Insurance Insights with Claude Thau

A 2019 Harvard report opens “American companies are facing a caregiving crisis—they just refuse to acknowledge it.”¹  Various studies indicate that 75%-80% of employees providing care for adults say caregiving has a negative impact on their job performance.^1,2

About 20% of employees generally identify as caregivers, but after a presentation regarding the nature of caregiving, 40% recognize that they’ve started down that path.³

For personal and professional reasons, fewer than 30% of caregivers discuss their long-term care (LTC) responsibilities with their employers.¹  So, it is important for employers to provide, with privacy, easily accessible programs to help make caregiving more efficient, more effective, safer and less expensive.  It is also important to educate employees, so they will be encouraged to discuss potential care needs with their elders while there still is time to take steps to make LTC situations more tolerable for all family members.

Employed caregivers sleep less, exercise less and go to their doctor less (they go to Mom’s or Dad’s doctors a lot).  Hence their chronic conditions are not diagnosed, treated or monitored, causing their health to deteriorate.  They eat more (particularly more junk food and fast food) and, as a group, drink more alcohol and take more drugs⁴. 

As a result, they are more stressed and fatigued.  Their sub-par productivity burdens co-workers and, depending on their job responsibilities, can expose their employer to increased liability as well as increased health and disability costs. ⁵ Higher-paid employees are most likely to quit for caregiving reasons.¹

Recognizing the increasing need for LTC with an aging population, numerous services have been developed to help caregivers, but many have failed to become economically sustainable.

Some LTC insurance programs offer a bevy of such services at no additional cost to the employer.  All employees, even if not insured, and all their relatives, can access services that make caregiving more efficient, more effective, safer and less expensive.  It can be attractive for an employer to have a third party monitoring the environment to bring attractive options to employees’ families.

Of course, there are other advantages to LTCi programs.  LTCi programs inoculate the next generation of potential caregivers.  If current employees have LTCi when LTC becomes necessary, their children will be much less burdened by caregiving needs.  For example, parents needing LTC are 50% more likely to move in with their children if they don’t have LTCi.⁶

Employer-sponsored (“worksite”) LTCi programs can be entirely voluntary (paid by the employee) or can be paid by the employer.  Cost can be shared between employer and employee, and the employer contribution (if any) can vary by employee class. 

Some worksite LTCi programs are traditional, stand-alone LTCi while others combine life insurance and LTCi.  Spouses/partners can be covered and sometimes other relatives can be insured.  Worksite LTCi program health concessions may allow employees to secure LTCi that would otherwise be unavailable to them.

Attractive Federal and Missouri tax breaks attach to employer contributions, making carve-out programs for executives (and their spouses/partners) particularly attractive.

The availability and attractiveness of programs vary depending on the number, and demographics, of employees and programs can be differentiated by employee class.  LTCi and caregiver support programs are a good topic to discuss with your benefit consultant.

¹Joseph B. Fuller and Manjari Raman, “The Caring Company”, Harvard 2019.

²Katie Kuehner-Hebert, “How to prepare for the new era of caregiving”, February 19, 2020, https://www.benefitspro.com/2020/02/19/how-to-prepare-for-the-new-era-of-caregiving/

³ Results of 17,581 surveys by AGIS of participants in its employee education sessions.

⁴ Mature Market Institute and National Alliance of Caregiving Study of Working Caregivers and Employer Health Care Costs, February 2010

⁵ Mature Market Institute and National Alliance of Caregiving Study of Working Caregivers and Employer Health Care Costs, February 2010

⁶ Derived by Claude Thau from the MetLife Study of Employed caregivers, March 2001.

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Ingram’s Long-Term Care expert, Claude Thau, a former inner-city schoolteacher and actuary, has helped employers, advisors and clients with LTC planning since 1994.  He has written the most-read LTC insurance (LTCi) surveys annually since 2005, was named one of 10 “power people” in the industry by Senior Market Advisor in 2007 and helped develop the LTCi program for Federal government employees.  He can be reached at 913-707-8863 or claude.thau@gmail.com.  He created this website where you can privately study LTC and LTCi: www.usa-bga.com/claude-thau.