The group market for long-term care (LTC) has tended to target programs to larger work forces due to the cost and time involved in creating new plans. "There's a lot of communication involved in setting up a plan, and first-year participation averages less than 10 percent because it's a voluntary product," says Christopher Matz, national sales director of group long-term care insurance at Prudential Insurance.
Employers offering LTC coverage also tend to want a white-labeled program they can customize with their own corporate identity. Completing the sales, underwriting, and customization processes of traditional group LTC typically takes Prudential about four months.
"From a carrier's perspective, you have to pick a threshold with traditional group where it will pay to invest your resources–which tends to be more than 500 employees," Matz says. "There has been a need for small employers to offer LTC, but it's been hard to meet premium requirements, and writing traditional group LTC below those requirements doesn't allow us to spread the risk."
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