term care services

Coverage is typically offered to employees and their adult family members

Guaranteed or simplified issue may be available for full-time employees (during open enrollment period)

Program can be customized for highly compensated employees (executive carve-outs)

Payroll deduction may be available (for groups of 50+)

Plans are fully portable

Ideal Buyer Profile

Age > 45 Income > $65,000 Tenure > 5 years Married

Benefit Consideration

Carriers & Programs AvailableLTC Carrier Product Discounted Rates Underwriting

ConcessionsNotes

Genworth Group Product is only available to employer groups and rates are state filed.

Modified Guaranteed Issue

Underwriting would include “knock-out” health questions and a height and weight question

John Hancock Individual Yes Full Underwriting

Same product available in the individual market with a Sponsored Group Discount (5%). Full Underwriting is required

LifeSecure Individual

(Multi-life)

Product is only available to employer groups and rates are state filed.

Simplified Underwriting

Simplified underwriting includes “knock-out” health questions. Discounted rates available for employer groups. Plan not available in NY, NJ, CT, MA, VT, NH and ME

Transamerica Individual

(Multi-life)

Product is only available to employer groups and rates are state filed.

Simplified Underwriting

Same product available in the individual market with an 5% Multi-life discount. Simplified underwriting includes “knock-out” health questions.

Sample Implementation Timeline1. Implementation Meeting2. Pre-enrollment Communications

3. Open Enrollment Begins

Awareness1 – 2 Weeks

Interest1 – 2 Weeks

Education1 – 2 Weeks

Decision4 – 8 Weeks

Review Plan Design Obtain/Confirm Contact Information Review Enrollment Materials & Customer Support Review Enrollment Strategy Review Billing

Announcement EmailEducational meetingsWebinar

Enrollment period BEGINSWebsite launchesAnnouncementRate quote letterWebinar

Education brochure & letter

Reminder postcard Educational meetingWebinar

Enrollment period ENDSEducational meetingWebinarReminder EmailUnderwritingBilling Certificates issuedCoverage effective