The Federal Long Term Care Insurance Program (FLTCIP) is a government-run long-term care insurance program established in 2002. It is regulated by the U.S. Office of Personnel Management (OPM) and supported by the John Hancock Life and Health Insurance Company.
The program provides financial assistance to federal government employees for long-term care services, like assistance with Activities of Daily Living (ADLs) due to chronic illness, injury, disability, or senior age. The Federal Long-Term Care Insurance Program also provides financial assistance for severe cognitive impairment, like dementia or Alzheimer’s disease.
To qualify for the Federal Long Term Care Insurance Program, you must be employed by a federal government office and enrolled in the Federal Employee Health Benefits (FEHB) program. Additionally, federal employees can enroll their spouses, parents, and adult children (aged 18 years or older) in the Federal Long Term Care Insurance program.
It should be noted that there is a 60-day window for new employees to enroll or add their relatives to the program. If federal employees or their families miss the 60-day deadline, they must submit a valid reason why they could not make the application within the required time frame. Examples of valid reasons are:
- The employee was in service elsewhere.
- The employee did not receive the relevant information about the program from a new employer.
- The employee was misinformed by the employing office regarding eligibility.
- The employee was formerly covered as part of another person’s enrollment and then not informed about that coverage being terminated.
Most federal employees are enrolled in the Federal Long Term Care Insurance 3.0 program, which gives them comprehensive long-term care coverage for the following:
- International benefits: This includes any care received outside of the United States with insurees being covered for 100% of their daily benefit amount.
- Stay-at-home benefits: This includes several options for home care support:
- Home modifications (installing wheelchair ramps and stair lift chairs)
- Emergency medical response systems (fitting fall alarms)
- Durable medical equipment (purchasing walkers, wheelchairs, adjustable hospital-style beds, and other medical equipment)
- Home safety checks (covering up to 30 times the daily benefit amount)
- Caregiver training (covering training expenses for up to seven times of the daily benefit amount)
- Friends and family caregiver expenses: The majority of home care is provided informally by family and friends rather than licensed caregivers. The Federal Long Term Care Insurance Program provides financial assistance for 100% of the insurees’ daily benefit amount. However, to qualify for this payment, the primary caregiver must not be a spouse nor have lived with the federal employee when they became eligible for these benefits. Additionally, informal care by family members is covered up to 500 days of care.
- Choice of care: This includes 100% of the federal employee’s daily benefit amount, which can be used to cover care in assisted living facilities, nursing homes, adult day care centers, and hospice facilities.
- Alternate plan of care: At times, insurees may need more customized services not typically included in the Federal Long Term Care Insurance Program. However, if these services are cost-effective, then they may be considered for coverage.
When it comes to long-term care insurance, there is no one-size fits all plan. Each Federal Long Term Care Insurance plan is designed to meet the needs of the federal employee, which means there are varying Daily Benefit Amounts (DBA) and benefit periods. The DBA for federal employees can vary between $100 and $450, while the benefit period can span two to five years.
The Pros and Cons of Federal Long Term Care Insurance vs. Private Insurance
While federal employees gain various benefits from enrolling in the Federal Long Term Care Insurance Program, it is not their only long-term care insurance option. In this section, we will discuss the pros and cons of federal long term care insurance vs. private insurance, starting with federal long term care insurance.
Pros and cons of federal long term care insurance
One of the biggest advantages of federal long term care insurance is that federal employees can start their insurance whenever they want (of course, within the 60-day time frame of being employed.) Additionally, the FLTCIP provides the added comfort of covering family members, which is why it is the most popular choice among federal employees.
Another advantage is that as long as federal employees pay their monthly premium fees on time, the federal long term care insurance program coverage will automatically be renewed. Lastly, federal long term care insurance coverage is still valid even after retirement.
As for the cons, if a federal employee does not need to use any long-term care services, the federal long term care insurance does not offer refunds or discounts, whereas private insurance companies do. Therefore, it is worthwhile for federal employees to shop around to see if an alternative private insurance policy might better meet their long-term care coverage needs.
Additionally, it can be difficult to calculate federal long term care insurance costs because premium payments and annual fees are often added to the overall cost. To help with this, the Federal Long Term Care Insurance Program offers a helpful online premium calculator tool, allowing federal employees to estimate their premium costs.
Pros and cons of private long-term care insurance
Private insurance offers added flexibility and coverage. Private insurance programs typically cover ADLs and Instrumental Activities of Daily Living (iADLs.) Therefore, as a claimant’s situation changes, the long-term care insurance company can reassess its benefits to incorporate more long-term care services. Of course, doing so can also increase the benefits payments. That is why claimants should speak with an insurance advisor to determine whether this is a viable option.
Furthermore, many private insurance programs allow for customizing coverage plans, giving individuals more flexibility and freedom to find an appropriate insurance policy. In some instances, it is possible to opt for a hybrid plan, combining long-term care and life insurance policies, which allows even more options in selecting benefits and coverage.
As for the con of private insurance, there is only one main one: the price can be too high. People generally purchase long-term care insurance policies to avoid depleting their life savings in anticipation of higher medical expenses. But paying long-term care premiums is not cheap, especially if one is on a low-income salary.
According to the American Association for Long-Term Care Insurance, the average premium for a fifty-five-year-old male is $875 per year, with a pool of benefits equalling $180,000. The rates for the pool of benefits are based on an initial benefit of $5,000 per month with a 3-year benefit period. However, long-term care costs can be very expensive. Therefore, the benefits of a private insurance policy can only take one so far.
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Which of the Following Types of LTC Is Not Provided in an Institutional Setting?
Here, an institutional setting generally refers to healthcare providers, like residential or long-term care facilities where patients reside and receive healthcare services. When patients are admitted into such an institutional setting, the admissions team will conduct a series of evaluations to determine what level of care they need and document the results in the facility’s long-term care software. After this, the healthcare provider will assume total care for the admitted residents until they are discharged.
However, a resident’s insurance policy, private or federal, will help determine the long-term care services covered. Therefore, before people take out a long-term care insurance policy, it is worth asking which of the following types of LTC is not provided in an institutional setting.
As mentioned earlier, the Federal Long-Term Care Insurance Program is the most popular long-term care insurance (LTC) policy among federal employees because of its extensive coverage. However, one of the downsides to the Federal Long-Term Care Insurance Program is the inflexibility of its policy plans.
Unlike private insurance programs, federal insurance uses a “prepackaged” or standard plan for basic coverage, which covers ADLs only. However, iADLs are not covered in the Federal Long Term Care Insurance Program, therefore, if federal employees need assistance with iADLs, they will need to cover the expenses out of their own pocket.
In comparison, if you compare federal long term care insurance vs. private insurance, private insurance offers much more flexibility because the plans can be tweaked to fit the individual’s specific situation, such as covering both ADL and iADL coverage.
If people are unsure about which insurance policy to purchase, it is worth speaking with an insurance agent to discuss their unique needs so that they can find the most appropriate long-term care coverage. Additionally, one can look online to see which long-term care insurance policies have good reviews and which policies are less likely to increase their premium costs.
How To Find Appropriate Private or Federal Long-Term Care Insurance Policies
For those eligible for the Federal Long-Term Care Insurance Program, it may seem like a simple decision to enroll in the program and know that their long-term care needs are covered. But making a decision about insurance should also include family members, as adult children will likely be involved in providing care and assistance. In addition, one should utilize free resources and speak with local community legal service programs, elder law attorneys, and certified financial planners who can help to provide valuable information.
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