personal care or supervision needed by persons of any age for an extended period of time.
long-term care (LTC)
It is poor planning to rely on the Medicare program because its objective is to pay for acute illness where __________; consequently, the program pays LTC expenses under very limited conditions
recovery is expected
The primary objective of the ______ is to help low-income families with their medical expenses even though it has unintentionally become the largest third-party payer for nursing homes and long-term care
The advantages to employees for having LTC insurance available are:
- (a) It can help protect their savings and assets from the high cost of care should they ever face an LTC event.
- (b) It may support them as caregivers since many policies extend provider discounts and other support services to family members.
The advantages to employers of offering LTC insurance are:
- (a) It allows employers to enhance their existing benefits package.
- (b) It may curtail lost productivity when employees assume caregiving roles at the expense of workplace responsibilities.
- (c) It allows any premium contributions made by an employer to be deducted as a business expense.
Under a true group LTC plan, the employer is the _____ and employees are issued _______. The employer may choose to include retirees, spouses, adult children, parents/in-laws and siblings as part of the eligible group. True group is generally a better match for larger employers.
- (a) Availability of guaranteed issue for eligible, actively at-work employees
- (b) No minimum participation requirements
- (c) Fully portable coverage
- (d) Low group rates, in many cases, with a rate guarantee period
- (e) Transfer of reserve capabilities
- (f) Turnkey approach to enrollment and administration
- (g) Employer-dedicated website to support enrollment.
certificates of insurance
individual insureds are the policyholders and are issued individual policies. This approach may be attractive to smaller employers or those wishing to give employees greater flexibility in customizing their coverage. The approach may offer the following advantages:
- (a) simplified underwriting,
- (b) preferred health and spousal/family member discounts,
- (c) broker-assisted enrollments, and
- (d) list and split billing.
multilife (individual insurance) policy
What two claims-paying approaches are offered by LTC carriers?
reimbursement approach and the disability approach
Most LTC policies pay benefits for care received in nursing homes, assisted living facilities, adult day care centers and the claimant’s home. When selecting LTC insurance, employers should carefully consider plan features. The following features are the primary determinants of plan cost (4):
- The daily benefit
- The lifetime maximum benefit
- The policy’s waiting (elimination) period
- Inflation options.
The three inflation options available in the LTC market are the following:
- future purchase option,
- automatic benefit increase approach
- consumer price index (CPI) option
LTC insurance benefits can be offered on a ______ basis or be ______, depending on the size of the employer’s population. Larger groups, generally over 1,000 employees, are the best candidates for ______
A small deviation in actual experience relative to pricing assumptions can result in a large difference in the level of required premium. Therefore, pricing assumptions should be set conservatively. This process is known as including
“provisions for adverse deviations” (PADs).
Beyond the basic and optional plan design features, an employer should also consider the following key policy provisions:
- (a) Guaranteed renewable provision
- (b) Portability
- (c) 30-day free look
- (d) Coordination of benefits
The four basic approaches to LTC insurance financing are:
- (a) Voluntary plans
- (b) Employer-paid
- (c) Executive carve-out
- (d) Core plus buy-up
Benefit eligibility is triggered under an LTC insurance policy when an insured becomes either ____ or _____ and has fulfilled a waiting period requirement.
functionally dependent or cognitively impaired
LTC is one of the most extensively regulated products in the insurance marketplace. The basis of regulation is the Model Act and Regulations developed by the ______
National Association of Insurance Commissioners (NAIC).
established to encourage individuals to take more personal responsibility for their LTC costs.
LTC partnership plans
Some of the consumer protection (5) provisions for LTC insurance included in the NAIC models are:
- (a) Third-party billing notification
- (b) Policy reinstatement provision
- (c) Contingent nonforfeiture
- (d) Independent third-party review
- (e) Timely payment of claims
Upon receipt of the policy, an insured has 30 days to decide whether to continue with the plan. If the insured decides not to take the coverage, all premiums paid will be refunded.
30-day free look
Most LTC insurance is sold on this basis, meaning the carrier cannot cancel coverage for any reason (other than nonpayment of premiums), unilaterally change the coverage, or raise rates on a single person for any reason.
(a) Guaranteed renewable provision—
Most LTC policies contain a ______ provision that governs which policy pays first in the case of multiple policies or coverage.
(d) Coordination of benefits—
this benefit allows an insured to keep reduced paid-up coverage in the event of a substantial premium rate increase.
allows the insured to request reinstatement if an impairment resulted in failure to pay premiums, resulting in a lapse of coverage.
Policy reinstatement provision—