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The Office of Personnel Management (OPM) has announced that The Metropolitan Life Insurance Company and John Hancock Life Insurance Company have been selected as the carriers for the government Long-Term Care (LTC) Insurance program for military and federal civilian beneficiaries that will start up late next year. Together, the two firms have formed a third corporation called Long Term Care Partners, LLC. The new company's sole responsibility will be operating the federal program. The contract is for seven years. Premium rates and benefit options could be released in late winter (Feb 2002). Coverage will be effective on October 1, 2002, but program sign-ups could begin much sooner, according to the OPM.
In related news, the House and Senate approved the Long-Term Care Security Act, HR 2559, for Presidential signature, which is expected shortly. The Act makes several improvements in the law that initially authorized the government LTC insurance program discussed above. H.R. 2559 exempts federal long-term care insurance premiums from state and local income taxability. It also expands eligibility to include gray area reservists, as well as federal civilian retirees with deferred annuities. (Gray area reserve retirees have served 20 or more qualifying years and are eligible to receive retired pay when they become 60 years of age.)
13 million federal workers and annuitants - including active and retired service members and their family members - will be eligible to purchase the long-term care insurance at group-discount rates when the program commences on Oct. 1, 2002. OPM expects the government program's premiums to be lower than those of commercial plans.
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