Elder Law Newsletter
The Federal Long Term Care Insurance Program
The imminent retirement of the baby-boomer generation, longer life-spans and improved health, have generated concerns regarding long term health care costs and insurance coverage. Often, long term care services, such as nursing home costs, are not covered by health plans or disability insurance. Fortunately for federal employees, the Federal Long Term Care Insurance Program (FLTCIP) was created to ease some uncertainties.
Background of the FLTCIP
In 2000, Congress enacted the Long Term Care Security Act. This Act enables certain individuals to receive long term care under the FLTCIP, which was launched in 2002. Sponsored by the U.S. Office of Personnel Management (OPM) and administered by Long Term Care Partners, (LTC Partners), the FLTCIP provides long term care for eligible federal employees and their families. LTC Partners is a joint venture of John Hancock Life Insurance and MetLife Insurance, which are the insurers of the FLTCIP.
In general, long term care coverage pays for services needed when an individual is unable to care for themselves due to injury, illness or aging. The FLTCIP was designed to provide reimbursement for long term care costs associated with the necessary diagnostic, preventive, therapeutic, curative, rehabilitative, maintenance or personal care services. The federal insurance program reimburses such costs in certain settings including assisted living facilities, nursing homes, adult day care centers or an individual’s home, but not in acute care units of a hospital.
For example, if eligible, the FLTCIP will pay for the nursing home care of an Alzheimer’s patient, which includes room and board, caregiver costs, drugs, incontinence supplies, dietary supplements, personal medical equipment, and laundry services.
Applicants must be at least 18 years old when they apply for coverage and must pass a medical screening. Those eligible to apply for possible FLTCIP coverage include:
- Federal government and agency employees
- Active members of the uniformed services
- Employees of District of Columbia courts
- Annuitants (retired uniformed services members)
- Spouses and adult children of covered employees and annuitants
- Parents, parents-in-law, and step-parents of covered employees
The FLTCIP does not provide long term care coverage in the following circumstances:
- Care or treatment for alcoholism or drug addiction
- Illness, treatment or medical condition resulting from participation in a felony, riot or insurrection or from an attempted suicide
- Care or treatment for intentionally self inflicted injuries
- Care or treatment provided in a government facility
- Care received while in a hospital
- Services or supplies covered by Medicare
- Services or supplies for which the insured is not obligated to pay in the absence of insurance
- Services provided by another person living in the home at time of eligibility
Those eligible for FLTCIP insurance coverage may select one of two coverage options:
- Facilities-Only: services in a nursing home or assisted-living and hospice facility
- Comprehensive: services covered under the Facilities-Only option, plus services at the home of a formal care-giver, an informal caregiver, hospice care and at an adult day care center
Coverage Amounts and Other Considerations
The insured must select a Daily Benefit Amount (DBA), somewhere between $50 and $300 (in $25 increments), which is the maximum amount of care for which the FLTCIP will pay per day. The Maximum Lifetime Benefit is the maximum amount a FLTCIP plan will pay and is determined by multiplying the DBA by the total number of days per year of coverage stated in the policy (either 3 years, 5 years or unlimited). The insured may select whether they wish to be reimbursed by the FLTCIP on a daily or weekly basis but weekly benefits are only available with a “comprehensive package.”
FLTCIP insurance also offers options such as international benefits for long term care abroad, an automatic inflation compound option, and an alternate care plan. There is a 30-day or 90-day waiting period which may be selected at the option of the insured. This period reflects the number of days during which the insured must be eligible for benefits and receiving covered services before benefits are actually paid, with the exception of hospice care. If the care that an individual actually receives costs less than their DBA, the surplus remains in the plan, for later use if necessary.
Effective Dates and Premium Payments
Once an application for FLTCIP coverage is submitted, the long term care plan becomes effective on the first of the month after it has been approved. The cost of FLTCIP premiums is based on the insured’s age when their application was received by LTC Partners. Premiums can be paid in a number of ways including a deduction from the federal employee’s payroll, an automatic debit from a checking account, or through direct billing from LTC Partners.
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