LTC INSURANCE: Tax Benefit Fails to Spur Public Interest
Despite the 1996 Health Insurance Portability and Accountability Act, which offers tax benefits to employers and employees who purchase long-term care insurance, a survey found that only 14.5% of 448 members of the International Foundation of Employee Benefit Plans offer the benefit, Business Insurance reports. Companies with at least 1,000 employees represented 74% of the employers who offered the benefit, and 80% offer the coverage on a voluntary basis, "but for nearly 71% of those employers, employee participation is less than 10%." Larry Aarbus, an IFEBP research associate, said, "For employers considering the benefit, ensuring employees are aware of the need for LTC insurance can contribute to a more successful implementation of the benefit" (7/12).
The Future is Now
According to the Sacramento Bee, a mere 20% of baby boomers plan to use LTC insurance to cover the costs of their long-term care. Sam Morgante, vice president for GE Capital Assurance, said, "So many of us have thought about our 401(k)s and about retirement planning. But so few people have thought about how the need for long-term care is the biggest danger to that financial portfolio they face." LTC is typically not covered by traditional insurance plans and can cost up to $70,000 for an 18-month stay in a nursing home. Patty Peterson, vice president of U.S. Bancorp Piper Jaffray, said, "Most people believe that long-term care costs will be taken care of by either the government, ordinary health insurance or retirement funds. That misperception could cost them their life savings." For those who wait until their twilight years to purchase LTC insurance, premiums may prove prohibitively high or coverage may be denied for those suffering from "severe infirmities" (Kalb, 7/18).