Guide Long-term care insurance for federal employees

— Last Updated May 27, 2022

Long-term care insurance for federal employees

In this article

— Last Updated May 27, 2022

Read Time
5 mins
Reviewed by
Eric Berkman

Long-term care insurance for federal employees

Stephanie Wilson

Director of Operations

Read Time

5 mins

Reviewed by

Eric Berkman

In this article

With the Federal Government announcing the suspension of FLTCIP applications, federal workers have time to apply for long-term care insurance by the 18th of December, 2022. 

Depending on your age, gender, and pre-existing conditions, federal employees that missed the deadline will find a broad range of options for long-term care insurance.

This article will help federal workers understand the basics of long-term care insurance, the proposed changes you can expect, and why you would need to look at private long-term care insurance.

What are long-term care services?

You or a loved one may require long-term care if you or they cannot consistently do any of the listed Activities of Daily Living (ADLs). The need for long-term care arises when a person has a chronic medical condition or disability requiring ongoing medical attention and help with basic self-care tasks.

You will need long-term care when you cannot do even the most tasks, including eating and bathing. To prepare for the potentially high costs of care, you must invest in long-term care insurance.

The suspension of applications

The Federal government has suspended long-term care applications for two years.

The Federal Long Term Care Insurance Program (FLTCIP) has been suspended after John Hancock Life & Health Insurance Company notified the federal Office of Personnel Management (OPM) that existing premiums are not sustainable and the company would have to increase rates significantly.

As of December 19th, the program will no longer accept applications; however, you still have time to apply.

Proposed changes to FLTCIP

The proposed changes outline the proposed changes to the underwriting process, the premium rates, and more. The suspension of the FLTCIP coverage applications would not impact existing FLTCIP participants. Individuals registered in FLTCIP who continue to pay premiums will keep their coverage.

Since FLTCIP is an enrollee-pays program and the government does not contribute to enrollee premiums, it is anticipated that the proposed adjustments would involve minimal administrative expenses for Federal agencies.

These are the three most important proposed changes noted in the Federal Register. 

Premium rates under review

Increases in premiums for the Federal Long-Term Care Insurance Program will likely result from the proposed changes. The lack of knowledge and understanding regarding long-term care expenses and the methods of financing these expenditures is cited as the grounds for the review. When the suspension is removed, premium rates are expected to increase for both existing and eligible employees. 

Proposed changes to the underwriting application

Changes suggested for streamlined underwriting that would standardize underwriting guidelines outside of limited-time application windows. Therefore, OPM recommends that a member of the active workforce be required to notify the Carrier about a change in eligible status after applying for coverage. 

If the application was initially filed with full underwriting, there is no need to reapply.

All future applications are no longer subject to abbreviated underwriting but rather to full underwriting. For the Carrier to decide whether or not to accept your application for coverage under the FLTCIP, applicants must answer numerous health-related questions about their health status and provide their medical records for review.

Reapplying when your eligibility status changes

Another proposed change will be if an applicant’s status changes from “active workforce member” to “annuitant,” “retired member of the uniformed services (e.g., U.S. Department of Defense),” or “qualified relative,” as defined in 5 CFR 875.211. The individual must reapply according to the full underwriting requirements when it comes into effect at the time of the change.

What if I miss the suspension deadline?

All eligible federal employees can join the Federal Long-Term Care Insurance Program before the suspension deadline. If you miss the deadline and under the proposed rule changes, OPM suggests that federal workers consider alternative health care plans. Plan ahead and apply for long-term care insurance.

If you or a loved one are 65 or older or have a chronic or debilitating illness or cognitive impairment requiring round-the-clock care, you may benefit from long-term care (LTC) insurance. 

Long-term care insurance aims to provide funding for the high costs of care and dependent care expenses for nursing home care, home health care, hospice care, assisted living facilities, and adult day care facilities. Long-term care insurance provides more customization possibilities than Medicaid and other government assistance programs.

If you’re a federal employee, Policy Solver can help you plan for the cost of long-term care in a manner that doesn’t drain your savings. You will be given options regarding how to pay for long-term care, whether you plan to use a retirement savings plan or a government program.

Policy Solver’s experts will also provide advice and guidance on long-term care insurance options to guarantee those federal employees can secure their financial future.

2022 Eligibility and qualifying criteria (current)

Before the 18th of December, 2022, eligible employees can apply for and get long-term care insurance coverage. Insurance premiums are calculated individually for each person, considering their age, household income, and other characteristics. Qualifying relatives would also be eligible for long-term care insurance if they are financially reliant on the employee.

If an employee is qualified for the Federal Employees Health Benefits Program (FEHBP), they may ask their employer to help them pay for a health insurance policy. Unless your company provides it, Medicare Part B might be a good option for you (Supplemental Medical Insurance).

If you fall into the category of “qualified relative,” you can shop for and acquire a long-term care insurance policy from any insurer authorized to do business in all 50 states. It’s important to remember that your rates and the coverage given by each insurance company will both increase as you become older.

Who is eligible?

  • Current employees, and eligible family members, including their wives (and domestic partners), parents, and adult children (aged 18 or older), can apply for FLTCIP.
  • U.S. Postal Service (USPS) employees and members of the Uniformed services (including members of the National Guard who are summoned to active duty).
  • Former federal civilian employees and reservists entitled to retire or retainer pay, parents, parents-in-law, and stepparents of live workers and their parents (but not domestic partners or annuitants).
  • New employees and their spouses (if applicable) have 60 days to apply from the hire date. Your new spouse will have 60 days to apply for benefits if you are already employed and have just been married, and a brief underwriting application is required in both cases.

FAQs

What insurance do most federal employees have?

Federal employees’ insurance includes retirement plans, basic life insurance coverage, medical, dental, and vision insurance, a Thrift saving plan, and up until the 18th of December, Long term life insurance.

Are spouses eligible for FLTCIP?

A spouse is eligible for FLTCIP benefits. The proposed changes by OPM include the possibility of spouses remaining eligible for the FLTCIP federal benefit if the deferred annuitants are dismissed with a dishonorable discharge.

Does USPS offer long-term care insurance?

Annuitants and employees of the Federal and U.S. Postal Service are eligible for FLTCIP insurance and comprehensive benefits.

Final Thoughts

Despite the proposed changes, existing FLTCIP members and their eligible family members will remain covered under FLTCIP. New applicants will be subject to the full underwriting process, however. New applicants must purchase long-term insurance for the next two years to ensure they can afford the high costs of nursing home care and everyday tasks their future needs.

November 23, 2022

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