Long-term care (LTC) insurance is a benefit that seems ripe for the needs of today’s workforce. Yet, when employers offer employees the chance to purchase long-term care coverage through the workplace, the participation is usually low. (Typically, LTC insurance is offered as a voluntary benefit, for which an employee pays the entire premium.) A study contracted by the U.S. Department of Health and Human Services (HHS) found that, while purchase rates varied considerably among the group of surveyed employers, 40% saw participation rates below 2%. A separate study published by the Employee Benefit Research Institute (EBRI) found employee participation rates for LTC insurance averaged less than 10%.

As with any voluntary benefit, there are advantages to purchasing LTC through the workplace: premiums are typically lower due to the power of group purchasing; underwriting may be less stringent; marketing comes to the employee, who does not have to take the time to seek out information; enrollment will be easy and payment convenient through payroll deduction. Given these advantages, why don’t more employees opt to enroll when offered the chance?

A study from AARP indicates misconceptions among Americans about long-term care needs, costs and services, and this may be one factor contributing to the low number of individuals who decide to purchase LTC insurance coverage. According to this survey, “Americans age 45-plus know less about long-term care than they think they do.” Some specifics from the survey indicate a sobering lack of knowledge about issues involving long-term care-

• Only 8% of respondents correctly estimated the monthly cost of a nursing home within 20% of the national average cost, and only 23% made a similarly correct estimate for the monthly cost of an assisted living facility.

• Close to a quarter didn’t know the cost of an in-home visit from a skilled nurse or an aide.

• A majority (59%) thought Medicare pays for extended nursing home stays, and 52% thought Medicare covers assisted living costs.

• Almost 30% said that they have purchased LTC insurance, a figure considerably higher than industry estimates about the number of policies that have been sold.

Clearly, more work needs to be done to educate individuals about the issues involving long-term care. Employers that make LTC coverage available agree with this assessment. The HHS study cited above reveals that employers found educating employees about the LTC benefit to be very important, but also very challenging. When asked what they would have improved about their LTC offering, most named education and communication during the initial offering period.

Looking back at the employee misconceptions about LTC, overcoming them indicates several key communications components:

• The cost of long-term care services. According to a 2007 study from Genworth Financial, the national average for a private room in a nursing home runs almost $205/day or almost $75,000/year; a stay in an assisted living facility costs more than $2,700/month; and hourly rates charged by certified home health agencies average more than $32.

• The funding sources for long-term care services. As noted above, many people think that, once they hit age 65, Medicare will pay for any long-term care needs that may arise. However, Medicare does not cover extended long-term care stays.

• The chances that long-term care services will be needed in one’s lifetime. According to figures from the government, currently, about 9 million people over the age of 65 need assistance with their long-term care needs. By 2020, this figure will likely rise to 12 million. According to one government study, individuals who reach age 65 have a 40% chance of entering a nursing home, and about 10% of people who do enter a nursing home will stay there for five or more years.

• The advantages of purchasing coverage through a voluntary workplace-based offering.

The EBRI study cites surveys showing that communications is the most important determinant of participation in a long-term care program; one survey noted found that 38% of employers making LTC coverage available wished, in retrospect, that they had communicated the plan more effectively. Thus, when contemplating an LTC offering-or when looking at an existing program-do not underestimate the importance communication and education will play in the program’s success.