Federal Long-Term Care Insurance Program (FLTCIP): A Simplified Guide

This is a detailed overview of the Federal Long Term Care Insurance Program for federal employees.

The Federal Long-Term Care Insurance Program (FLTCIP) is sponsored and regulated by the Office of Personnel Management (OPM) and administered by John Hancock. The program was established in 2002 as a result of an act of Congress, the Long-Term Care Security Act of 2000. FLTCIP is on a renewable 7-year contract that must be approved by Congress. 

Who is Eligible to Apply?

The Office of Personnel Management enacted a two-year suspension of FLTCIP applications for new enrollees as of December 19, 2022. When the program is not suspended, most federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives are eligible to apply for coverage.

Long-Term Care Uses

  • Home Care assists with ADLs inside the home
  • Assisted Living provides a community that is focused on a social lifestyle for seniors who are generally active but need some help with everyday tasks
  • Nursing Homes provide long-term medical care for adults with serious health issues. Nursing homes usually cost more than assisted living due to the higher level of care.

Key Features

Daily Benefit Amount (DBA)

This is the maximum amount your insurance will pay a day. FLTCIP offers eight daily benefit amounts (DBAs) from $100 to $450 in $50 increments.

Benefit Period

This is the length of time benefits will be paid if you receive benefits every day equal to your full daily benefit amount (DBA). You can choose from a 2, 3, or 5-year benefit period. If you receive services that cost less than your DBA or you don’t receive services every day, your benefits will last longer than your benefit period. The benefit period is used together with the DBA to calculate the maximum lifetime benefit.

Inflation Protection Options

Added feature that ensures your benefits keep pace with inflation. There are two types of inflation protection options offered by FLTCIP.

Option 1 = 3% Automatic Compound Inflation Option (ACIO)

The DBA automatically increases by 3% compounded every year. The premium does not increase each year, however, premiums are not guaranteed not to increase in the future. The premiums are generally higher with this option.

Option 2 = Future Purchase Option

You are given the opportunity to increase your DBA every two years with a corresponding increase in your premium. You may decline the increase a maximum of three times before you stop receiving offers. The increase in your benefits is based on the Consumer Price Index for All Urban Consumers (CPI-U).

The amount of the increase to your DBA and the corresponding increase in your premium will be sent in a notice every two years prior to the increase’s effective date. The increase will automatically take effect unless declined.

If you select the future purchase option, your premium will increase for each inflation increase under this option unless you decline offers. The additional premium for each increase will be based on your age and the premium rates in effect at the time the increase takes effect. As your benefits increase, your future purchase option (FPO) premium also increases and may eventually become greater than the ACIO premium.

Average Consumer Price Index increases from 1992 to 2021 are as follows:

Length of TimePeriodCPI-U
10 years2012-20211.88%
20 years2002-20212.15%
30 years1992-20212.32%
*In the long term the FPO benefit will be less than the ACIO benefit | Source: BLS

What is the Maximum Lifetime Benefit?

The maximum lifetime benefit (MLB) is the maximum amount your coverage can pay.

MLB calculation = daily benefit amount x benefit period (in days)


  • Daily Benefit Amount = $200/day
  • Benefit Period = 3 years or 1,095 days
  • Maximum Lifetime Benefit amount is $219,000

Customize Plans

Below are the options available to customize a plan for FLTCIP 3.0.

1. Daily Benefit Amount

  • $100
  • $150
  • $200
  • $250
  • $300
  • $350
  • $400
  • $450

2. Benefit Period

  • 2 years
  • 3 years
  • 5 years

3. Inflation Protection Option

  • 3% automatic compound inflation option
  • Future purchase option

How are Premiums Determined?

Premiums are based on your age and the premium rates in effect at the time the application is received. Premiums are guaranteed renewable, meaning that John Hancock cannot cancel your coverage if you pay your premium on time.

Premiums are unaffected based on increasing age or health status. However, this does not mean that premiums are guaranteed to remain unchanged.

We have seen a history of the premiums increasing in cost every 7 years. Historically, premiums have increased severely each time the 7-year contract was up for renewal. 

In 2016, premium rates rose 83% on average, and as high as 126%. In 2009, premiums rates increased on average 17%, and as high as 25%. In 2023, we saw increases from 49% up to 86%.

The good news is that OPM must approve any premium changes and the rates will not increase during the 7-year contract period.

Premium Increases

John Hancock has the right to increase premiums in the future. The premium may NOT increase based on your individual age or health. It may only increase if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, OPM must approve the increase in premium.

Waiting Period

The waiting period is 90 days. Benefits are not paid during this time, except for hospice care, respite services, and the stay-at-home benefit. The waiting period is only once in your lifetime. Days applied toward satisfying the waiting period need not be consecutive, nor associated with the same episode of care.

Waiver of Premium

The premium is not owed if you are eligible for benefits and have satisfied the waiting period.

Eligibility of Benefits

Eligibility for LTC requires you are unable to perform at least two activities of daily living (ADLs).

  1. Bathing
  2. Dressing
  3. Toileting
  4. Continence
  5. Eating
  6. Transferring (from bed to chair)


FLTCIP is a great program, but keep in mind it is not the only program available. In the past several years, multiple competitors have joined the market with solutions that may better fit your needs. A key advantage of FLTCIP is that the premium will not increase in between the 7-year contract period whereas other LTC providers may increase the premiums on an annual basis. Make sure to do your homework and review all the options available. LTC is a long-term commitment and a large expense. The decision should not be made without proper planning.

Source: The Federal Long Term Care Insurance Program 3.0

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Securities and advisory services offered through Osaic Wealth, Inc., member FINRASIPCOsaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Representatives may not be registered to provide securities and advisory services in all states. Branch address: 10701 Parkridge Blvd, Ste 130, Reston, VA 20191. Branch phone: 571-543-2783.

About the Author

Brennan Rhule, co-founder of PlanWell Financial Planning, is focused on empowering federal employees to retire with confidence. PlanWell is committed to providing financial education to Feds on a national level, delivered through weekly articles, webinars, and personalized guidance. Sign up to attend our Federal Retirement Webinars – we hope to see you there!