Following are two sets of guidance, one a benefits notice and the other a Federal Register notice, on the special election period for the FLTCIP program.
The purpose of this Benefits Administration Letter is to provide guidance about an Enrollee Decision Period for current enrollees in the Federal Long Term Care Insurance Program (FLTCIP), to be held from July 18 to September 30, 2016.
New Contract Term
Per Federal law, the U.S. Office of Personnel Management (OPM) must issue a new contract term every seven years for FLTCIP. In addition, the law requires that premiums must reasonably and equitably reflect the cost of benefits. OPM engaged in a full and open competitive bidding process for the third FLTCIP contract term and received a single bid. The FLTCIP contract was awarded to John Hancock Life & Health Insurance Company, effective May 1, 2016. John Hancock proposed higher premiums because recent analysis of the program, using updated assumptions based on identified trends and actual claims experience, indicated that the current FLTCIP premiums would not be sufficient to meet the future, projected costs of the benefits. The new premium rates are those established as a result of this competitive process. Most current enrollees are impacted by the premium increase, which will take effect on November 1, 2016. Therefore, OPM is holding an enrollee decision period for current enrollees from July 18 to September 30, to give them the opportunity to review their current coverage and make decisions that allow them to accept or alleviate the premium increase.
Long Term Care Partners (LTCP), LLC, a subsidiary of John Hancock, will continue to administer the program. Their toll-free phone number, 1-800-582-3337 (TTY 1-800-843-3337), and website, www.LTCFEDS.com, remain the same.
Enrollee Decision Period for Current Enrollees
a) Personalized Options
Long Term Care Partners (LTCP) will send a 2016 Enrollee Decision Period offer package with personalized options to impacted enrollees. It will include an introductory letter, a return envelope, an informational brochure, and an options form with detailed information about the enrollee’s current coverage and options to change coverage in an effort to reduce the impact of the premium increase. At least one of the options will allow the enrollee to reduce coverage in order to maintain the current premium at or below the current level. In general, enrollees will be able to choose:
- a premium-neutral option to fully offset the premium increase
- a partial increase, accepting roughly half the premium increase along with moderate coverage reductions; or
- the full premium increase to retain the current benefits and inflation protection
Eligible enrollees may also elect the paid-up, limited benefit. This option allows enrollees whose premium increase is beyond a certain percentage to stop paying premiums and keep paid-up coverage with a reduced level of benefits. Enrollees may request other benefit selections not indicated on the Benefit Options Form, but these options may require underwriting and/or a higher premium.
The current enrollees who will receive an offer package include:
- enrollees whose age at purchase was 79 years or younger
- enrollees who have standard FLTCIP coverage and are not enrolled in the FLTCIP’s Alternative Insurance Plan
- enrollees who applied for coverage before new application rates were raised on August 1, 2015
- enrollees who are not currently eligible for benefits or awaiting a decision on a pending claim
If an enrollee does not respond by the September 30, 2016, deadline, the current coverage will remain the same and the premium will increase.
b) Underwriting Requirements
Eligible enrollees who choose to reduce their coverage or keep their current coverage (with the premium increase) will be able to do so without underwriting. Coverage increases require full underwriting.
c) Timing of the 2016 Enrollee Decision Period Package
The offer package mailings will begin in mid-July and will be staggered over several weeks; enrollees will not receive their packages at the same time. Enrollees may also visit www.LTCFEDS.com/myaccount to sign into or register for a MyLTCFEDS account to review their personalized options.
d) Due Date for Decision
The deadline for enrollees to submit a selection is September 30, 2016. If an enrollee does not respond by September 30, 2016, the enrollee’s coverage will remain the same and the premium will increase.
e) Effective Date
The effective date of coverage changes that do not require underwriting will be November 1, 2016, regardless of when the Enrollee Decision Period request is received. Coverage changes requiring underwriting, if approved, will be effective the first day of the month following approval of the request, but not before November 1, 2016.
f) For Current Enrollees Only
The Enrollee Decision Period is for current FLTCIP enrollees only. It is not a general open season for all employees, annuitants, and qualified relatives.
g) Educational Resources
The 2016 Enrollee Decision Period offer packages will include information on alternative benefit options that an enrollee can select in order to help reduce the impact of the premium increase. The FLTCIP website www.LTCFEDS.com/QA has general questions and answers on the contract award and the Enrollee Decision Period. The FLTCIP website, www.LTCFEDS.com, will also have instructional videos that enrollees can access in their My LTCFEDS online account to help in the decision-making process. These videos will be specific to the individual enrollee’s plan options. Webinars will be available to help enrollees make their selection during the Enrollee Decision Period. LTCP has a call center with trained program consultants to help current enrollees understand their choices. Personalized assistance is available from 8 a.m. to 8 p.m. (ET) at 1-800-582-3337 (TTY 1-800-843-3357).
SUMMARY: The U.S. Office of Personnel Management (OPM) is announcing rules for current enrollees in the Federal Long Term Care Insurance Program (FLTCIP) who will be eligible to change coverage during a limited Enrollee Decision Period to be held this year. These rules pertain only to current eligible enrollees who may make certain changes because of premium rate increases that affect most enrollees. Eligible enrollees whose application was received on or before July 31, 2015, and whose enrollment was approved may make changes during this Enrollee Decision Period, provided they are not in benefit eligible status. Enrollees affected by the premium rate increase will receive information from Long Term Care Partners, the administrator of FLTCIP, with information on their opportunities to make changes to their coverage.
DATES: The Enrollee Decision Period will be from July 18, 2016 through September 30, 2016.
FOR FURTHER INFORMATION CONTACT: Enrollees may call 1-800-LTC-FEDS (1- 800-582-3337) (TTY: 1-800-843-3557) or visit http://www.ltcfeds.com.
SUPPLEMENTARY INFORMATION: The Long-Term Care Security Act (Pub. L. 106-265) directs OPM to provide periodic opportunities for eligible persons to apply for coverage under the FLTCIP. OPM has issued regulations (5 CFR 875.402-875.404) which set forth procedures for FLTCIP open seasons. This notice is issued under the provisions of § 875.402(c). The Enrollee Decision Period described in this Notice is solely for current enrollees affected by the premium increase to make coverage changes. Eligible enrollees will be notified directly about the Enrollee Decision Period by Long Term Care Partners, LLC, the program administrator.
Enrollees who are subject to the premium rate increase effective November 1, 2016 will receive an offer package from Long Term Care Partners, LLC, with personalized options to allow them to reduce their coverage in order to mitigate the effect of the premium increase.
Enrollees who make coverage changes outside of the personalized options provided during the Enrollee Decision Period may be subject to full underwriting, as specified in § 875.403, and different premium calculation rules.
Qualified enrollees under these special rules: Persons enrolled in a FLTCIP standard plan whose application was received on or before July 31, 2015, and whose enrollment was approved, are eligible to make changes during the Enrollee Decision Period, provided they are not currently eligible for benefits and were not 80 years of age or older at purchase. Qualified enrollees will receive an offer package with personalized options.
Underwriting requirements: Eligible enrollees who wish to reduce their coverage or keep their current coverage (subject to any applicable rate increase) will be able to do so without underwriting. They may also change to a specified personalized option without underwriting. No enrollee’s coverage will change unless he or she voluntarily chooses to change it. Coverage increases require full underwriting.
Billing age: For enrollees who retain their current benefits, premiums are based on the enrollee’s age at purchase. For enrollees who choose to increase their benefits, outside of the Enrollee Decision Period personalized options, premiums will be determined on a blended rate basis, taking into account the enrollee’s age at purchase and the enrollee’s attained age as of November 1, 2016.
Premiums: Enrollees affected by the premium increase will receive detailed written information in the 2016 Enrollee Decision Period offer package. This package will be mailed from Long Term Care Partners, LLC, the program administrator, and will include the specific amount of their increase. The package will also include personalized options to help enrollees reduce the effect of the premium increase. At least one of the options will allow enrollees to reduce coverage in order to maintain their current premium at or below the current level that is paid. Premiums for coverage changes will vary according to the coverage options selected.
Eligible enrollees may also be given an opportunity to stop paying premiums and convert their coverage to a paid-up, limited benefit (a consumer protection feature that is built into FLTCIP coverage).
Effective date: The effective date of coverage changes that do not require underwriting will be November 1, 2016. Coverage changes requiring underwriting, if approved, will be effective the first day of the month following approval of the request, but not before November 1, 2016.
Enrollees who make coverage changes during the Enrollee Decision Period will receive a new Schedule of Benefits. Enrollees will have 30 days after the date the Schedule of Benefits is received to cancel their Enrollee Decision Period coverage changes and revert to their original coverage with the full premium increase.