Could workplace benefits help solve America’s long-term care gap?

Industry experts believe a new trend of employers offering long-term care solutions could help bridge a coverage gap that’s edging the country towards a crisis.

“I think there’s an increase in long-term care focus. I haven’t yet seen trends of the employers covering that cost. I think, from a voluntary benefit, it’s now an offering… The interest is coming well too; there’s a push from the market for those solutions from the companies that actually offer those solutions,” Brandy Burch-Thompson, CEO, Benefitbay said.

Data from LIMRA indicates that while the average 65-year-old has a 70 percent chance of needing LTC during their lifetime, just around three percent of Americans have any type of long-term care insurance.

However, consumers seem increasingly aware of this — and both employers and carriers are starting to respond.

“Carriers seem to have taken notice of the opportunity for workplace long-term care solutions, and they’ve also seemingly begun to ramp up,” Ronald Neyer, associate research director, Workplace Benefits Research Team, LIMRA, said.

As such, Burch-Thompson expects to see not only employees starting to demand LTC benefits on a greater scale, but also greater competitive advantage for employers who are offering more flexible benefit solutions.

“It’s the evolution of benefits and allowing individuals to choose and plan for their family,” she said. “I think we’re going to continue to see more of a consumer-based approach through employer benefits that allow the employer to define how much they’re going to invest and then a suite of marketplace products that are available only for their employees.”

LTC becoming ‘top of mind’

According to LIMRA’s 2025 Consumer Perspective on Long-Term Care and Insurance Update, two in five employees consider long-term care insurance benefits to be “very important.” More than one in five said they want LTC coverage, but it’s not currently offered through their workplace benefits.

That could soon change, as 11 of 40 companies surveyed by LIMRA are already marketing some form of LTC solution through employers. Another 11 are “sitting on the sidelines” for now, but plan to enter the marketplace in the future.

“More than half, 54 percent, of employers said they expect their employees to be very interested in LTC benefits five years from now. That perception increases at larger businesses, goes up to about 75 percent in the large case market,” Neyer said.

He noted that some employers are now ranking LTC coverage equal to critical illness insurance and above hospital indemnity insurance, indicating how much interest has surged recently.

“I get the sense that the need’s becoming more apparent, not only at the workplace but just with consumers in general, and employers are probably taking note of that,” Neyer said. “There’s the Washington Cares Act, there’s also been a lot of talk about federal activity, a lot of talk in the press about the aging population. So, I think it is more top of mind.”

“I think there’s a push from the market for those solutions from the companies that actually offer those solutions. I think, too, the need is coming from so many of us,” Burch-Thompson added.

She herself is one of the many Americans being “sandwiched from costs at both ends” with children in college and aging parents with long-term care needs.

“An ability to still be raising your children while you’re addressing long-term care needs of your parents is something that’s very difficult for the workforce to do effectively. Long-term care options are something that bridge the gap for the cost,” she said.

Opportunity to close gaps

The strong, sustained interest in LTC could be an ideal opportunity for carriers and employers to provide awareness, education and innovative solutions like hybrid products with bundled coverage.

“Long-term care is a problem that you don’t understand when you’re in your teens, 20s and even 30s sometimes. But, eventually, everybody deals with this problem — either for themselves, for their family, or through their friends. It’s just unfortunate what happens, and the workplace is the best place for people to learn about it,” Brian Gordon, president, Gordon Associates Long Term Care Insurance, said.

“If you’re 26 and your parents aren’t aging yet, you may not be thinking about it, but it’s something that you need to plan. If an employer has flexibility in where the employee can decide which benefit offerings they’re able to participate in or how they can prepare for those future financial risk categories, then I think we should be doing a better job in the long-term care gap as an employer,” Burch-Thompson said.

“In order for the industry to make a true dent in the need for coverage, I think employers need to play a key role because agents and advisors selling individual policies in the retail channel typically focus on more affluent prospects. The workplace has become a very well-established channel for carriers to reach middle and lower-income consumers with their products,” Neyer added.

Benefitbay is a virtual platform that enables employers and brokers to find and compare personal healthcare benefit solutions. It was founded in 2013 and is based in Kansas City, MI.

Gordon Associates Long Term Care Planning is an Illinois-based, family-owned specialist agency established in 1975.

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