This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
On Oct. 14, 2011, the U.S. Department of Health and Human Services (HHS) announced in a letter to Congress that the 2010 health care reform law's program to provide long-term care insurance through the workplace was unworkable and would not be implemented.
The Community Living Assistance Services and Supports (CLASS) Act program, part of the Patient Protection and Affordable Care Act, was intended to provide a basic lifetime benefit of at least $50 a day in the event of illness or disability. Critics charged that the program, intended to be self-funded, was financially unsustainable without major government subsidies in addition to premium collections.
“At this point, we do not have a viable path forward to implement the CLASS Act,” said Kathy Greenlee, HHS assistant secretary for aging.
The financial challenges facing the CLASS Act program were detailed in an October 2011 HHS report. "While the report does not identify a benefit plan that I can certify as both actuarially sound for the next 75 years and consistent with the statutory requirements, it reflects the development of information that will ultimately advance the cause of finding affordable and sustainable long-term care options," HHS Secretary Kathleen Sebelius said in her letter to Congress.
"The challenge that CLASS was created to address is not going away," added Sebelius. "By 2020, we know that an estimated 15 million Americans will need some kind of long-term care and fewer than 3 percent have a long-term care policy."
Republicans charged that the program's unraveling was the first step in dismantling the entire health care reform law, while Democrats contended that the CLASS Act stood apart from the rest of the health care overhaul.
On Oct. 17, 2011, The Hillreported that while HHS has indefinitely suspended implementation of the CLASS Act long-term care program, the administration announced it will oppose congressional efforts to formally repeal the CLASS Act.
Long-Term Care as an Employee Benefit
Access to long-term care insurance (LTCI) —typically as an employee-paid voluntary benefit with premiums deducted through salary deferral—can be an important addition to the benefits mix. According to the Society for Human Resource Management's (SHRM) 2011 Employee Benefits survey, access to LTCI was made available by 29 percent of responding SHRM members' organizations.
Large employers often can provide access to LTCI under a group plan with lower premiums than employees would pay for individual policies, whereas small employers are more likely to negotiate with an insurer for at least a small discount on individual policies purchased by employees.
Unlike medical insurance, premiums on LTCI provided through a section 125 cafeteria plan are not excludable from the employee’s taxable income. However, tax-excluded funds from an employee's health savings account (HSA) can be used to pay LTCI premiums up to certain annual limits, even if the HSA is offered through a cafeteria plan. LTCI premiums cannot, however, be reimbursed under a health care flexible spending account (FSA).
(To learn more about LTCI, see the SHRM Online article "Planning for the Future: Long-Term Care as an Employee Benefit" and the articles and video listed below.)
Stephen Miller, CEBS, is an online editor/manager for SHRM.
The Need for Long-Term CareMost employees are unprepared for the enormous expenses posed by long-term care, says Peter Goldstein, EVP at Univita Health.View this video
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 10,000 companies