Posts Tagged ‘worksite Long Term Care Assisted living’

Two Benefits of CLASS Act Come With a Caution Sign

Posted on April 23rd, 2010 by Em-Power Services

Have you read anything about the CLASS Act yet? CLASS stands for Community Living Assistance Services and Support and it’s a Ted Kennedy legacy program that slid into healthcare reform with little notice. It’s a voluntary government run long-term care insurance program that will require a decision from employers whether or not to participate. Where employers do participate, their employees will automatically have premiums deducted form their pay checks unless they specifically opt-out.

When does CLASS become effective?
Not later than October 1st, 2012, the Secretary of the Department of Health and Human services, taking into consideration the recommendation of the CLASS Independence Advisory Council will select the final benefit to be provided out of three benefits presented to meet the requirements defined in the statute. Following that date a period for public comment will be provided making a kick off date in 2013 probable.

What is long-term care?
Long-term care is help people need due to accidents or illness that can happen at any age. It is referred to as custodial care and it includes help with dressing, eating, bathing, toileting, continence or just moving around. By definition, long-term care is not intended to make you get well again and it is specifically excluded from traditional health insurance or Medicare when you reach age 65. This care can be very expensive and without insurance protection tens of thousands of Americans have become impoverished.

What’s good about CLASS?

  • Brings attention to the problem:
    Possibly the most important benefit of the CLASS Act is that it finally brings long-term care to the front page of newspapers and the national news. For too long, far too many families with resources to purchase insurance protection have had their lives shattered when a loved one needed long-term care and they didn’t own insurance. Most people don’t understand the consequences that come with needing long-term care until it is too late and they never learned about affordable planning options when they were young.
  • Allows everyone to receive a nominal benefit regardless of health problems:
    The other primary benefit of CLASS is to guarantee every citizen the opportunity to purchase a nominal long-term care insurance policy regardless of pre-existing medical conditions. Unlike private insurance with medical underwriting that excludes high risk individuals to control premiums, government provided coverage will accept virtually every citizen.

So what is the caution sign for?
Government run long-term care insurance stems from noble intentions and it does in fact provide some important benefits to a segment of society, but these benefits come at a price. Stay tuned for information every employer, employee and benefit specialist needs to understand before making decisions on long-term care protection and the CLASS Act.

EM-Power is a unique brokerage in that we:

  1. Work with employers to show them why adding LTC as a employee benefit is a win-win opportunity; and
  2. Work with brokers to teach them how to better educate their clients about LTC to create a win-win opportunity.,

If you are an employer needing help or a broker looking to help your clients with Long Term Care reach out and contact Doug Ross at 800-483-1115

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3 Reasons Employers Shouldn't Wait for the Class Act

Posted on April 16th, 2010 by Em-Power Services

Finally, the Federal government has recognized the devastating gap in the safety net caused by long-term care by passing the CLASS Act, a national voluntary long-term care insurance program. Don’t wait to begin a conversation on long-tem care because once CLASS Act becomes operational, employers will need to decide if they should participate or if there are better alternatives. Regardless of what employers choose, employees hearing about CLASS Act will begin bringing questions to work.

There are some important differences between private long-term care insurance and the government run program – and it is in your interest to understand them now – before a decision to participate or opt-out is required. And these differences make it advantageous to offer private coverage to employees today.

  1. Coverage is projected to be more expensive and the risk of future premium increases will be higher with government coverage
    One size fits all coverage from the government, when available, is projected by Milliman, a respected independent actuarial firm, to be more expensive and more likely than private insurance to increase in price in later years. Because government provided long-term care has no underwriting requirements, provides subsidies to the poor, and premiums must be set to ensure financial viability for 75 years, the cost will be higher than private insurance.

    When CLASS was first introduced, the expected monthly premium was $30. Compare that now to premiums projected to be $180-$240 month for a nominal benefit. The higher the premiums, the lower the participation and the more likely the government will suffer from adverse selection with participants more likely to have pre-existing health conditions that prevent them from being approved for private coverage.

  2. Waiting for CLASS may cause some employees to lose insurability and age based premiums get more expensive each year
    Educating employees now and offering private insurance allows employees to submit applications when they are most likely to pass medical underwriting required by private insurance carriers to screen out high risk people that drive up the cost of coverage. Offering coverage today allows employees to lock in both their insurability and rates that are tied to the age coverage is purchased.
  3. Providing employees’ education now will help them to make informed decisions when CLASS becomes available
    The CLASS Act does not include sufficient funding to provide extensive marketing or education to employees making it likely participation will be poor. Education provided as part of a private long-term care insurance benefit allows employees to learn about long-term care, how it is paid for and how to make it part of financial planning. Educated employees will be in a position to make an informed when CLASS Act does become available, and those who could not pass medical underwriting will be able to purchase coverage then.

Still think you should wait for details on the CLASS Act before implementing an employer sposnored plan? Click here to see what executives from the respected financial rating agency A.M. Best have to say about CLASS Act.

Bringing the conversation about long-term care to employers and employees addresses a serious planning issue. Offering private insurance provides an opportunity to learn about the problem now and put an affordable solution in place. And when CLASS Act is available, those who cannot pass the underwriting of private insurance will have an option to protect themselves.

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