Success in the individual marketplace led to interest in group long-term care insurance as an employee benefit. The first group long-term plan was written in 1987, and a small but growing number of employers, mostly large ones, now make coverage available. The number of insurance companies writing coverage has also grown, but it still remains relatively small and is primarily limited to the largest group insurance carriers.
For the most part, group long-term care policies are comparable to the better policies being sold in the individual marketplace. However, there are a few differences, mostly because of the characteristics of group coverage:
- Eligibility for coverage generally requires that an employee be full-time and actively at work. At a minimum, coverage can be purchased for an active employee and/or the spouse. Some policies also make coverage available to retirees and to other family members of eligible persons, such as minor children, parents, parents-in-law, and possibly adult children. There may be a maximum age for eligibility, but it is often age 80 or 85.
- The cost of group coverage is usually slightly less than the cost of individual coverage. To some extent this is a result of the administrative services, such as payroll deduction, being performed by the employer.
- An employee typically has less choice in benefit levels and the duration of benefits under a group policy. The amounts and duration of benefits are selected by the employer and normally apply to all employees. However, some policies do allow choice but to a lesser extent than is allowed under individual policies.
- If a participant leaves employment, the group coverage can usually be continued on a direct-payment basis, under either the group contract or an individual contract.