Long Term Care FAQs
This material is intended for use by eligible Purdue University employees.
- What is long term care insurance?
Long term care insurance is designed to help reimburse charges for the care you may need if you are chronically ill -- that is, you need help with some of the everyday activities we often take for granted (like eating, bathing or dressing). It also pays for care if you need supervision due to a cognitive impairment like Alzheimer's disease.
People often confuse long term care insurance with long term disability insurance. Long term disability coverage provides income protection to help you cover daily expenses such as rent, utilities and food. It is not intended to pay for your care if you have a long term care situation.
- What does long term care insurance cover?
Long term care insurance covers care received in a nursing or assisted living facility, at home, or in community settings like adult day care centers. The plan also has features that may help you stay in your own home, such as benefits that help reimburse the costs for informal care, home modifications, caregiver training and in home monitoring systems, as well as a respite care benefit.
- Who is eligible to apply for coverage?
The Purdue University Group Long Term Care Insurance Program is available to actively-at-work, benefits-eligible employees, their spouses and same-sex domestic partners, and other family members. Specifically, the following are eligible for this program:
- Benefits-eligible, full-time employees who work at least 20 hours per week
- Family members of an eligible employee who are under age 80, including:
- Spouses and same-sex domestic partners
- Adult children
- Parents, parents-in-law, step parents, step parents-in-law
- Grandparents, grandparents-in-law, step grandparents and step grandparents-in-law
- What happens to my coverage if I leave Purdue University?
Your coverage is fully portable, which means that it continues according to its terms as long as you pay your premium on time.
- How do I learn more about the program?
- Visit the Genworth Life Insurance Company website. Go to:
- Enter the Group Name: Purdue
- Enter the Access Code: groupltc
- Call 800-416-3624 toll free to speak to a Genworth program expert to order a printed information kit that contains full details of the program, including important disclosures as well as applications you can fill out, sign and mail.
- Visit the Genworth Life Insurance Company website. Go to:
- Do I have to apply for coverage in order for my spouse, same-sex domestic partner, parents, or other family members to get coverage?
No, eligible family members can apply for coverage whether or not the eligible employee applies.
- As a current benefits-eligible, actively-at-work Purdue University employee, do I have to answer any health questions when applying for coverage?
Any benefits-eligible, actively-at-work employee who did not elect coverage during the Spring 2012 open enrollment, or within 60 days of hire, can apply for coverage at any time. Individuals requesting coverage will be asked to complete a questionnaire that underwriters will use to determine whether the application can be accepted.
- Who is the insurance carrier offering this long term care insurance coverage?
Genworth Life Insurance Company is a leader in the long term care insurance industry, with more than 35 years of experience with this type of coverage. Genworth Life was selected by Purdue University to be the carrier for its group long term care insurance program after a competitive bidding process and extensive due diligence.
Genworth Life's experience includes:
- Being a leading provider of long term care insurance with more than a million insured individuals
- A proven claim servicing capability, including paying out more than $5.7 billion in claims to more than 132,000 claimants
- Experience with large complex accounts:
- AARP (40 million members)
- Texas Retirement System (1.2 million employees and members)
- Commonwealth of Virginia (350,000 employees and members)
- A multi-year alliance with the Alzheimer's Association
- The annual cost of care survey, which tracks the costs of long term care throughout the nation
- The Genworth Financial Annual Long Term Care Symposium, which brings together elected officials, researchers, caregivers, media observers and business leaders to discuss the costs and challenges of long term care
- Can I upgrade my plan as time goes on?
Yes, you have two ways to upgrade your plan in the future. If you did not purchase an Automatic Benefit Increase Rider, you will have the opportunity to increase your coverage every three years with no additional underwriting, as long as you are not in claim status. The premiums for the increase will be at your then attained age, and each offer you accept will increase your current Total Coverage Amount by approximately 15 percent. These offers will be made as long as you have not declined two consecutive offers. You also have the opportunity to apply for increased coverage any time, with full underwriting. You can apply to increase your coverage to any plan option that is currently being offered under the Purdue University Group Long Term Care Insurance Program.
- If age 79 is the oldest age for a family member to apply for this program, does that mean the program ends when I (or they) reach age 80?
No. You can keep this coverage as long as you pay the premiums and you still have benefit amounts remaining in your Total Coverage Amount
- Can I apply for coverage anytime after the initial enrollment period and, if so, will I have to go through underwriting?
Yes, after the initial enrollment period, an employee or a spouse/same-sex domestic partner can apply at any time for coverage and will be required to go through full underwriting by completing a long-form application. Other family members can also apply at anytime with full underwriting by completing a long-form application.
- Will there be another open enrollment next year for the long term care insurance?
No. Faculty and staff and their eligible family members may apply for coverage anytime, but they must satisfy full underwriting requirements.
- Is long term care insurance affordable?
The cost of long term care insurance varies depending on your age and the options you choose. Many people find the group premiums more affordable than they expect.
- Should I wait until I am older to buy it?
Long term care insurance premiums are based on your age when you apply; so typically, the younger you are, the lower your premiums will be. The possibility of a long term care event increases as you age and your level of health starts to decline. You need to make a careful consideration between the costs of this coverage and the likelihood of your need for long term care services.
- If I enroll now, will my rate increase annually, as I get older?
Unless you take action to change your coverage, the premium is designed to remain the same.
The plan offers two ways to hedge against inflation:
- If you enroll in an option with an automatic benefit increase rider – where your coverage increases three percent or five percent each year to hedge against inflation – your premium does not go up each year, and it is based on your age when you began the coverage. Premiums for coverage with the automatic inflation increase are higher than the initial premiums for coverage without the automatic increases (future purchase option).
- Alternatively, the future purchase option offers the opportunity to increase coverage every three years with no additional underwriting, as long as you are not in claim status. The premium will go up each time you purchase additional coverage, and that increase will take into account not only more coverage, but also your increased age. Over time, the amount paid in premium is greater if the FPO is elected.
- Once I am receiving benefits, do I have to continue to pay my premiums?
No. Premium payments will be waived while you are receiving benefits under the Nursing Facility or Assisted Living Facility Benefit, Bed Reservation Benefit, Home and Community Care Benefit or Hospice Care Benefit.
- Do I have choices in how I pay for this plan?
Yes, you have two ways you can pay your premiums. You can use electronic funds transfer or you can be billed directly on a quarterly, semi-annual or annual basis. Your premiums will be paid directly to the Genworth Life Insurance Company.
- Can premiums go up in the future? If so, under what circumstances?
No insurance company can guarantee that premiums will never increase. Genworth Life Insurance Company has priced this coverage conservatively to help avoid future rate increases; however, it does retain the right to raise premiums in the future. Such an increase would have to be reviewed and approved by the state of Indiana Insurance Department, and it would have to be for an entire class of individuals, not for you as an individual. You cannot be singled out for a rate increase and your premiums will never be increased based on your age, claim or health status.
- If I die prior to using any of my benefits, will my premiums be returned to my estate?
- Are there any tax implications or advantages to enrolling in LTC coverage?
The Purdue University Group Long Term Care Insurance Program is a tax-qualified plan. This means that long term care insurance premiums are tax deductible for federal income tax purposes to the extent that they can be included under your medical expense deductions. Benefits, should you draw them in the future, are not subject to federal taxes.
- Can employees pay their long term care premiums through their health savings account (HSA)?
Yes, tax-qualified long term care insurance premiums can be reimbursed, tax free, through an HSA up to the Eligible Premium amounts listed in Table One below.
Tax-qualified long term care insurance premiums are considered a medical expense. For an individual who itemizes tax deductions, medical expenses are deductible to the extent that they exceed 7.5 percent of the individual's adjusted gross income (AGI). The amount of the long term care insurance premium treated as a medical expense is limited to the eligible long term care insurance premiums, as defined by Internal Revenue Code 213(d), based on the age of the insured individual. That portion of the long term care insurance premium that exceeds the eligible long term care insurance premium is not included as a medical expense.
Individual taxpayers can treat premiums paid for tax-qualified long term care insurance for themselves, their spouse or any tax dependents (such as parents) as a personal medical expense.
The yearly maximum deductible amount for each individual depends on the insured's attained age at the close of the taxable year (see Table 1 for current limits). These deductible maximums are indexed and increase each year for inflation.
2012 Long Term Care Insurance Federal Tax Deductible Limits Taxpayer's Age At End of Tax Year Deductible Limit
40 or less
More than 40 but not more than 50
More than 50 but not more than 60
More than 60 but not more than 70
More than 70
Employees are encouraged to work with the Purdue University HSA administrator for reimbursement.
- What is the level of tax deductibility?
The Purdue University Group Long Term Care Insurance Program is designed to meet the requirements of a tax qualified plan under Section 7702B(b) of the Internal Revenue Code. On the federal level, long term care insurance premiums are considered a deductible medical expense. The long term care insurance premium deduction is subject to age-based limits that are adjusted annually under the IRC. For more information, go to http://www.irs.gov/publications/p502/ar02.html.
- What is the procedure if I don't pay my premium on time?
If you do not remit premium to Genworth Life when due, the following process will be followed:
An initial period of 31 days will be granted for each premium that is unpaid on the date due. If premium has not been paid by the end of that 31-day period, Genworth Life will send you a notice (if you pay premiums to Genworth Life directly) explaining that a payment has been missed and that coverage is in danger of lapsing. The notice will provide an additional 35 days, beginning on the date we mail the notice, to pay the unpaid premium.
If you pay premiums to us directly and you have designated an individual to be notified in case of lapse, we will also send notice to your designee at the address you provided.
Payment will allow coverage to continue in force without interruption. Failure to pay any unpaid premium by the end of the grace period will result in the termination of coverage as of the date the premium was initially due.
- When will this program pay benefits?
Benefits become payable under this program when:
- You need help with at least two "activities of daily living" and will likely need it for at least 90 days, OR
- You are diagnosed with a cognitive impairment that requires supervision, AND
- A medically licensed health care professional certifies that your condition qualifies you.
In addition, the elimination period (also known as a "waiting period") must be satisfied, and you must be receiving covered services under a plan of care.
- What is an "elimination or waiting period" and how does it work for this program?
Once you qualify for benefits, a "waiting period" of 90 calendar days starts on the first day you receive care and continues for 90 calendar days while you remain chronically ill. You are not required to receive services during these 90 days. Once the elimination period is satisfied, benefits for covered services become payable.
- How is a claim filed?
When you receive your certificate of coverage, you will receive a toll-free number to contact Genworth Life claim services. Should the need for a claim arise, you or your representative should call that number. After speaking with an intake analyst, you will be contacted by a member of the Care Coordination team. The Genworth Care Coordination team can help in developing your plan of care and providing information on available long term care resources in your area. The team may set up a face-to-face meeting and conduct a needs assessment.
- What happens to the Total Coverage Amount (pool of money for eligible expenses) when a person receives benefits under this plan?
The pool of money is reduced by any claims that are paid. Please note that this program does not contain a restoration of benefit provision.
- Will my group long term care insurance plan pay for care provided by family members, friends, neighbors, etc.? If so, how much will it pay for?
When you become eligible to receive benefits, your plan will pay a limited amount each year for care provided by "informal caregivers" such as family members (who do not live with you), friends, neighbors, etc. via the Informal Care Benefit only. The Informal Care Benefit will pay 1 percent of your monthly benefit for up to 30 days each year for informal care provided in accordance with your plan of care.
So, for example, if you selected a $3,000 monthly benefit, the annual Informal Care Benefit would be:
1% x $3,000 = $30
$30 x 30 days = $900 per year
In this case, the benefit available to help pay for this type of care will be up to $900 per year.
- What is the requirement for coverage to go into effect?
An employee must be actively at work for at least 30 days before his coverage can go into effect. If he does apply before he's been actively at work for at least 30 days, the coverage will not become effective until that time requirement is met
- What is the definition of "actively at work" for the purpose of applying for long term care insurance?
This program requires the faculty or staff member to be engaged in his or her normal assignment at work for the 30 calendar days prior to the policy effective date. Individuals on leaves of absence (paid or unpaid) for sickness, accident, injury, sabbatical, parental, voluntary early partial retirement, personal or other leave other than vacation are not considered "actively at work."