FLTCIP – Federal Long Term Care Insurance Program

The Federal Long Term Care Insurance Program (FLTCIP) provides insurance for several types of long-term care that people may need because they are unable to care for themselves — including nursing home care, assisted living facility care, formal and informal care in the home, hospice care, respite care and similar services. Federal employees, retirees, certain family members and similarly situated members of the military community are eligible for the benefit, which was offered starting in 2002.

The coverage is administered by LTC Partners, LLC, and underwritten by the John Hancock insurance company. The initial contract covered 2002-2009. A second contract covering 2009-2016 changed some of the available benefits, although those already enrolled at that time were allowed to keep their existing coverage. The third contract, covering 2016-2023 did not change the available benefits, although premiums increased for most enrollees.

Key features of the program include:

  • Premiums are the same for all purchasers of standard coverage at any given age regardless of their employment status.
  • Newly hired employees and their spouses—as well as newly acquired spouses of current employees—for the first 60 days after the hiring or marriage are subject only to abbreviated underwriting, which in essence seeks to learn if they would be currently eligible to draw benefits or likely to be eligible in the near future. Otherwise, employees, retirees and other eligible persons are subject to full underwriting, which adds questions about general lifestyle and health practices.
  • The coverage is guaranteed renewable. That means that the insurance carrier cannot cancel your coverage unless you stop paying premiums.
  • The coverage is fully portable. For example, that means that if you leave federal employment or get divorced from your federal employee spouse, you can keep your policy at the same premium.

FLTCIP Eligibility and Enrollment

As specified in the law, individuals eligible to apply for this insurance coverage are:

  • Federal employees and members of the uniformed services. This includes employees of the U.S. Postal Service and Tennessee Valley Authority, but does not include employees of the District of Columbia government. For federal and postal employees, in general if you are in a position eligible for FEHB coverage, you are eligible for this program (whether enrolled in FEHB or not—the key is eligibility). The exception is that temporary employees and employees working on seasonal or intermittent schedules are not eligible even if they are eligible for health insurance.
  • Federal annuitants, surviving spouses of deceased federal or postal employees or annuitants who are receiving a federal survivor annuity, those separated and who will be eligible for a “deferred” annuity, individuals receiving compensation from the Department of Labor who are separated from the federal service, members or former members of the uniformed services entitled to retired or retainer pay, and retired military reservists at the time they qualify for an annuity or those separated and not yet drawing an annuity (also known as gray reservists).
  • Current spouses of employees or annuitants.
  • Adult children (at least 18 years old, including adopted children and stepchildren) of living employees, annuitants, and of surviving spouses receiving an annuity.
  • Parents, parents-in-law, and stepparents of living employees and their spouses (but not of annuitants or their spouses).

In addition to the categories of eligibility in the law, under 5 CFR 875.213 unmarried domestic partners (of either gender) meeting certain standards (see Domestic Partners) of federal employees and retirees are eligible. One partner must provide a declaration to the employee’s agency or to the retiree’s retirement system that they meet certain standards, including intent to remain a partner, sharing of a residence and financial obligations, among others. Detailed standards and a sample form are in Benefits Administration Letter 10-901 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters; the form is not mandatory but any substitute declaration must meet all the criteria. The employee or retiree must be eligible for FLTCIP for a partner to be eligible, but does not have to be personally enrolled. Partners are subject to the same underwriting and approval requirements as other applicants and if coverage is approved it would continue if a relationship is later dissolved. The policy does not apply to opposite-sex domestic partners nor to same-sex partners of military personnel or retirees.

Newly hired employees, their spouses and newly acquired spouses of current employees, and similarly situated domestic partners, may apply for the program using the abbreviated application within 60 days of becoming eligible. After that time, they can still apply, but have to use the “full” application form that asks more questions about the state of their health.

Full underwriting always applies to retirees and their eligible family members, unless that person is eligible for abbreviated underwriting on his or her own accord.

Individuals eligible for the coverage in more than one category can choose the status from which to apply. For example, a retiree who is reemployed in a federal job that conveys eligibility for FLTCIP (as most do) could apply as a newly hired active employee, not as a retiree, and be subject only to abbreviated underwriting during the 60 days after the hiring.

The program does not conduct regular open seasons.

For an enrollment kit, contact your personnel office, call (800) 582-3337 (TDD (800) 843-3557), or go online to www.ltcfeds.com.

Underwriting

Underwriting is the process of reviewing medical and health-related information furnished in an insurance application process to determine if the applicant presents what the insurance industry considers an acceptable level of risk.

In abbreviated underwriting, the application has several health-related questions designed to determine who may be immediately eligible for benefits, or eligible for benefits within a short period of time. The questions ask whether the applicants: currently are receiving long-term care type services; are being (or have been) treated for certain conditions, including Alzheimer’s; use certain types of medical devices; or have been diagnosed with mental or nervous disorders that have required hospitalization. Spouses eligible for abbreviated underwriting also must answer whether they require help with certain activities or use crutches or a multi-prong cane.

Full underwriting asks numerous health-related questions. It may also include a review of medical records and/or a personal interview. In addition to the questions applying in abbreviated underwriting, full underwriting asks additional medical questions as well as lifestyle-type questions, including queries on exercise habits and use of alcohol and tobacco.

If your application is approved, it doesn’t matter if you have a pre-existing condition. You will be offered the standard insurance product. Individuals who do not pass underwriting will be offered non-standard insurance or services.

Benefits Choices

Enrollees can customize the benefit amount, the length of the policy, and inflation protection.

An enrollee can decrease to anything that is available under the program, and premiums (which will be based on original age) will also decrease. Enrollees would not have to undergo new underwriting in order to decrease your coverage. However, there is no “paid-up benefit” crediting for premiums already paid for a higher level of coverage.

An enrollee at any time also may request an increase in coverage. However, in order to receive approval of a request for an increase outside of an open season, the enrollee would have to provide, at his or her own expense, evidence of good health that is satisfactory the carrier. The amount of an increase is subject to what’s then available under the program. The additional premium will be based on the enrollee’s age and the premium rates in effect at the time the increase takes effect.

In addition, a special period for changing coverage was held in late 2009-early 2010 for enrollees who had elected coverage under terms of the original provider contract to change coverage, including electing newly benefits available under the second contract, without underwriting. See above.

Daily Benefit Amount

This is the maximum amount the plan will pay in any single day. If the cost of the care you receive in a single day costs less than your DBA, the difference is carried over for you to use later.

You choose your daily benefit amount. You can choose a DBA from $100 to $450 in $50 increments ($50 to $300 in $25 increments under the original contract that expired in April 2009). The cost of care in an assisted living facility or a nursing home or hospice care (whether in a facility or at home) will be reimbursed up to 100 percent of your DBA. Home care will be reimbursed up to 100 percent of your DBA (75 percent under the original contract).

Benefit Period and Maximum Lifetime Benefit

If you choose a lifetime benefit, benefits will continue for life. In effect, there is a limitless benefit period and no maximum lifetime benefit.

If you choose two, three or five years of coverage (a two-year term was not available under original contract; see above):

  • The benefit period is the length of time your maximum lifetime benefit will last if you receive care every single day at a cost equal to or more than your daily benefit amount. If you receive services that cost less than your daily benefit amount, or don’t receive services every day, your benefits will last longer.
  • The benefit period is used as a multiplier, along with your daily benefit amount, to calculate your maximum lifetime benefit, the maximum your plan will pay. The calculation is: daily benefit amount x benefit period (in days) = maximum lifetime benefit. For example, if you choose a $100 daily benefit amount and a three year benefit period, your maximum lifetime benefit would be $109,500 ($100 x 1095 days (which is three years at 365 days/year)) = $109,500.

This amount of money is available for reimbursement of approved long-term care costs for as long as you’re eligible for benefits, after you meet the waiting period you selected.

The maximum lifetime benefit is also referred to as a “pool of money.”

If you are eligible to receive benefits and have met your waiting period, the maximum lifetime benefit is available to you. It does not matter how long you have paid premiums.

Inflation Protection

The program lets you choose between the following two inflation protection options.

Automatic Compound Inflation Option

With this option, your daily benefit amount and the remaining portion of your maximum lifetime benefit will automatically increase by 4 or 5 percent every year with no increase in your premium. The benefit increases continue even if you are eligible for benefits. (Notes: Rates under this option were increased effective in calendar year 2010 under the second FLTCIP contract, for those who were younger than age 70 when they purchased the coverage. Under the original contract, only a 5 percent level was available.)

Future Purchase Option

This allows you to buy additional coverage every two years at an extra cost. The increase offered in your daily benefit amount and the remaining portion of your maximum lifetime benefit is based on increases in the Medical Consumer Price Index. Each time you buy additional coverage, your premium will increase. The premium for the additional coverage will be based on your age and premium rate at the time the increase takes effect. Every two years you will receive your Future Purchase Option notification provided you are not eligible for benefits and have not declined three Future Purchase notifications in the past.

You may switch to the Automatic Compound Inflation Option without proof of good health when you receive your Future Purchase notification as long as you are not at the time eligible for benefits and have not declined three Future Purchase notifications in the past.

You can request a decrease in your coverage at any time. You can decrease to anything that is available under the program, and your premiums (which will be based on your original age) will also decrease. For example, if you have the five year benefit period, you can decrease to a three year benefit period. You do not have to undergo new underwriting in order to decrease your coverage. Your premiums would continue to be determined as of your age when you took out coverage and would decrease according to the effect of the options you chose.

Waiting Period

The 90-day waiting period is the number of days during which you must be eligible for benefits and receiving covered services before your benefits start. It works like a deductible in health insurance. You only have to satisfy the waiting period once in your lifetime. Days applied toward satisfying the waiting period need not be consecutive, nor associated with the same episode of care. The days will be added together until the waiting period is satisfied.

The waiting period does not apply to hospice care and respite care.

Premium Rates

Premiums are based on your age when you buy the coverage (the younger you are when you buy, the lower the premiums, all else being equal). Premiums also vary based on the choices you make about your daily benefit amount, benefit period, waiting period, and the type of inflation protection you select.

Premiums may increase during the course of a contract due to enrollment and claims patterns, as they did effective in March 2010 for enrollees who were under age 70 when they purchased automatic inflation coverage. Also, rates were increased for all enrollments after July 31, 2015 for the same reason; that did not affect those already enrolled at the time. Further, rates increased in November 2016 when the latest contract became effective—again for the same reason—for most of those who had enrolled before August 1, 2015.

Premiums may change only for entire groups, not on an individual basis.

When you choose the future purchase option for inflation protection, your premiums will increase if you choose to increase your benefits.

Premiums are the same for all purchasers of the same coverage at the same age—employees, annuitants, and all the other eligible groups.

The coverage is guaranteed renewable. That means that the insurance carrier cannot cancel your coverage unless you stop paying premiums (or unless you commit fraud when completing your application).

When benefits start and end

In order to begin drawing benefits from the program, you would have to submit a claim within 12 months from the date you incurred charges for whatever services are covered under the plan option you chose. LTC Partners may contact you, your physician or others familiar with the services provided, access your medical records, and request to have you examined at its expense by a health care provider, among other steps.

Start of benefits

You will be eligible for benefits after you meet the following conditions and you satisfy any required waiting period.

  1. A licensed health care health practitioner certifies that:
  • you are unable to perform two of six activities of daily living and your condition is expected to last at least 90 days; or
  • you need substantial supervision due to a severe cognitive impairment.
  1. Long Term Care Partners agrees with the certification.
  2. A licensed health care professional develops a plan of care for you and LTC Partners approves that plan of care.

Activities of daily living are common activities that people perform every day, specifically:

  • bathing: washing your hair, washing yourself by sponge bath, or in either a tub or shower, including the task of getting into or out of the tub or shower;
  • dressing: putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs;
  • transferring: moving into or out of a bed, chair or wheelchair;
  • toileting: getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene;
  • continence: maintaining control of bowel and bladder function, or, when unable to maintain control of bowel or bladder function, performing associated personal hygiene (including caring for catheter or colostomy bag); and/or
  • eating: feeding yourself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

A severe cognitive impairment is an impairment or loss in:

  • short or long term memory;
  • orientation as to person, place and time; or
  • deductive or abstract reasoning.

Such impairment or loss places you in jeopardy of harming yourself or others and therefore in need of substantial supervision by another person.

End of benefits

Unless you elect lifetime benefits, benefits end when the maximum benefit amount (pool of money) is exhausted. Once you have used up your benefits, you will not be able to renew or restart a policy, even if you have recovered.

Appeal Rights

If a claim is denied, you will be able to request reconsideration within 60 days and the carrier will respond within another 60 days. If the reconsideration decision is again to deny the benefit, you may file an appeal within 60 days that will go to an appeals committee that also will issue its decision within 60 days.

If that committee in turn upholds a denial, you may request an appeal to an independent third party to be determined by OPM and the carrier. Again, the request would have to be made within 60 days and a decision would come within 60 days afterward. The third party could, for example, uphold a denial of benefits based on a determination of your capability to perform the “activities of daily living” that serve as triggers for coverage, but it could not intervene in strictly administrative decisions such as whether you have exhausted the pool of money available to you if you choose other than lifetime coverage.

Once you have exhausted this appeals process, you may seek judicial review in federal district court of a final denial of eligibility for benefits or a claim. However, the amount of recovery would be limited to the benefits that would have been payable. Also, suits against OPM or the third-party adjudicator are not allowed, nor are suits under state or local law or regulations.

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