Addressing the Growing Long-Term Care Crisis with LTC and Legal Insurance

By Tim Weber

To me, the caregiving story is a personal one. My parents struggled with a protection problem — not knowing how best to protect their estate and future security should they face a serious illness — issues that carry big financial, health and emotional impact. When my dad died, he only had a will, not a trust — which meant that we spent an immense amount of time finding and reconciling his financial accounts and navigating the probate process. Shortly after, I served as a caregiver for my mom when she faced some serious medical challenges. Circumstances like these underscore the importance of planning ahead and having key healthcare documents in place for peace of mind.

My family’s situation isn’t unique. Sharing stories like this is usually met with nodding heads from those dealing with similar issues.

In my experience, the conversation around the burgeoning care crisis typically follows two paths: the growing need for caregiving and the need to understand long-term care options. These are two sides of the same coin to me. Many times, a caregiving situation for a loved one, like a parent or grandparent, evolves into long-term care — something employees usually aren’t prepared for as they navigate their busy daily lives.

Caregiving in the United States

In the past several years, we’ve seen just how important caregivers are — and the struggles they face. According to a study by AARP and the National Alliance for Caregiving:

• 21% of Americans are caregivers who have provided care to an adult or child with special needs at some point in the last 12 months

• And among this group, 61% of family caregivers are also employed

Research from the Roselyn Carter Institute for Caregivers shows that most employees who are providing caregiving services feel that their work, careers and productivity have been disrupted — and close to one-third of these employees have voluntarily left their jobs because of their caregiving responsibilities.

And these responsibilities disproportionately affect women. Sixty-one percent of caregivers are women and, according to the AARP Caregiving in the U.S. report, women are more often caring for two or more adults.

Jennifer Morris-Pugliese, Care Support team manager at CareScout.com, tells us that there are several factors affecting caregiving in the United States. “The number of older adults who need care is on the rise, but the number of available caregivers, like home care and clinical nurses, is decreasing. This lack of staff has led to a crisis in some places, particularly rural areas.”

As those who are currently serving as caregivers continue to age, there will be a whole new generation of individuals with long-term care needs. As of September 2021, there were around 12 million Americans who required long-term care services, according to the U.S. Department of Health and Human Services. By 2050, it’s estimated that this number could reach an overwhelming 27 to 30 million.

Morris-Pugliese continued, “The sandwich generation is stressed beyond belief. They’re not exercising, sleeping, or eating well because they’re caring for everyone around them and not themselves. That might mean that they’re postponing their own routine medical care, like screenings or follow-up visits. And this lack of focus on their own health, coupled with the long-term effects of the stress they’re under, is worrisome.

“It’s critically important for caregivers to seek out at least one hour a day for themselves, for things like appointments, exercise, sleep, therapy –– any kind of self-care,”she says. “It might seem small, but these tiny actions can really help over time. Burnout is very much a real thing.”

The caregiving crisis for employers

All these forces are combining to create a caregiving crisis for employers. They need to support employees who provide care for a loved one, while also helping employees plan for their own long-term care needs. The reality is, most employees aren’t prepared for their own long-term care needs, which creates a vicious cycle of generations that are ill-prepared for the future.

As employers continuously assess their benefits offering to remain competitive, a major focus is how they can provide a financial hedge to help employees plan for their own long-term care needs. This is all coming at a time where long-term care insurance is being mandated in a growing number of states. In this case, employers who are in non-compliance are facing payroll tax deductions.

In California specifically, lawmakers are spending much of this year discussing and researching the pros and cons of mandating long-term care insurance.

For those who live in a state where long-term care insurance isn’t mandated, finding a policy is often expensive, especially for those who are nearing retirement. And depending on the carrier, those who are 65 or older might not even qualify due to their age.

As an alternative, some employers have started offering benefits that combine life insurance with long-term care riders. In that case, an employee could potentially use an accelerated death benefit rider on a life insurance policy so they can access funds to cover long-term care needs.

In the past, stand-alone long-term care insurance plans that provide good coverage were common. However, in recent years, they have become less accessible due to the high cost of premiums.

Addressing present caregiving issues

Long-term care insurance for employers is often addressing a problem that is looming for the future. But what about employees’ more immediate caregiving issues?

Many employers are working hard to find solutions that enable their employees to care for their loved ones while still working. This would include offerings like flexible working arrangements, including work from home arrangements or flexible hours, access to daycare and back-up care for kids and adults.

Morris-Pugliese adds that employers offering training and services around the importance of financial planning for the future and general education around benefits can also be a huge help. “Offering basic education can help employees save money and stress,” she said. “For example, a lot of people don’t understand the limits of Medicare, when it comes to their future needs. Something like a tutorial on how to plan for long-term care or the potential impact of not having a will or durable power of attorney would be hugely effective in getting employees thinking ahead — before it becomes an issue.”

Complementary offerings — long-term care benefits and legal plans

Morris-Pugliese pointed out the synergies between legal insurance and long-term care, particularly in the planning stages. “Legal insurance can ensure that caregivers have the legal documents and financial structures that that they need so they can make decisions on their loved ones’ behalf, while also helping employees plan for their own future care needs.”

Many legal plans include coverage for wills, trusts and other essential estate planning documents, helping employees think about, and legally record, their wishes for their future. Using these instruments to plan for the future can help employees’ loved ones avoid costly legal processes, like probate or Medicare appeals and inheritance disputes. Certain legal insurance plans also extend coverage to employees’ parents and grandparents.

Morris-Pugliese reminds us that while it’s easy for employers to say that family comes first, it’s another thing to create policies and benefits that really achieve a family-first mindset.

It’s safe to say that the caregiving need is here to stay— and without the proper support, the long-term care crisis will continue to plague employers. But with the addition of benefits, like flexible work arrangements, caregiving assistance and long-term care insurance, combined with legal benefits, employers can feel confident that they’re supporting employees in their current caregiving endeavors and future long-term care planning.

Tim Weber, a long-time voluntary benefit veteran, serves as VP, Group Sales and Client Management at ARAG, overseeing ARAG’s core sales business: group sales, sales operations, client management, product development and client support services.

To learn more: www.araglegal.com

PUBLISHER’S NOTE:

California Broker is pleased to have a collaborative relationship with Buddy Insurance, a leading long-term care insurance education, marketing and technology company. CEO Marc Glickman and his specialists will collaborate with health and life insurance professionals to help design LTCi options. Learn more about LTCi and refer clients — or learn how to write your own LTCi policies using his process.

CONNECT to Buddy Insurance LTCi PORTAL HERE: http://www.buddyins.com/calbroker