Your Money: July

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Long Term Care INsurance When Parents Become Dependents

By Judy Fertig Panneton

It’s happening more often these days. Employees are taking personal phone calls at work, calling in sick, arriving late or leaving work early to take care of dependents — but we’re not talking about children. These dependents are parents, who, because of physical or mental-health issues, need special care.
    The difficulties begin when there isn’t enough money for needed services, and adult children become their parents’ caretakers. A Wall Street Journal Online/Harris Poll determined 28 percent of adults believe they and their siblings will be sharing the cost and work of elder care in the future. The reality is reflected in a report from the U.S. Census Bureau and the National Alliance for Caregiving: One of every five caregivers has to balance work and some form of healthcare assistance.
    There are about 7 million Californians who are 55 and older, according to the California Partnership for Long-Term Care. The agency helps educate employers about long-term care insurance products. “In a nutshell, it will help the bottom line and absenteeism will lessen,” says agency chief Brenda Bufford. “A few years ago, the National Alliance for Caregiving came up with the statistic that 57 percent of employees came in late, took off early, or were absent for an extended period of time because of elder-care issues.”
    Sacramento insurance broker Laurie Rood is a self-described huge believer in long-term care insurance, personally and professionally. Her mother Sara’s policy covers room and board as well as the workers who help with medication and bathing needs. Rood, president of Rood & Dax Advanced Insurance Services Inc., estimates the annual cost for a business to offer long-term care insurance  would be a maximum of $350 per employee.
    “Generally, employers can deduct premiums they pay for long-term care insurance for their employees,” says Jan Rosati, a CPA with Macias Gini & Co. in Sacramento. “It’s a tax-free benefit for employees, like health insurance.”
    Long-term care insurance policies can be purchased directly, and most offer the option of buying insurance for parents, but Rood suggests using an independent broker. “The broker has no loyalty to a particular carrier and can compare the plans to help make the best decision regarding benefits and cost,” she says.
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