MultiLife Discount Program

Transcription

1 MultiLife Discount Program Sponsored Long-Term Care Insurance E m p l oy e r s G u i d e LTC (0507)

2 Your valu employees are

3 able Protect your key resource. Contents Your Employees are Your Business 1 Employee Benefits Solutions 1 2 Potential Impact of Long-term Care 3 MultiLife Discount Program 4 Why Offer Long-term Care Insurance? 4 Tax Advantages 5 A Name You Can Trust 6 Industry Evolution 7 Effective Communications 7

4 Your company depends on its Your Employees are Your Business In order to protect your business, you need to take care of your employees. Most companies couldn t succeed without their employees. Like many businesses that compete for employees as well as customers, you want to protect your most valuable resources. Employee Benefit Solutions One effective way to attract, retain and protect employees is with a comprehensive employee benefit package. What benefits are you currently offering to attract and retain quality employees? Health insurance Life insurance Disability income insurance retirement and savings plans How does your benefits package address your challenges? Long-term soundness and stability rewards and incentives for employees at all levels Value for recruiting and retention Did you know? According to the U.S. Department of Labor, the labor force in the next 10 years will be affected by the aging of the babyboomers (those born between 1946 and 1964). The labor force will experience an annual growth rate of the 55-and-older group that will be 4 times the rate of growth of the overall labor force. By contrast, the growth rate for 25-to-54 year age group will be 0.3%. 1 1 U.S. Department of Labor, Bureau of Labor Statistics, Labor force projections to 2014: retiring boomers (November 2005, Vol. 128, No. 11) 1

5 people, and your people depend on you. What if you, your employees, or family members should be affected by a need for long-term care services? Long-term care encompasses services provided to individuals suffering from a chronic illness, disabling condition or cognitive impairment. Services may be provided in the home, in your community, in an alternate living facility or in a nursing home. Is your company already dealing with these situations today? Potential Impact of Long-Term Care Long-term care can be a family concern. It presents physical and emotional challenges for your employees, and their families, that can affect their attendance and productivity at work. That means it s an issue that can affect your business. Nearly six in ten caregivers (59%) are employed either full-time or part-time. 2 About 10 million Americans need long-term care, and out-of-pocket payments cost recipients and their families $37 billion in % of family caregivers have had to make some adjustments to their work life, from reporting late to work to giving up work entirely. 2 23% of caregivers report having left his or her job either temporarily or permanently, and 10% of employed family caregivers go from full-time to part-time jobs because of their caregiving responsibilities. 2 Accidents and disabling diseases such as Multiple Sclerosis or strokes may require a young person to receive long-term care services. 2 National Alliance for Caregiving and AARP. Caregiving in the U.S. Washington, DC: Author, Georgetown University Long-term Care Financing Project National Spending for Long-Term Care Washington, DC: Georgetown University Press, February

6 Are your employees and their How might this impact your business? Northwestern Long Term Care Insurance Company (Northwestern LTC) has an opportunity to help you and your business. With the MultiLife Discount Program, your company can offer employees long-term care insurance that will help to: recognize, reward and protect your valued employees and their families Protect you, and your family members Help attract and retain quality employees Differentiate your employee benefits program from competitors Offer potential tax advantages to your business Provide a cutting edge benefit, while enabling caregivers to continue working Did you know? By 2050, the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living, or skilled nursing facilities) will likely double from the 15 million using services in 2000, to 27 million people. This estimate is influenced by growth in the population of older people in need of care. 4 4 U.S. Department of Health and Human Services, and U.S. Department of Labor. The future supply of long-term care workers in relation to the aging baby boom generation: Report to Congress. Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, (2003). (20 Jan 2005) 3

7 families dealing with long-term issues today? MultiLife Discount Program 5% premium discount 5 Three W-2 employees to qualify Discount then applies to: employees and their spouses employee s parents, parents-in-law Retirees, and the retiree s spouse applies regardless of whether the employer is paying all, part or none of the premium 5 a 15 percent spousal discount may be leveraged with the 5% MultiLife discount 6 Note: Employees who already own Northwestern LTC insurance policies may help the employer meet the three-participant minimum. Advantages/Benefits of Long-Term Care Insurance Companies can choose to pay part, or all, of the premium for employees who meet a certain criteria. The is one of the few health-care-related benefit programs that can be offered on a discretionary basis. 7 all policies are underwritten individually and are issued as individual policies to employees. Employees may take their coverage with them if they retire or leave the company. Participants who leave the employer and keep their policy in force will retain eligibility for the MultiLife premium discount. any necessary changes made to issued policies are handled directly by Northwestern LTC s Administration Office. northwestern LTC helps minimize the possibility of your employees becoming distracted, encountering frequent personal interruptions or increased stress due to LTC concerns about themselves or their families, which may lead to a decrease in productivity. 5 Policies issued in New Jersey, New York and Pennsylvania with the MultiLife Discount have the form number RS.LTC.ML(1101). In New Jersey, the MultiLife discount is available for ages 40 and above only. In New York employer may not pay more than 50% of the premium. When spouses apply together and both policies are approved. 6 In Montana, discounts based on marital status are not available. A caregiver discount is available in Montana only. Please see your network representative for more information. Discount may be applied when both spouses apply for and are issued policies. 7 Employers should consult with their legal and tax advisors for specific advice. 4

8 Tax Advantages Many people don t realize that for the individual who is insured, tax-qualified policy benefits that are paid on a long-term care claim are generally received tax free. (a) A company that pays for some or all of its employees premiums may deduct a portion of the premiums paid for these tax-qualified policies, depending on how the business is structured. S-Corp, LLC, partnership or sole proprietor C-Corp Owners 8 Employees where the company pays the premium Eligible, age-based premium may be withdrawn tax-free from a Health Savings Account (HSA). (b) Premiums paid using non-hsa funds must be included in income and then deducted according to age-based limitations. (c) The employer can deduct the premium. The employee does not have to include the premium as part of income. Premiums are deductible for spouses who are not employees. The company can deduct the premium. (d) The owner, if participating in the plan as an employee, does not have to include the premium as part of income. (e) The company can deduct the premium. (d) The employee does not have to include the premium as part of income. (e) Premiums are deductible for spouses who are not employees. (d) Maximum Eligible Premium in 2007 indexed for inflation annually Self-employed deductibility guidelines (f) Age Amount 40 or less $ $ $1, $2, and older $3,680 Tax Codes: (a) IRC 7702B(a), 104(a)(3), 105(b) (b) IRC 223(d)(2), 223(f)1) (c) IRC 213(d)(10), 162(l) (d) IRC 162(a) (e) IRC 106(a) (f) IRC 213(d)(10) 5 8 Two percent or more shareholder. Employers should consult with their legal and tax advisors for specific advice. The Employee Retirement Income Security Act of 1974 (ERISA) establishes employer responsibilities for some employer-supported insurance plans. Employees of companies that do not pay LTC insurance premiaums: Individuals paying their own premiums on tax-qualified long-term care insurance may deduct such premiums (subject to the above age-based limitations on amount) to the extent that those premiums and other unreimbursed medical expenses exceed 7.5 percent of their adjusted gross income for the year. A tax advisor should be consulted for definitive advice with respect to individual situations.

9 Trust Why Northwestern LTC? Northwestern LTC is a wholly owned subsidiary of The Northwestern Mutual Life Insurance Company (Northwestern Mutual), the only company in Fortune s prestigious list of the world s most admired companies to rank first in its industry every year since Northwestern LTC shares a commitment to the same values and guiding principles. Our Commitment Values of mutuality We make decisions based on the best long-term interest of policyowners guided by the principle of equitable treatment for all, and building long-term relationships to meet their needs. Financial strength We have the best possible insurance financial strength ratings from all four major industry ratings services. Flexibility in plan design We offer the ability to customize the plan design and individual insurance policies to meet your specific needs. Claims handling It is Northwestern LTC s philosophy to pay claims promptly, fairly and accurately, compatible with Northwestern s principle of fairness to all customers. Policy participation We offer a participating long-term care insurance policy, and announced a [$3.9 million dividend for 2007.] Recognized Financial Strength 9 Financial strength is and has been integral to Northwestern LTC s vision for policyowners, who own the company. Northwestern LTC maintains the best possible insurance financial strength ratings from all four major rating services. These ratings provide a professional assessment of Northwestern LTC s financial strength and security and represent our A++ AAA AAA Aaa A.M. Best Superior Standard & Poor s Extremely Strong Fitch Ratings Extremely Strong Moody s Exceptional Highest Highest Highest Best Possible Rating Rating Rating Rating promise to pay our claims and meet our obligations. Additionally, benefits of Northwestern LTC policies have been 100 percent guaranteed by Northwestern Mutual. Neither the existence nor the amount of a dividend is guaranteed in any given year. Decisions with respect to the determination and allocation of divisible surplus are left to the discretion and sound business judgment of the Board of Directors. There is no guaranteed specific method or formula for the determination and allocation of divisible surplus. Northwestern Long Term Care Insurance Company s approach is subject to change. Any dividends paid will be used to reduce future premiums. 9 The four agencies listed base ratings on the financial strength of the insurance company. These ratings are not recommendations of specific policy provisions, rates or practices of the insurance company. Since its entrance into the long-term care insurance market in 1998, all four agencies have given Northwestern Long Term Care Insurance Company the best possible insurance financial strength ratings. At the time of this publication, our most current ratings are for the following dates: A.M. Best (May 2006), Fitch Ratings (May 2005), Moody s (March 2006), and Standard & Poor s (May 2006). 6

10 Stability Industry Evolution Many of our competitors have either abandoned the long-term care insurance marketplace or have merged their product line with another company. Of the top ten companies selling long-term care insurance in 1996, many are no longer selling long-term care insurance today and few are of the same ownership*. Northwestern Long Term Care Insurance Company began issuing long-term care insurance in 1998 only after closely examining the long-term care insurance marketplace, and we have quickly moved into the top ten companies for newly issued business while pricing to promote long-term stability. Effective Communication Effective communication to your employees regarding the value of a long-term care insurance program is essential to its success. Northwestern LTC can provide various resources to help you market long-term care insurance to your employees: Workplace marketing and promotion Letters, brochures, payroll stuffers, table tents Intranet and newsletter articles employee education presentations templates 7 *As reported by LIMRA International in 2007.

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12 Your state s insurance department may have additional information, including a buyer s guide, explaining longterm care insurance. This insurance policy contains exclusions and limitations. For costs and complete details, please contact your Financial Representative. Northwestern Long Term Care Insurance Company A Subsidiary of The Northwestern Mutual Life Insurance Company Milwaukee, WI The purpose of this material is for the marketing and solicitation of insurance. Policy forms: RS.LTC.(1101) & RS.LTC.ML.(1101). RS.LTC.ML.(1101) is only available in New Jersey, New York and Pennsylvania LTC (0507)