Turning North America into a big source of profits took about 300 years.
Sometimes, it seems as if getting significant income from long-term care insurance (LTCI) employee benefits programs will take about as long.
Tom Riekse Jr., a managing general principal in the Lake Forest, Ill., office of LTCI Partners Inc., said in an interview that he continues to see steadily growing employer interest in helping workers with long-term care planning, and plenty of insurance organizations have survey data supporting that assessment.
But Rich Reda, an executive vice president at Lockton Companies L.L.C., Kansas City, Mo., an insurance broker, said he is having trouble finding many carriers that can offer the kinds of underwriting strategies and stable prices that employers are looking for.
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A few years ago, Reda said, he could give employers a choice of as many as 10 major voluntary LTCI carriers. Now, he says, he often has only 2 or 3 names to offer.
An employer can provide LTCI benefits by offering a true group LTCI policy, paid in whole or in part by the employer; bringing in sellers of worksite LTCI policies, or individual LTCI policies designed for sale at the worksite; or arranging for employees to make contact with sellers of true individual LTCI policies.
Traditionally, employers have tended to focus on offering voluntary, employee-paid, worksite LTCI programs. Those programs hold the employer’s costs down, by requiring the employees to pay all premiums; give the insurers at least some ability to decide which employees can and cannot qualify for coverage; and often give the employees access to coverage that is cheaper and somewhat easier to qualify for than if they simply applied for true individual LTCI coverage on their own.
The Federal Long Term Care Insurance Program, for example, offers coverage to federal employees who are actively at work. Federal employees’ relatives can apply for coverage, too, if they go through a medical underwriting process.
About 45,000 “members of the federal family” signed up for new LTCI coverage through an open-enrollment period that ended in June 2011, and total enrollment in the LTCI program increased 20%, to 270,000, according to the U.S. Office of Personnel Management.
LIMRA, Windsor, Conn., found that total U.S. long-term care insurance sales through the voluntary market were 20% higher during the first 3 quarters of 2011 than they were during the comparable period in 2010.
Sales of voluntary LTCI performed better over that period than sales of any other voluntary products that LIMRA tracked other than long-term disability insurance and critical illness insurance.
Employers have been slower to add voluntary LTCI benefits options than many other types of voluntary benefits products.
When Prudential Financial Inc., Newark, N.J. (NYSE:PRU), commissioned a recent employer survey, it found that only 33% of the large employers that participated said they offer a voluntary LTCI program, compared with 35% that offer critical illness insurance and 52% that offer dental insurance.
“Life and disability remain the core of the voluntary package at most employers,” said Gil Lowerre, president of Eastbridge Consulting Group Inc., Avon, Conn.
Selling LTCI through the voluntary market is less common, in part because of the complexity of pricing voluntary LTCI policies and evaluating the riskiness of the workers who apply for voluntary LTCI coverage, Lowerre said.