Transition begins to new long-term care contract

Some participants in the Federal Long-Term Care Insurance Program could experience substantial premium increases due to changes that took effect on Thursday unless they change their coverage during the next several months.

On Oct. 1 the program began a transition to a new contract with John Hancock Life and Health Insurance Co. as the sole insurance provider for all participants. Enrollees in the automatic compound inflation option who were 69 or younger when they purchased the plan will see premium hikes ranging from 5 percent to 25 percent under the new setup unless they decide to modify their coverage. The increases will take effect January 2010 and will be greater the younger employees were when they bought the plan.

Current long-term care enrollees will receive a letter in mid- to late-October notifying them of their options, and will have until Dec. 14 to change their benefits. Those who don't make an election will remain at their current coverage level and will be charged any accompanying premium increases.

More information about the options is available here.

The menu of choices will look different under the new contract. For example, the Facilities Only Plan -- which covers nursing homes and assisted living but not other types of long-term care -- has been eliminated, and participants will not be able to choose the Weekly Benefit Amount Option.

But the new contract offers increased coverage for home care and for informal care provided by family members. These differences are outlined in detail on the long-term care program's Web site.

The period for changing benefits elections applies only to employees enrolled in the program before Oct. 1. There will be a separate open season in late 2010 for employees and annuitants who want to enroll, though employees are free to apply at any time.

In a Sept. 25 letter outlining the transition to the new contract, OPM apologized for the higher premiums.

"We regret that premium increases are necessary," the administrative letter stated. "The premium increase is needed so that sufficient funds will be available to pay benefits to enrollees in the future. OPM and John Hancock believe it would be irresponsible not to increase premiums at this time."

The long-term care program would benefit from "greater overall transparency and improved marketing practices" to make sure employees are aware of premium increases and are getting the best deal possible, the National Treasury Employees Union said in a statement.

The union supports a bill (S. 1177) that would push for greater consumer protections and transparency in such programs. The legislation is before the Senate Finance Committee.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.