Worksite Smarter.
Now is the time for chronic care benefits.
By Russell Norris
Posted on: Sept 15, 2023
In today’s challenging labor market, employers are looking for every advantage to attract, retain and engage their workers. For many, this means taking a closer look at their benefits packages and what employees need and value.
Your clients may be surprised to learn that one of the concerns that’s weighing heavily on the minds of working Americans is how to plan for and meet the growing cost of chronic care needs. At the same time, many workers are looking to their employers for help in protecting against this threat to their long-term financial security.
In fact, a soon-to-be-released MassMutual 2023 Chronic Care Study found that 79% of working Americans are very or somewhat concerned about the impact of a chronic health condition or illness.1 Employees want and need help protecting their families from the financial burden a chronic health condition can cause and 78% of the workers we surveyed are interested in purchasing coverage through their employer that includes benefits that help cover chronic care expenses.1
The opportunity to help your clients stand out by addressing this need is considerable, especially as employers look for practical, affordable solutions to help their employees prepare for future needs such as a chronic illness. MassMutual’s Group Whole Life Insurance with the Chronic Care Benefit2 can help answer this need.
A versatile financial solution, our Group Whole Life insurance provides certificate owners access to a Chronic Care Benefit to help cover the costs associated with a chronic illness. The Chronic Care Benefit is a “living benefit” included with every Group Whole Life insurance certificate we underwrite at no added premium cost to your clients or their employees. Employees pay for the benefit only if it is exercised and that fee is deducted from their benefit amount, so there are no additional out-of-pocket costs ever.
When an employee accesses this feature, their benefit is payable once they have been certified as having a qualifying chronic illness. There is no waiting period. Once approved, it’s theirs to use. And it is paid in a lump sum without any plan of care requirements, offering the employee complete flexibility to use the money any way they choose. It can be used for making modifications to their home or car, purchasing a wheelchair or other special equipment, or any other expenses, such as travel costs for obtaining care. This straightforward approach to how the benefit works can make a real difference to an employee and their family dealing with an already difficult and stressful life situation.
Better still, if an employee doesn’t have a need for the Chronic Care Benefit, nothing is lost: their full death benefit will be available to their loved ones later. In the meantime, they have the peace of mind knowing that their Chronic Care Benefit is there if they need or want it.
Very simply, Group Whole Life insurance presents an opportunity for your clients to enhance their benefits package with a financial wellness solution that does more — which can be key to attracting and retaining talent in today’s competitive job market. At the same time, the flexibility of MassMutual’s Group Whole Life can help your clients send a strong message to their workers that their financial well-being matters, no matter what the future may hold.
As employers continue to broaden their benefit offerings, many are looking to their benefits broker to help them identify meaningful and cost-effective solutions that can help strengthen the financial stability of their workers — and to communicate the value of those benefits to their employees. Providing voluntary benefits, such as MassMutual Group Whole Life insurance with the Chronic Care Benefit, can be a smart way to provide the coverage employees want and need, with little or no impact to your client’s bottom line.
Finally, be on the lookout for the full MassMutual 2023 Chronic Care Study results where we’ll share all we’ve recently learned so you can keep Worksite Smarter.
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FOR FINANCIAL PROFESSIONALS. NOT FOR USE WITH THE PUBLIC.
1 2023 MassMutual Chronic Care Study, which was conducted by PSB Insights, LLC. 2102 respondents ages 22-67 were surveyed in February 2023. The study is to be published June 2023.
2 The Chronic Care Benefit is not intended to be a qualified long-term care insurance contract under section 7702B of the Internal Revenue Code. The Chronic Care Benefit is neither long term care, nursing- home, or home care insurance and is not conditioned upon the receipt of long-term care or medical services. Having a chronic illness means the insured: is permanently unable to perform, without substantial assistance, at least two Activities of Daily Living (eating, toileting, transferring, bathing, dressing, and continence) (in NY, for a period of 90 consecutive days) due to loss of functional capacity; or requires Substantial Supervision to protect the insured from threats to health or safety due to permanent Severe Cognitive Impairment. Additionally, in North Carolina, and Washington, generally, Chronic Illness is any medical condition that requires continuous confinement in an Eligible Institution, where the Insured is expected to remain there for the rest of their life. In New York, generally, the Insured requires continuous care for the remainder of the Insured’s life in an Eligible Facility or at home.
There is a fee to exercise the Chronic Care Benefit. The fee is a percentage of the Eligible Amount for the Chronic Care Benefit and is determined based on the Insured’s age at the time the benefit is approved to be exercised: 18% for ages 45 and above; 27% for ages 44-35; 36% for under age 35. In certain situs states the term “Fee” is replaced with “Actuarial Discount” or “Reduction.” The certificate’s premium payments will be based on the reduced amount of insurance at the current rate. Fees are taken from the Chronic Care Benefit payment.
Except in Washington and North Carolina, the acceleration of the death benefit is intended to receive favorable tax treatment under §101(g) of the Internal Revenue Code. Accessing other similar benefits may cause the per diem limit to be exceeded. The insured must be chronically ill as defined in 26 USC 7702B. Receipt of accelerated death benefits may be taxable. For certificates issued in Washington or North Carolina, the Chronic Care Benefit defines a chronic illness in accordance with state insurance requirements, and may be taxable, as the state prescribed definition differs from the federal tax law definition. Certificate owners should seek advice from a tax advisor prior to requesting a benefit payment.
Accelerating the payment of the death benefit may affect eligibility for public assistance programs, including MEDICAID and SUPPLEMENTAL SECURITY INCOME (“SSI”). Insureds should contact the Medicaid Unit of the local Department of Public Welfare and the Social Security Administration Office for more information. In NY, the Chronic Care Benefit is not a health insurance certificate providing long-term care insurance subject to the minimum requirements of New York Law, does not qualify for the New York State Long Term Care Partnership Program and is not a Medicare supplement certificate.
The payment of the Chronic Care Benefit will reduce the certificate’s death benefit, any cash value and any loan values. The certificate’s premium payments will then be based on the reduced amount of insurance and the rates in effect for the policy.
Clients should carefully read the accelerated death benefit disclosure provided at application. Restrictions and limitations will apply.
For more detailed information about how the Chronic Care Benefit works, please ask your benefit representative for a MassMutual Chronic Care Benefit brochure approved for use in your state.
The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
State variations will apply. The product and/or certain features are not available in all states. This material is not for use in California. The Chronic Care Benefit is not available in Massachusetts.
Group Whole Life Insurance (GPWL), (policy/certificate forms MM-GPWL-2014 and MM-GCWL-2014, and MM-GPWL-2014 (NC) and MM-GCWL-2014 (NC) in North Carolina), is level-premium, participating permanent life insurance. The GPWL policy and GCWL certificates are issued by Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001.