Federal Long Term Care Insurance Program (FLTCIP)

• Eligibility
• Enrollment
• Underwriting
• Benefit Choices

The Federal Long Term Care Insurance Program, authorized by Public Law 106-265, the Long Term Care Security Act of 2000, covers services that individuals may need because they are unable to care for themselves due to a chronic mental or physical condition. Included are services such as nursing home care, home health care, assisted living facilities, adult day care and personal/homemaker care. The coverage is provided by LTC Partners, LLC, a partnership of the John Hancock and Metropolitan Life insurance companies under contract with the Office of Personnel Management.

Coverage is voluntary and enrollees pay the entire cost of the premiums; there is no government contribution. The FLTCIP is “guaranteed renewable”—it cannot be canceled as long as you pay your premiums for reasons of age, change in health or any other reason, including leaving the eligible enrollment group.

Eligibility

Individuals eligible to apply for this insurance coverage are:

• Federal employees and members of the uniformed services. This includes employees of the U.S. Postal Service and Tennessee Valley Authority, but does not include employees of the District of Columbia government. For federal and postal employees in general, if you are in a position eligible for Federal Employees Health Benefits program coverage, you are eligible for FLTCIP (whether enrolled in FEHB or not—the key is eligibility).
• Federal annuitants, surviving spouses of deceased federal or postal employees or annuitants who are receiving a federal survivor annuity, individuals receiving compensation from the Department of Labor who are separated from the federal service, members or former members of the uniformed services entitled to retired or retainer pay, and retired military reservists at the time they qualify for an annuity (also known as gray area reservists). Retired employees of the D.C. government are not included.
• Current spouses of employees and annuitants (including surviving spouses of members and retired members of the uniformed services who are receiving a survivor annuity).
• Adult children (at least 18 years old, including natural children, adopted children and stepchildren) of living employees and annuitants. Foster children are not eligible.
• Parents, parents-in-law, and stepparents of living employees (but those of annuitants are not eligible).

There is no upper age limit for who can apply for this insurance but there is a minimum age; you must be at least 18 years old at the time you submit your application.

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Enrollment

Eligible individuals may enroll at any time; it is not necessary to wait for an open enrollment period. An early enrollment period was offered March 25 - May 15, 2002, with an open season running July 1 - December 31, 2002. Dates of subsequent open seasons are yet to be determined, although they will not be held on an annual basis. During the 2002 early enrollment and open season periods, active employees and their spouses were subject only to abbreviated underwriting.

Newly hired employees and their spouses have 60 days to enroll and use abbreviated underwriting. Afterward, they must use full underwriting.

All other enrollments are subject to full underwriting.

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Underwriting

“Abbreviated” underwriting applies to newly hired employees and their spouses and also applied to all active employees and their spouses during the initial 2002 open season. (Note: It is still to be determined whether abbreviated underwriting would apply to current employees during any future open seasons or whether they will have to undergo full underwriting.)

The abbreviated underwriting application has seven health-related questions designed to determine who may be immediately eligible for benefits, or eligible for benefits within a short period of time. Spouses of active employees eligible for abbreviated underwriting also are subject only to abbreviated underwriting, although they must answer two additional questions regarding their mobility and any need for help with everyday tasks.

All other applicants are subject to “full” underwriting at all times. This means that they must answer numerous health-related and lifestyle-related questions in addition to questions asked of active employees and their spouses qualifying for abbreviated underwriting.

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Benefit Choices

Enrollees can choose a maximum benefit, the length of the policy, the type of inflation protection and the waiting period before benefits begin. They also can choose between comprehensive coverage and coverage for only facility-based care. The program offers four standardized packages known as Facilities 100, Comprehensive 100, Comprehensive 150 and Comprehensive 150+. However, enrollees may tailor their coverage as they see fit. Also, you may change coverage levels after you are first insured.

Benefit Amount—The maximum daily benefit can range from $50 to $300 a day in a multiple of $25; weekly benefit amounts also can be elected.

Length of Policy—The length of policy can be three years, five years or lifetime coverage. If you select a three-year or five-year policy, that length and the maximum weekly benefit you chose determine a “pool of money.” The insurance will pay benefits until your pool of money is exhausted, a process that may take longer than the length of the policy. For example, a $700 weekly benefit and a three-year policy would produce $109,200 ($700 x 52 weeks x 3 years) for covered services. When the pool is gone, your insurance ends.

A lifetime benefit has a limitless pool of money.

Inflation Protection—Two inflation protection features are available. Under Automatic Compound Inflation Protection, your benefit would automatically increase by 5 percent every year, regardless of actual inflation. Your premiums would remain level for life, even as your weekly benefit increases.

Under the Future Purchase Option, every two years you would have the option to increase your benefits based on a medical inflation index. Your premiums would increase as your benefit increases; they further would be based on the age at that election, not the age at which you first took out the policy. If you decline more than two FPO offers, you can still apply for future inflation increases but would have to show satisfactory evidence of insurability.

You can switch from the Future Purchase Option to the Automatic Compound Inflation Protection option without proof of good health at the time of a Future Purchase Option notification if you have not declined more than two notifications in the past and are not eligible for benefits at that time. Premiums for those who make this change will be based on age at that time and premiums already paid in, not on the standard rate tables for new enrollees.

Waiting Period—Enrollees also can choose the waiting period—also called an elimination period or deductible—which is the number of days of covered care that you (or other insurance coverage you may have) must pay for before the insurance begins to pay. The choice is either 90 days or 30 days.

Types of Coverage—Two basic types of coverage are available. A Facilities-only Plan covers care in assisted living facilities, nursing homes and inpatient hospice care. It also provides benefits for respite services in a facility. It does not cover home care.

A Comprehensive Plan covers everything a facilities-only plan covers plus care at home (formal or informal care), in adult day care centers, hospice care at home and respite services at home.

Changing Coverage Levels—You can request a decrease in your coverage at any time. You can decrease to anything that is available under the program, and your premiums (which will be based on your age at time of original enrollment) will also decrease. For example, if you have the five-year benefit period, you can decrease to a three-year benefit period. But you could not decrease to a two-year benefit period, because such a benefit period is not available under the program. You do not have to undergo new underwriting in order to decrease your coverage. However, you don’t get paid-up benefits.

At any time, you also may request an increase in your coverage by contacting LTC Partners. To receive approval of a request for an increase outside of an open season, you must provide, at your expense, evidence of your good health that is satisfactory to LTC Partners. The amount of an increase is subject to what's then available under the program. If you request and LTC Partners approves an increase in your daily benefit amount (not counting an increase due to your inflation protection option), your additional premium will be based on your age and the premium rates in effect at the time the increase takes effect. Other coverage increases you request that LTC Partners approves will cause your entire premium to be based on your age and the premium rates in effect at the time the increase takes effect.

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