In today’s era of job-hopping and quiet quitting – the phenomenon where employees remain at their jobs but don’t perform at their highest level – enticing employees to stay engaged is more important than ever.
The FIRE movement, or Financial Independence, Retire Early, is leading more individuals to live frugally, plan ahead, and leave their jobs in their 30s, 40s or early 50s – well below the average retirement age.
For employers desperate to keep good employees in the workforce – and in their companies – it’s crucial to evaluate your healthcare insurance, disability insurance, paid family leave and ancillary benefits. But you should also think about retirement benefits, including a Group Retiree Health plan, as important recruiting and retention tools.
Think about it this way: Health care costs account for 15% of the average woman’s retiree’s income and 9% of the average man’s retirement income, according to a study by the Center for Retirement Research at Boston College. A portion of these costs come from paying for Medicare Part B and Part D premiums, Forbes reported. Average Part B premiums cost more than $170 per month in 2022 but can go as high as $538 for high-earning retirees. Part B also requires a 20% coinsurance payment.
If you’re an insurance broker looking to write Group Retiree Health as part of a benefits package that includes short-term disability, private Paid Family and Medical Leave, and ancillary benefits, it’s important to remind your clients that company owners and the c-suite – who are often closer to retirement age than mid-level employees – will stand to save the most from a Group Retiree Health plan. After all, their out-of-pocket healthcare costs, just based on Medicare premiums, could be more than double the average employee.
Providing Group Retiree Health Benefits, which can cover copays, deductibles, and coinsurance, can entice employees at every level to stay with your company until they ready to retire and – perhaps more importantly – until they are ready for Medicare at age 65. A good benefits package is no substitute for a positive company culture, clear direction, and room for advancement. But for future-focused employees thinking about how they might pay for retirement, it can sweeten the deal.
Fully insured group retiree health benefits have no network requirements, which means that beneficiaries can receive treatment from any healthcare provider that accepts Medicare. No medical exam is required, and no medical questions are asked. The DBL Center can write Guaranteed Issue coverage for any retiree and their spouse over the age of 65 enrolled in Medicare A and b
Retirees can begin coverage any time of the year with a qualifying Medicare event.
Coverage may include deductibles, co-pays, and co-insurance, as well as prescription drugs. Plans are available where the retiree pays the premiums, the company pays the premium, or they can share the costs, with employers paying a flat rate or anywhere from 0% to 100% of the premium.
Your clients can opt to include ancillary coverage like vision, hearing, chiropractic, acupuncture, and physical exams as part of the plan. Some programs also provide gym access or at-home fitness tools and resources to plan members.
If you have clients who are currently providing retiree healthcare coverage but looking to reduce costs, switching to a GRH plan that works with Medicare coverage could be the solution. Likewise, if you have clients in industries such as manufacturing, financial services, universities, hospitals, utilities, public entities and even the insurance industry, GRH plans can help reduce their costs. These industries tend to have large numbers of retirees and employees close to retirement.
According to the U.S. Department of Labor, employers can shift, reduce, or terminate health benefits at any time. However, switching to a group retiree health plan can reduce costs while maintaining good relations. This is especially important for publicly held companies whose value can be swayed by negative media attention.
Group retiree health plans provide a balance that helps organizations control costs while providing coverage to retirees and offering those close to retirement peace-of-mind that their insurance benefits may cover some significant expenses in their later years.
The DBL Center has the resources and carrier relationships to help you write the best Group Retiree Health plans so your clients can provide the full benefits package expected by employees today. Meanwhile, as a DBL Center broker, you can expand your book of business and commissions with new and existing clients.
by Larry Estridge
When employees are in their 30s, job-hopping and looking for the organizations with the best salaries and benefits packages, long-term care insurance (LTC) is not usually on their minds.
But, the fact is, it should be.
Life insurance sales increased during the coronavirus pandemic. And it’s good that even younger employees started exploring their own mortality and ensuring their families are cared for in the event of their death.
But everyone, from company executives to hourly workers should also be considering long-term care insurance as an important part of voluntary worksite benefits or individual benefits.
I was fortunate when I was younger, being in the insurance industry, that I had mentors who explained why I should buy LTC in my 30s. I got in while rates were low.
I know the peace-of-mind it gives me, today, knowing that my family won’t have to worry about taking on the burden of caring for me in my later years or facing financial hardship if they have to pay for my long-term care.
However, not enough insurance brokers are selling this benefit to their clients. Either you haven’t heard enough about it or you simply don’t realize the importance of it. Unless you are caring for aging parents, you may not realize how much long-term care costs or how important it is to alleviate the challenge of caregiving on family members.
Rates have gone up since years ago and will continue to rise. The best time to buy LTC would have been a decade ago. The second-best time, as they say, is now. It’s simply an easier sell right now than it will be in the future when rates go up again.
Before we go further, let’s explore the basics of LTC and LTC insurance.
Long-term care describes physical assistance with the activities of daily living (described as ADLs by medical professionals) for an individual who is elderly, injured or disabled.
Individuals in need of long-term care often need assistance with personal hygiene and getting dressed, as well as basic household tasks like cooking and cleaning. Caregivers typically do not provide nursing or medical assistance. Most caregivers cannot administer medications but can make sure the patient takes them. While they cannot treat or diagnose a medical condition, they should be able to recognize signs of medical emergencies or any changes in the patient’s condition.
LTC pays for assistance in skilled nursing facilities, assisted living facilities, and also at-home care. LTC will also pay for hospice care.
If the individual is being cared for by family members or someone else, LTC can pay for adult day care or respite care to give caregivers a break. Respite care benefits may be available before the patient has filed a claim for other LTC.
Long-term care insurance fills in where Medicare, Medicaid, and medical insurance does not provide coverage for care for individuals who are chronically or terminally ill, injured, or unable to perform ADLs due to age.
Medicare typically does not cover long-term care and, if it does, only for 100 days. Typically, Medicare will only cover skilled nursing care, not coverage to perform activities of daily living.
Medicaid will only cover LTC or nursing care once all other assets have been depleted. This means anyone using Medicare for LTC will have no inheritance to leave their children and no other funds to splurge and enjoy their last days as best they can.
Most medical coverage only pays for acute care. Like Medicare, there are sub-limits or caps to the amount of extended care traditional medical insurance will pay for.
According to LongTermCare.gov, costs in 2016 (the most recent year the government has data available) for nursing home care in a semi-private room were an average of $6,844 per month. A private room would cost an average of $7,698 per month. You could afford a Manhattan apartment for those prices if you didn’t need skilled nursing care.
A one-bedroom unit in an assisted living facility ran an average of $3,628 per month.
If you opt for at-home care, APlaceForMom.com cites the median cost of in-home, full-time care at roughly $4,480 per month for 44 hours per week of care. The rate for in-home care services rose as much as 3.8% per year between 2004 and 2020. That was before inflation, the great resignation, and rising minimum wage pushed rates for hourly workers like Home Health Aides higher.
If your plan is to have children care for you if anything happens and you are unable to care for yourself, ask yourself this:
These are all factors to consider, although you can’t put a price on them. Having LTC insurance can alleviate the financial and emotional burden and give your family options without having to worry as much about costs.
Whether you’re considering LTC for yourself or sharing the details with your clients in order to create an additional revenue stream with LTC commissions, the time to buy is now.