Businesses are feeling the impact of employees' long-term care obligations, yet many are slow to add Long-Term Care insurance to employee benefits. Because productivity can suffer when employees struggle to meet caregiving responsibilities or worry about how they will pay for future care, employers should consider Long-Term Care insurance as an affordable and appreciated enhancement to a benefits program; see The Importance of Long-Term Care Insurance for Employees.
Studies document the cost of long-term care and the personal toll caregiving can take. Nursing home rates now average $183 per day (semi-private), Medicare-certified home health aide services average about $46 per hour, and assisted living facility residence averages $2,825 per month; for more on care delivered at home, see Long-Term Home Care Coverage.
The Evercare Study of Family Caregivers, conducted with the National Alliance for Caregiving, found a relationship between a caregiver's out-of-pocket spending and the extent of reported adverse emotional and physical effects. Those effects included starting or increasing unhealthy habits such as smoking or alcohol use, new or worsening health problems, trouble sleeping, feelings of depression or hopelessness, weight changes, more anxiety or stress, and difficulty keeping personal medical or dental appointments.
When employees experience these physical or emotional effects, on-the-job performance can decline. Caregivers under strain are more likely to be absent for personal illness or caregiving crises, and when at work they may have attention lapses, make mistakes, or show reduced productivity. One study using the Work Productivity and Activity Impairment (WPAI) Scale found working caregivers had a 21.2% work productivity loss due to caregiving, combining 5.4% of work time missed with reduced productivity while at work.
The actual cost of these losses to employers is substantial. Research from the MetLife Mature Market Institute estimates that lost productivity by working caregivers costs U.S. businesses billions of dollars each year.
Despite the evidence, many employers have been slow to respond. A study of companies with 10 to 1,000 employees found employer misconceptions led to reluctance to offer Long-Term Care insurance even when employees showed concern about affording care. Only about one-fifth of businesses surveyed offered a Long-Term Care insurance plan as an employee benefit; among those not offering coverage, perceived implementation cost and perceived lack of employee interest were commonly cited—topics discussed in Rising Long-Term Care Costs and Employment Considerations.
The long-term care market is evolving, with traditional standalone Long-Term Care plans and hybrid products that combine life insurance or annuities with Long-Term Care benefits. Products are available to meet a variety of individual needs at a range of costs, and if offered on a voluntary basis the employer may incur minimal or no cost. To evaluate options and how they might fit your workplace, talk to an agent.
Frequently Asked Questions
Who is most likely to benefit from employer-offered Long-Term Care insurance?
Employees who are caregivers, have aging parents, or who want to protect retirement savings from care costs typically benefit most from such coverage.
Can employers offer Long-Term Care insurance with little or no cost to the company?
Yes; many employers offer voluntary Long-Term Care plans where employees pay the premiums and the employer's administrative burden and cost are minimal.
Do Long-Term Care policies only cover nursing homes?
No; many policies also cover home health care, assisted living, and other forms of long-term support services, depending on the policy terms.
How should an employer gauge employee interest in Long-Term Care benefits?
Employers can survey staff, review workforce demographics, and consult with benefits experts to determine likely interest and appropriate plan options.