Long-term care planning focuses on preparation for healthcare spending as we age and need extra funds for home care, assistive devices, medications or home modification. We often ignore this area when we plan for retirement, believing that it is reserved for the elderly. However, according to data from Sun Life Financial, more than one out of every 10 people who has received long-term care insurance benefits was under age 50 at the time of claim.
Women, in particular, need to be aware of the impact of long-term care on their lives because they face a double jeopardy. Not only do they provide the majority of care for loved ones, they also receive the most care because they tend to live longer. Women do worry more than men about future long-term care needs. According to a 2007 Manulife Financial survey (conducted by Market Probe Canada), 62% worry about the likelihood that they or their partners might need a nursing home, assisted living or home care in the future, and 63% worry about their ability to pay for this care. However, only 21% have factored long-term care costs into their retirement plans.
Steps for Employees
Employees are often misinformed about long-term care costs, assuming that the government will take care of them later in life. Planning for future healthcare costs can help remove this burden from family and friends.
To plan appropriately, employees need to understand the healthcare system (for example, public versus private coverage) and the resources available to them. They also need to know their family health history and be aware of any chronic conditions that they may face in the future.
Based on all of this information, employees should establish clear financial and legal directions regarding future healthcare, ensuring that wills, powers of attorney and advance directives are complete and current. These documents should be stored in a safe place, communicated to family members and updated on an annual basis.
Strategies for Employers
What can employers do to encourage employees to be more proactive about long-term care planning?
One option is to include communications and education initiatives in their benefits programs. For example, an employer could offer education sessions and resource materials or send out targeted communications with employee pay notices. These options are inexpensive and can easily be repeated so that employees will get the message.
Having employees who are more positively influenced and educated regarding their future healthcare needs can also benefit employers. Should an unexpected adverse health event happen to an employee—or to his or her aging parent—employees who are prepared will be better able to cope with the costs and the stress, meaning less time off work and greater productivity during a difficult period.
Adopting this approach may also help employers to create a more attractive workplace in today’s competitive labour environment. Boomers are becoming more involved with aging parents every day. Too often, they see first-hand the lack of planning and communication in their own families—and therefore, they are much more open to the opportunity to plan for themselves. Integrating long-term care planning into the group benefits program may help a company retain its older and more experienced employees.
No one likes to think about the unthinkable. But employers can help support their older employees by educating them about the need for long-term care planning—and then help them to make it happen. Karen Henderson is founder and chief executive officer of The Long Term Care Planning Network. karenh@ltcplanningnetwork.com
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