Depending on when you first attained your FLTCIP plan, you’re either partially or fully covered if you need Long Term Care (LTC) coverage internationally.
There are 265,000 enrollees in the Federal LTC Insurance Program (FLTCIP). Unlike similar benefits available to government employees and retirees, immediate relatives of feds – even their parents and adult children – are eligible to apply for their LTC insurance plan. This might be subject to change however, as OPM recently hinted they might have to freeze new enrollment for as long as two years.
Currently, an individual’s application to FLTCIP can be disqualified based on them having certain medical conditions, or a specific combination of illnesses. This policy exists to encourage early enrollment, so people don’t hold off on applying for the insurance until they develop a condition that might make the need for LTC more likely down the road. But a lot of eligible feds have decided they’d rather not apply at all, for better or worse.
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The anticipated volume of feds and their family members who would apply for a plan with FLTCIP was much higher than the actual amount who purchased a plan. This led to the 83% average premium spike in 2016, among other things. To make FLTCIP more enticing, the “FLTCIP 3.0” plans went into effect starting with all plans purchased on October 21, 2019. Whether your FLTCIP coverage began before or after this date determines if you have the “3.0” features. These include a premium stabilization option, more at-home LTC coverage, and 100% international coverage.
LTC insurance coverage goes into effect when 2 out of 6 ADLs (activities of daily living) can’t be performed due to a chronic illness, injury, disability, or the aging process. The ADLs include bathing, other personal hygiene functions, dressing, functional mobility, eating, and using the restroom. If a FLTCIP enrollee is either traveling overseas or living in another country, they can still use their federal LTC insurance to cover qualifying expenses. For those with FLTCIP 3.0, international LTC expenses are 100% covered. If your policy was purchased before October 21, 2019, then only 80% of LTC costs are covered when incurred internationally.
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.