Vol. 48, No. 9
Elder care benefits range from basic to comprehensive as employers help employees cope with this growing need.
Child care used to be the topic of discussion at parties, says Dr. Sandra Timmermann. “Now it’s aging parents.”
Timmermann, a gerontologist, tracks the demographic trends of an aging society as well as employers’ responses to their workers’ growing elder care responsibilities as director of the Mature Market Institute, a policy resource center in Westport, Conn., for the New York-based MetLife insurance company (which markets a long-term care insurance product).
“The workforce is maturing,” and thus more employees will become caregivers for their aging relatives, says Timmermann.
As employees’ elder care obligations increase, many experts say, so will employers’ costs. Currently, according to MetLife, these costs come to at least $11 billion a year in lost productivity—absenteeism, workday interruptions—as well as turnover when employees leave the workforce because they feel overwhelmed by their elder care responsibilities.
Reining in such costs, according to some experts, may hinge on the availability of elder care programs designed to curtail productivity losses and reduce employee stress.
“The reality is that people who are having elder care problems” are in their mid-50s and have parents in their 80s who need help, but can’t scale back on their jobs because their 401(k)s have shriveled, says Richard Federico, vice president of work/life and communications at the Segal Co., a New York-based HR consulting firm.
Helping those workers is an increasing “challenge that employers are going to face,” he says.
Indeed, a 2002 report by the federal Office of Personnel Management (OPM) states: “Elder care is clearly a rapidly growing phenomenon,” especially for baby boomers—those now 39 to 57. Many employees “are adding elder care responsibilities at the same time they are raising children,” thus becoming members of the so-called sandwich generation—“facing both elder care and child care demands that sap their energy and require their time and resources.”
Caring for an elder used to mean placing a relative in a nursing home, the OPM report continues, but now it “can mean anything from daily check-ins with an elder to comprehensive residential services that include around-the-clock medical care. It includes assistance with transportation, shopping, medical appointments, medicine administration, medical procedures, assisted living and geriatric care management.”
The OPM study notes that caregiving employees can be affected by “feelings of overwhelming responsibility, frustration and distraction at work.” As a result, they may use up their leave, drop back to part-time status or quit the workforce. That in turn spells trouble for employers, who already are facing the first waves of retirements by baby boomers and looking at a smaller pool of workers to replace them.
The Employer’s Part
To help stem the loss of productivity and employee attrition, the OPM suggests workplace solutions that are familiar to HR professionals: flextime, telecommuting, job-sharing, extended family leave, part-time employment and information on a wide range of topics—from health care to homemaker services to finances.
About 20 percent of companies offer elder care referral services, according to the 2003 Benefits Survey by the Society for Human Resource Management in Alexandria, Va. This year’s figure is down a percentage point from last year’s but up a point since 2001. About 15 percent of companies said they offer elder care leave above what is required under the federal Family and Medical Leave Act, up from 12 percent last year.
Retention and enhanced productivity were important considerations for going above and beyond basic elder care benefits at the Bon Secours Richmond Health System, a Virginia-based segment of the nine-state, 24-hospital Bon Secours Health System. The Richmond division, with three hospitals and several other health facilities, has more than 5,000 employees—26 percent of them over 50, says Dawn Malone, administrative director for work and family services.
Aware that many of its experienced nurses and other health professionals are older and are caring for aged relatives, Bon Secours Richmond decided to pay half of the cost of in-home care up to 10 days a year for an employee’s elder relative.
And if an employee caring for an elderly relative needs time away and has no back-up caregivers, Malone says, Bon Secours Richmond will place the relative in one of its assisted living facilities for a short time. “We provide many services to the elder community we serve, and we simply tweak things to make them benefit our staff when possible,” she says. It’s done, she explains, “to help employees who might be in a bind.”
Moving to the Next Level
Setting up elder care benefits can be as basic as connecting employees with local care agencies, or as advanced as contracting with a nationwide consulting firm to take care of employees’ parents across the country. Communicating such benefits to employees can be as straightforward as putting articles and resources on a company intranet. Measuring the results can be as simple as a follow-up survey.
On the basic level—the first tier of elder care benefits—according to experts such as Timmermann and Federico, are company-provided information sources and referral services, flexible work scheduling and, in some instances, the availability of counseling through an employee assistance program (EAP).
Elder care benefits in the second tier include company-paid onsite geriatric counseling, long-distance elder care and in-home health assessments.
As parents and their adult children increasingly find themselves separated by retirement relocation and job demands, long-distance care is becoming more common, says Federico. Long-distance care would involve contracting with geriatric counselors who can put an employee in touch with health care experts locally or in other parts of the country, establishing contact with the employee even before he is faced with a relative’s sudden medical emergency.
An even more sophisticated approach, Federico says, is to sponsor geriatric case management in which a counselor makes a home visit to evaluate the elder person’s care needs and “creates the dialog between the caregiver and the patient.”
Federico explains that “the role of the company is to work with the proper vendor.” EAPs with national scope, for example, have databases of such experts, he says. San Francisco-based United Behavioral Health and Ceridian, headquartered in Minneapolis, are just two of several major consulting firms offering such expertise.
A more comprehensive elder care program is one that offers these benefits and much more, such as an onsite elder care consultant or group discounts on long-term care (LTC) insurance.
For instance, Fannie Mae, a congressionally chartered mortgage financing company, offers a breadth of elder care benefits, including flexible work options, EAP consultations and reimbursement for a portion of backup dependent care costs—such as for substitute caregivers when a scheduled caregiver cannot show up.
Beyond that, at Fannie Mae, where the average age of its 4,700 employees is 40, an elder care counselor is available daily at the corporation’s Washington, D.C., headquarters to help employees “make calls, find resources,” arrange consultations and help with other caregiving needs, says Michelle Stone, the company’s manager of dependent care programs.
Fannie Mae’s elder care consultant, Gracie Ortez, helps about 45 people a month. She is on the payroll of Iona Senior Services, a Washington, D.C., community organization, and works exclusively at Fannie Mae under a contract arrangement that’s “easily replicable” at other companies, she says. Most communities have organizations that, like hers, focus on helping elderly residents maintain independence, and such organizations—found through local government agencies—can be drawn on by employers, much as Iona is being tapped by Fannie Mae.
Fannie Mae also offers employees a group discount on LTC insurance—a type of coverage that employees can buy not only for themselves but also for other family members.
“One of the goals” of Fannie Mae’s wide-ranging elder care benefits program, Stone says, “is to help employees realize they need to plan ahead.”
Preparedness is the underlying notion of LTC insurance. It generally covers much if not all the costs of care if the beneficiary becomes chronically ill or has Alzheimer’s disease. Its appeal rests partly on it being a safety net when special care is suddenly needed, whether for the employee or for a relative.
LTC insurance typically requires a medical screening, its age-based premiums can be substantial, and companies rarely pick up any portion of the cost, although many offer it at group-discount rates. The criteria for group discounts on premiums vary from carrier to carrier, says a spokeswoman for LIMRA International, a financial-services research organization in Windsor, Conn. One carrier might give a discount only if the number of policies sold exceeds a certain minimum—10, perhaps, or 100 or more, depending on the carrier—while another might set a minimum percentage of employees signing up. Last year, according to a LIMRA report on the LTC industry, “employer-sponsored group sales ... more than tripled.”
A major boost for LTC coverage has come from the federal government, which now offers it to all qualified federal employees and certain relatives—a pool of about 20 million people. Coverage is available through MetLife and John Hancock.
MetLife’s Timmermann says LTC sales will continue to grow partly because employees with elder care responsibilities of their own are saying, in her words, “I don’t want this to happen to my children.” In that respect, she adds, LTC coverage is becoming “part of the package” of personal financial planning—a hedge against the derailment of retirement plans by a long-term illness.
Building an elder care benefits package isn’t the end of HR’s role. It’s also necessary to determine if the benefits prove worthwhile.
Bon Secours Richmond has concluded that its costs in helping employees with elder care obligations so they can be on the job are substantially less than what the hospital system would spend for temporary workers to fill in for those caregivers, says director Malone.
Fannie Mae surveyed employees who have used the services of its onsite elder care consultant, says dependent care manager Stone. All respondents said they would do it again, 92 percent said the consultation saved them time, and 28 percent said consultant Ortez helped them with an issue that otherwise would have required them to curtail their working hours.
Overall, Stone says, the program’s costs have been more than offset by the potential turnover costs it has saved.
Terence F. Shea is associate editor of HR Magazine.