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Should Employers Educate Their Employees About Long Term Care?


By Patti Goldfarb



Americans are poorly educated about the need to plan for the risk of long term care expenses. Since employers offer them the opportunity to save for retirement, shouldn't they do the same for this financial risk? 70% of people over the age of 65 will need some type of long term care in their lifetime.

Long-term care is one of the biggest financial challenges we face today. It impacts employers, their employees and even the sustainability of Medicare and Medicaid which will end up affecting us all. Employers can make difference and be part of the solution to these problems with little to no cost to their company.

Why is long term care becoming such an issue? People are living longer; the average life expectancy is 83. Baby boomers have less children to take care of them and families today are spread out across the country. Not to mention, most families have two working spouses. And finally, because Medicare was not designed for us to live into our 80’s or 90’s.

Who needs to learn about long term care? Well, it can happen to any of us. It’s all around us…

Many people live with it every day, but your employees don’t understand what to expect from their health insurance, Medicare or Medicaid. And they are not aware of the planning options available.

Employers offer retirement programs because they understand that employees appreciate them and they are useful in attracting and retaining employees. And, employees understand the concept and invest their money in them. But, there is one thing missing from this program. A way to protect the employee’s assets from the ravages of long term care.

Most people are aware of the need to prepare for health expenses after retirement. They sign up for Medicare Parts A & B, and either purchase a Medicare Advantage plan that may include Part D (the Rx plan) or a Medicare Supplement and a separate Part D plan .Or, in some cases, are offered a retiree health plan through their employer.

However, when it comes to long term care, unless someone has had a personal experience with it ( such as a family member needing it), is an issue that the majority of people are unaware of. When they find out the enormous costs of long term care and the fact that Medicare covers only a limited amount of care, under very limited conditions, the unfortunate situation is that it is too late to do any kind of planning. According to Doug Ross of EM-Power Services Inc. the average American loses their entire life savings within eleven months of starting long term care. This is why this issue has such far reaching impact and why planning is so necessary.

Wouldn't it make sense to include this information at the next annual retirement plan meeting? This would be a good time to broaden the discussion from investments to retirement planning and all its realities. Topics could include how Medicare worked and how to apply for it, what is and isn't covered. Or, if the company offers retirement health, how that program works. A discussion about long term care planning should include insurance, when to use an Elderlaw attorney and spending down assets to qualify for Medicaid.

If there is enough interest, it may be possible to get a discount on individual policies if the employer sponsors them. If not, a good agent can structure a policy to try to make it fit into person's budget. Even if no one buys a long term care insurance plan at the very least you have given your employees important information about what to expect when the time comes that they need long term care.




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About the Author

Patti Goldfarb, Employee Benefits Advisors Group
442 Teaneck Rd
Ridgefield Park, NJ 07660
201-255-6239

If you would like to re-print this article, please contact the author.
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