Approaching their retirement years, the senior management group has become increasingly important to their corporations. Their employer now has an important and unique opportunity to reward their long-term dedication.

Assuming the norm, studies shows that the majority of their lifetime medical expenditures will occur when the executive is no longer insured by a corporate medical plan. Those expenditures will not be made up of skilled and intermediate care expenses. At the worst imaginable time, with a fixed income and Medicare on the horizon, the retiring executive will be totally exposed to the cost of a long-term care event.

Unfortunately, our national workforce tends to do their long-term care planning as part of the retirement planning process. Since fewer and fewer of our retirees have adequate finances to actually retire on, the long-term care planning process almost never happens. From the senior management executive's perspective, the ever increasing long-term care risk reaches the dangerous stage just about retirement time.

The starting point is the employer's commitment to establish the venue for creation of an employer-sponsored long-term care insurance program. Then one option is to determine the feasibility of installing a "core" plan – $2,000 per month for two years – at a cost of $25 to $30 per month for each employee. Or employers could choose between installing a completely voluntary, employee paid plan or creating an employer-paid LTC plan for the senior management group.

A fourth option for the corporation might be to pay the long-term care insurance premium on behalf of the senior managing employee while the employee agrees to an "equivalent salary reduction." This concept works well with LTC insurance as any company, regardless of the type of corporation, can pay for an employee's LTC insurance without the employee having to report the value of the benefit as income. Most other benefits require income reporting of the value of the benefit if the corporation pays for the benefit. The company can pay the employee's LTC insurance premium without regard to discrimination testing due to the fact that such testing is not required by the IRS for deduction eligibility. Employers and their advisors are urged to consult their own tax advisors relative to the feasibility and validity of this approach.

Based on sound employee benefit principals, "one size fits all" no longer works when considering the lifetime benefit needs of the "driving force" behind the success of a business.

Allan Checkoway, RHU recently published ElderCare Survival … Long Term Care in the 21st Century; Long Term Care Insurance Marketing Presentations for Insurance & Financial Advisors. For more information, visit www.eldercaresurvival.com.