TOPICS
TOPICS
OPM extends window for long-term insurance changes
In response to a premium hike, the Office of Personnel Management is giving federal employees enrolled in the Long-Term Care Insurance Program two extra months to make changes to their coverage.
Employees now will be able to modify their plans until Feb. 15, 2010.
In May, OPM announced that it had signed a new contract with John Hancock Life and Health Insurance. The contract included premium hikes ranging from 5 percent to 25 percent for federal employees who opted to pay higher premiums upfront to avoid future increases driven by inflation. The amount of inflation depends on the enrollee's age and length of enrollment.
Some employee groups expressed dismay at the premium increases, and both Democrats and Republicans in Congress criticized the hikes during an October hearing of the Senate Special Committee on Aging and a Senate Homeland Security and Governmental Affairs subcommittee on the federal workforce. They argued that enrollees had assumed they were purchasing a guaranteed insurance rate when they chose protection from inflation. The rate increase, however, was not based on inflation, but on the amount John Hancock would have to pay out in benefits, a calculation that the company and OPM reassessed during negotiations over the new contract.
Daniel Green, OPM's deputy associate director for employee and family support policy, apologized at the October hearing for confusion caused by promotional materials distributed to federal employees enrolled in the program, and said the agency was considering extending the period to enable enrollees to make changes.
Margaret Baptiste, president of the National Active and Retired Federal Employees Association, said OPM's decision was an important first step, but the agency should consider how to keep the long-term care insurance program strong in the future.
"The downturn in the long-term care insurance industry and further consolidation could make matters worse in 2016 when the contract is rebid," she said, "Consolidation means there is less competitive pressure on carriers to offer the best possible product.
National Treasury Employees Union President Colleen Kelley said her union would continue to work to support the 2009 Confidence in Long-Term Care Insurance Act (S. 1177), which would provide more information to consumers about what their insurance programs cover, and how their premiums can change.
COMMENTS
- I've also got this as soon as it was offerred and I was 41 at the time. I pay 78/month and think that is too much but unfortunately I was passed 40 when this thing came out. I didn't realize they would change Ins. companies. That's most likely why there is an increase. I/We had MetLife if I'm not mistaken and now it's going to be with John Hancock. Guess I was thinking that it was like Life Ins and you keep the same company as long as you pay your premiums. Since they changed insurance companies we should be able to opt out. I'd also like my $$ back but I know it won't happen. But I too will keep it since 78/month for 7 1/2 years is alot of $$ to through away. I'd like to at least get some nursing assitance at home and stay out of nursing home if possible. If they start taxing this benefit however, that's it I'm done. I think you can get this insurance (if they accept you) at any age but the older you are the more it cost and at some point it may not be economical to have it. Ann Posted November 20, 2009 12:16 PM
- I lost my LTC due to my own mistake Paid 2 months @ once the first month being late & they cut me off . Even though they had cashed my checks. Told me I was canceled & then refunded those two months of premiums 2-3 months later.All that build up for coverage in the future. Sounds like Gov as usal. Tell you one thing & keep raising the costs & changing rules midstream I no longer have any LTC. A bit scary but I don't have money like that now that I am older & I am still working. mjd Posted November 2, 2009 2:13 PM
- You could also take the reduction in ACIO and keep your rate, but I'm thinking it might be better to get out of this given my age. I won't use this insurance, theoretically, for 24 years, so I'm thinking about bailing out of it now. It IS a breach--I too was confident that there would be no premium increase. Susan Posted October 31, 2009 8:39 AM
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