Download to read offline
Uploaded byCynthia Wilson
30 Minute LTC Presentation
This document provides information about long term care planning from Financially Focused, LLC, an insurance brokerage and financial planning firm. It discusses the company's services, common questions about long term care insurance, the history and definitions of long term care, expenses covered by long term care insurance, state partnership plans, statistics on long term care needs, and the tax deductibility of long term care insurance premiums. The overall purpose is to educate clients on long term care planning and insurance options.
30 Minute LTC Presentation
- 1. Planning for Long TermCare: Protect & Enhance the Quality of Life for You and those You Love Cynthia Williamson, Insurance Broker, CPA Providing Wealth Protection & Tax Planning Strategies Financially Focused, LLC (877) 948-3746
- 2. About Financially Focused,LLC Boutique financial planning & services firm. We help clients accumulate wealth and protect retirement accounts against loss. Dually licensed as tax advisors and a life & health insurance broker, uniquely positioned to align tax planning opportunities with financial products including Life Insurance, Long-Term Care & Fixed & Indexed Annuities. Customized financial plans are comprehensive & tax efficient, saving clients both time and money. Specialize in assisting clients to secure their financial future, aligning tax planning opportunities with wealth protection & investment objectives. Licensed Life & Health Insurance Broker for Kansas & MO. Clients receive objective guidance free of the inherent conflict of interest that can exist without a broker status. The Mission Statement of Financially Focused LLC is “Securing Your Financial Future”. One way this happens is through educational seminars on relevant financial issues.
- 3. Common Questions aboutLTC How do benefits become payable? How long are benefits paid out? What happens when LTC Insurance benefits are exhausted? Expenses Covered by LTC Insurance. Will Medicare pay for LTC? What should I look for when selecting an insurance company? Tax treatment of premiums / benefits. Can my premiums be increased after I purchase a LTC policy?
- 4. Intro Health Reformis on the radar screen. However, LTC is the gorilla in the room. Has capacity to inflict serious damage to a retirement plan where the risk is not mitigated. Mindset to not plan. Pie chart shows where payments to skilled nursing facilities originated. Most rely on Medicaid to fund their long-term care costs. Except for Hospice, Medicare doesn’t pay for LTC costs. Source: Centers for Medicare & Medical Services, National Health Accounts, 2005, www.cms.hhs.gov
- 5. History of LTCInsurance In the past, LTC Ins was known as nursing home insurance and Medicaid was called the Middle Class’ long-term care insurance. HIPAA, Federal Consumer Protection Reg took effect Jan 1, 1997 Changed standards on qualifying for benefits. Did away with medical necessity of 3 night hospital stay followed by a check-in to a nursing home within 30 days HIPAA set standards for Benefit triggers: 1 Physical impairment to the degree a person needs assistance with two or more Activities of Daily Living Defined ADLs: Bathing, dressing, eating, mobility, toileting & continence. 2 Cognitive Impairment – Memory Recall, short & long-term, Orientation as time & place, judgment & reasoning skills, awareness of safety issues. Cognitive impairments typically associated with Alzheimer’s, dementia & Parkinson’s. Kinder & gentler approach as it is more proactive, not reacting to a traumatic event or accident such as a broken bone from a fall.
- 6. History of LTCInsurance Cont’d Forever changed the landscape of how care is delivered. Fits the care to the condition. Persons diagnosed with a chronic condition no longer confined to a Nursing Home. Home health care can supplement support from family, friends & community services. Assisted Living Facilities (ALFs) give persons 24 hour access to staff and home health aides in close proximity. Restaurant style dining & housekeeping, social activities, exercise classes, entertainment, beauty salons, transportation. Emphasis is on having persons function at optimal level, giving them greater dignity, privacy, autonomy & assistance to the degree needed. Allows for a better quality of life & more choice than a nursing home with it’s lack of privacy & institutional feel.
- 7. Defining Long TermCare Wide range of services for those with… A condition is chronic (long-term) when a licensed health care practitioner (physician, RN, Licensed Social worker) diagnosis the need for assistance and Condition is expected to continue for at least 90 days or isn’t expected to improve. Chronic conditions are progressive meaning the condition tends to worsen over time, requiring increasing levels of care. Cognitive or functional impairment
- 8. Medical Expenses Reimbursedby Long-Term Care Typical Medical Charges Not Covered. Hospital charges – Medicare Part A Physician & Lab charges – Medicare Part B LTC policies cannot duplicate coverage the insured has through Medicare or other insurance. Many policies pay for prescription meds at an SNF Medical “skilled” care – requires a doctor’s prescription: Therapeutic services such as occupational, physical, respiratory or speech therapists. Treatment for falls, fractures, injuries & wounds. Pulmonary & Cardiovascular disorders. Medication management.
- 9. Non-Medical Expenses Reimbursed Custodial Care Hands-on & Stand-by Assistance primarily for physical impairments. Assist with ADLs. Supervisory Assistance mainly for persons with cognitive impairment to keep persons on task in their daily routine. Ambulances Services Emergency Response Systems Personal Care Rehabilitative care such as speech or physical therapy for a
- 10. State Partnership Plans LTC Partnership programs are an alliance between State Medicaid programs and private insurance companies to help Americans pay for future long term care expenses. These programs are relatively new. Partnership plans signed into law July 1, 2009 in Kansas. Grandfathered to 2006. A partnership policy protects person from Medicaid spend- down. Dollar for dollar protection up to the face value of LTC insurance should benefits be depleted. Example 1: Mr. & Mrs. Jones have a combined $250,000 in their checking, savings, CDs, investments, 401K plans & IRAs, etc. They obtain a three year LTC policy with a lifetime benefit of $300,000. Their retirement assets are protected up to $300,000 from Medicaid spend-down if their insurance benefits are exhausted.
- 11. State Partnership PlansContinued Protects assets, not income from Medicaid spend down. Example 2: Alice owns a LTC policy with a lifetime benefit of $150,000. At the time she applies for Medicaid savings have grown to $200,000. She also has SSI of $1,000 per month. Alice must spend down $50,000 down to $150,000 before she qualifies for Medicaid. Once she is receiving care, Alice must assign $940 to the state of her SSI. The state cannot place a lien against her house after she passes away to recover the cost of care they paid on her behalf. Effectively allows persons to obtain LTC insurance for less than lifetime coverage; 2-5 years. Then apply for Medicaid after benefits are depleted. Extends protection to estate recovery.
- 12. State Partnership PlanRequirements Participation in the program requires inflation protection rider based on age: Less than 61: Compound (3-6%) 61 – 75 Simple 76 and older: None required Reside in the state sponsoring the partnership program at the time of Medicaid application OR Reside in a state with a reciprocal partnership agreement with the issuing state; and Have resided in the state sponsoring the partnership program when the policy was issued.
- 13. Stats Theprobability of becoming disabled in at least 2 ADL’s or being cognitively impaired is 68% for people age 65 and older. www..longtermcare.gov Probability of needing LTC at age 65: Men - 58% Women 78% 74% of nursing home residents are women. 44% of people age 65 & older are expected to enter a nursing home at least once in their lifetime. (NAIC) Average Stay: Men 2.2 yrs Women 3.7 yrs
- 14. Important Points toKnow about Premiums Age of Insured, Insurance Age Health of Insured: Preferred, Standard, Substandard. Elimination Period: 30, 90, 180 days Length of Policy: 2, 3, 5, 10 years or lifetime coverage. States must approve rate increases: Insurers cannot increase prices without first obtaining approval from state Rate Increases: Expectation that LTC premiums are to remain level and not increase. Not a guarantee. An insurer can raise rates for an entire class of persons, but not on an individual policy. In this regard LTC insurance differs from automobile or medical insurance policies where premiums are adjusted yearly. Cost of Living Adjustments: (COLAs) Insurers offer an increasing benefit amount that is calculated at rates of 3% - 6% computed on a simple or a compound basis.
- 15. Cost of Care& Cost of Insurance Average Cost of Care in Kansas City area. Cost varies based on how care is delivered1 : Home Health: $36,000-72,000 per year (5-10 hours care per day) Assisted Living Facility: $33,000 – 54,000 Skilled Nursing Facility: $56,000 ($155 per day) Memory Support: $73,000 ($200 per day) Cost of Insurance2 – Quote based on age and preferred health rating. Annual cost of $36,000 coverage, 3 year benefit period, $108,000 of coverage. Age 55: $ 492 Age 65: $ 1,057 Age 60: $ 675 Age 70: $ 1,852 Age 75: $ 3,720 Age 80: $ 6,289* 1 - Genworth April 2009 Cost of Care Survey for KC area. 2 - Coverage is Comprehensive, meaning it includes home health and skilled nursing facility care. 3 – Some Insurers stop underwriting at age 79.
- 16. Age-Based Statistics 83%of persons purchased LTC Insurance prior to age 65.2 Ages at which claims for LTC benefits are made.1 40% of claims are from persons in their 70’s 50% of claims are from persons in their 80’s Age range of persons who are declined coverage.3 50 – 59: 14% 60 – 69: 23% 70 – 79: 45% 80 and over – 70% 1- Long-Term Care, How to Plan & Pay for It, 7th Ed., Pub Oct 2008, p 272. 2- 2007 study of 400,000 policy applicants. American Assn for LTCI 2008 Sourcebook. 3- The New Savage Number, 2nd Ed, Pub Sept 2009, p 227.
- 17. 2010 Tax Deductibilityof Premiums Deduction is limited to lesser of actual premium paid or age eligible IRS defined limits. Deductibility (per person) increases with age: Age 40 and Under $ 330 Age 40 to 50 $ 620 Age 51 to 60 $1,230 Age 61 to 70 $3,290 Age 71 or over $4,110
- 18. Benefit Payout &Tax Treatment Expense Reimbursement: Benefits are paid based on actual qualifying expenses incurred up to daily benefit amount. Pools of benefits are often associated with this option. Example: Mary Ellen has a 5 year LTC policy with a $200 daily benefit amount. She locates a facility that she likes and it costs $175 per day. The unused amount of $25. per day stays in her account balance and she can extend the length of her policy beyond the 5 years by keeping daily costs down. Indemnity Rider: Benefits are paid on a daily basis at the rate of $200 per day. Receives an additional $25.00 per dat tax free. Excluded from income up to $290 for 2010, unless actual expenses are more. Example: A LTC policy pays a per diem benefit of $300 in 2010. $290 is not taxable. The remaining $20 is taxable income unless it represents actual expenses incurred.
- 19. LTC Insurance isFlexible Not a one-size-fits-all financial product. Persons whose primary objective is to keep premiums low would be interested in a 2 year benefit period and partnering with the state to cover remaining care needed while protecting their retirement savings from Medicaid spend down. Persons who are unsure if they will need LTC Insurance can structure their policy using a return of premium rider. Funds can be passed on tax free to the surviving spouse and contingent beneficiaries. Persons who use LTC to it’s full advantage as a life planning tool to finance their care in their later years, taking advantage of indemnity riders. Not all Insurer’s offer an Indemnity Rider.
- 20. LTC Insurance Terms& Riders Cont’d Return of Premium Rider – Premiums paid less any claim benefits received are paid to a beneficiary of your choice. Allows for recovery of premiums in the event benefits are not claimed. Estate Planning. Waiver of Premium Rider – Waives premiums when the insured is receiving LTC benefits. Paid Up Survivor Benefit Rider –If you have owned a policy for 10 years and either you or your spouse die, the policy is considered paid up and no further premium payments are due. Restoration of Benefits – Benefit dollars spent from claims made can be restored after 180 days of not requiring and not collecting any benefits. Rider not necessary for persons who have obtained lifetime coverage. Indemnity Benefit Rider – Rather than having benefits paid on a reimbursement basis, you can elect to receive the full daily benefit, regardless of expenses incurred. Allows for additional income.
- 21. Selecting an InsuranceCompany Reputation & Financial Strength • Does insurer have a history of complaints logged against the company? • What are the financial strength ratings issued by major rating agencies? • Structure of company – Is it a mutual insurance company or a publicly traded corporation? Go Long & Strong Do business with a company that you know is going to be around for the long haul. Select a company that is strong financially and has a reputation for integrity and is well managed.
- 22. Life Expectancy Longerlife expectancies have increased the likelihood of needing long-term care. By 2020, 1 in 6 people will be 65 years & older. Life Expectancy Men Women 1900s- at birth 50 51 1970- at birth 67 75 2008- at birth 75 81 2008- Age 65 81 84
- 23. Quote from World’sOldest Man Quotes from a speech by the world’s oldest man. Walter Breuning turned 113 on Sept 21, 2009. Remember that life isn’t measured in days or years, but by what we have done therein. There will always be in this life wrongs---no wrong is really successful. There are great things within us if we will seek them and find them out.
- 24. Mary Josephine Ray,Age 114 Oldest person in US dies in NH at age 114 Day WESTMORELAND, N.H. – Mary Josephine Ray, the New Hampshire woman who was certified as the oldest person living in the U.S. died at age 114 years, 294 days on 3/8/2010. "She just enjoyed life. Ray was the oldest person in the United States and the second-oldest in the world. She was also recorded as the oldest person ever to live in New Hampshire.
- 25. Wrap Up Evaluation Form. Schedulean appointment to explore pricing and obtain a quote. Take advantage of Certificate for Personal Financial Planning Session.
- 26. Next Steps Have aLong-Term Care Plan Where will you live? Who will care for you? How will you pay for the care?
- 27. Planning for Long TermCare: Protect the Quality of Life for You and the People You Love
- 28. Medicare Medicare isthe federal government’s health insurance program. Implemented in 1965. Provides health coverage for people 65 and older, blind, disabled or late-stage kidney disease & hospice. Medicare is the nation’s largest health insurance program. Poor financial condition Currently pays out more than it receives. For every 25 cents it takes in, Medicare pays out $1.00. Without any changes, insolvent by 2017. When it comes to Long-term care, Medicare only pays when person’s condition is not chronic (long-term).
- 29. Medicare & LTC Medicare currently pays for Hospice, or end-of-life care. Both healthcare bills, House & Senate include significant cuts for hospice. The extent of the cuts is in the billions of dollars. Medicare only pays for conditions that are improving, not chronic or long-term. Before payment, a medical necessity needs to have occurred traumatic enough to require: 3 night hospital stay. Within 30 days of the hospital stay check in to a Skilled Nursing Facility (nursing home). Medicare will pay the nursing home as long as a condition is improving. Once a patient’s condition is determined to be ‘chronic’ or ‘long-term’ Medicare will not pay.
- 30. Government Health Plan Medicare is financed by payroll taxes: 1.45% of gross payroll is paid by employees and 1.45% is matched by employers. Convergence of several factors makes have created Medicare Meltdown Record number of people reaching retirement age: 1 in 6 persons projected to be 65 years and older by the year 2020. High unemployment makes situation worse. Longer life spans.
- 31. Why it’s importantto discuss Long Term Care Planning Now Cost of LTC is a significant exposure in a retirement plan. Failing to mitigate this risk has the potential to wipe out a lifetime of earnings in a few short years. Unrealistic to plan on not getting sick or needing assistance in our later years. Coverage isn’t automatic, obtain while insurable. Pre-existing condition clause in Health Insurance reform will most likely not apply to long-term care. That would be like purchasing home insurance after the house caught fire. Insurer’s couldn’t stay in business. Medicaid is likely solution for those with pre-existing conditions.
- 32. Medicare – Reimbursementfor Costs Incurred at a Skilled Nursing Facility To qualify for Medicare to pay: Medical necessity. 3 day hospital stay. Patient admitted to a SNF within 30 days of hospital stay. Care delivered at a Medicare-certified facility. Once diagnosis is changed from ‘improving’ to ‘chronic’ Medicare will not pay. Medicare pays: Days 1- 20 covered at 100% Days 21-100 co-pay of $133.50 Day 101 Medicare pays nothing * 3 day hospital stay may not be required for Medicare Managed Care Plan (Part C)
- 33. Medicaid & LTC Most people have developed a mindset to not provide for their own LTC, preferring to rely on Medicaid. Unfortunately they may be unaware of the full extent of what it means to them financially. Relying on Medicaid to pay LTC isn’t a good financial solution as it only pays after a person spends all their savings. Medicaid takes monthly income also. With Medicaid the end result is people are spending their own money. You do have a choice: pay a fraction of the cost through insurance premiums or spend all your savings later. It’s easier because it doesn’t require up front payments or planning. Some people have utilized estate planning strategies to qualify for Medicaid to their own detriment. They give away control of their financial resources to appear destitute and qualify for program designed for people who are indigent. LTC insurance helps ensure you receive the type of care you want in the setting you choose; at home, an assisted living facility or a continuing care retirement community. It opens up a range of greater possibilities.
- 34. Medicaid Statistics Medicaidwas established in 1965 as a companion program to Medicare. Designed for following persons who meet federal poverty levels; The elderly, dependent children and their mothers and persons with disabilities. Each state develops and administers a State plan which must be approved by CMS. Medicaid expenditures in 2006 accounted for 1/6th of the nation’s health care spending. In 2006 Medicaid expenditures were $241 Billion. Half of this was spent on Long-term care.
- 35. Medicaid Spend-down ofSavings Medicaid is intended for people who meet federal poverty levels. The safety net that many have relied on to their own detriment. Stringent spend down requirements: KS = $2,000.00 MO = $ 999.00 Limits monthly income of chronically ill spouse to: KS = $ 60.00 MO = $ 30.00 Reimbursement limited primarily to nursing home care. Does not pay for Home Health. Limited payments Assisted Living Facilities. Care must be delivered at a Medicare-certified facility.
- 36. Medicaid Income Requirements Community (well) spouse is permitted to keep a minimum monthly maintenance of at least $1,822 of income per month, but no more than $2,739. For example, assume the following monthly income is received: Well spouse social security income: $ 1,200 Chronically ill spouse pension: $ 622 Chronically ill spouse SSI: $ 2,000 Married spouse’s finances are divided in half. Excess above $219,120 must be spent on care. Well spouse can keep up to $109,560. Chronically ill spouse must spend their $109,560 down to $2,000. Financial Planning Tip: For persons unable to obtain long-term care insurance, an annuity can convert savings into income. This planning tool can be used even though it occurs within the 5 year look back period.
- 37. Common Chronic Conditions Common chronic conditions: Alzheimer’s – age is greatest risk factor - 5th leading cause of death for persons over 65 - Permanent & irreversible. Progresses from mild to moderate to late stage. - 50% of persons 85 & older have Alzheimer’s. - Once diagnosed, duration is 4-6 years but can live up to 20 yrs after diagnosis. Arthritis, Cancer, Diabetes, Glaucoma Multiple Sclerosis & Muscular Dystrophy Parkinson’s Disease Strokes
- 38. Long-Term Care Insuranceas an Group Benefit Employers are increasingly extending Long Term Care insurance benefits to either key employees or to an entire group of employees. Insurance premiums paid on behalf of key employees are tax deductible by the employer. The employee is not taxed on the value of premium payments provided as an employee benefit. Long-term care insurance is not subject to non-discriminatory rules so discretion can be used in deciding upon the amount of benefits available to various employee groups. Long-term care insurance has tax advantages over other insurance benefits. For example, with certain term insurance or split dollar arrangements, the employee must include the value of insurance received in their W-2, treating it as additional compensation subject to FICA and income taxation at the federal and state level.
- 39. Long-Term Care Benefits:Not taxed when received The employee is not taxed on Long-Term Care Insurance benefits. When paid to the employee they are tax-free provided the benefits do not exceed very generous daily benefit limits. In 2012, $310 of insurance benefits can be received each day without being subject to taxation. This applies even if the expenses are less than $310 per day. An “Indemnity Rider” indemnifies a person up to the IRS approved limit or cost, whichever is greater. Most insurers offer simplified underwriting and additional discounts when Long-term care insurance is extended to an employer group.
- 40. LTC Eligibility &Disqualifying Conditions Answering YES to the following questions can result in an automatic rejection for LTC with some insurers: Current diagnosis of Cancer, AIDS, Alzheimer’s, Cystic Fibrosis, Dementia, Memory Loss, Kidney Failure / Dialysis, Organ Transplant, Mental Retardation, Multiple Sclerosis, Muscular Dystrophy, Parkinson’s, Schizophrenia. Diabetes and currently taking more than 50 units of insulin daily. Use of wheelchair, walker, scooter, quad cane or oxygen. Physical, occupational or speech therapy in past 6 months. Stroke in the past ten years. Mental / nervous disorder other than Alzheimer’s / Dementia.
- 41. LTCi Policy Options How long are benefits paid? Very flexible. Lifetime coverage is the priciest option. Benefit periods of 3 – 5- 10. Some insurers offer a 2 year benefit period. Elimination periods 30, 60, 90 & 180 days. Riders Waiver of premium Indemnity rider Cost of Living Riders Return of Premium
Editor's Notes
- #2 Welcome to today’s LTC Conference. THX for taking time out of your Saturday to attend this session to learn more about LTC Get Comfortable, grab a donut & hot coffee. THX to Freedom Pointe for hosting the conf & providing refreshments & the comfortable beautiful facilities. FP is in the business of enhancing people’s enjoyment of life and they do it quite well. Brookdale Living Community. Well respected in Sr Care. They’ve been doing this for 30 years, so they’ve got it down. Well run machine they know seniors and they know what they’re doing. Go beyond meeting needs of their resident’s- they increase quality of life. Calendar Events: Bible Studies, Bingo & Blackjack Beauty Parlor, Breathing & stretching classes, coffee & conversation, . They engage their resident’s, interesting them in life & social activities & interaction., Ice Cream Parlor, snacks & drinks throughout the day, 3 meals a day, spacious accommodations, fine dining experiences. Most importantly, they are in safe environment, they’re in good hands. When you are vulnerable and depend on others, there’s nothing more important than knowing you can rely on others to do good to you & for you. 1-My name is Cynthia Wilson, CPA & my company is FF I specialize in aligning wealth protection & investment strategies with tax planning opps In connection with that I am licensed as an Insurance Producer licensed in KS & MO. W/out licensing I would not be able to advise my clients about finl products or to talk about much of the info I’ll be sharing with you today. These are wealth protection & wealth accum products: Life Ins, LTC, Annuities. As a result, my clientele are better served because not only is it a more efficient process, they’re also saving $ by not having to pay additional funds to obtain tax planning guidance & counsel. I feel that wealth protection is often THE MOST neglected component of most person’s retirement plan for a number of reasons: 2- Most know very little about finl products because it’s a very regulated industry. 3 People often procrastinate or don’t understand the value to be derived or discount it believing there isn’t much they can do. 4- As a CPA it’s easy for me to see the importance of positioning people for fin’l security & protect their retirement from avoidable losses by mitigating risk. It is my expectation that after today’s conference you will feel more confident about the choices that you have & you can make more informed decisions. More and more, we are realizing that LTC real concern and people want access to good info so they’re prepare. Unrealistic to plan on not getting sick or needing assistance in our later years. Financially can make better decisions when you know about the programs & what you can expect at the Federal & State level. Survey audience for knowledge of subject matter. Highly knowledgeable about this area? You’ve maybe had 1st hand experience with placing someone in an ALF or SNF, looked into payment plans & know what care is covered by LTC Ins.
- #3 LTC is a very undersold product. WHY? Because people know so little about it & state regulations restrict how it is sold. Only persons with a Life & Health License can advise clients about LTC. Ins is a fin’l product so it only makes sense to have a fin’l professional analyze the components of wealth protection & structure a policy that meets a person’s unique fin’l objectives. Often people try to get by on their own without consulting a tax professional, Turbo Tax or H & R Block, several disparate investments resulting in a disjointed approach that lacks direction. Far too frequently people don’t have a single finl prof who is knowledgeable about their fin’l situation from a long-term perspective. Advise about pitfalls and strategies to avoid large losses. For example, many people were heavy in equities and lost significant sums when the mrkt crashed. A sound finl plan will identify what is negotiable & non-negotiable. Mitigating Risk & Protecting Wealth Against Loss in a tax advantaged way. HSAs
- #4 LTC is a unique animal so it takes some getting used to. How long are benefits paid? What happens when a person runs out of benefits? Does Medicare cover LTC? What should I look for when selecting an insurance company?
- #5 Healthcare Crisis. Reform taxes businesses who don’t provide coverage and requires persons without coverage to purchase it or pay a tax or a penalty, depending on version. Problem is taxing businesses & persons least able to afford coverage. People say they don’t want the govt making their healthcare decisions for them & they don’t want socialized medicine but when they fail to put together their own plan, by default they’re delegating control of their healthcare to the govt May not have access to the type of care you want when you need it. They are predicting the demand on health care prof to be straining at the seams due to the aging population that is living longer due to medical advances. How many of you have ever called a doctor and needed to get in, but were told you would have to wait 6-8 weeks for care? I experienced that when I first Chart reveals that most people don’t have a plan for how they’ll pay for LTC. Paying for long term care represents a very significant risk to all of the plans we’ve put in place. Many people mistakenly believe that Medicare pays for long-term care No one is immune to sickness & illness. Unfortunately instead of putting together a plan in the event of a diagnosis of a chronic condition most people do nothing. Procrastination is one of the worst things to do because then you are just completely unprepared. Now, I’m not saying LTC Ins is always the answer. It may be if you have a healthy spouse or other family members who can take care of you, but what happens if the one person whom you’re depending on is no longer able to assist with your care? Everyone has their own issues they deal with. I’ve talked with people who assured me their parents don’t need LTC because they will be their to give them the care they. Denial – they’re holding 40 + hour full time jobs. Unless they are able to clone themselves, realistically, they are not able to give the care thats needed. Hoping for the best is not the most effective way to shield your retirement plan from the devastating finl consequences Now we turn to the question of “Who pays for long term care?” Medicare pays only about 20% of all nursing home costs, typically just for short-term skilled nursing home stays after hospitalization. It covers home care for short-term unstable conditions, not for longer term assistance.
- #6 These changes have effectively lowered the hurdle so that people can qualify for insurance benefits without having to suffer a serious injury or traumatic event that would require a 3 night hospital stay before they can receive benefits. Cognitive Impairment: A deficiency in short-term or long-term memory; orientation as to person, place, or time, deductive or abstract reasoning, judgment as it relates to safety awareness. The Degree of cognitive impairment is measured by industry recognized & medically accepted clinical evidence & standardized tests. HIPAA – Health Insurance Portability & Accountability Act I personally chose to focus on LTC for a couple of reasons: 1- As a CPA I see the need for it in doing retirement planning. It’s the ticking time bomb in a person’s retirement portfolio. 2- More affordable than people think. (story about a quote and person saying that’s the cost for my policy?) 3- State partnership plan make it more attractive than ever. 4. The peace of mind it provides is well worth it. Besides adding clarity to how the policies should be structured, HIPAA and its creation of the QLTCI policy made the ownership of long-term care insurance more attractive from the consumer’s perspective. By supporting ownership of private long-term care insurance, HIPAA is aligned with the goals of the state partnership programs and their constituents: shift the long-term care financing responsibility from the government (Medicaid) to individuals and their insurance companies. We will also talk about the next steps you can take, to make sure you have a plan that you are comfortable with. I am not here to sell you anything, and our discussion will not be based around “why you need to buy long term care insurance”. That is a personal decision you should make with the help of a licensed professional. Instead, I will encourage you to look at the options, and to understand what they really are.
- #7 Recognized that a person’s needs may change as their condition progresses or deteriorates. It adapts care to people rather than people to an institution. ALF – very popular places to be because these facilities are centered on allowing residents to function at their optimal level. Providing an environment that contribute to a persons total well-being; nutritionally, physically, spiritually, mentally and emotionally factors. Its a secure environment with nursing staff & home health aids in close proximity to provide assistance as needed, whether that be with bathing, dressing, assisting residents with mobility needs. Amenities: Housekeeping service, restaurant style dining, breathing/relaxation classes, Bible Studies, bookclubs, Piano & Hymn Singing activities such as Ice Cream Socials, outings to the mall, stein-mart, walmart, grocery, on-site banking & check cashing, bingo, shuttles to church, transportation to appts., coffee & conversation, card games People now longer have to suffer the consequences of an accident or event that creates a medical necessity. More proactive & not reactive. HIPAA – Health Insurance Portability & Accountability Act I personally chose to focus on LTC for a couple of reasons: 1- As a CPA I see the need for it in doing retirement planning. It’s the ticking time bomb in a person’s retirement portfolio. 2- More affordable than people think. (story about a quote and person saying that’s the cost for my policy?) 3- State partnership plan make it more attractive than ever. 4. The peace of mind it provides is well worth it. Besides adding clarity to how the policies should be structured, HIPAA and its creation of the QLTCI policy made the ownership of long-term care insurance more attractive from the consumer’s perspective. By supporting ownership of private long-term care insurance, HIPAA is aligned with the goals of the state partnership programs and their constituents: shift the long-term care financing responsibility from the government (Medicaid) to individuals and their insurance companies. We will also talk about the next steps you can take, to make sure you have a plan that you are comfortable with. I am not here to sell you anything, and our discussion will not be based around “why you need to buy long term care insurance”. That is a personal decision you should make with the help of a licensed professional. Instead, I will encourage you to look at the options, and to understand what they really are.
- #8 Excerpt from a LTC policy – “You may select any licensed Health Care Practitioner of your choosing. However, the designated person cannot be an immediate family member. “Substantial assistance due to the presence of cognitive impairment is established by clinical evidence & standardized tests.” Long term care is not acute or sub-acute care in a hospital. LTCI follows a plan of care prescribed by a licensed medical practitioner. A few examples are: Someone with Alzheimer’s may need supervision or stand-by assistance with activities of daily living. Someone who has suffered a stroke may need hands-on assistance or physical therapy.
- #9 Medicare, like private health insurance, only pays for skilled care designed to get you better. Medicare does not cover most in-home care. Medicare requires that you receive in-patient hospital care for at least three nights, enter the nursing facility within 30 days of the hospital stay, and for the same reason that necessitated the hospital stay. You must also have a prognosis for improvement. There are a lot of things that we may think of as skilled care, but they really are not.
- #10 Medicare, like private health insurance, only pays for skilled care designed to get you better. Medicare does not cover most in-home care. Medicare requires that you receive in-patient hospital care for at least three nights, enter the nursing facility within 30 days of the hospital stay, and for the same reason that necessitated the hospital stay. You must also have a prognosis for improvement. There are a lot of things that we may think of as skilled care, but they really are not.
- #11 Estate Recovery Avoided with Partnership Program Perhaps more significant than the asset spend-down exemption is the DRA’s lifting of the estate recovery rule. Recall that the original partnership program was effectively frozen in place with passage of OBRA in 1993, which required that assets that were shielded from Medicaid’s spend-down rule would be subject to recovery at the beneficiary’s death. As we have learned, estate recovery gives states the right to recover assets—even those that were deemed “noncountable” (for example, the primary residence) upon a Medicaid recipient’s death. So even if an individual were able to hold onto assets deemed uncountable while receiving Medicaid benefits, possession exists only as long as the individual is alive. Since assets could not be preserved for heirs, the effect of OBRA was to chill consumer interest in partnership programs. However, DRA has changed all that. Now, for individuals participating in their state’s partnership program, assets that are protected from Medicaid’s spend-down requirements remain protected through the estate settlement process. As assets of the decedent, they become subject to probate and, with proper advance planning, may be passed on to heirs. They cannot be attached or seized by the state.
- #12 Estate Recovery Avoided with Partnership Program Perhaps more significant than the asset spend-down exemption is the DRA’s lifting of the estate recovery rule. Recall that the original partnership program was effectively frozen in place with passage of OBRA in 1993, which required that assets that were shielded from Medicaid’s spend-down rule would be subject to recovery at the beneficiary’s death. As we have learned, estate recovery gives states the right to recover assets—even those that were deemed “noncountable” (for example, the primary residence) upon a Medicaid recipient’s death. So even if an individual were able to hold onto assets deemed uncountable while receiving Medicaid benefits, possession exists only as long as the individual is alive. Since assets could not be preserved for heirs, the effect of OBRA was to chill consumer interest in partnership programs. However, DRA has changed all that. Now, for individuals participating in their state’s partnership program, assets that are protected from Medicaid’s spend-down requirements remain protected through the estate settlement process. As assets of the decedent, they become subject to probate and, with proper advance planning, may be passed on to heirs. They cannot be attached or seized by the state.
- #13 A- Policyholders should have been notified of the right to exchange existing coverage w/comparable coverage that qualifies them for the KS Partnership program. Offer was good for 45 days from the postmark date of the notification letter sent by the insurer to the individual insured. If you needed care, do you know how much it could cost? Have you thought about the emotional, as well as the financial costs of not having a plan? A lot of people never really think about what the options for handling care are. We are starting to see what happens when people don’t have a plan. Many of us have seen someone faced with the unfortunate realities of dealing with long term care. Usually, our families will take care of us as long as they can, but then the options become pretty clear cut. If we need custodial care, we either spend your own money for care, or end up needing to rely on welfare. Think about whether or not your family has a plan in place.
- #14 Inability to pay health care costs is most common reason for bankruptcy among middle class -1 74% of nursing home residents are women- 2009 Source book of Am Assoc for LTC – The New Savage Number pg 224. Age sneaks up on you. One day you’re 30, turn around & your 50, 60, 70 Where did the years go? HIPAA – Health Insurance Portability & Accountability Act I personally chose to focus on LTC for a couple of reasons: 1- As a CPA I see the need for it in doing retirement planning. It’s the ticking time bomb in a person’s retirement portfolio. 2- More affordable than people think. (story about a quote and person saying that’s the cost for my policy?) 3- State partnership plan make it more attractive than ever. 4. The peace of mind it provides is well worth it. 5. Movement underway to encourage people to plan and pay for their ltc w/baby boomers hitting retirement age.
- #15 A policy may define the elimination period in service days or calendar days. Service Day elimination periods count days in which the insured receives care Calendar Day elimination periods count the number of days the insured needs care, regardless of whether the care is actually delivered or not. The elimination period starts on the first date of service. Some policies are more generous than others. For example, John Hancock when one day of service is received in a given week, they will credit the insured with 7 days toward the satisfaction of the elimination period. JH requires licensed home health providers to provide care. Informal not permitted by JH Other insurer’s may permit informal care to be rec’d during the elimination period. A lot of people never really think about what the options for handling care are. We are starting to see what happens when people don’t have a plan. Many of us have seen someone faced with the unfortunate realities of dealing with long term care. Usually, our families will take care of us as long as they can, but then the options become pretty clear cut. If we need custodial care, we either spend your own money for care, or end up needing to rely on welfare. Think about whether or not your family has a plan in place.
- #16 Source: Centers for Medicare & Medical Services, National Health Accounts, 2005, www.cms.hhs.gov Now we turn to the question of “Who pays for long term care?” As you can see, Medicaid also pays for long term care. However, it typically provides benefits only after you exhaust most of your resources. Medicaid has strict asset limitations to qualify for benefits. It is a tax-funded program for people who cannot afford care. Medicare pays only about 12% of all nursing home costs, typically just for short-term skilled nursing home stays after hospitalization. It covers home care for short-term unstable conditions, not for longer term assistance. When it comes to actual long term care, Medicare pays only about 5%.
- #17 Adult Daycare - Though many states regulate adult day care centers, some do not. Some states subsidize these programs. ADS programs aim to achieve the following goals: delaying or preventing institutionalization by providing alternative care; enhancing self-esteem; and encouraging socialization. Home Health Aides in most states must be licensed. Home health aides may or may not work for a social service agency or under the supervision of a nurse. Their objective is to help support and maintain the functioning of individuals in their own homes.
- #18 Make sure you are in control. Most of us would like to be able to choose where we receive care, and who will provide that care. It is important to get a real handle on the cost of care and make sure the plan to pay for the care is in place. We have looked at what happens if you need to pay for care by invading your principal. Most people would prefer to structure a plan that allows them to pay for a plan using only a portion of their interest instead.
- #19 Make sure you are in control. Most of us would like to be able to choose where we receive care, and who will provide that care. It is important to get a real handle on the cost of care and make sure the plan to pay for the care is in place. We have looked at what happens if you need to pay for care by invading your principal. Most people would prefer to structure a plan that allows them to pay for a plan using only a portion of their interest instead.
- #20 Persons who are actively planning where they’ll spend retirement years. Senior Retirement Community w/amenities of restaurant style dining, housekeeping svc, social activities, transportation, Assisted Living Facilities w/on-site nursing station Persons desiring to remain independent in home as long as possible at home.
- #21 Long term care policies typically provide the insured with a dollar per day benefit. This amount is stated in the LTC policy and is paid out to the insured on a monthly basis. Long term care policies can pay benefits on an indemnity or expense‐incurred basis. The difference between the two is that with an indemnity payment method, the insured is directly compensated the stated amount in the policy regardless of services provided. With the expense‐incurred method, the insured must submit claims to the insurance company, and the insurance company will either reimburse the medical service provider or the insured. Guaranteed renewable policy provision = Insurers are permitted to raise premiums, but only for an entire classes of insureds. A definition of “pre‐existing condition” that is more restrictive than the following cannot be used: “Pre‐existing condition” means a condition for which medical advice or treatment was recommended by, or received from, a provider of health care services, within six months preceding the effective date of coverage of an insured person.
- #22 Mutual companies. No stockholders or private owners. Mutual companies are called “participating” companies because policyholders share in company profits. Don’t just take my word for it. Listen to Moody’s analysis: "Shareholder-owned companies are under pressure to deploy and optimize excess capital in order to achieve higher returns on equity. Mutual insurers can take a longer-term horizon in setting and meeting sales and financial objectives. [For these and other] reasons, our average insurance financial strength rating for mutuals is higher than that for stock insurers and we expect this differential to persist." — Moody's Investors Service, September 2002 Long & Strong – solid track record. Life insurance pays benefits 20-30-50 years down the road. So, you want to choose a company who has expertise. Successful over the long term. Well managed. Independent objective financial ratings.
- #23 Women have more of a challenge because they live longer. Therefore, they’ll want to pay extra attention to make sure they have a finl plan in place to meet their day to day living expenses as well as mitigate the risk associated with ltc issues. It’s a demographic reality: We are an aging population, and our projected life expectancy is much higher than our parents’ generations. Without a plan, it is likely that we will pay out of our own savings and income for care, or our family will do their best to juggle the caregiving responsibilities. 1- efmoody.com/estate/lifeexpectancy. Derived from National Vital Statistics 2- 2008 CIA World Factbook 3- The New Savage Number, 7th Ed. Pub Sept 2009, page 10. Statistics from CDC for 1970 and Wikipedia form 1900 and 2008.
- #26 We will also talk about the next steps you can take, to make sure you have a plan that you are comfortable with. I am not here to sell you anything, and our discussion will not be based around “why you need to buy long term care insurance”. That is a personal decision you should make with the help of a licensed professional. Instead, I will encourage you to look at the options, and to understand what they really are. After meeting with a professional, it is important that you and your loved ones really understand what your plan is, and what the benefits of having that plan will be.
- #27 What you want to do is put together a care plan that covers all the bases. It would provide solutions to issues for a married couple or a single person for various contingencies. Identify where you would want to receive care. Ask others about ALF’s. Visit these places & take a tour. Talk to the residents. The best time to address this important issue is before you need it, and while you are young and healthy enough to purchase it at optimal rates. However, in a group setting like this it is not possible to determine what is best for you and your family. The only thing we know is, you need to have some sort of plan in place. Keep in mind the person you choose as your care provider may be dealing with their own health issues & concerns. Unfortunately, none of us are immune to health problems. It is important not to just leave here and decide that long term care insurance is or is not the right planning solution for you. <Today/Tonight> we have only talked about the issue and some of the solutions. The best thing you can do is to meet with a licensed professional who can help you personally navigate this issue and help you to design an appropriate plan, which may or may not include long term care insurance. After meeting with a professional, it is important that you and your loved ones really understand what your plan is, and what the benefits of having that plan will be.
- #28 Coming here to <today/tonight> is an important first step. You should now know a little bit more about long term care, and what it can mean to you and your family if you ever need care.
- #29 Medicare spending to nursing homes cut by $200 billion Medigap or Medicare Supplemental for co-pay of $133.50 Without a plan, it is likely that we will pay out of our own savings and income for care, or our family will do their best to juggle the caregiving responsibilities. Paying for long term care represents a very significant risk to all of the plans we’ve put in place. Many people mistakenly believe that Medicare pays for long-term care
- #30 When I looked at this chart it dawned on me that people readily insure their home, yet when it comes to our own personal care, not so. As a result most people have to rely on Medicaid. Seems to be a very drastic measure comparable to quitting a job to avoid income taxes. What does that say about our value system? Maybe we’re selling ourselves short. improved the type of care that’s delivered and the way it’s delivered Age sneaks up on you. One day you’re 30, turn around & your 50, 60, 70 Where did the years go? We don’t plan to get older, it just happens. Insurance is like that – fin’l protection for things that just happen Situations that have the ability to take a large part of our $$$ HIPAA – Health Insurance Portability & Accountability Act I personally chose to focus on LTC for a couple of reasons: 1- As a CPA I see the need for it in doing retirement planning. It’s the ticking time bomb in a person’s retirement portfolio. 2- More affordable than people think. (story about a quote and person saying that’s the cost for my policy?) 3- State partnership plan make it more attractive than ever. 4. The peace of mind it provides is well worth it. Besides adding clarity to how the policies should be structured, HIPAA and its creation of the QLTCI policy made the ownership of long-term care insurance more attractive from the consumer’s perspective. By supporting ownership of private long-term care insurance, HIPAA is aligned with the goals of the state partnership programs and their constituents: shift the long-term care financing responsibility from the government (Medicaid) to individuals and their insurance companies. We will also talk about the next steps you can take, to make sure you have a plan that you are comfortable with. I am not here to sell you anything, and our discussion will not be based around “why you need to buy long term care insurance”. That is a personal decision you should make with the help of a licensed professional. Instead, I will encourage you to look at the options, and to understand what they really are.
- #31 Govt wants to discourage people from using Medicare / Medicaid so they have made the experience as unpleasant as possible. Spending to nursing homes projected to be cut by $400 billion
- #32 Premiums are primarily age-driven. For every 10 years a person waits, premiums are expected to double. Structure your plan with a ten pay plan or a paid up at age 65. Once a policy is paid up, an Insurer cannot go back and increase rates. It’s a demographic reality: We are an aging population, and our projected life expectancy is much higher than our parents’ generations. Without a plan, it is likely that we will pay out of our own savings and income for care, or our family will do their best to juggle the caregiving responsibilities. Paying for long term care represents a very significant risk to all of the plans we’ve put in place. Many people mistakenly believe that Medicare pays for long-term care
- #33 Medicare is a subsidized health care plan. For most beneficiaries, the govt pays 75% and the Part B premium covers 25% of the cost. Example: Eleanor fell out of bed, broke a leg, was admitted into the hospital. During the hospital stay she contracted pneumonia and was admitted into a care facility to receive ongoing care and physical therapy until her condition stabilized. Vicky’s mom, diagnosis was terminal. Example: If a person suffers a stroke or cancer, Medicare will pay for hospitalization and treatment. However once the beneficiary no longer requires a bed in an acute care facility, Medicare benefits cease and the person is on their own. Conditions that are expect to last 90 days are chronic and Medicare no longer pays. Medicare will not pay for personal care services or custodial care outside a nursing facility. However, if an individual qualifies for coverage based on the need for skilled nursing or rehabilitation as described, Medicare will cover all of the beneficiary’s needs in the facility, including assistance with ADLs. Medicare does not pay for personal care services or custodial care except as part of an otherwise covered stay in a skilled nursing facility. For those who have a Medicare Part C Advantage plan or a Medigap plan, this supplemental coverage may cover part of the cost of days 21 through 100, when Medicare coverage requires a daily co-payment. However, when the underlying Medicare benefit ceases, the supplemental coverage also stops. Neither Medigap, a system of 12 standardized insurance policies designed to provide additional coverage and benefits where Medicare fails, nor the very comprehensive Medicare health insurance program, provides LTC benefits as many people believe.
- #34 When I looked at this chart it dawned on me that people readily insure their home, yet when it comes to our own personal care, not so. As a result most people have to rely on Medicaid. Comments on Estate Planning Strategies to qualify for Medicaid Seems to be a very drastic measure comparable to quitting a job to avoid income taxes. Rules may change and cannot guarantee they will qualify at the time medicaid app. Increased costs for complying with new rules. Giving away control of your assets comes with risks. What if children spend the money, have creditors, get divorced, attny fees. Losing control of your assets Where did the years go? We don’t plan to get older, it just happens. Insurance is like that – fin’l protection for things that just happen Situations that have the ability to take a large part of our $$$ HIPAA – Health Insurance Portability & Accountability Act I personally chose to focus on LTC for a couple of reasons: 1- As a CPA I see the need for it in doing retirement planning. It’s the ticking time bomb in a person’s retirement portfolio. 2- More affordable than people think. (story about a quote and person saying that’s the cost for my policy?) 3- State partnership plan make it more attractive than ever. 4. The peace of mind it provides is well worth it. Besides adding clarity to how the policies should be structured, HIPAA and its creation of the QLTCI policy made the ownership of long-term care insurance more attractive from the consumer’s perspective. By supporting ownership of private long-term care insurance, HIPAA is aligned with the goals of the state partnership programs and their constituents: shift the long-term care financing responsibility from the government (Medicaid) to individuals and their insurance companies. We will also talk about the next steps you can take, to make sure you have a plan that you are comfortable with. I am not here to sell you anything, and our discussion will not be based around “why you need to buy long term care insurance”. That is a personal decision you should make with the help of a licensed professional. Instead, I will encourage you to look at the options, and to understand what they really are.
- #35 Source: CMS As you can see, Medicaid also pays for long term care. However, it typically provides benefits only after you exhaust most of your resources. Medicaid has strict asset limitations to qualify for benefits. It is a tax-funded program for people who cannot afford care. Varies by state. The important thing to know about Medicaid is that people must pay for care out of pocket until they “spend down” their assets enough to become eligible. Look Back Period refers to how far back the state can examine your records to see what you or your spouse have done with your money. In most cases the look back period is 3 (or 5 – check) years. Any transfer of ownership of assets, within the look back period, will trigger a “penalty period” or ineligibility period. The penalty period is how long you are ineligible for Medicaid if you have transferred assets within the look back period. A simplified example of penalty period: Transferring an asset valued at $30,000 in a state with a monthly nursing home cost of $3,000 would result in a 10 month period of ineligibility for Medicaid (penalty period).
- #36 Govt wants to discourage people from using Medicare / Medicaid so they have made the experience as unpleasant as possible. Varies by state. But the important thing to know about Medicaid is that people must pay for care out of pocket until they “spend down” their assets enough to become eligible. Look Back Period refers to how far back the state can examine your records to see what you or your spouse have done with your money. In most cases the look back period is 3 (or 5 – check) years. Any transfer of ownership of assets, within the look back period, will trigger a “penalty period” or ineligibility period. The penalty period is how long you are ineligible for Medicaid if you have transferred assets within the look back period. A simplified example of penalty period: Transferring an asset valued at $30,000 in a state with a monthly nursing home cost of $3,000 would result in a 10 month period of ineligibility for Medicaid (penalty period).
- #37 Any income the community spouse receives in his/her name; SSI, pension, dividend, investment, annuity may be retained fully by the community spouse. No portion of the community spouse’s own income (up to $2,739) is required to be assigned to Medicaid or diverted to cover the cost of care for the institutionalized spouse. Govt wants to discourage people from using Medicare / Medicaid so they have made the experience as unpleasant as possible. Varies by state. But the important thing to know about Medicaid is that people must pay for care out of pocket until they “spend down” their assets enough to become eligible. Look Back Period refers to how far back the state can examine your records to see what you or your spouse have done with your money. In most cases the look back period is 3 (or 5 – check) years. Any transfer of ownership of assets, within the look back period, will trigger a “penalty period” or ineligibility period. The penalty period is how long you are ineligible for Medicaid if you have transferred assets within the look back period. A simplified example of penalty period: Transferring an asset valued at $30,000 in a state with a monthly nursing home cost of $3,000 would result in a 10 month period of ineligibility for Medicaid (penalty period).
- #38 Home Health Aides in most states must be licensed. Home health aides may or may not work for a social service agency or under the supervision of a nurse. Their objective is to help support and maintain the functioning of individuals in their own homes.
- #39 Ins is a fin’l product so it only makes sense to have a fin’l professional analyze the components of wealth protection & structure a policy that meets your fin’l objectives. to create a cohesive, integrated plan. Instead, try to get by on their own, Turbo Tax or H & R Block, several disparate investments resulting in a disjointed approach that lacks direction. Far too frequently people don’t have a single finl prof who is knowledgeable about their fin’l situation from a long-term perspective When it comes to Fin’l planning, all of these pieces need to be in place. Mitigating Risk & Protecting Wealth Against Loss
- #40 Ins is a fin’l product so it only makes sense to have a fin’l professional analyze the components of wealth protection & structure a policy that meets your fin’l objectives. to create a cohesive, integrated plan. Instead, try to get by on their own, Turbo Tax or H & R Block, several disparate investments resulting in a disjointed approach that lacks direction. Far too frequently people don’t have a single finl prof who is knowledgeable about their fin’l situation from a long-term perspective When it comes to Fin’l planning, all of these pieces need to be in place. Mitigating Risk & Protecting Wealth Against Loss
- #41 Adult Daycare - Though many states regulate adult day care centers, some do not. Some states subsidize these programs. ADS programs aim to achieve the following goals: delaying or preventing institutionalization by providing alternative care; enhancing self-esteem; and encouraging socialization.
- #42 Kaiser Family Fdn – well respected research institute on healthcare policy and proposed legislative issues. I’ve seen subsequent language that allows employers to choose to not participate.