Looking for ways to help clients deliver greater value with their portfolio of offerings? Start by helping them pair complementary benefits and highlight their commonly missed synergies, so employees see the value —at little-to-no incremental cost. An emerging opportunity to do just that is to assess what plans or services can complement long term care benefits—and fill in critical gaps in coverage.
There’s a growing care crisis as increasing numbers of employees are shouldering caregiving responsibilities for loved ones—and at the same time are delaying or avoiding the preparation for their own long term care situations. No single solution can handle all of these burgeoning care needs; it takes a set of complementary benefits to help employees navigate the myriad medical, financial, legal and logistical situations they may encounter.
Employers face a caregiving conundrum
Having to shoulder caregiving responsibilities for an aging loved one is already a cause of significant stress for employees, and taking on the caregiver role can create a major disruption in the caregiver’s life. The medical needs and financial hardships, coupled with the logistical and legal issues that emerge, can wreak havoc on an employee’s ability to provide care while remaining fully employed, let alone staying focused at work. The impact on their mental, financial—and possibly legal—well-being comes at a cost for employers. According to the Rosalynn Carter Institute for Caregiving,1 it’s causing:
- Higher employee attrition. Nearly one-third of senior caregiver employees have voluntarily left a job to meet their caregiving responsibilities.
- Reduced workplace productivity. Annually, employees lose up to $3 trillion in wages and benefits while employers lose $17-33 billion due to absenteeism and turnover.
- Increased legal liability. There’s been a steep rise in the number of family responsibility discrimination claims in the past ten years, with discrimination against working caregivers to the elderly being the second most common category of claim.
With more than one in five Americans serving as caregivers2 and the majority (61 percent) caring for an adult relative or friend while working,3 this growing need for senior care is at the forefront of employers’ concerns. In fact, 43 percent of employers cite senior care benefits4 as the main benefit they’re prioritizing this year. As a result, companies are searching for innovative and attainable ways to assist employees with the immediate needs of caregiving, as well as addressing their care needs when they’re older.
Here’s the crux of the matter: Many of today’s employees are having to address the caregiving needs of their aging parents or grandparents who didn’t have a solid plan in place for their changing medical, financial and legal situations. Yet as these employees themselves age, their children—who will soon join the workforce—may face the same caregiving reality for their parents or grandparents.
This vicious cycle will continue unless employees become better prepared and are able to reduce the caregiving challenges they pass on to their children. Perhaps having experienced the financial and emotional fall-out with their parents or grandparents who require long term care, it may spur younger employees to think about their own futures and take action now. They could recognize that purchasing long term care insurance in some form means they’re protected as they age.
Forecasting the long term care crisis
When it comes to employees’ own future long term care needs, it’s not necessarily top of mind, as 63 percent of consumers who have received long term care did not consider the need for it beforehand.
This mindset flies in the face of a perfect storm brewing on the horizon: Americans are living longer, but not necessarily healthier, lives.5 Also, consider that 80 percent percent of older Americans can’t afford long term care service.6 Plus, financially strapped Medicaid programs are breaking under the strain as more and more people are relying on state assistance. The bottom line is that people just aren’t prepared to meet long term care needs nor the skyrocketing costs, as evidenced by the monthly price of a private room in a nursing home facility, which averages over $9,000.7
All of these factors lead to a current workforce that is increasingly being called upon to pick up the slack. For example, Washington was the first state to deduct money from workers’ paychecks to finance long term care benefits for residents who can’t live independently due to illness, injury or aging-related conditions such as dementia.8 And 12 other states are considering adding their own long term care payroll tax.9
Potential solutions for long term care
Traditional long term care plans, which have historically provided solid coverage, are largely out of reach of many employees as premium costs have increased. In fact, only around 10 percent of the marketplace is now stand-alone long term care insurance versus combination products.10 As a result, employers are looking at newer solutions, like products that combine life insurance with long term care riders, which have become a more prevalent benefit option in the market. For example, an employee might be able to use the accelerated death benefit rider on a life insurance policy, which allows them more immediate access to necessary funds to cover any long term care needs.
Also consider what other benefits can fill in the gaps of long term care coverage by providing ancillary services that address related issues that come with long term care. This could include an employee assistance program that offers financial or mental health counseling or a legal plan that gives employees access to legal counsel and related services.
How legal can fill the caregiving gap—now and for the future
It can be argued that many situations that employees encounter in life, from getting married to moving to retirement, can have a legal component to it. When it comes to a long term care plan, legal insurance can provide complementary coverage—providing benefits that will help employees both with immediate caregiving needs for loved ones, as well as helping them plan ahead for their own care needs. In fact, in a recent survey, more than one-third of ARAG clients have expressed interest in how their legal plan can complement other long term care benefits.
First, legal insurance can help employees plan ahead for their long term care needs by empowering them to create critical documents like wills, advance directives and trusts to protect themselves and their loved ones financially and from protracted legal processes, such as probate or Medicare and inheritance disputes. A legal benefit may also provide access to attorneys for legal advice, document review and even representation for a parent or grandparent of a plan member.
Second, a legal plan may also feature caregiving referral services for the parents and grandparents of employees, where they can work with an elder care advocate who can provide information and referrals when selecting a care facility for a loved one.
Help Clients Navigate Long Term Care Benefit Needs
The long term care terrain is getting even trickier for employers to navigate—and hybrid product solutions will continue to evolve in response. Here’s an opportunity to help clients in their ongoing search for innovative and attainable ways to assist employees with the immediate needs of caregiving, as well as addressing their care needs when they’re older. Pointing out the synergies with legal insurance gives them additional tools and, frankly, the peace of mind, to deal with the rising costs and complex situations that come with long term care.
Reference:
- https://rosalynncarter.org/new-white-paper-reveals-why-one-in-five-employees-are-at-risk-of-leaving-the-workforce-and-what-employers-can-do-to-help/.
- https://www.aarp.org/ppi/info-2020/caregiving-in-the-united-states.html.
- https://www.aarp.org/pri/topics/ltss/family-caregiving/managing-a-paid-job-and-family-caregiving/.
- https://www.care.com/business/resources/ebooks-and-reports/future-of-benefits-report-2023/.
- https://www.prb.org/resources/americans-living-longer-not-necessarily-healthier-lives/.
- https://www.ncoa.org/article/80-percent-of-older-americans-cannot-pay-for-long-term-care-or-withstand-a-financial-shock-new-study-shows.
- https://www.genworth.com/aging-and-you/finances/cost-of-care.html.
- https://apnews.com/article/washington-long-term-care-tax-disability-cb54b04b025223dbdba7199db1d254e4.
- https://ltcconsumer.com/resources/ltci-library/twelve-states-now-considering-implementing-ltc-tax/#:~:text=States%20Considering%20Their%20Own%20Tax,North%20Carolina%2C%20Pennsylvania%2C%20Utah.
- https://brokerworldmag.com/2021-milliman-long-term-care-insurance-survey/.
