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CCH® BENEFITS — 2/21/08

More Employers Sponsor, More Employees Buy Group Long Term Care Insurance

From Spencer's Benefits Reports: In 2007, nearly 10,000 employer groups offered long term care insurance to their workers and their families. These policies covered slightly more than 2 million individuals, according to a study from the American Association of Long-Term Care Insurance (AALTCI). The study was published in the AALTCI’s 2008 LTCI Sourcebook.

In 2007, nearly two-thirds (63%) of employer-sponsored group long term care insurance purchasers were younger than age 55, and two-thirds were ages 45 through 64. Half of all new policies in 2007 provided a daily benefit of between $100 and $200,.and four-fifths (79%) of the policies were for a period of coverage of at least five years.

Four of the largest group long term care insurers paid a total of $172.1 million in claims during 2007, a 15.9% increase from 2006, the AALTCI study found. Approximately 12% of the first-time group long term care benefit recipients in 2007 were younger than age 60, but, as might be expected, individuals in the oldest age groups represented the largest proportion of claimants: 37.7% were in the age 80 and older group, while 31.9% were in the age 70 through 79 group. The largest continuing claim ranged from $340,000 to $458,000, with claimants receiving benefits for between six and nine years. Payments for home care represented 38.3% of group long term care payments, 17.2% of claims were for care in assisted living facilities, and payments for nursing home care accounted for 44.5% of group long term care payments.

To obtain a copy of the complete AALTCI 48-page study, which costs $49 to nonmembers if purchased by March 1 and $59 thereafter, call (818) 597-3227.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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