Long-term care coverage for University employees scrutinized

by Karlee Weinmann

Recently, the University made the switch to John Hancock Insurance and Financial Services, its new provider for employees’ long-term care insurance.

This type of coverage takes effect when policy holders are no longer able to care for themselves and are placed in assisted living settings.

The company recently came under scrutiny – in the midst of University employee enrollment – when it was mentioned in a March 26 New York Times article about insurance companies’ denial of so-called “legitimate” claims.

Though the story focused primarily on two other carriers, some University employees called the employee benefits office questioning the validity of the allegation and John Hancock’s reputation.

On April 1 the company took over the coverage, which was first offered to University employees in 2000. The University has worked to ease the process of transferring coverage directly from CNA Insurance to John Hancock for covered employees.

Karen Chapin, manager of health programs in the University’s employee benefits office, said the shift in endorsed policies occurred after a scheduled evaluation of the previous policy.

In step with most programs in the benefits office, CNA’s long-term care was weighed against other companies’ offerings. Four carriers responded to the University’s request for proposals, allowing a comprehensive appraisal of each.

The University settled on John Hancock, due centrally to lower premiums for new employees and broader eligibility for employees’ family members.

Chapin said after the article ran and employees expressed concern, she asked John Hancock for a response to the allegations against them.

“I was concerned about the article,” Chapin said. “I think that John Hancock’s issues were not as significant as the other (mentioned) carriers, but we did call (John Hancock) the minute we got the article.”

In the March 27 response, John Hancock said “policy rescissions are very rare occurances” and essentially happen to “prevent fraud and protect Ö policyholders.”

According to the company, its complaint rate is among the lowest in the industry at less than 1 percent.

Since long-term care is optional coverage, Chapin said she is not discouraged by the criticism of John Hancock.

“We’re in good hands with them,” she said.

Currently, 2,400 people subscribe to the University’s long-term care policy. Some are retirees or relatives of employees.

“This isn’t the kind of program where you necessarily have a target number (of policy holders),” Chapin said. “It’s just one we want to make available to people.”

Bill Roberts, associate director of parking and transportation services for the University, is also a representative to the University’s Benefits Advisory Committee.

Although Roberts said the committee was notified of the carrier change after the fact, it worked to extend the period of open enrollment, which began Feb. 19, from its original end date of March 16 to April 20.

The policy coverage amount is variable, offering daily coverage for three, five or 10 years.

Despite a lengthier time to decide on coverage, Roberts said he will not establish a long-term care policy, which would require continual payments for the remainder of his life to cover the policy.

“I don’t think it’s a bad deal,” Roberts said. “I have no desire to ever be in a nursing home that long, so that’s why I chose not to buy it.”

George Green, associate dean of the graduate school and member of the Benefits Advisory Committee said he is a long-term care policy holder, but not through the University.

Green and his wife decided to take out policies to protect financial well-being in the event either one of them needed nursing home-type care.

He said when he bought a policy about five years ago, discrepancies relating to lack of claims coverage were not “on the horizon” for the then-new form of coverage.

When Green read the article, he did not see John Hancock as a prominent target, but the mere mention, he said, could sway employees’ choices to purchase policies.

“There seems to be companies practicing hardball tactics,” he said. “If I were thinking about these policies, it would certainly influence my decision.”

The University will hold a series of meetings leading up to the decision deadline for employees curious about the program.