Federal Government to Suspend Long-Term Care Benefits Program

Clients who are federal government employees have only a few more days to sign up for the Federal Long Term Care Insurance Program.

The U.S. Office of Personnel Management says it will stop taking applications for FLTCIP coverage at 11:59 p.m. Eastern Time Dec. 18.

Program managers posted a short notice in November saying that they planned to suspend program enrollment for at least two years to give the coverage issuer, Manulife Financial's John Hancock Life & Health Insurance Company, "time to thoroughly assess benefit offerings and establish sustainable premium rates that reasonably and equitably reflect the cost of the benefits provided."

Coverage for current claimants and current enrollees who are not yet on claim will not change as long as they continue to pay the premiums, OPM officials said.

The History

Other issuers of stand-alone long-term care insurance regarded the federal LTCI program as a formidable competitor when it came to life in the summer of 2002. John Hancock and a unit of MetLife teamed up to provide voluntary coverage for active federal employees, employees' spouses and employees' parents.

The program came up for renewal every seven years.

MetLife dropped out in 2009, as insurers' worries about the interest rate and policyholder behavior assumptions they used to design and price stand-alone LTCI coverage grew.

The U.S. Government Accountability Office noted in 2011 that some federal program characteristics, such as a lack of insurer access to a list of home addresses of active federal employees, made the program especially unattractive to insurers that might have considered offering LTCI coverage to federal employees.

When OPM renewed the program in 2015, it had 274,000 enrollees. In 2016, enrollees faced an average premium increase of 83%. The average monthly premium climbed to $245, from $111.

OPM announced a program update in 2019. Program administrators tried to stabilize costs and premiums by putting cash in a fund that could provide rebate cash if program performance was stronger than expected.

At that time, OPM officials said the program had 268,000 enrollees.

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