Overview: As the US workforce ages and the baby boomer generation reaches retirement age, more employees are likely to need long-term care insurance for themselves or an elderly family member. Employers that provide access to long-term care insurance for their employees may be able to reduce absenteeism and improve productivity, particularly if employees no longer need to miss work to care for an elderly parent.
Long-term care insurance covers the cost of long-term care services for the elderly, either at home or in a nursing home, assisted living facility or hospice facility. It normally covers things that health insurance, Medicare and Medicaid do not cover. For many, long-term care services are too expensive to pay for out-of-pocket, without an insurance plan. An employer's group plan may be less expensive than an individual long-term care insurance policy, depending on an individual's age and health status.
Most employers offer long-term care benefits on a voluntary basis, meaning the employee pays the full cost. If the employer pays the full cost of long-term care insurance, the expense is tax-deductible for the employer and not reported in the employee's income.
Trends: The cost of long-term care services is on the rise and coverage provided by government-sponsored programs such as Medicare and Medicaid is limited. More employers recognize this and are increasingly including long-term care insurance in their employee benefit programs.
Author: Tracy Morley, SPHR, Legal Editor
Updated to reflect the federal tax reform law's effect on commuter/transportation benefits, effective January 1, 2018.
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Employment glossary definition of Long-term Care (LTC) Insurance.