U.S. Office of Personnel Management www.opm.gov - Recruiting, Retaining and Honoring a World-Class Workforce to Serve the American People

Deferred Annuitants Now Eligible! President Bush signed P.L. 107-104 (H.R. 2559) on December 27, 2001. This law makes Federal deferred annuitants eligible to apply for insurance under the Federal Long Term Care Security Act when they satisfy all requirements (age and service) for title to their annuity and have filed the application for that annuity. Before this bill became law, deferred annuitants were not eligible — only Federal annuitants retiring on an immediate annuity. This new law also makes the FLTCIP exempt from state premium taxes. These are taxes that our contractors, LTC Partners, would otherwise have had to pay. Before this bill became law, the contractor would have likely added the cost of these taxes into enrollees' premiums. So this is all good news!

H.R. 2559 — [Web Page]   [PDF File]

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OPM Selects Metropolitan Life and John Hancock To Provide Long Term Care Insurance -- The U.S. Office of Personnel Management today announced that Metropolitan Life Insurance Company and John Hancock Life Insurance Company have been selected as the insurers for the Federal Long Term Care Insurance Program.
         A number of factors influenced OPM's selection of Metropolitan Life and John Hancock. Together, they have the resources and experience to efficiently provide this insurance protection. Separately, each has name recognition with the public that inspires trust.


         Metropolitan Life and John Hancock have formed Long Term Care Partners, LLC, a jointly owned entity devoted exclusively to operating the Federal Long Term Care Insurance Program.
         Metropolitan Life and John Hancock were selected after a rigorous competitive process that involved actuaries and long term care experts from the Departments of Defense, Treasury, Health and Human Services, as well as the Pension Benefit Guaranty Corporation.
         The complete premium schedules and benefit options for the program will be announced after John Hancock and Metropolitan Life conduct final market research with members of the groups eligible to enroll. Under terms of the contract, Metropolitan Life and John Hancock will conduct an extensive educational campaign to assure that the eligible populations are in a position to make informed decisions about long term care insurance.
         An early-enrollment opportunity for the program is scheduled for early 2002 due to significant interest and comments from individuals who are familiar with long term care insurance coverage.
         OPM expects that most applicants will benefit from the extensive education and marketing campaign, which will begin in February 2002 and culminate in an open season registration that will be held sometime in late summer/early fall.
         Annuitants will receive information at their correspondence addresses and employees will receive information at their worksites. The Metropolitan Life/John Hancock team will present several thousand work site and offsite meetings across the country to introduce the new program. The team will produce satellite broadcasts, informative booklets, newsletters, pamphlets, interactive web sites, and more to spread the word about this exciting and important new insurance program.

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We've faithfully posted a first-of-the-month-update every month since January 2001. This month is no exception, though there isn't much to say. We did not sign a contract in November. We're meeting with our Director next week and are on target for announcing an award this month.

Some people thought the program was going to be available by October of this year. That was never our intention. The program will indeed be available by October 1, 2002, as we have always said. And we will indeed have an early enrollment opportunity around March 2002 with an open season in late summer/early fall 2002. Announcing an award later than our own internal goal of October 2001 does NOT push those dates back.

Please take a look at our newly-posted information on state tax incentives for long term care insurance, compliments of the Health Insurance Association of America.

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In keeping with our "open door" policy, we want to update you on where we are with this important new program. We're still on track for a contract award this month. Our technical evaluation and cost evaluation panels submitted their reports to our contracting officer who is preparing his report to Kay Coles James, our agency Director, who will make the final determination. We do hope to announce our insurance partners later this month or early next month through a notice on this webpage, and a press release, which we're sure will be picked up by the popular press.

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We received the Best and Final offers from the contractors in the competitive range on October 15th, as scheduled. We're very close to making a decision on who our insurance partners will be. Something that is common to all of the offers is an early enrollment opportunity for those who have already done their long term care insurance homework and are in a position to make an informed decision as soon as our benefits and premiums are known. This web page will probably be the first place that we announce details of the early enrollment opportunity, so stay tuned for the good news.

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We put the main questions that people ask about the Federal Long Term Care Insurance Program on this page and in our Frequently Asked Questions. Two new ones just posted are:

• I'm a Federal employee caring for my mother who has Alzheimer's. How can this program help me? Her?
• I've been waiting for this program ever since my father was diagnosed with dementia last year. I heard that your program will provide retroactive benefits to anyone whose need for long term care began on/after September 19, 2000, when the President signed the law. Is that true?

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October 17, 2001 —

Are you married? Be sure to read our latest Did You Know entry.

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October 1, 2001 —

Yes, we're making progress evaluating the proposals! No, we haven't signed a contract yet. We've invited insurance companies to visit us to talk about their proposals this week. The companies that have a reasonable chance of winning the award will submit Best and Final offers to us by October 15th. This is slightly later than we had hoped, but the events on September 11th pushed our schedule back a bit. We hope to sign a contract before mid-November. Don't worry - that will still leave plenty of time to get the program up and running well before October 2002. Also, we are pretty sure there will be an early acceptance opportunity for those who have already done their long term care insurance homework and are in a position to make an informed decision as soon as our benefits and premiums are known. We'll give you more details on that opportunity as soon as we have them.

We appreciate your patience and understanding.

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September 1, 2001 —

YES -- we received quality proposals from the insurance industry and are confident that we will indeed have a Federal Long Term Care Insurance Program next year (please hold the applause until we sign a contract around the middle of October of this year). In the meantime, we added another entry to our now-famous "Did You Know" column.

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August 22, 2001 —

Yes, proposals are due from the insurance companies today! Gosh, did you think you'd be able to come to our web page today to find out which companies sent in proposals? Sorry! As we told you on August 1, procurement rules prohibit us from telling you the number of proposals we receive and who submitted them. As a matter of fact, we haven't even opened any envelopes yet. But we do hope that we can assure you by September 1 that we received quality proposals and that the Federal Long Term Care Insurance Program WILL indeed be up and running by October 1, 2002. And we do still plan to sign a contract with our insurance partner(s) on/about October 1 of this year. Thanks for your patience, and stay tuned….

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August 1, 2001 —

We issued Amendment 4 to our Request for Proposals (RFP) on July 31.

Responses to the RFP are due on August 22. That's only 3 weeks away, and we're anxious to read and evaluate the proposals. Under Government procurement rules, we can't release the number of proposals we receive, or the names of the companies who submit the proposals (so please don't ask). When we sign a contract on/about October 1, 2001, we will publicize who we will be partnering with to offer this exciting new insurance, but the names of the other bidders will continue to be confidential.

In the meantime, here's another entry in our continuing series of educational snippets:

Did you know that long term care services are expensive? The cost of one year in a nursing home can exceed $50,000 (and that's just room and board. It doesn't include the cost of drugs, incidental supplies, etc.). The cost of home care for only three 8-hour shifts per week can easily exceed $20,000 a year. Both of these costs can be significantly higher in high-cost areas. And that's before inflation! Paying for long term care can easily exhaust your savings. Buying long term care insurance can protect your savings.

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July 23, 2001 —

We issued our third amendment to our Request for Proposals on July 20th.

Here's our 3rd educational snippet on long term care and long term care insurance. Have you read all of them? Be sure to visit our snippet archives.

Did you know that long term care is not just for senior citizens? Over 40% of people who are receiving long term care are under age 65. They may need continuing care due to a serious accident, a stroke, a brain tumor, multiple sclerosis, Parkinson's disease, etc. You can't always prevent your need for long term care, but you can protect your assets, preserve your choice of care, and reduce the burden on your family by buying long term care insurance.

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July 12, 2001 —

Can I Receive Credit For Already Having a Private Policy? We just added a new frequently asked question on this topic. This is by far THE most frequently asked question that we've received by email.

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July 10, 2001 —

On July 3rd, we issued the first two amendments to our June 20th Request for Proposals. Our July 9th pre-proposal conference with insurance companies interested in bidding on our Request for Proposals went well.

We promised to continue providing you with educational "snippets" on long term care and long term care insurance. Here's our second one:

Did you know that your health plan probably doesn't cover long term care services? Take a look at your health plan brochure. Chances are there are specific exclusions for nursing home care and extended or chronic care provided in the home. If you're enrolled in a Federal Employees Health Benefits (FEHB) plan, take a look at the "Not covered" blocks in sections 5(a) and 5(c) of your FEHB plan brochure. If you're like most people, the lack of coverage will surprise you.

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July 1, 2001 —

This month, we're hosting a conference with insurance companies that are planning to respond to the Request for Proposals that we issued in June. The proposals are due to us in late August, and we'll then spend the next 6-8 weeks analyzing the proposals, negotiating with one or more insurance companies, accepting best and final offers, etc. We expect to award a contract in October 2001, although even by then we may not have all of the details of the final program design and final premiums. As soon as we have those details, of course, we'll share them with you.

In the meantime, we'll post some educational "snippets" to introduce some concepts about long term care and long term care insurance in general.

Here's our first one:

Did you know that most long term care is not skilled care? Only 18% of long term care is nursing home care. Most long term care is home care, home health care, adult day care, assisted living facility care, etc.

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June 20, 2001 —

YES! We issued our Request for Proposals (RFP) for long term care insurance to the insurance industry. With one exception, the proposed product design in the RFP is identical to the proposed product design here on our web page. We continue to listen to the public — at the request of the National Association of Retired Federal Employees (NARFE), the RFP now asks for the premium impact of using short form underwriting for annuitants, rather than long form underwriting.

Responses to the RFP are due to us in late August. Stay tuned...

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June 1, 2001 —

We posted new frequently asked questions (FAQs) and we made a few changes to our proposed product design. Be sure to read both. We're still on track for issuing the Request for Proposals on or about June 15.

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May 1, 2001 —

We met with insurance partners and gave them an idea of what our request for proposals may look like and an opportunity to ask questions about our proposed product design. We also met with the National Association of Retired Federal Employees (NARFE). We are meeting today with a group of agency payroll office representatives to talk through the enrollment and premium process that we envision.

Now we're really hunkering down to finish writing the RFP. We plan to issue it on/about June 15. We appreciate all of your comments about our proposed product design.

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April 2001 —

We have posted a general description of our current thinking about the product and options we will ask for when we request the insurance industry to give us proposals for a long term care insurance program for the “Federal family.”

We are continuing to consider the various options available to us, so the product we describe in our request for proposals (which we plan to issue in June) may vary from the product we describe here. The product could be further refined after we have selected the carrier(s) we will work with to meet your long term care insurance needs.

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March 2001 —

As noted last month, we have received excellent input from representatives of the long term care insurance industry. We're now at the point of reviewing their recommendations with a panel of long term care expert consultants to arrive at some tentative conclusions about plan design and underwriting approaches. We will spend the balance of this month getting some reactions from stakeholder groups. We expect to post our tentative plan design here in April.

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February 2001 —

We're almost done meeting with the major long term care insurance companies. We're very encouraged with the industry's response to our ideas for this new program. We remain convinced that we will be able to offer a long term care insurance product that meets or beats the best pricing for individual policies and provides better value for your dollar.

Stay tuned for our thoughts on the product design and what questions you'll have to answer to see if you qualify for the coverage!

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January 2001 —

We continue to work with stakeholders, consultants, industry representatives, actuaries and others to develop the specifications for the contract solicitation, including defining the program features and options.