long-term care insurance multi-life discount program metropolitan life insurance company new york,...

Long-Term Care InsuranceMulti-Life Discount Program

Metropolitan Life Insurance Company • New York, NY 10166

PRODUCER OR BROKER/DEALER TRAINING USE ONLY—NOT TO BE USED WITH GENERAL PUBLICL06087162[exp1209]

LTC 04730(0608)

2PRODUCER OR BROKER/DEALER TRAINING USE ONLY — NOT TO BE USED WITH GENERAL PUBLIC

Why LTCI Multi-Life Discount Programs?

Producer• Multiple policy sales potential

• Door opener for other financial service needs

• Discounted premium rates for employees and eligible family members

• Reduced underwriting requirements compared with individual policies sold outside the workplace

• Opportunity to substantially increase book of business

• Cross-sell opportunities with the employer for other employee benefits broker may offer


Why LTCI Multi-Life Discount Programs?

Employer• Help maximize recruitment and retention of employees

• Help minimize productivity losses due to caregiver distractions– i.e. when parent or spouse has coverage and becomes chronically ill,

the employee is less likely to require time off or be distracted while at work

• Achieve potential tax deductions for businesses (if employer pays the premium)*

• Help employees protect their retirement savings/assets from potentially high costs of LTC events

* MetLife does not provide tax and legal advice. Clients should consult their attorney and /or tax advisor.


Why LTCI Multi-Life (continued)?

Employer Considerations• American businesses lose between 17.1 - $33.6 Billion

in productivity costs per year1

– Productivity costs include replacing employees, absenteeism, workday interruptions, unpaid leave and reducing hours from full-time to part-time

– Based on employees making workplace accommodations as a result of caregiving responsibilities

• Eldercare calculator

– www.eldercarecalulator.org drills down this figure on an individual employer basis

Source: MetLife Mature Market Institute®, “MetLife Caregiving Cost Study: Productivity Losses to U.S. Business,” July 2006


Employee Productivity Concerns:

• More than one-fifth (22%) of the sandwich generation furnish aid to their parents, other elderly family members, or both.– 17% personally provide help, which may include financial as

well as other forms of assistance, and another 5% bestow financial support alone.

• From 1996 to 2001:– 43% of older boomers have taken time off from their own jobs

to care for someone

– 17% have reduced the amount of time they work

Source: AARP, In the Middle: A Report on Multicultural Boomers Coping with Family and Aging Issues, July 2001.



Source: MetLife Study of Employed Caregivers: Does Long-Term Care Insurance Make a Difference? 2001.


Employee Concerns:

• With the aging workforce, childcare concerns are being replaced with eldercare issues

• LTC Insurance for eligible family members can help reduce future employee job disruptions

– With LTC Insurance, the caregiver nearly twice as likely to continue working

– Caregivers can have more “quality time” and leave hands-on assistance to care service providers


Why MetLife?

Multi-Life Competitive Advantages• MetLife is a leading carrier in the employer-sponsored LTCI market

• Simple participation requirements

– All eligibles count towards participation requirements

– Minimum requirement of 3 lives to establish a group

• No reduction in commission for 10+ life segment

• Reduced underwriting for everyone

• Spouse can have access to simplified underwriting if Employer-Paid*

• 10% Multi-Life discount available (employer-paid simplified underwriting)

* Does not apply in the 3-9 life segment


Eligibility* for Multi-Life Discount Program

• Employees/Retirees and their:– Spouses/Domestic Partners**

– Adult Children

– Parents and Parents-in-law (including step)

– Grandparents and Grandparents-in-law (including step)

*State variations may apply to eligible participants

**Spouses include, where permitted by law, Domestic Partners and Civil Union Partners

All participants must be age

18 to 84


Multi-Life Discount Programs

Four Program Options:

1. Employer-Paid*; Simplified Underwriting Program - 10% Discount

2. Employer-Paid*; Modified Underwriting Program - 5% Discount

3. Voluntary-Paid; Simplified Underwriting Program - 5% Discount

4. Voluntary-Paid; Modified Underwriting Program - 5% Discount

Discounts may vary by state.

*Employer may pay full or partial premium, however minimum contribution levels may apply

The discount program must be selected during the case review process


Participation Minimums

Two Participation Categories:

• 3 – 9 life segment

• 10+ life segment (No reduction of commission)


Participation Minimums

Simplified Underwriting Programs:

• Voluntary: – At least 10 insured lives (all

eligibles) must be received by MetLife within 90 days of case approval (3-9 life segment not available)

• Employer-paid: – At least 3 insured lives

(employer-paid, employees) must be received by MetLife within 90 days of case approval

Modified Underwriting Programs:

• Voluntary or employer-paid: – At least 3 insured lives (all

eligibles) must be received by MetLife within 12 months of case approval



If the employer chooses a:

• Modified Underwriting Program

– All eligible applicants must meet the Modified Underwriting requirements

– Preferred Health discount is available to any qualified, approved applicant

– Household discounts available to any qualified, approved applicant

– All features and options are available with Modified Underwriting



If the employer chooses a:• Simplified Underwriting Program:

– Employees and employer-paid spouses, age 65 and younger, may apply by meeting Simplified Underwriting requirements*

– All other eligible applicants must meet Modified Underwriting requirements

– Preferred Health discount is NOT available to any applicants within the group

– Household discounts are available to any qualified, approved applicant

– Benefit limitations apply

* Employee must meet actively at work requirement, and apply during initial enrollment period. Spouses must be employer-paid and apply during initial enrollment period. Benefit limitations apply.



Executive Carve-Out Programs:

• LTCI is a discriminatory plan which allows the employer to make contributions towards the premium of a select class of employees; the remaining employees will have access to the discount program on a voluntary basis.

For example:1. The employer agrees to pay the LTCI premium for the 5 executives

(executive carve-out); and 2. The remaining 25 employees are offered the same discount on a

voluntary basis.

Note: There may be ERISA implications depending on how LTCI policies are made available to the employees. Employers should consult their own tax and legal advisors for further information on potential ERISA implications.


Modified Underwriting Requirements

• Available to:– All eligible participants

– Medical questions similar to individual sales

– Age ranges for requirements more lenient than individual sales

Requirement* AgesMulti-Life Application - “Modified Questions” completed

All applicants

Attending Physician’s Statement (APS)

Applicants age 66-84

Phone Health Interview (PHI)


Face-to-Face Nurse Interview


*All requirements may be deemed necessary by Underwriter, if applicant’s health warrants it.


Simplified Underwriting Requirements

• Available to:– Employees age 65 and younger actively at

work (& spouses/domestic partners 65 and younger if premium paid by employer)

• Must be applying during initial 90-day enrollment period

• Must be applying for coverage within benefit limitations (see below)

– All other applicants must meet Modified Underwriting Requirements

• Simplified Underwriting Maximum Benefits*:

– VIP2: 5 year benefit period, $300 DBA

– LifeStage Advantage: • $6k MBA/$300k TBA (Simple Advantage)• $9k MBA/$500k TBA (Custom Advantage)

– All other benefits available

* State variations may apply

Requirement Ages

Multi-Life Application -5 “Simplified Questions” completed

Employees age 18-65

Multi-Life Application -6 “Simplified Questions” completed

Employer-paid spouses age 18-65


Modified Vs Simplified Underwriting What to Choose?

Simplified UnderwritingPros:+ 5 Insurability Questions for eligible

employees

+ Ease of enrollment

+ Employer-paid spouses eligible if group is set-up in the 10+ life segment

Cons:- Preferred Health Discount not available to

anyone in group

- Benefit limitations

- Limited to 90-day enrollment period

Modified UnderwritingPros:+ Fewer medical questions than standard non-

Multi-Life policy underwriting

+ Preferred Health Discount available

+ More benefit options available

Cons:- Additional underwriting may be considered

(phone and face-to-face interviews) for applicants under age 66, if their health warrants it

- Longer underwriting process

- Potential for more declines


Available LTCI Discounts

• Spousal/Domestic Partners– 30% when two spouses apply and are approved for coverage

• Marital– 15% when only one spouse applies or both apply but only one receives coverage

• Residential– 15% when two or more applicants reside in the same household and meet eligibility requirements

• Preferred Health– 10% for applicants who meet specific underwriting criteria and are not part of a Simplified Underwriting Multi-Life Program

Note: Spousal/Marital/Residential discounts may vary by state and may not be combined


Modified Underwriting:

Voluntary or ER Paid Multi-Life 5% + 30% Spousal/Domestic Partner + 10% Preferred Health = 45%

Voluntary or ER Paid Multi-Life 5% + 15% Marital/Domestic Partner + 10% Preferred Health = 30%

Simplified Underwriting:

ER Paid Multi-Life 10% + 30% Spousal/Domestic Partner = 40%

ER Paid Multi-Life 10% + 15% Marital/Domestic Partner = 25%

Voluntary Multi-Life 5% + 30% Spousal/Domestic Partner = 35%

Voluntary Multi-Life 5% + 15% Marital/Domestic Partner = 20%

Sample Discount Combinations

Note Spousal/Marital discounts may vary and be limited by state


Multi-Life Billing

Choice of Billing Options1) Direct Billing

– Available to: all eligibles– Monthly (Automatic Checking Account Deduction), Quarterly, Semi-Annual or Annual

basis– Bills are mailed directly to the insured unless it is a Monthly direct bill, which is only

available as an Automatic Checking Account Deduction

2) 3rd Party Billing– Available to: all eligibles– Bills are mailed to a third-party payor selected on the application on a Quarterly, Semi-

Annual or Annual basis

3) Employer List Billing – Available to: employee & their spouse only– Monthly statement sent to Employer or Payroll Vendor– Cash with application not acceptable

4) [Split Billing]– [Available to: employee & their spouse only]


ERISA and Employer-Sponsored Plans

The Employee Retirement Income Security Act (ERISA)

• Enacted in 1974

• Employer must specify to carrier whether the LTCI Plan they make available to their employees is considered an ERISA or non-ERISA plan

• If employer requests, please provide a copy of the ERISA Monograph, which includes a sample Summary Plan Description (SPD).– Ask your Multi-Life Program Advisor for a copy

Please refer your client/prospect to consult with their tax/legal advisor to determine ERISA status


LTCI Taxation Summary

C-Corporation S-Corporation

Business Tax Deduction

100% of total premiums paid

100% of total premiums paid

Personal Tax Deductions to Owner(s)*

None Owners of more than 2% stock can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns

Income Tax to Employee’s (premiums paid by employer)

Generally None Generally None

Income Tax to Owner(s)

Generally None Must declare premiums paid on behalf of themselves, their spouses and dependents as income

Employers should consult their own tax and legal advisors. The IRS Tax Codes that reference this summary are as follows: 104(a)(3), 162(l), 213(d), 7702B(a), 7702B(a)(3), 7702B(d)(2), Rev. Proc. 206-53

* No deduction allowed on coverage for the owner, spouse or dependents if the owner is eligible to participate in any other employer-subsidized (wholly or partially-paid) plan including that of a spouse’s employer

Under certain Internal Revenue Code (IRC) sections, such as §7702(B), tax qualified (TQ) LTCI policies may receive favorable tax treatment. For example, benefits received from an employer-paid TQ LTCI policy are generally non-taxable to the employee, and the employer-paid LTCI premiums for employees may be tax deductible to the employer.


LTCI Taxation Summary (Continued)

Partnership Sole Proprietor

Business Tax Deduction

100% of total premiums paid 100% of total premiums paid

Personal Tax Deductions to Owner(s)*

Partners can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns

The owner can deduct 100% of “eligible” premiums paid for themselves, their spouses and qualified dependents on their personal tax returns

Income Tax to Employee’s (premiums paid by employer)

Generally None Generally None

Income Tax to Owner(s)

Must declare premiums paid on behalf of themselves, their spouses and dependents as income

Must declare premiums paid on behalf of themselves, their spouses and dependents as income

Employers should consult their own tax and legal advisors. The IRS Tax Codes that reference this summary are as follows: 104(a)(3), 162(l), 213(d), 7702B(a), 7702B(a)(3), 7702B(d)(2), Rev. Proc. 206-53

* No deduction allowed on coverage for the owner, spouse or dependents if the owner is eligible to participate in any other employer-subsidized (wholly or partially-paid) plan including that of a spouse’s employer


Important to know

• Portable: Discount and coverage stays with employee if they leave the company

• No linkage required: Employee does not have to apply for family members to be eligible

• Employer-Paid: Partial or full payment acceptable & must be paid by employer (minimum contribution levels may apply)

• Exclusivity: Producer owns the rights to the discount for the group


The Trend: Sizes of Companies Offering LTCI

8 %4 %

9 %

1 2 %1 2 %

5 3 %

1 - 1 0 0 e m p lo y e e s

1 0 1 - 5 0 0 e m p lo y e e s

5 0 1 - 1 ,0 0 0 e m p lo y e e s

1 ,0 0 0 - 5 ,0 0 0 e m p lo y e e s

5 ,0 0 1 - 1 0 ,0 0 0 e m p lo y e e s

1 0 ,0 0 0 + e m p lo y e e s

Source: HIAA ILTC Survey, 2002.

“By the end of 2001, more than 4,700 employers were offering a Long-Term Care Insurance plan to their employees, retirees or both.”

– HIAA. Long-Term Care Insurance in 2000-2001, January 2003.


Preferred LTCI Multi-Life Business Characteristics

Recommended

• Small, closely held businesses (25 – 3,000 employees), including:

– Law & Accounting Firms

– Banks & Financial Institutions

– School Districts

– Technology Companies

– Carve-out employee groups

• Employer interest & support

• Stand alone offering

• Few locations

• Stable Industry

• Employee average age >40 yrs

• Employee income >$50,000

Not Recommended

• Building & trade contractors

• Charitable organizations

• Warehouse workers

• Unions

• Seasonal employees

• Foodservice workers

• No or little employer support

• Unrealistic enrollment timeline

• Complex plan design/requests

• Multiple carriers involved

• Multiple locations for enrollment


Recommended Business Types

• Small closely held/family businesses for executive carve-out cases

• Medical practices, healthcare

• Educational

• Financial, accounting and insurance

• Law firms

• Technology firms


Keys to Successful LTCI Plan Participation

• Employer support

• Simple plan design – 3 plan variations

• Strong marketing communications strategy that includes preliminary needs awareness building– Enrollment implementation with 8-11 employee communication

touch points

• Sufficient lead time for implementation

– 60 – 90 days


Importance of Employer Support

• Employers help create multiple employee touch-points and can provide you with employee access:

– Enforce mandatory seminars and one-on-one LTC educational meetings either during or after business hours• Meetings after business hours will allow eligible family members to

attend

– Assist with distribution of materials• E-mail and home address lists

– Provide a designated employer point-of-Contact

– Ability to facilitate payroll deduction, if list bill


When Are LTCI Offerings Not Successful?

• Lack of producer access to employees during pre-awareness campaign, program launch and enrollment

• Too many voluntary offerings competing for the same employee dollar

• Majority of employee population is under age 40 years with an annual salary below $50,000

• Unrealistic implementation timeframe

• Unclear need or low interest for LTCI

• Complex plan design with too many choices


Multi-Life Sales Support

• Multi-Life Program Advisor

– Responsible for group set-up

– Communicates with Producer/GA

• LTCI Wholesaler Team

– Training/Education

– Marketing strategies

• LTCI Resource Line

– Program Overview/ General Assistance

– Quotes/Proposals


Multi-Life Program Advisor

• Actively manage inbound Multi-Life calls

• Owns case from beginning to end

• Responsible for:

– Agent consultation: process/rules/options

– Illustration support

– Group review/approval

– Implementation meeting*

– Follow up & feedback

*Implementation meetings are mandatory for cases that are set up on a list bill


Multi-Life Approval Process

Step #1 MGA/Producer to send qualification form(s) to MetLife

– We will review group within 1-2 business days

– Applications should never be taken at this stage

Step #2 MetLife to send offer letter to MGA/Producer

– Authorized officer from organization to sign offer letter and return to producer

– Producer to provide signed letter to MetLife

Step #3 Formal approval

– MetLife will assign the Multi-Life Group number

– MetLife will inform the MGA/Producer of correct applications to use

– MGA/Producer can begin to market discount and enrollments


Quotes & Proposals

Quote/Illustration

• Available on MetWINS

• Introduction Illustration– Side by side of 3 plan designs for

ages 18-84

– Suitable for any group interested in our pricing

• Summary Illustration– Detailed quote for each employee

within group

– Suitable for employer paid situations

• Multi-Life Web-site

Proposal

• Used for bidding situations or when employer wants detail on MetLife and the LTC offering

• Must be pre-qualified

• Prepared by Multi-Life coordinator

• Customized for employer

• E-mailed to producer


Additional Information Sheets

• Handout Material

– Multi-Life Underwriting Program Overview

– ERISA Monograph

– Identifying Prospective Companies Sheet

QUESTIONS?

long-term care insurance multi-life discount program metropolitan life insurance company new york,...

Documents

ltci multilife continued

general public source

help employees

employer help

productivity losses

individual employer

employee concerns

replacing employees