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Employers: LTC Skeptics

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Few small companies think they can afford to offer long term care insurance, and many doubt whether employees want the benefit.

The long term care insurance division at John Hancock, Boston, a unit of Manulife Financial Corp., Toronto, has based those conclusions on results from telephone interviews of about 500 benefits decision makers at companies with 10 to 1,000 workers.

About 20% of the participating employers already offer LTC insurance benefits.

When researchers asked participating employers without LTC benefits about their reasoning, 66% cited concerns about cost, and 63% cited an apparent lack of employee interest.

In addition, 33% said they thought adopting a plan would be too time-consuming.

Only 5% of the participating employers that actually offer LTC insurance said cost or implementation had been a problem, Hancock says.

Hancock questioned the assumption that employees are uninterested in the product: 63% of the benefits decisionmakers said employees are worried about their ability to handle LTC care costs.

About 50% of the survey participants at employers with 500 to 1,000 employees said LTC issues have affected productivity or absenteeism.

In companies that have chosen to offer LTC insurance, the 4 main reasons for doing so are to attract and retain key employees (47%), tax advantages for the business or business owner (43%), employee demand (43%), and first-hand exposure to LTC issues (42%).

When asked about choosing a carrier, the top factors were the carrier’s rating (82%) and the carrier’s name recognition (77%).