Considerations for the Federal Long-Term Care Insurance Program

If you are considering applying for the federal employee long-term care insurance program, here are several factors that may impact when you apply.

Long-term care insurance is of interest to many federal employees as the expenses for long-term care can destroy a family’s financial picture.

The Office of Personnel Management (OPM) has some advice for those who are applying for the federal long-term care insurance. Predicting the future is a crap shoot but OPM is telling federal employees to be careful when applying for this insurance.

Here’s why.

OPM currently contracts with two companies, Metropolitan Life and the John Hancock Life insurance company, who are in a joint venture to administer the program. The current contract expires in April 2009. OPM is now in the process of selecting the company or companies that will run the program after that date. When a new contract is awarded, regardless of the winners of the competition, there may be changes to the program, including higher rates for those who are insured.

OPM is telling federal employees to be sure to consider the following when you decide to apply for the federal long-term care insurance program:

  • The rates may change. If you apply, and your application is approved, the current rates will be in effect until April 30, 2009. After that date, they may go up.
  • The new contract may offer new or different benefits.
  • The new contract may not be administered by the same companies in the current joint venture.
  • Some medical conditions may prevent an applicant from being approved for the program. If you decide to delay applying until you know more about the new contract, your application will be considered based on your medical condition at the time of your application. If you are now in good health, waiting until next year involves the risk that you could develop a medical condition that would make you uninsurable.
  • If you are eligible to apply for LTC insurance with abbreviated underwriting, your opportunity to apply under this abbreviated provision expires 60 days after you are hired or your eligibility date. If you want until after this 60-day limit, you will have to answer more questions about your health status because you will have to apply with full underwriting.

If you have questions about your situation, check out this website or contact your human resources office for assistance.