Why Quality Assurance Is Critical When Offering Long-Term Care Insurance
If you’re already offering long-term care insurance (LTCI) to your employees, you are ahead of the curve! You are not only adding protection to your participating employees’ retirement and savings endeavors, but also giving employees the opportunity to maintain their assets should they need long-term care. As we know, long-term care is expensive, so having a tool to protect yourself against these costs is invaluable.
As employers, some of our largest liabilities lie within our administration of benefits. How would you like to know that someone is proactively performing quality assurance for you, thereby making you less exposed to liabilities?
Finding the right partner for your LTCI plan can help you reduce, if not remediate, this liability.
WHAT’S AT RISK?
Long-term care insurance is different from other benefits. Its specialized characteristics can make the administration of the benefit complicated — if not managed appropriately, it can leave law firms exposed to liability.
A clear example of this exposure, and how common it is, can be seen in a recent compliance audit we did for a client that revealed billing errors amounting to more than $27,000. The majority of the inaccuracies were found in unreported terminations of employees. There were some eligible employees who were never added to the plan and some incorrect dates of birth and names, which could spell difficulty when a claim is filed or when an employee would normally port their policy after leaving their job. There were also inexact deduction amounts, as well as deductions taken from employees’ payroll for coverage they did not have.
All in all, we uncovered a potential liability for this employer.
When employers have a long-term care insurance policy, they remove the financial burden from employees’ lives and therefore ease the emotional stress at a time when they might need it the most.
WHY LTCI IS VALUABLE TO EMPLOYEES
Law firms that offer long-term care insurance clearly understand how significant insuring employees’ retirement dollars can be. They’re also aware of the quality of life their employees have grown accustomed to — a consideration that cannot be ignored. Your employees are able to protect not only their retirement funds, savings and assets, but also their family (and their family’s quality of life). When they need long-term care, it will likely lead to two things: financial and emotional stress. When employers have a long-term care insurance policy, they remove the financial burden from employees’ lives and therefore ease the emotional stress at a time when they might need it the most.
HOW TO PROPERLY ADMINISTER A POLICY
Long-term care insurance can be such an involved process for any employer. You wonder if anything is falling through the cracks or if anything is being set in motion for a potential liability. Let’s look at the kinds of items you can inventory to shine a light on potential liabilities within your own firm:
- Do you reconcile your premium deductions to the carrier bill every month?
- Are you performing quarterly payroll audits (name, plan design, date of birth, terminations, additions, employee ID/Social Security number) against the carrier files?
- Do you have a protocol in place for new hires so that they can opt in within the underwriting timeframe?
- Are your employees offered claim support or care coordination support at the time of a long-term care event?
- Are your employees offered education-based support if/when the time comes to compare LTCI plans as the marketplace continues to change?
- Do you have a process to confirm that departing employees are getting directly billed by the carrier to ensure continued coverage?
- Is there a process in place to make sure new applications have been submitted to the carrier? That they’ve received confirmation of coverage from the carrier? That they’re on payroll deduction?
- Are your employees educated on how they can use their HSA funds for their LTCI premiums?
If you answered “no” to any of these questions, you’re not alone — many law firms find themselves exposed to some liability. Partnering with a specialist can help you answer “yes!”
On a more human level, you are providing a much-needed benefit to your employees. You are giving them and their families protection against financial and emotional strain when they need it the most.
About the Author
Christine McCullugh is the Founder and President of LTC Solutions. The brokerage advises carriers, brokers and employers on individual and group long-term care insurance (LTCI).Website