Made Your Decision About Long Term Care Insurance? Hold That Thought…

If you made a decision on FLTCIP based on recent info, you need to reconsider until you receive and evaluate the correct information.

No doubt, some in the Office of Personnel Management are wondering what else can go wrong with the federal long term care insurance program.

A lot of participants in the federal long term health care insurance program are unhappy about an unexpected increase in their insurance premium. Some people are scheduled to have a premium increase of as much as 25%. Materials describing the program led at least some participants to believe there would not be an increase in the insurance premium.

The confusion has already led to a possible investigation by a House committee and a Senate hearing on the program—a situation that few agencies or companies like to confront as problems get aired in public and publicity about problems puts officials and programs in an uncomfortable spotlight.

But, if the premium increase leaves you confused, angry and frustrated, your emotional reaction may get worse before it gets better. Here is why.

The Error

Letters that were mailed to tens of thousands of participants in the Federal Long Term Care Insurance Program (FLTCIP) contain errors in calculating potential premiums.

In a benefits administration letter dated September 25, 2009, the Office of Personnel Management wrote:

“In August, Long Term Care Partners sent a letter to each current enrollee with general information about the changes to the Program. We have attached a sample copy of the version most enrollees received in Attachment 1. This letter enclosed formal documentation noting the change to John Hancock as the insurer for the second contract term (Attachment 2) and provided information for the enrollee on what to expect in the next several months as the program transitions to the new contract. Enrollees in claims status and enrollees in the Alternative Insurance Plan received a slightly different letter.”

Now, in a news release dated November 12, 2009, OPM notes:

“The U.S. Office of Personnel Management has been notified by Long Term Care Partners (a wholly owned subsidiary of John Hancock Life & Health Insurance Co.) that letters the company mailed to tens of thousands of enrollees in the Federal Long Term Care Insurance Program (FLTCIP) contain errors in calculating potential premiums.”

So, while you may be paying more in an insurance premium for this program, you may not be certain of what your final insurance premium will be.

Here is how the error is described in a notice from Long Term Care Partners:

  • Regrettably, for enrollees with the automatic compound inflation option (ACIO) whose anniversary date for their annual benefit amount increase falls in November, December, or January, there are errors in these forms. We apologize for these errors and regret any inconvenience they may have caused.
  • We are notifying all affected enrollees by letter, mailed November 13, and will also send them each a corrected personalized options form in the coming weeks.

What is Being Done About the Error?

The result is that the new premium described in the letters that were mailed out may have been too low.

So, if you have been considering your decision to enroll or continue your enrollment in the long term care insurance program, you may want todelay your decision until you have the correct information.

In its press release, OPM says that “Long Term Care Partners reports they will begin mailing notices to the approximately 71,600 affected individuals, alerting them to the errors about the premiums shown in the “Benefit Amount” section of their election letters. The company also reports that in December, they will mail personalized letters providing accurate information to affected enrollees so that they can make an informed decision using correct information.”

If you have received a letter with the error, you will also have more time to make your decision.

Due to the error, Long Term Care Partners is extending the decision period for those who received an erroneous letter to March 15, 2010.

Who Do You Call?

No doubt, many readers who have enrolled in this program will be confused and have questions about the program and how this error will impact them. The Office of Personnel Management says that enrollees with questions should call Long Term Care Partners at 1-800-582-3337.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47