While employees may be clamoring for their employers to offer more long-term care (LTC) insurance options, their requests may fall on deaf ears. John Hancock yesterday announced the results of a small business survey on long-term care, finding that employer misconceptions have resulted in a hesitation to offer LTC insurance despite a perception of employee need.

The study, conducted as part of John Hancock's "Know Your Options" LTC education campaign, surveyed more than 500 benefits decision-makers at companies with 10 to 1,000 employees.

According to the survey, six in 10 small businesses think that employees are concerned about their ability to afford LTC. Of the organizations that responded, more than half of those with 500 to 1,000 employees, reported negative impact due to employees dealing with LTC issues. Yet, few small businesses currently offer LTC insurance to their employees.

When asked to rank employee concerns, the ability to afford LTC for themselves or other family members was second only to that of not having enough money for a financially secure retirement (63% versus 84%). The perception of need was more pronounced among companies with 500 to 1,000 employees, with 72% viewing LTC as an employee concern.

The survey also showed that employers are beginning to feel the effects of LTC at the workplace, with more than one-quarter of small businesses, including more than half of the businesses with 500 to 1,000 employees, saying that their companies have been negatively impacted in terms of productivity loss or increased absences by employees who are dealing with LTC issues.

Despite these concerns and the actual impact on business, only one-fifth of the companies surveyed offered LTC insurance plans as a benefit to employees.

"When John Hancock undertook this survey, our intent was to gauge the attitudes of smaller employers in order to better understand and serve this important market segment", says Marianne Harrison, president of John Hancock's LTC division. "What we learned was that small employers hold a number of misconceptions about both the need for care and long-term care insurance itself."

When small employers were asked why they do not offer LTC insurance, two leading reasons cited were the perceived cost to implement a plan (66%) and a perceived lack of interest on the part of employees (63%). One-third of respondents (33%) also mentioned that they thought it would be too time consuming to implement a plan. These results contrast with the actual experience of respondents who offer LTC insurance to their employees and felt the implementation and cost of an LTC plan was rarely a problem: very few (5%) had a poor experience with cost or ease of implementing a plan.

The perceived lack of employee interest is curious, and may reflect a lack of cohesive thinking about LTC in general because the same percentage of respondents (63%) also reported that their employees are concerned about the ability to fund future LTC.

"These survey results were not surprising," says Dennis Healy, VP of John Hancock's LTC Employer-Sponsored Sales Department. "Many employers have mistaken beliefs about LTC insurance that are just not borne out by actual experience."

In looking at why companies chose to offer LTC insurance, survey respondents indicated that the four leading reasons important in their decision were attraction and retention of key employees (47%), tax advantages to the business or business owner (43%), employee demand (43%), and exposure to first-hand experiences dealing with LTC issues (42%). When asked about choosing a carrier, leading responses cited as important included the rating of carrier (82%) and being offered by a well-known carrier (77%).

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