Long Term Care Insurance as an Employee Benefit

Despite our current deficit and the fiscal condition of government programs like Social Security and Medicare, many people believe a Federal program has to be better than private insurance.

I can certainly understand that when you look recent events like government bail outs of banks, automobile manufacturers and homeowners under water with their mortgages. But at some point, bills come due, and the combined effect of America aging and the burden of our current entitlements are the reasons the CLASS Act is to be funded completely by participant premiums.

When you hear your premiums go in to a lock box, do you feel secure? Can you visualize a large box made out of heavy steel with a giant lock? Unfortunately this isn’t how it works. The Federal government uses trust fund accounting. The money coming in from premiums is included with all other revenue collected and used to pay current obligations. At the same time, those premiums are credited to a trust fund that will accumulate interest. The problem is, even the Federal government can’t spend the same money twice.

Anything accumulated in the trust fund becomes an IOU from the general budget and we all know what condition that is in. According to the bi-partisan fiscally conservative Concord Coalition, Congress could have moved the CLASS program entirely out of the budget and invested the premiums in private securities that would have been available to pay claims, but genuinely funding the program would have eliminated money Congress needs to pay for healthcare reform.

In my next blog we look at Myth #3 – CLASS Act premiums are less likely to increase in the future than private insurance.

Empower helps employers of all sizes implement long-term care insurance benefit programs in the workplace and conducts workshops & educational classes concerning LTC and the CLASS Act for employers and employees.  If you would like to know more about the CLASS Act and how it might impact your company call us.

We also provide  Resources, training, and assistance to brokers looking to educate or help their clients with and Long Term Care and understanding the CLASS Act.

For help or more information contact Doug Ross at 800-483-1115, send an email todross@empowerltci.com, or visit our site at www.empowerltci.com.

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