Work places are directly involved in elder care!

In the words of a noted Gerontologist, "This next decade is bound to be the elder care decade." Employers already see this and report more and more employees are caring for or assisting in the care of an aging parent or family member. Studies indicate as many as 54% of the workforce will soon be involved in care giving!

What specific impact does care giving have in the workplace?

AARP Public Policy Institute studies confirm being a care giver, while working, is an emotionally charged and complicated time. They also found care givers face major changes in their work situation such as:

• 83% arrive late; leave early; or take time off during the day
• 41% have to take a leave if absence
• 37% change from full to par time
• 35% have to give up working

It is also know that 84% of care givers use work hours coordinating or following up on care. These activities result in "presenteeism," e.g. an employee is at the work site but unable to function to their potential because of distractions related to caring for their family member.

Bottom line - employees who are care givers have a large impact on productivity and because more will be involved the impact is growing. Some describe it as being torn between two jobs!

What can employers do to help employees with elder care?

Some firms have provided care giving information by expanding their EAP. A more effective approach is to offer a Long Term Care insurance benefit so employees and their relatives can have the opportunity to buy. Firms which have implemented this important benefit the Parker Agency calls "key" family protection © report:

• Employees with a LTCi benefit feel more secure about the future knowing they protected their retirement savings. The result - they are more productive.
• Care givers whose loved ones have LTCi are twice as likely to continue working!
• Even when its a voluntary benefit employees are very interested in obtaining LTCi through the workplace. Interest is now higher than for term life.

Extensive education is an important part of implementing this special benefit so employees can better understand the value of not having to be a burden on others. One important part of the education is to encourage the employee and their siblings to work together to help their parents buy.
(Especially so for the many employees who live some distance from their parents.)

What does an employer gain by offering a Long Term Care insurance benefit?

• Employees recognize the firm is concerned about them, realizes they do not want to be a burden on others, and has responded to their interest
• Employees realize the firm recognizes employees want to create a personal safety net to protect their retirement savings.
• Improved recruiting since it is a highly desired benefit
• Workers with valuable skills will appreciated the benefit and stay in the work force. Thus, improving retention.

What are some advantages for employees?

Employees gain a great family focused benefit and know:

• They have a pool of money to pay for this expensive assistance, not covered by medical insurance, and can be in control to hire quality help.
• Any income from a disability plan can be used for the expenses of having a home and not to cover medical assistance expenses.
• Having Long Term Care insurance protects savings and funds planned for retirement from being used up.

Another plus for this great family benefit is lower premiums in the workplace. Why?

• Buying when relatively younger (40's and 50's) means a lower rate.
• Discounts - may gain a preferred health rate; for being married or having a partner; and perhaps 5% by buying through a plan set up by the employer. Employer discounts often also apply to family members!

What is the tax status of Long Term Care insurance for employers?

Business owners operating as a Sole Proprietor, Partners, or in an LLC have more flexibility than individuals. The IRS aged based allowable amount, shown on the Value of LTCi page can be deducted as a business expense. Owners in a C Corp have two additional advantages:

1. The full premium is a business expense.
2. LTCi can be purchased just for select executives.

How can employers use these special tax regulations as an executive reward or benefit?

A firm could divert some dollars planned for a bonus or a deferred compensation program and buy LTCi. There is no additional cost to the firm. Then too, LTCi is of considerable interest to the executive since it is a benefit, which is normally available to their spouse.

Payments could also be connected to performance and/or continued service, which is a great way to retain important employees.

More information can be found on:

Long term care services and their costs - see the What's LTCi page.

The value of Long Term Care insurance - see the Value of LTCi page.

The importance of early planning - see the Value of Early Planning page

Want to talk about all this? Call John C Parker [860.739.0005] Its important to set up a plan so you won't burden family and can protect your nest egg.