Today, the U.S. Office of Personnel Management (OPM) briefed NTEU on the upcoming premium rate increases for the Federal Long Term Care Insurance Program (FLCTIP). In April 2015, OPM awarded a new, seven year contract, as required by law, to John Hancock Life & Health Insurance Company. John Hancock was the existing insurance carrier for the FLTCIP program, and was also the sole bidder for this new contract. Based upon updated actuarial assumptions regarding mortality rates, medical care usage, inflation and costs, and actual claims and investment performance, OPM approved the increase in premium rates.
The majority of the current 274,000 enrollees will experience significant premium increases as of November 1, 2016. Note that federal employees will see the new amount deducted as of the first full pay period after November 1st, and annuitants will first see the new higher premiums deducted starting with their December 1st annuities.
Any FLTCIP enrollee affected by the premium increase will receive a personalized packet from FLTCIP which will begin to be mailed out as of this week over a several week period. The mailing will inform each individual what their exact premium increase will be based upon benefit options (benefit period and inflation option), issue age (when the person first applied and was approved for coverage), and the original plan purchased (FLTCIP 1.0 versus FLTCIP 2.0). Individuals do not need to take any action if after seeing the premium increases, they want to remain enrolled in the program at current coverage levels.
Enrollees will also be offered options to reduce coverage levels, which will result in the ability to maintain current premium levels (or lower premium rate increases than the full rate increases). The deadline to inform FLTCIP of any interest in one of the alternative options is September 30, 2016. If enrollees do not take any action, they will simply be charged the higher premiums as of November 1st. Enrollees will not be able to elect one of these alternative options after September 30th. Submission can be made online at www.LTCFEDS.com/MyAccount, via fax at 1-866-921-4511, or via the mail to Long Term Care Partners, P.O. Box 8330, Portsmouth, NH, 03802-9908.
General Long Term Care insurance information, as well as further details about the FLTCIP program, is available at https://www.ltcfeds.com/ or via toll-free with a trained long-term care customer service representative at 1-800-582-3337 (8 a.m. – 8 p.m. Eastern).
NTEU is concerned that already-expensive long-term care insurance will soon be completely unaffordable for federal employees, and questions the viability of the FLTCIP program for the future given the overall drop in long-term care insurance carriers and current premium increases.