Insurance industry trade groups are backing a new Senate bill that could help workers pay for long term care insurance.

The bill, S. S.2281, the Aging with Respect and Dignity Act, was introduced by Sen. Rick Santorum, R-Pa.

The bill would let employers offer long term care insurance through cafeteria plans, and it would let workers pay LTC insurance premiums with funds contributed to health care flexible spending accounts.

The bill also would let employees use “life care annuities,” or annuities that offer long term care benefits, to create long term care accounts.

“This bill is the right thing to do to ensure that Americans have a secure retirement,” says Steve Bartlett, president of the Financial Services Roundtable, Washington. “As our Blue Ribbon Commission report on retirement security showed, people are simply not saving enough to cover the costs of long term health care. Sen. Santorum’s bill provides comprehensive and affordable alternatives to those preparing for retirement.”

Last fall, Frank Keating, president of the American Council of Life Insurers, Washington, sent a letter encouraging Santorum to introduce the bill, saying passage of the bill would improve the availability of long term care insurance by giving workers more ways to buy it.

Offering tax breaks for purchasers of annuity-LTC insurance hybrids “would encourage individuals to use one product to save for retirement, prepare for long term care expenses and manage retirement income,” Keating wrote in the letter. “This is a concept ACLI strongly endorses.”

The ACLI also supports the idea of letting employers add LTC insurance benefits to cafeteria plan menus, Keating wrote.