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Enrollees to See Massive Increase in Federal Long Term Care Premiums

Most Federal Long Term Care Insurance Program (FLTCIP) members can expect to see a change in premium rates, says the Office of Personnel Management (OPM), ranging from zero up to 126%, with the average rate increase at 83%, or $111 more per month.

Every seven years, OPM is mandated to issue a new contract for the program, and this year John Hancock Life and Health Insurance Company was the only bidder to provide long-term care insurance services.

“As is occurring across the industry, rates are increasing,” said Sam Schumach, Spokesperson for OPM. “To address the financial impact of the increases on affected enrollees, OPM has worked with John Hancock to provide them with different policy options to help mitigate or offset the effects of any increase in their premiums.”

“We understand that a premium increase may not be affordable for some. This is why we are offering enrollees personalized options to help reduce the impact of the premium increase,” said Joan Melanson, director of promotion for FLTCIP. “John Hancock [Life & Health Insurance company] proposed significantly higher premiums because recent analysis of the program, using updated assumptions based on identified trends and actual claims experience, indicated that the current FLTCIP premiums would not be sufficient to meet the future, projected costs of the benefits.”

Additionally, Schumach said an individual’s premium increase will be based in part on an enrollee’s age, the plan they originally purchased (FLTCIP 1.0 or 2.0), the plan design and whether an enrollee makes changes to their current policy.

Though many will see an increase in premiums, there are several groups who will not. For those who applied for coverage on or after new application rates were raised on Aug. 1, 2015; those who purchased a plan at the age of 80 years or older; those enrolled in the FLTCIP’s Alternative Insurance Plan; and those currently eligible for benefits or awaiting a decision on a pending claim – these individuals will not see an increase in their premiums.

The new premiums will go into effect on Nov. 1st, but members can make changes to their plan during the decision period, which runs from July 18th through Sept. 30th.

For more information, please see the fact sheet issued by the FLTCIP.

Posted in General News



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