Long-Term Care Coverage Expands

April 16, 2001 (PLANSPONSOR.com) - While more employees were covered by long-term care coverage last year, fewer new employers embraced the benefit in the face of rising premiums.

Still, the passage of the Federal Long-Term Security Act of 2000, the proposed tax reform, and the results of a recent survey point to a positive outlook for employer-sponsored long-term care insurance.

An 11-year ongoing long-term care market study by LIMRA International also found that in 2000, compared to 1999:

  • the number of those covered by employer-sponsored long term care insurance increased by 19%
  • new employers offering the benefit fell by 6%
  • the number of participants was actually 22% lower
  • while, premiums increased by 6%

In addition, the study found that almost 3,800 employers offered plans, covering some 929,000 employees by the close of the year. If self-funded public employer plans are added to the total, enrollment figures reach over one million in total.

The Passage of the Federal Long-Term Care Security Act of 2000 will boost those numbers further, when long-term care insurance is offered to approximately 20 million active and retired federal employees, postal workers, military and eligible family members in October 2002.

The Office of Personal Management estimates that between 300,000 and 600,000 of these individuals will enroll during the first sign-up period, which will be held before the program starts.

Market share is highly concentrated for LTC, with the top five companies accounting for 85 percent of all in-force group premium.