OPM kicks off long-term care insurance program

Federal employees, military personnel, retirees and their family members can sign up for long-term care insurance during an early enrollment period that started Monday, Office of Personnel Management officials announced.

Premiums for the long-term care insurance run from $50 a year for workers under 30 to $6,893 a year for 99-year-olds. The insurance covers nursing home stays and other types of day-to-day care for people with chronic illnesses or disabilities.

The early enrollment period, which runs to May 15, is aimed at people who are already familiar with long-term care insurance. OPM and Long-Term Care Partners, the Portsmouth, N.H.-based contractor that will administer the program, will not launch a major education campaign about the new benefit until the official open season, which will run from July 1 to Dec. 31. People who don't know much about long-term care insurance should wait until the open season to enroll, officials said.

OPM Director Kay Coles James kicked off the early enrollment period at a press conference in Washington, where she announced that she was the first person to sign up for the long-term care insurance. "I believe in leadership by example," James said. James also said that Janice Lachance, the previous OPM director, was the second person to sign up for the insurance. Lachance, who attended the press conference but is no longer a federal employee, is eligible for the program because her father is a Postal Service retiree.

Paul Forte, CEO of Long-Term Care Partners, said the premiums available to federal employees are an average of 15 to 20 percent less expensive than premiums available to individuals on the open market. Lawmakers who sponsored the 2000 legislation that authorized the long-term care insurance program predicted at the time that premiums would cost 15 percent to 20 percent less.

According to the Health Insurance Association of America, the average annual premium for long-term care insurance for individuals is $1,677. The average for employer-sponsored long-term care insurance is $722. But long-term care insurance premiums can be difficult to compare because the benefits included vary from company to company.

Early enrollees in the federal long-term care insurance program will be able to pick a daily benefit amount (the amount of money available for care per day during a chronic illness or disability) of between $50 and $300 in $25 increments; a benefit period of either three years or five years; and a waiting period for benefits to kick in of either 30 days or 90 days. Enrollees can also select an inflation protection option.

A 55-year-old federal employee who signs up for a $150 daily benefit amount, a three-year benefit period, a 90-day waiting period and inflation protection would pay an annual premium of $1,368.

An option with an unlimited benefit period will be available during the regular open season, but not during the early enrollment period. People who sign up for long-term care insurance during the early enrollment period will be able to upgrade their policies in July.

Federal employees, postal employees, military personnel and their spouses can sign up for the insurance by answering fewer than 10 questions about their medical history. Retirees; their spouses; retirees' surviving spouses; the parents, parents-in-law or stepparents of federal employees or military personnel; and the adult children of federal employees, postal workers, military personnel or retirees must answer up to 22 questions about their medical history. Because they have to answer more questions, the second group is more likely to be denied coverage.

Unlike standard health insurance premiums, which can be paid from pre-tax income, federal employees must pay long-term care insurance premiums with after-tax income. But they can deduct the cost of the premiums at tax time if their medical and dental expenses for the year, including the premiums, add up to more than 7.5 percent of adjusted gross income.

James said Monday that the long-term care insurance benefit would help the government recruit and retain workers.