Work places are directly involved in elder care!

How?

First - We know 28.5% of Americans are care givers and studies indicate as many as 54% of the workforce will soon be involved in care giving.

Second - looking ahead we know from a noted Gerontologist, "This next decade is bound to be the elder care decade"!

What kind of impact is care giving having?

Employers see that employees, involved in caring for or assisting in the care of an aging parent or family member are frequently distracted. This is known as "presenteeism" and has a large impact on productivity. What employers are reporting is backed up in the findings of a study on care giving while working by the AARP Public Policy Institute. An important finding is that for care givers who are workig - it's a complicated and emotionally charged time and results in major changes in a persons work situation. For example:

• 83% of employee care givers arrive late; leave early; or take time off during the day
• 41% have to take a leave of absence
• 37% having to change from full to part time
• 35% have to give up working

It is also known that 84% of employed care givers use work hours coordinating or following up on care. Some describe it as being torn between two jobs!

What can employers do to lessen the impact of employees dealing with elder care?

Some firms have expanded their EAP with information on types of care giving help and where employees can go for assistance. A more effective approach is to implement a Long Term Care insurance (LTCi) benefit. Even when set up as a voluntary benefit firms report:

• Employees feel more secure about the future knowing they have protected their retirement savings. The result - they are more productive.
• The benefit is usually made available to family members and perhaps with a discount.
• Employees are very interested in obtaining LTCi through the workplace. Interest is now higher than for term life.

A significant part of implementing a LTCi benefit is an extensive education effort since its important for employees to understand the value to them and family of not becoming a burden on others. One important focus is to encourage employees, if they have siblings to work together, to help their parents buy. Why? Employees whose loved ones have LTCi are twice as likely to continue working!
   (Especially so for the many employees who live some distance from their parents.)

What does an employer gain by offering workplace Long Term Care insurance coverage?

• Employees recognize the firm is really concerned about them and realizes they are very interested in not becoming a burden on others. 
• Employees are very interested, especially during these uncertain economic times, in a way to create a personal safety net to protect their retirement savings. Many have had personal experience with family members.
• 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.
• The EEOC now has guidelines to prevent discrimination against care givers. Having a LTCi benefit shows the firm is committed to elder care issues.

How does this family focused benefit help employees?

• Knowing they have a guaranteed pool of money available to pay for needed help means they can be in control of any on going long term services or support.
• Any income from a disability plan or funds in savings can be used for living expenses and not diverted to cover medical assistance expenses.
• Their income, savings, and funds planned for retirement are protected.

Another plus is lower premiums in the workplace. Why?

• Buying when relatively younger (40's and 50's) means a person will have a much lower premium and it will normally remain level.
• Discounts such as - being married - having a partner - perhaps 5% for buying through a plan set up by the employer.
• Employees appreciate the employer discount often applies to family members!

This special benefit can be a big help to people during their working years:

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

An individual, with a tax qualified Long Term Care insurance plan, can take a medical expense deduction on their annual 1040, for amounts above 7.5% of AGI. This deduction is limited to the amount in an IRS established age based schedule. During 2010 the schedule is: - age 40 and under = $330 - 41 through 50 = $620 - 51 through 60 = $1,230 - 61 through 70 = $3,290 - 71 and older = $4,110.

When this special family protection is purchased through a business IRS guidelines provide more flexibility.

1. A Sole Proprietor can deduct up to the age based schedule amount. It is not subject to the AGI limitation.

1. Businesses operating as a Partnership, or in an LLC can take the full premium as a business expense. The owner(s) then take the age based amount as a person medical expense deduction and it's not subject to the AGI limitation. Premium amounts, above the schedule, can be taken as a business deduction. This amount would generally become taxable income to the owner.
2. Incorporated businesses: The entire premium is a  business expense and there is no taxable income to the employee when the premium is paid or when benefits are received. IRS regulations allow a plan to be purchased just for the owner and spouse or select executives such as Vice Presidents and their spouses.

Bottom line - the tax advantages of Long Term Care insurance make it a more flexible benefit than health insurance.

One suggested addition to the firms executive bonus or deferred compensation, which has numerous advantages, is to divert some of these dollars and buy LTCi. In what way?

• LTCi is of considerable interest to executives since it is a benefit, which is normally also available to their spouse.
• Looking forward from the middle of 2010 executives face increasing income taxes both at the Federal and State level plus higher payroll taxes. Thus, the tax advantages of a LTCi benefit plan are now and will be of much more value than ever to key executives.
• Including a LTCi benefit in an executive compensation program results in a better benefit with no additional cost to the firm. 
• Payments for this benefit could also be connected to performance and/or continued service, which is a great way to retain important employees.

Want to talk about a Long Term Care insurance benefit program for your firm? Call John C Parker [860.739.0005].