Worksite LTC Insurance with Kevin Sypniewski

I had the pleasure of having Kevin Sypniewski, CEO of AGIS Network, on Steadfast Care Planning podcast. 

We discussed the importance of group and work site long-term care insurance for employers and employees. 

Here are the key topics from their conversation:

1️⃣  What’s the difference between Group and Worksite LTC insurance?  

2️⃣  What size employers can offer LTCi to their employees?

3️⃣  What does the process look like for employers to setup LTC insurance for their employees?

4️⃣  What are the minimum participation requirements by the carrier? 

Tune in to the episode to learn more about the differences between group and work site long-term care insurance, as well as the advantages and disadvantages of each.

➡️ Watch this full episode on YouTube: https://youtu.be/0ZDcYbNDh08

For additional information about Kelly, check her out on Linkedin or www.SteadfastAgents.com.

To explore your options for long-term care insurance, click here.

Steadfast Care Planning podcast is made possible by AMADA Senior Care and Steadfast Insurance LLC.

Come back next time for more helpful guidance!

Transcript

Kelly Augspurger [00:00:02]:

Hey, everyone. Welcome to Steadfast Care Planning, where we plan for care to live well. I'm your guide, Kelly Augspurger. With me today is Kevin Sypniewski. Kevin is the CEO of AGIS Network. AGIS works with benefit advisors to provide employers with long-term care insurance and support services. Kevin, thanks so much for being here.

Kevin Sypniewski [00:00:22]:

Thank you, Kelly. Happy to participate.

Kelly Augspurger [00:00:24]:

Today we are going to be talking about group and work site long-term care insurance. Kevin, can we jump right in?

Kevin Sypniewski [00:00:30]:

Sure, jump in. Let's go.

Kelly Augspurger [00:00:32]:

All right, let's go. Well, I want to give everyone a quick background of what it looks like for employers and employees when we consider when there's a long-term care situation. So we know, and Kevin, I know you can back me up here and probably even provide even more statistics and evidence, but we know that elder care impacts the work life of employees, right?

Kevin Sypniewski [00:00:52]:

Very much so.

Kelly Augspurger [00:00:53]:

And for the aging workforce, elder care is replacing childcare as the number one concern. There's an estimated 26 million caregivers that also hold jobs and mostly full time. There's a phrase or a word called presenteeism, and that means employees are physically present, but they're distracted by non work concerns, and this costs employers many times more in lost productivity than absenteeism. Right, Kevin?

Kevin Sypniewski [00:01:23]:

Yes.

Kelly Augspurger [00:01:24]:

When we're talking about statistics in the workplace, there are a few ones that I think that are really important. The first is that 12% of employees take leaves of absence to handle those elder care concerns, and 36% miss workdays. 40% have to rearrange their work schedule. So, Kevin, given this information, if employers can offer a solution to their employees and their families, enabling them to protect their family from long-term care situations, then it's a win for the family and a win for the employer, right?

Kevin Sypniewski [00:01:56]:

It really is. And it used to be we would talk about this and not get an employer to immediately start talking, "Oh, yes, we see that every day." But these days, over the last three to five years, employers are very aware of the elder care issues going on. But statistically, if they know of a few, most say that they don't tell their employers about what's going on with their elder care situation. So an employer knows a few, there's probably another five behind that that they don't know about.

Kelly Augspurger [00:02:24]:

And some of the solutions that are available include long-term care insurance and support services, maybe some caregiver training, caregiver resources for these family members that can be offered from the employer through a Group or Worksite long-term care insurance solution. So, Kevin, tell us, what's the difference between Group and Worksite long-term care insurance? I think people are familiar with the term Group, but I think Worksite is a little bit of a different term. So what does that mean?

Kevin Sypniewski [00:02:55]:

Yeah, it really came from the 90's when group long-term care insurance was a thing. So most of our employee benefits are group benefits, right? We have group long term disability, we have group health, group life. And so when long-term care started in the workplace, it was also a group policy where the employer held the master policy and employees got certificates. The employees didn't technically have their own policy. They were part of a broader group policy. In the early days, most long-term care was group in the workplace. Now a lot of it is their individual plans. The employer doesn't actually get a policy, the employees that buy it get a policy. And that's really more what we are talking about when we say "Worksite".

Kelly Augspurger [00:03:36]:

Got it. Now are there differences between the underwriting and the pricing when we look at this?

Kevin Sypniewski [00:03:42]:

The biggest difference in the old days group long-term care had guarantee issue. So new hires would get guarantee issue. When you put in a plan, everyone would get guarantee issue. And then if you were a late enrollee you'd already had your group offering and your guarantee issue offering and you tried to get on, then it was underwritten. These days if we're talking about traditional long-term care versus life with a long-term care, if we're talking about traditional long-term care there is no more guarantee issue out there. Unless you have a legacy unit plan then that might still offer some guarantee issue for the new hires. But you can't put in a new group long-term care plan because all the carriers that were offering those are no longer offering them.

Kelly Augspurger [00:04:20]:

So when we're talking about underwriting we're looking really at simplified underwriting, correct?

Kevin Sypniewski [00:04:25]:

Some carriers are simplified, some carriers are full underwriting. So a lot of what we do today is full medical underwriting. If it's the traditional long-term care, if we're doing life for long-term care products where you're getting a life policy and a long-term care policy, then those still offer guarantee issue. But for traditional long-term care they're either going to be simplified underwriting or full underwriting.

Kelly Augspurger [00:04:47]:

And I think it's important to even talk about the distinction between traditional and life with an LTC rider for those that might not be familiar. So when we're talking about traditional long-term care insurance, we're simply talking about standalone pure insurance if you have a long-term care need, right?

Kevin Sypniewski [00:05:02]:

Exactly.

Kelly Augspurger [00:05:03]:

Versus if you have a life insurance policy where we're adding a rider on there to be able to use part of the death benefit to pay for care. So, those are the two main different types of long-term care policies available today. And so that's what Kevin's talking about when he says traditional and then the life with the LTC.

Kevin Sypniewski [00:05:22]:

Exactly. And most new plans going in these days at larger employers are life with a long-term care because they do offer the guarantee issue. And when we're working with a traditional product, a traditional long-term care, we're seeing about 25% to 30% of the applicants get declined. Now realize that's not everyone applying because those that have issues are more likely to apply. So I don't think if you did 100% of a population, you'd see 30% declines, it'd be much less. And when it's a voluntary basis, people with needs and with health issues raise their hand first and therefore we're seeing that 25% to 30% decline rate.

Kelly Augspurger [00:05:59]:

Got it. Health is important when we're talking about full underwriting or even simplified underwriting, there are questions, health questions that need to be answered. And if you have a slew of medications you're on and lots of complications and health issues, you might not be able to get the coverage. So if you have an employer that is offering a guaranteed issue plan, it doesn't matter what your health is. Yeah, I think that's important to consider there too. And now for a brief message from our show's sponsor. The Steadfast Care Planning Podcast is sponsored by the CLTC Certified in Long Term Care Training program, which gives financial advisors tools to discuss extended care planning with their clients. Look for the CLTC designation when choosing an advisor. Kevin, tell me what size employers can offer long-term care insurance solutions to their employees.

Kevin Sypniewski [00:06:51]:

Really, any size employer, if it's one or two people, then you're going to be using an individual traditional product, fully underwritten. Or, it could be a life and long-term care. Again, fully underwritten. You're going to need to get up in the hundreds of lives before you're really going to see a guarantee issue offer. For the most part, you might be able to get if it's 50 lives and the employer is paying for it, there might be some guarantee issue available in the life of the long-term care, but really every employer can do it. The best part about the traditional long-term care is the employer can deduct the premiums and the benefits are tax free. So that's about as good as you can get right from a tax standpoint. Whereas, if you're doing life for the long-term care because there's life insurance in there, there are some limitations to what's tax deductible for the employer. It is a benefit expense.

Kelly Augspurger [00:07:41]:

Yeah, that makes sense. What about the advantages and disadvantages between doing a work site product versus an individual product? I mean, we've already talked about the health, right? Like that's really important. If you're getting an individual policy, it's going to be fully underwritten. So, you're going to have to go through detailed questions. They're going to look at your medical records. They may, or may not, want some type of cognitive screening, possibly a medical exam. But let's talk about other things outside of the health. What's to be considered there?

Kevin Sypniewski [00:08:10]:

Yeah, I think the other thing is the pricing, right? If you're doing traditional long-term care, typically offering it to a group of employers, more than one or two employees, typically not always but typically you'll get unisex rates, which means male and females pay the same amount. And that's going to create significant discounts for the females. Yes, because while men pay higher life insurance rates because we die earlier, women pay higher long-term care rates because they use long-term care more often. The biggest difference really from the individual to the worksite will be if there's any sort of simplified underwriting offer and if it's a smaller group, that might not be the case. The real difference is the women pay a much lower rate using a unisex pricing. Men might pay a little more, 5% or 10% more, but typically it's a 30, 40, 50% discount for the women to get that unisex rate.

Kelly Augspurger [00:09:05]:

Yes, huge advantage for women if you're able to get this in the workplace. What about as far as funding it? Are these typically employer funded 100%, a combination of employee and employer or voluntary? What are you seeing?

Kevin Sypniewski [00:09:20]:

All of the above really. But more often than not, the larger the employer, the less funding. If you are talking a 5000 employee group, typically the employers don't fund much at all, if any. Or they might carve out some executives, which you can do with long-term care as well. You can discriminate with long-term care as long as it's not based on age or gender, that sort of thing. But you could say the executives or the vice presidents and above we're going to pay for and the rest were not.

Kelly Augspurger [00:09:50]:

Which is unique. Right, which is very unique in the benefit space. Can you talk about that a little bit?

Kevin Sypniewski [00:09:55]:

Yeah. Usually you can't discriminate amongst employee types, but with long-term care you can. As long as you do it based on job classification. We do a lot that are based on years of service. So employers say, well this is a long-term program, obviously long-term care and we want to give it to our employees who are going to stay with us. For our employees to turn over each year, we don't really care. So we're not going to fund a plan for them. Right now we're looking at some where they're saying, "Hey, if an employee has been here five years we'll buy them a long-term care plan," and they can buy more. Usually employers will fund a base level, as you said, a base coverage funded by the employer and then the employees can buy more from there. Once you get into the three, four, 5000 and up employee lives, typically they're not funding something for everyone.

Kelly Augspurger [00:10:41]:

Okay.

Kevin Sypniewski [00:10:41]:

In the old days they did because it was much less expensive when they kind of mispriced it. But nowadays if the employer does fund it, it's typically somewhere between $25 and $50 a month per employee on average. And then if it's an executive carve out, they might be spending hundreds a month per employee.

Kelly Augspurger [00:11:03]:

What about the minimum participation requirements by the carrier? And I know, this depends on the carrier and if the employer is funding a part of it. What do you think is maybe the range or typical given the participation limits?

Kevin Sypniewski [00:11:16]:

It can vary. If you're doing a plan that has any sort of underwriting concession, whether it's guarantee issue or simplified underwriting, you're going to have a minimum participation requirement. Typically it's ten applications approved or ten lives approved. Call it that. If it's a small group, five employees, you could do two or three that buy it and the other two or three don't because they're fully underwriting those. Once you get into the small, everything's fully underwritten so they're much more flexible on participation.

Kelly Augspurger [00:11:46]:

What about the process? We've got an employer that is interested in setting up a solution for their employees. What does that process look like for them to get it all set up?

Kevin Sypniewski [00:11:57]:

It can be pretty painless for a couple of reasons. One of the main reasons is we these days try to do direct bill so that employees are paying this out of their bank account versus the employer payroll deducting it because all too often when employees leave employment, they look at their health insurance, their 401K, they forget about the long-term care. It's kind of a tertiary benefit. They forget about it, they don't take it with them and then months later they come back, "Oh, I wanted to take that," and the plan has lapsed, so they've lost it. And so one of our newer statements that we make is long-term care is one of the few employee benefits you should die with. You should hold it till you are no longer with us. Whereas with your employer health insurance, your employee group term life insurance, your employer disability, those are not policies and coverages you're going to take into retirement. This is one by nature, you're typically going to use it around 80. So you want to make sure you take it into retirement. So for that reason when employees enroll, we just go ahead and do bank draft, EFT, ACH, however you want to call it. So there's no administration from the employer, right? They're not dealing with bills, they're not dealing with employees taking it when they leave because they already own it directly. So the lift is pretty minimal for the employers. The one thing that I will tell you is it is something that needs to be explained and employees need to be educated because there's human resource benefit. People that don't know long-term care. It's one of those, as we said, tertiary benefits, right? People have had group life, group long-term disability, group health for decades. Long-term care has just not been one of those. And so it's important that you educate on this because employees don't know well, "What is it, long-term care? I thought I had long-term disability. Oh, well, Medicare pays for that or my health insurance pays for that." And as we know in the industry. None of that is covered by Medicare, none of it's covered by your group health plan and long-term disabilities to replace your income, not pay for services when you need extra care. So it's super important to educate employees on that. And if the employer doesn't want to educate on that and it's a voluntary plan, then it's really not worth doing because no one's going to. It's going to flop and it's just going to be a disappointment for everyone and you're not availing. So, we all the time tell employees, are like, "Well, we're too busy, we really can't do this. We can't do a big outreach right now." And then we say, then we shouldn't do it right now. We should do this at a time when it's good for you to make it worth your time. And so that your employees truly learn they don't all have to buy, but they should all understand what decision they're making. Yes or no?

Kelly Augspurger [00:14:32]:

Yeah, I agree. And I know it's often said, and I think you guys probably say this too, is off cycle is usually a good time for employers to offer this benefit, right? And that means not an open enrollment when you're offering all of your other group benefits because it probably is going to get lost.

Kevin Sypniewski [00:14:48]:

It will get lost, yeah.

Kelly Augspurger [00:14:50]:

And so if you're able to do this off cycle at a different time of the year and educate, educate, educate the importance of planning for the future, the importance of planning for LTC, you're going to have a better success rate.

Kevin Sypniewski [00:15:03]:

Yeah, very much so. We recommend five to eight emails where you're sending an email weekly just prior to the enrollment period, starting during the enrollment period. Holding webinars, right? And now everyone's comfortable with Zoom thanks to COVID. That's one of the great things...Not much great came out of COVID but people's comfort with being on camera and using Zoom has really changed that. So educating through webinars and you can do recordings and videos, right? It's super easy with technology today to educate people if the employer will set aside the time, encourage employees to understand it, and then send out a few emails. But that's really the employer's lift is sending out some emails, meeting with the agent or producer benefit broker that's putting this in once a week, every other week to get it planned and going. It can be a pretty painless effort for the employer, aside from some basic education.

Kelly Augspurger [00:15:54]:

And now for a brief message from our show sponsor. The Steadfast Care Planning podcast is sponsored by Amada Senior Care. Columbus Amada is your one stop shop for in home caregivers, senior housing advice, and long-term care insurance claim assistance. Visit AmadaSeniorCare.com forward slash Columbus Senior Care, to learn more. Just so everyone knows, I do work with AGIS and they are, a very reputable company offering these LTC solutions to worksite. Can you talk about even doing those webinars. That's something that you assist in the process so the employer doesn't have to come up with the content. Like you guys provide that content. Can you talk about that?

Kevin Sypniewski [00:16:34]:

There's really nothing the employer has to come up with. We put it all in front of them, and then they just approve or say, "Well, hey, we don't call our employees employees. We call them teammates, right? We call them associates," so that kind of thing, and making sure the verbiage and the printed material matches their culture. But aside from that, myself and anyone out there that does what I do, they come to the table with, here's the content for your emails, here's the postcard we want to send to the home, if that's happening, and then here's the webinar, and here's how we're going to explain it. And yeah, so everything's pretty much pre-baked. We've been doing this for 25 years. Our goal is to not make the mistakes that we've seen made previously, so we can pretty much help. We always say, "Hey, we've made all the mistakes there are to make on this after 25 years, so we want to help you avoid them." And so we kind of just put it all in front of the employer and then make it match their culture and their feel.

Kelly Augspurger [00:17:29]:

What do you think is reasonable for employers to expect as far as how long that process takes? Once you have that initial conversation? Is this three months, six months, nine months, a year. What do you think is realistic?

Kevin Sypniewski [00:17:41]:

Typically eight weeks. If an employer says, let's run, we'll meet with them weekly for four weeks to get it all set up. Half an hour meetings, maybe weekly to get it all set up. And then a month enrollment period. Right. 30 day enrollment period. You could do two weeks if it's depending on what their cycle is, call it two to four weeks for an enrollment period, and then it's really a wrap-up and a couple of meetings after that just to wrap it up. So it's a lot less of a lift than a normal open enrollment. When you're looking at open enrollment for Medical or open enrollment for when you're doing four products at once, that can be consuming. Which is, as you said, one of the reasons we do a lot of these off cycle is so that you're not getting mixed in with the medical because it's the same reason they forget to take it with them when they leave. People are focused on medical, dental, even pet insurance for your 401K plan. Long-term care is down the line, and if it's mixed in with everything else, a lot of times it'll get lost in the shuffle.

Kelly Augspurger [00:18:35]:

Yeah, direct bill is important there.

Kevin Sypniewski [00:18:37]:

Direct bill is super important.

Kelly Augspurger [00:18:38]:

Well, Kevin, any other final advice or you think, helpful information that's important to share about Worksite Long-Term Care Insurance?

Kevin Sypniewski [00:18:46]:

Yeah, I think the biggest thing is for people to know that there's great options out there. There's new carriers getting into this business, which isn't something we've said for a decade or two. Right. I'll call it about 2010 until 2020. We kind of call that the nuclear winter of long-term care. It's just there were fewer carriers. Employers weren't engaged in it. But over the last three to five years, people are seeing this is a problem. And I think the most telling statistic that I've seen recently. I know statistics don't sell, but if you think about the volume of people needing this care, the people receiving long-term care right now are the silent generation, the World War II generation, and just after that, receiving long-term care. Right now, there's about 19 million of those people. There's 70 million baby boomers four times almost. And we're having a problem with long-term care right now. Right. Medicaid is being burdened by the states. States are looking for solutions. 62% of nursing home residents are on the welfare program, which is Medicaid, not Medicare. So, if we're having this problem today and then the next 20 to 30 years, we're going to have four times the problem. It's going to be an issue that people are going to really need to wake up and start to address, both at the employer level, at the individual responsibility level, and at the state and federal level.

Kelly Augspurger [00:20:06]:

Right. We need to do proactive planning and not reactive planning. We don't want to wait 20 years and get to it. And we are just crushed by this influx of baby boomers. And then what do we do? No, we need to solve this problem now. How are these people going to pay for care? Who's going to provide care and where are they going to receive that care? Those are all things that need to be addressed.

Kevin Sypniewski [00:20:28]:

It's one of the biggest problems of our society for the next two decades. No question.

Kelly Augspurger [00:20:33]:

Agree. Well, Kevin, where can people find out more about AGIS and how you help people?

Kevin Sypniewski [00:20:38]:

Yeah, I would say, www.AgisNetwork.com is a great place to start, or just email myself, or you, Kelly, and we'd love to help. We work with all size employers, all parts of the country. We're a specialist in this one little field. We don't do the other benefits so most of our programs are with other benefit brokers or other insurance agents, perhaps like yourself, that specialize in long-term care. But when it comes to doing a 5000 life group that might be larger than you have the resources, or an individual agent has the resources for, we're just there to help people try to resolve this issue. And we've been doing it for 25 years and hope to be doing another 25.

Kelly Augspurger [00:21:16]:

Yeah. Awesome, Kevin. As he said, I do partner with Kevin and AGIS. And so if there is an employer out there that is looking for a solution for their clients, I'm happy to help in that aspect. Partnering with AGIS and providing just top notch solutions and support services, right? Caregiver platforms. We didn't even really dive into that in too much detail, but there's other support services that are available for employees, even if they're not on claim.

Kevin Sypniewski [00:21:40]:

Exactly. We always say when someone gets pregnant, they get the book, "What to Expect When We're Expecting".

Kelly Augspurger [00:21:46]:

Right.

Kevin Sypniewski [00:21:47]:

We get a book that tells us what's going to go on. With caregiving, no one's given us that book. We have to help people with this because it's crushing families, people's health, people's ability to work, and there are things we can learn. If you've been through a caregiving event and I'm going into a caregiving event, I can learn a lot from you. It doesn't have to be a professional, right? It's just sharing. We don't have enough caregiver support groups at work. We think there should be more support groups in the workplace, down at the senior center. Let's help the caregivers. Because most of us are going to be caregivers long before we're care recipients, and it's just nothing we've trained for or planned for.

Kelly Augspurger [00:22:28]:

Absolutely, spot on. Well, Kevin, thanks so much for your time today. Really appreciate your time and expertise, and have a great day.

Kevin Sypniewski [00:22:36]:

Thank you so much. Thanks, Kelly.