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Benefits for Employers

Offering long-term care insurance to employees is good business.

1. Enhance Your Benefit Package Without Cost to the Company

Benefits to Employees without costOffering long-term care insurance on a voluntary basis is a great way to add an important employee benefit without increasing costs to the company.

Employees watching their parents and grandparents age are becoming increasingly aware of the catastrophic consequences of not planning for long-term care and are appreciate the new benefit.

2. Recruit, Retain and Reward Key Employees

Federal rules allow employers to pay for coverage for selected classes of employees on a tax advantaged basis. Companies can pay for owners, key executives, or other defined groups of employees while offering coverage to the remaining employees on a voluntary basis. In fact, the federal government provides more generous tax incentives to businesses for long-term care insurance than it does for any other insurance product.

  • Money paid for coverage for owners or select categories of employees does not count as income to employees and is tax deductible to the business, depending on its form of organization.
  • Benefits, when received, are tax free to the policyholder.

In addition to federal tax incentives, many states offer additional incentives to encourage individuals to purchase coverage. New York, for example, allows a 20 percent state tax credit on the amount of premium paid.

3. Preserve Productivity

Approximately 20 percent of all American workers are providing long-term care to a family member while continuing to hold down a job. Without resources to pay for help, employees arrive late, leave early and in some instances leave the workforce altogether. The costs in missed time, additional recruiting and training, missed advancement opportunities was estimated to be $33.6 billion annually in studies conducted by MetLife and Genworth.

Long-term care insurance provides employees with the resources they need to pay for help in caring for loved ones allowing them to remain more focused and productive on the job.

4. Contain Rising Health Insurance Costs

A recent study by MetLife showed that employees who are also caregivers are significantly more likely to report depression, diabetes, hypertension or pulmonary disease. This is true regardless of their age, gender, and the type of work they do. In that same study a multi-state company with 17,000 employees showed that caregiving employees used eight percent more health insurance services than their non-care-giving counterparts at an estimated annual cost of $13 billion.

Employees and their family members who are covered by long-term care insurance will have funds needed to pay for help with caregiving. With less physical and emotional stress, employees will use fewer health care services, helping to contain the cost of health insurance.