What You Need to Know
- Mutual of Omaha is suspending LTCI sales in the state.
- Thrivent is suspending sales through independent agents and outside advisors.
- National Guardian Life has set tough new minimum standards.
Private insurers are deciding to opt out of dancing with Washington state’s new WA Cares Fund universal long-term care (LTC) benefits program.
The carriers say they want to make sure Washington state residents aren’t simply buying private coverage to avoid paying a new 0.58% payroll tax that’s supposed to cover the cost of the public LTC benefits program. The new tax is set to take effect Jan. 1, 2022.
Residents can opt out of the public program, and the tax, if they can show they have had private coverage in force before Nov. 1, 2021, under current program rules.
National Guardian Life Insurance Company — a relatively small carrier based in Madison, Wisconsin — has responded to the birth of the state’s LTC program by requiring applicants to buy richer LTCI policies and meet tougher underwriting standards.
Thrivent Financial for Lutherans has cut off new LTCI policy sales through independent agents and outside advisors. The Minneapolis-based carrier is still selling LTCI policies in the state through its own agents.
Mutual of Omaha has suspended new LTCI sales in the state. The Omaha-based carrier says it hopes to resume LTCI sales there in November.
National Guardian Life, for example, told agents in a memo that it has started to see a surge in applications, and that most of the applicants are seeking the minimum amount of coverage needed to avoid paying the payroll tax.
Thrivent and Mutual of Omaha said they want to see that customers are using its LTCI policies in a manner consistent with the original intent to protect clients against the risk of LTC expenses.
WA Cares Fund History
State lawmakers created the new LTC benefits program three years ago, by passing the Washington State Long-term Services and Supports Trust Act.
The act requires many residents to either have long-term care insurance (LTCI) coverage from a private insurer or else pay a 0.58% tax on wages and stock-based compensation to the state, to pay for a public long-term care (LTC) benefits program.
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June 21, 2021 at 06:52PM
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Insurers Try to Avoid Collision With State LTCI Program - ThinkAdvisor
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