Since 8/14/2001
Q How does long-term care coverage give me financial
protection?
A It pays for your care so you don't have to
drain your own savings to do so. You decide how to use your assets, including
gifts to your children or just to enrich your own life. It protects your spouse
and allows your family to maintain their standard of living if one of you needs
long-term care.
Q Is long-term care really that
expensive?
A Sadly, it's very expensive. Nursing home care
costs between $46,000 and $60,000 per year. At-home care is also expensive and
can cost $20,000 or more per year, depending on the kind of care you need.
Q Won't my medical coverage or Medicare pay for long-term
care?
A Medicare may cover some costs, but that
coverage is limited and approved only for short periods. Neither Medicare nor
the retiree medical plan cover lengthy nursing home stays or home care services
for personal care needs. The retiree medical plan specifically excludes coverage
for custodial care.
Q What about coverage for long-term care under
Medicaid?
A Medicaid covers long-term care expenses, but
only if you meet their financial eligibility criteria, which require you to
spend down your assets. Under Medicaid, your choice of where you receive care
may also be limited.
Q Will inflation protection be automatic or can I elect it
at periodic intervals?
A The existing Bronze Option has no
inflation protection. The three new options include one without and two with
inflation protection. Inflation protection, if selected, will be automatic and
associated benefit amounts, both daily and lifetime, will be adjusted annually.
Q If inflation protection is selected, will benefit
adjustments be simple (a flat dollar amount) or compound (a percentage) each
year?
A The Gold Option features simple inflation protection
at 5% annually. The Platinum Option features compound inflation protection at 5%
annually. The increases apply to both the daily and lifetime benefit amounts.
Q What happens to premiums under the inflation protection
option?
A The premiums are designed to pay for the inflation
protection and will not increase as the value of the benefit increases or as you
age.
Q Are the premiums tax-deductible?
A
Yes, if your total medical expenses exceed 7.5% of your adjusted gross income.
However, there are limits on the amount of long-term care premiums that you can
deduct. Contact your tax advisor for more information.
Q Are the benefits taxable?
A No, as a
tax-qualified plan, any benefits that you receive are not taxable.
Q Can premiums increase?
A Yes, but only
if premiums are increased for the plan as a whole. Premiums do not increase as
you age or as inflation protection increases are made.
Q Does the plan coordinate benefits with another long-term
care plan that I purchase?
A The new options will coordinate
benefits with any group plan, such as one you might purchase from another
employer. The two plans will coordinate to pay up to 100% of your costs or the
daily maximum, whichever is less. However, most regulatory and advisory agencies
recommend that you do not purchase more than one long-term care plan.
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Since 8/14/2001 |