What is Federal Long Term Care Insurance Program (FLTCIP)?

FLTCIP is group-sponsored long-term care insurance program sponsored by the U.S. Office of Personnel Management (OPM), insured by John Hancock Life and Health Insurance Company, and administered by Long Term Care Partners, LLC.

If you become unable to care for yourself because of chronic sickness, accident, disability, or just old age, the FLTCIP can assist cover the costs of long-term care insurance that you purchase to cover those expenses. FLTCIP covers the cost of any monitoring you might require because of serious cognitive impairment. Alzheimer’s disease falls into this category, for example.

The goal of long-term care is not to heal you and may be required for the rest of your life. The duration and cost of this treatment may exceed your budgetary limits, depending on the complexity of your condition and the resources available in your area. To some extent, these costs can be offset by purchasing long-term care insurance.

We will go into further depth about this coverage plan in the next paragraphs. If this interests you, keep reading!

Who Is Eligible For This Program?

Employees

• Positions within the federal government that imply a worker is eligible for the Federal Employees Health Benefits (FEHB) program regardless of whether or not they are enrolled in the program,
• Positions within the United States Postal Service (USPS) that imply FEHB program eligibility regardless of whether or not an employee is enrolled in the program, and
• Persons currently serving in the armed forces.

Annuitants

• Retirees receiving pensions from the Federal Government or the United States Postal Service under CSRS or FERS,
• Active and retired military personnel, and
• Those who are entitled to a delayed annuity but are not yet receiving payments – considered deferred annuitants.

Qualified relatives

• Spouses of active employees who are qualified,
• Only the current spouse of a CSRS or FERS annuitant is entitled to receive an apportionment of their annuity,
• Eligible workers’ biological and adoptive parents and stepparents; However, children, spouses, and grandchildren of annuitants are not eligible.
• Children, including adopted and stepchildren, of qualifying workers and annuitants who are still alive and are at least 18 years old, and
• Spouses and children of workers and pensioners are considered eligible.

Federal and U.S. Postal Service employees and annuitants, active and retired members of the Uniformed Service, and their qualified relatives are eligible to apply for coverage under the FLTCOP. The following is a breakdown of specific individuals who are eligible to apply for coverage:

Policies under FLTCIP

When it comes to long-term care insurance, you have several options from which you can choose. The qualified persons may select from the following options:

• Daily benefit amount
• Benefit period, including maximum lifetime benefit
• Inflation protection

Daily benefit amount

A person’s FLTCIP insurance has a maximum daily payment that is equal to the daily benefit amount. Eight different daily benefit amounts (DBAs) are available under the FLTCIP, ranging from $100 to $450 in $50 increments.

If you’re looking for a DBA in line with the estimated daily cost of care that Americans have to pay, then $250 is a good choice. Those who foresee themselves relocating to a region of the country where the cost of LTC exceeds the national average DBA should select a higher DBA than the national norm.

Benefit Period, Including Maximum Lifetime Benefit

If a person with long-term care insurance receives DBA benefits every day, those benefits will be paid out over the benefit period. One can choose to receive benefits from the FLTCIP for either two, three, or five years. Benefits may extend beyond the policy’s benefit term if the policyholder obtains less expensive services than their DBA or if the services are not received daily.

An individual’s budget and anticipated demands should be taken into account while determining the optimal benefit period. Two- or three-year benefit periods may be suitable for those who wish to keep premium costs low and are prepared to pay some long-term care costs out of pocket. A five-year benefit term may be preferable if it’s anticipated that future medical improvements will result in a higher life expectancy and the potential of needing care for many years.

To determine the maximum lifetime benefit, the DBA and the benefit period are employed. An individual’s long-term care insurance policy has a limit known as the maximum lifetime benefit (MLB). The MLB is found by multiplying the DBA by the number of years of the benefit (in days).

Inflation Protection Options

The FLTCIP provides two kinds of inflation protection – automatic compound inflation option and future purchase option – to help make sure a policyholder’s benefits stay up with inflation and the growing cost of care.

Automatic compound inflation option (ACIO)

By selecting this plan, your DBA share of your MLB will grow by a compounded 3% annually. Benefits increases under this option are granted regardless of the policyholder’s age, the policyholder’s claim status, the policyholder’s claim history, or the length of time that coverage has been in place, should the policyholder become eligible for benefits. Despite these yearly increases in benefits, your premium remains the same. Almost every year, the cost of long-term care increases, making it more appealing to consider the ACIO for workers, annuitants, and other qualifying FLTCIP policyholders. Since one is prefunding future benefit increases that are intended to keep pace with inflation, the initial premiums are greater than the future purchase option.

Future purchase option (FPO)

Every two years, FLTCIP policyholders can use the FPO to raise their DBA and MLB for a small additional price. There’s no assurance of payment for premiums. When a FLTCIP policyholder declines an FPO offer three times, subsequent offers will no longer be made. Any FLTCIP policyholder who can prove they are insurable may switch to the ACIO. This implies the policyholder will have to foot the bill for providing medical records that convince Long-Term Care Partners, LLC that they are in excellent health.

Applying for FLTCIP and premiums

Anyone who meets the requirements and would want to apply for the FLTCIP must submit an application. You can send in your application at any time if you meet the requirements. Long-Term Care Partners determines premiums according to the applicant’s age and the current FLTCOP premium rates. Long-Term Care Partners LLC makes no guarantees about the acceptance of any applications. Historically, there have been several causes for application disapproval in the FLTCIP. It’s also worth noting that the premiums for FLTCIP insurance may increase or decrease during the lifespan of the policyholder.

Conclusion

Long-term care has become more expensive as the average lifespan in the United States has risen. If you are a federal employee, you may qualify for the Federal Long Term Care Insurance Program. Beneficiaries of the FLTCIP are given the freedom to create their long-term care plans, putting them in charge of their coverage and expenses. Inevitably, the cost of care in the future will exceed that of care in the present, thus it is important to have the ability to hedge against inflation when determining a plan’s daily benefit amount, benefit duration, and other policy details.