With multi-life programs, long-term care insurance can be a win-win for both employers and employees. Although some employers have started to offer long-term care insurance due to employee demand, others have added it because of the tremendous tax advantages.
Under certain Internal Revenue Codes, there are tax perks for businesses that buy long-term care insurance. Premiums for tax-qualified policies paid for employees, their dependents, spouses and retirees are 100 percent deductible as a business expense for C-corporations.
All or a portion of premium expenses for tax-qualified policies are also deductible for sole proprietors, partners, members of Limited Liability Companies and shareholders or employees of S corporations. How much these individuals can deduct is limited to an eligible amount based on the applicant’s age.
Additionally, employees receive benefits from long-term care policies tax-free. Spouses and qualified family members are also eligible for coverage and discounts under multi-life programs, which can add up to as much as 45 percent in premium savings.
Long-term care insurance is one of the only benefits that allow employers to deduct the cost while the employees receive both the premiums and the benefits on claim tax-free. In other words, this is the most tax-advantaged benefit on the market today.
With qualified professionals in high demand, a long-term care insurance program is a great solution for businesses looking to offer a flexible and competitive benefits program. According to a 2009 survey, more than half of full-time employees with defined benefit plans said the package was the main reason for staying with their current employer.
Long-term care insurance is also a great way to reward and recognize key employees for their hard work and dedication. Many businesses are using these benefits to attract and keep qualified professionals thanks to the HIPPA accepted benefit status of long-term care insurance.
Business owners can now select a group of people based on a class of who is going to receive the long-term care benefit. This creates a huge opportunity for companies to reward their top talent with a benefit they are not required by law to provide to all employees.
Since long-term care insurance can be offered as an employer-paid benefit, a voluntary employee paid benefit or a combination of both, companies can use long-term care coverage as an effective retention tool without paying a dime for it themselves. Many business owners have allowed their key employee to use their annual bonuses to fund premiums.
Long-term care insurance offers protection that no other benefit can provide and with the advantages of multi-life programs, it’s also a wise business investment.
Offering long-term care coverage is a key way business owners can show they understand and are responsive to employee needs. Nearly 30 percent of people living in the U.S. provide some type of informal care for an aging or ailing loved one.
Employees currently facing long-term care issues are acutely aware of the financial, physical and emotional impact of this type of care. These people want to protect their futures better than their parents did and they want their employers to help them. Long-term care benefits offer employees a way to help protect their loved ones from the burdens of caregiving.
Offering employees an effective way to manage long-term care costs also helps them focus on their careers, which can have a very positive effect on a company’s bottom line. Businesses in the U.S. lose roughly $34 billion each year in lost productivity due to caregiving, a recent MetLife study found. In fact, 48 percent of workers lost a job, changed shifts or missed a career opportunity due to caregiving responsibilities.
Long-term care insurance offers protection that no other benefit can provide and with the advantages of multi-life programs, it’s also a wise business investment. If you are a business owner, we would love to educate you on the benefits of paying long-term care premiums through your company.