Right now, there's only one “true group” long-term care insurance carrier actively offering new business plans. So why would employers still look at LTCI as a vital retirement planning protection product? It's because a product line initially designed for small groups—multi-life individual LTCI contracts—is now moving to the big time.

To understand why, it's important to understand the history of LTCI offered to groups. Since the 1980s and 1990s, the majority of plans sold were of the “true group” variety. What do we mean by “true group?” A true group plan is one in which the insurance company issues a master policy to the employer, while each employee participant receives a certificate. This approach was used by companies such as Unum, MetLife, CNA, John Hancock, Prudential, Aetna and others. There were several advantages to this approach for carriers, benefit brokers and employers:

• Plans were based on the situs state of the employer's headquarters so all employees could typically have the same plan regardless of which state they resided in.
• Employees could have simplified enrollment, often with guaranteed issue, compared to individual policies.
• Plans and contract language could be customized for employers based on unique needs.

Most of these group plans were designed for groups of more than 1,000 eligible lives.

 In the meantime, on a different floor of the carrier home office, teams were designing small group long-term care  plans using individual contracts. Often these plans offered a premium discount and some type of underwriting concession—although never guaranteed issue like group products. Although these products were designed for the small group market, some LTC specialists started to use them for larger groups.