The Caesars Palace, Las Vegas November 2 nd 6 th,

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1 The Caesars Palace, Las Vegas November 2 nd 6 th, The use, disclosure, reproduction, modification, transfer, or transmittal of this presentation with out the written permission of the Employer Healthcare & Benefits Congress is strictly prohibited Employer Healthcare & Benefits Congress

2 The Life of Long-Term Care: After the CLASS Act A Real Case Study Ruth Larkin Thomas President LifeCycle Benefits Sheila Director, Employee Benefits Denver Broncos

3 Agenda The Situation: What Are the Risks/Costs/Concerns LTC Market Overview/Update What Options Are Available to Employers at This Time? Should the Employer Get Involved? A Case Study - The Denver Broncos Football Club Summary/Q&A

4 The Situation: What are the Risks/Costs/Concerns 70% of Americans over 65 will need LTC 1 78 million Baby Boomers in the U.S. start turning 65 in Average LTC claim lasts 2.5 years 3 40% of Claimants are <65, average age of all claimants is % of Adult Children provide Personal Care or Financial Support to a Parent that has more than tripled over the past 15 years 5 Average annual cost of care is currently $81,000 and is projected to exceed $300,000 per year in 30 years 6 1 U.S. Department of Health and Human Services 2 U.S. Census Bureau Population Estimates as of 7/1/ Genworth claims department 4 Genworth claims department 5 National Clearinghouse for LTC 6

5 The CLASS Act Community Living Assistance Services Supports Act Was Designed to be a Voluntary, Premium Paid Program Would Have Been Offered on a Guaranteed Acceptance Basis Would Address the Uninsurable Working Disabled Never Intended as a Comprehensive LTC Program Determined to be Financially Unsustainable Raised Awareness, Attention & Debate over LTC Planning

6 The Current LTC Marketplace The Options: Self Insurance Traditional LTC Group & Individual Platforms Linked/Hybrid Products The Carriers: Continual Evolution of Product/Pricing/Administration Movement toward Core Competency Genworth/John Hancock/Mutual of Omaha/United of Omaha/TransAmerica/LifeSecure/MedAmerica/Lincoln National/New York Life/MassMutual/Trustmark

7 The Current LTC Marketplace The Challenges: Prolonged Interest Rate Environment/ROI Impact Unprecedented Low Lapse Rates Claims Experience Inconsistent Participation/Enrollment The Opportunities: Target Market/Demographic Stratification Evolving Delivery Mechanisms for Education/Enrollment Program Offers That Deliver Worksite Benefit Advantages

8 What Options Are Available to Employers at This Time? Voluntary Programs 0% employer paid Available to employees, spouses, parents, grandparents, siblings, and adult children Includes discounts, underwriting concessions, payroll deducted or direct billed Employer-Funded Base with Employee Buy-ups Typically offered when a voluntary plan is not available due to a group s demographics Employer provides some level of coverage to some or all of the employees and employees can buy more Executive Carve-outs Discriminatory benefit (excluded from new PPACA nondiscrimination rules) Tax-deductible premiums to the employer (for employees & dependents) Zero imputed income for W2 employees Long-Term Care Insurance benefits are income-tax free Full portability

9 Should the Employer Get Involved? Estimated Productivity Cost is over $33 Billion per Year 17% of FT workers are Caregivers, 33% are in Professional Positions Working Caregivers miss an average of 6.6 days/year LTC Issues impact Corporate Wellness Initiatives, Health Plan Utilization, Time-Loss Management, and Retirement Planning Many LTC Tax advantages exist for Employer-Paid Plans Premium Deductions, No Imputed Income, Discriminatory, HSA Deductibility LTC Insurance is not for everyone, but LTC Planning is. Most Employees are Self-Insured without a clear understanding of the risks and potential costs Metlife/AARP/National Alliance for Caregiving Study

10 A Case Study - The Denver Broncos Football Club The Denver Broncos: A mid-sized Employer Group with a mixed Demographic Profile The Executive Group is very mature so LTC planning was topical Effort driven by Key Executives personal interest and Advisor awareness and ability to address the subject matter Program objectives were to provide competitive plan options, pricing and uniform employee access to the program Group size challenged the access objective solution was to provide a base plan that differentiated Executives and Staff Enrollment was staged in 2 cycles due to timing issues/employee response was positive/organization response was very positive Voluntary enrollment had 30% participation

11 Summary LTC Issues have a distinct impact in the worksite The need to address LTC Planning is increasing Especially for the Mature Workforce nearing Retirement The LTC messaging is valued by employees Employers are faced with many Voluntary Benefits options what are your Objectives with each offer and which segment of your population benefits most by each program?