Breaking Into Worksite LTCI: A Step-by-Step Guide 

As “kitchen table” long term care insurance (LTCI) sales have declined over the last several years, the number of employer-sponsored programs has grown exponentially. Long term care is the largest unfunded liability we face, and employers and employees alike are beginning to realize it is a missing element in the employee safety net.

With most employers offering some form of tax-advantaged saving vehicle, it’s not uncommon for employees to accumulate significant retirement portfolios. That’s great news, but everything is at risk when a long term care situation arises.

Employer-sponsored individual long term care

Insurance carriers recognize that the future of LTCI is in the employer market. Reaching employees while they are young and healthy reduces the chance of their being declined because of health problems and allows them to incorporate long term care planning into their financial plan while protection is inexpensive.

Several carriers now offer employer-sponsored LTCI programs using individual products with premium discounts and simplified medical underwriting that can be implemented without cost to employers. With health insurance increases being passed to employees each year, companies are now open to offering the benefits of sponsored long term care on a voluntary basis.

Breaking into an untapped market

The opportunity for LTCI in the worksite is virtually untapped. Not only can companies offer premium discounts and underwriting concessions to their employees without cost, they can choose to pay for owners and key executives on a discriminatory basis. Company-paid coverage is tax-deductible and not counted as income to the employee, and when it comes time to collect benefits, they’re received by policyholders tax-free.

How do you get involved?

Although you can contact employers yourself and make a compelling presentation, the first thing they’ll do after you leave is call the person who handles their benefits. In most cases they have a relationship with their benefit advisor and may even be personally close with them. Have you met an insurance agent who won’t say, “I can do that, too”? The fact is, they are licensed to sell insurance, which brings us to step two.

LTCI is unlike other core employee benefits because most people don’t understand what it is or why it’s important. People have preconceptions that it’s for nursing homes, it’s very expensive, or it’s something for old people. To be successful, you must know how to apply carrier rules for discounts and underwriting concessions to structure programs that work for employers. In addition, you need a system to disseminate enrollment information, deliver education, and have the ability to meet one-on-one with employees to provide advice and write business.

The strategy is to use your long term care knowledge along with a process for worksite enrollments to convince employee benefit advisors to partner with you. Benefit advisors have relationships, but they don’t necessarily understand the product, have time for it, or have a system to implement it.

In the long run, it’s easier and more productive to partner with benefit advisors and split cases than it is to fight against them. They have years of friendship, loyalty, and trust that you can use to close sales.

What must the system include?

The benefit advisor’s role is to make appointments for joint sales calls to their clients. They should ask clients for an hour so you can share information about a problem that threatens everything they’re working to achieve with their business. “The topic is long term care, and it’s directly related to your financial plan,” they should tell clients. “It doesn’t have to cost the company anything, and I need to know you understand it.”

Following is an outline of what you’ll need to sell and enroll worksite LTCI.

First-call presentation with owner or HR manager

The first meeting should be a joint sales call with the benefit advisor who has the relationship. Before going into the meeting, have a discussion with the benefit advisor about their role. Ideally, they will introduce you as their partner in long term care and turn the meeting over to you.

The first meeting should be educational without a sales pitch. Present an overview of what long term care is and what people can expect from traditional health insurance, Medicare, and Medicaid without mentioning carrier or product names. Review general features of employer-sponsored plans and discuss available options such as voluntary, executive carve-out, or a combination of the two.

The first meeting is virtually the same as the meeting we do for employees, which puts the employer at ease. Knowing how they reacted to the presentation themselves, employers are more comfortable with how their employees will receive it.

The final goal for the first meeting is to obtain a spreadsheet with employee census information. The census should contain date of birth, date of hire, salary, marital status, resident state, and position/title. If the employer is uncomfortable with giving you salary information, point out that you don’t need names or Social Security numbers.

Prepare a proposal

Based on census information, prepare a proposal that includes two to four carriers. Showing all viable carriers eliminates the need to deal with other advisors. The proposal should not be produced from carrier software. As the expert, develop your own format that compares premiums for several carriers. It isn’t the products that differentiate advisors — it’s the enrollment process and your ability to deliver information, education, and one-on-one consultations to customize solutions for each employee.

In addition to showing multiple carriers, each proposal should contain four plan-design options. The first option is the smallest plan allowed by law, and the fourth is the richest available with underwriting concessions.

In each option, sort employees by length of service within position category and subtotal premium for each category. Proposals structured this way plant seeds for employers to pick and choose whose plans they can contribute something toward. Instead of showing the total cost for all employees, the employer gets to see cost summarized by position and length of service.

Promote the benefit to employees

Once the employer has committed, schedule an implementation meeting to define the activities of the enrollment. Depending on the size of the enrollment, touch employees four to 10 times with information on the new benefit.

Educational employee meetings

Limit meetings to groups of no more than 15 to 20 employees. They are most effective when employees are comfortable with sharing information about their own situations and experiences.

Enrollment meeting packages

Each employee receives an informa-tion package at the enrollment meeting. The package includes benefit option sheets customized for them and their spouse based on their ages. At the end of the meeting, present a slide with a picture of a benefit option sheet, at which point employees are instructed to pull their sheets out of their packages.

A benefit option sheet shows the cost of up to four plan designs along with how much the employer is paying for each and how much the employee must contribute. Under the cost information is the total current value of the benefit for each plan design. For example, a $100-per-day benefit for three years is worth $109,500 ($100 x 365 days x 3 years). Under the value of the benefit, we show the value of the benefit in the future at ages 50, 60, 70, and 80. When a plan option includes 5 percent compound inflation protection, the value of the benefit increases each year.

Customized benefit option sheets allow employees to see the actual cost for different plans and what the benefit will be worth when they are likely to need it after emotionally connecting to the issue during the educational meeting.

One-on-one consultations

At the conclusion of the group educational meeting, employees fill out a response form giving their contact information to schedule follow-up meetings. One-on-one meetings are used to review riders and customize solutions for each employee. Benefit option sheets are only guides, and during the edu-cational meeting, employees are told they can purchase exactly what is right for them.

Administrative services

A system for worksite LTCI should include a process for efficiently delivering policies, coordinating payroll deduction information for employers, and enrolling newly eligible employees each year.

Employer-sponsored long term care insurance completes the safety net provided by the company benefit package and provides a steady stream of new LTCI clients. With the right approach, you should have no problem dominating the worksite LTCI scene.

Doug Ross is president of ElderCare Insurance Agency, which specializes in worksite long term care insurance enrollments and provides back-room support and services to insurance advisors that have employer relationships. Mr. Ross can be reached at 800-483-1115, Ext. 223 or dross@elderltc.com.