LONG-TERM CARE INSURANCE FILLS IMPORTANT NEED, WHY AREN'T MORE EMPLOYERS OFFERING IT?

Businesses are feeling the impact of employees' long-term care obligations, yet are slow to add Long-Term Care insurance to their employee benefits offerings. Because productivity can suffer when employees struggle to meet their long-term care obligations, as well as when they worry about how they'll someday pay for their own long-term care needs, employers should consider Long-Term Care insurance as an affordable and appreciated enhancement to a benefits program.

Studies document the cost of long-term care, the personal toll long-term care obligations can take on an individual, and the impact of this on workplace productivity. Nursing home rates now average $183 per pay (semi-private), according to an annual study from Genworth Financial, with Medicare-certified home health aid services at $46 per hour and residence in an assisted living facility at $2,825 per month.

As to the effect of caregiving obligations on the caregivers themselves, the Evercare Study of Family Caregivers, conducted in collaboration with the National Alliance for Caregiving, found a relationship between a caregiver's out-of-pocket spending in fulfilling caregiving obligations and the extent to which the caregiver reported adverse emotional and physical effects of caregiving. These adverse effects included starting or increasing a bad habit such as smoking, alcohol abuse or prescription drug abuse; experiencing new or worsening health problems; having trouble sleeping; feeling depressed or hopeless; gaining or losing weight; feeling increased anxiety or stress; and being unable to set or keep necessary personal medical or dental appointments.

When employees undergo any of these physical or emotional effects, it's apparent that work performance will suffer. Caregivers under such strain are more likely to be absent due to their own personal illness or a caregiving crisis, and when at work will tend toward attention lapses, mistakes, and overall lowered productivity. According to a study in the Gerontologist that used the Work Productivity and Activity Impairment (WPAI) Scale, working caregivers experienced a 21.2% work productivity loss due to their caregiving role, a combination of missing 5.4% of their work time and being only 80.8% productive while at work.

And the actual cost of these losses to employers? A study from the MetLife Mature Market Institute estimates that the cost to U.S. businesses due to the lost productivity of working caregivers is $17.1 billion to $33.6 billion per year.

Yet, businesses have been slow to respond to such data. A study from John Hancock of companies with 10 to 1,000 employees found that employer misconceptions have resulted in a reluctance to offer Long-Term Care insurance despite a perception of employee need. Although six in 10 of the surveyed employers thought employees were concerned about their ability to afford long-term care, and ranked employee concern about the ability to afford long-term care for themselves or another as second only to that of not having a financially secure retirement, only one-fifth of the businesses offered a Long-Term Care insurance plan as a benefit for employees. Among businesses that did not offer long-term care insurance, 66% cited the perceived cost to implement a plan and 63% cited a perceived lack of interest on the part of employees. However, according to the survey, among respondents that had a Long-Term Care insurance plan in place, only 5% reported a poor experience with plan cost or implementation. Also, contrary to the 63% that perceived employee interest to be low, an identical percentage reported that their employees were concerned about their ability to fund future long-term care.

The long-term care market is evolving, with traditional standalone Long-Term Care insurance plans and, recently, hybrid products that combine Life insurance or annuities with Long-Term Care insurance. Products are available to meet a variety of individual needs, at a range of cost. And, if offered on a voluntary basis, the employer incurs minimal or no cost. Clearly, Long-Term Care insurance is not only a timely benefit program addition, but a practical and feasible one as well.

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