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Long Term Care:
Start Planning Today for a Secure Future
What happens if you need to go into a
nursing home when you get older? Many people don’t think about how they
would pay for the cost of long term care, even as our elderly population
increases substantially. An estimated 40% of people who reach age 70 will need
care in a nursing home, with some of them needing care for more than 5 years.
The average length of stay in a nursing home in Connecticut is 2 1¦2
years. With the cost of long term care, this could easily deplete a
person’s savings in no time. It can also be quite a burden when the
children of the person in the nursing home have to absorb some of the costs.
Even if you do not need a nursing home, the cost of assisted living facilities
and home health care are hefty as well.
The national
average cost per year of care in a nursing home is $54,900, or $150.18 per day.
Even more troubling is the fact that long term care costs in Connecticut are
among the highest in the nation with an average of $93,500 per year, or $255.96
per day, according to a study done by GE. Studies show that less than half of
the costs of nursing homes are paid by government programs, such as Medicaid or
Medicare. The remaining percentage of these costs are covered by individuals or
long term care insurance. Many people do not realize that Medicare and Medicaid
have restrictions on coverage of skilled nursing facilities. Medicare will
cover up to 100 days of skilled nursing care under certain conditions, and it
is not covered in full for the whole time. Medicaid will only cover nursing
home costs within certain guidelines, which usually require a person to deplete
their assets before they are eligible. This is a concern to those who want to
leave an inheritance to their children or someone else. So what can you do to
protect yourself and your family?
The market for
long term care policies has increased 18 percent each year for over ten years
now. More and more Americans are considering purchasing a long term care
policy, whether on their own or through an employer. However, as few as 6% of
Americans currently have a long term care policy, and not many understand the
true costs of long term care. There are many considerations when choosing a
long term care policy, including the premiums, deductibles, benefit periods and
amounts, optional riders available and discounts. The costs of long term care
are lower the younger you are, so it is not too early to start looking at
policies. There can be tax benefits to long term care policies, including the
potential for individuals to deduct the premiums as a medical expense.
Businesses who decide to offer employer contributions can deduct them and they
will not be counted as taxable income to the employee. Also, group plans are
available and can provide discounts to the members even if the employer
doesn’t contribute to the premium. For additional information and
definitions of long term care terms used, please see page 3 of this newsletter
or contact our office.
Employee
Retention: A Little Benefit Can Go a Long Way
With many employers not offering raises
this year, or giving smaller than usual pay increases, employers often need to
find other ways to boost employee morale. Benefits managers often need to be
creative in setting up additional benefits to employees that will cost the
employer little or no extra money. Here are some suggestions:
- Offer voluntary term
life insurance that the employee pays for through payroll deduction. This
insurance can be for the employee only or include their dependents.
- Provide automobile
and homeowner’s insurance that can be payroll deducted. Often the rates
available through a group-sponsored plan can be lower than what the employee
could get on their own.
- Allow employees to
submit for a reimbursement for part of a fitness club membership. If you
require a certain number of visits to the club, it is a great incentive for
employees to use it.
- Consider offering
domestic partner benefits. More employers are now providing benefits to
same-sex and opposite sex couples similar to those offered to married couples.
There are some administrative considerations, so you would want to talk to our
office about the pros and cons of doing this.
- Setup wellness
seminars for the employees. Topics such as smoking cessation, stress
management, diabetes management, nutrition, and many others may interest the
employees while providing them with ways to help them stay healthy.
- Offer employee
massages. You can hire a massage therapist to come in on a regular basis and
have employees sign up to get one.
Please feel free to contact our office
if you have any questions or are interested in offering some of these benefits
to your employees.
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