E.  PREMIUMS.  LTC premiums will be based on the age of the policyholder at the time the coverage is purchased and the choices selected.  Because this is a group plan sponsored by OPM, it is expected that premiums will be 15 to 20 percent lower than in the private market.   

1. Age When Coverage is Purchased.  Age will be particularly important to many NARFE members because policies are cheaper at younger ages when services are not expected to be needed for many years. The chart below (taken from a Worldwide Assurance for Employees of Public Agencies bulletin) shows the typical increase in LTC premiums according to age (the lower figure is the marital discount and the second is the group-sponsored discount).    Members who find that it is not cost-effective for them to participate in the LTC program may consider alternative types of care such as Continuing Care Retirement Communities (see section A6) or other group plans (see section G4).                       

2. Type of Benefit Choices.   Besides age, premiums will vary depending on the weekly benefit, the length of the policy, the waiting period, and the inflation protection chosen.  The larger the weekly benefit, the longer the length of the policy, and the shorter the waiting period, the higher the premiums will be (see section C).  Inflation protection will also increase the premium initially, but premiums will remain level for life if inflation protection is selected at the time the contract is purchased.  If inflation protection is chosen in the future, premiums will increase as benefits increase (see section C5).     

3.  Method of Payment.  Policyholders with a federal or military salary or annuity can pay premiums through payroll or annuity deduction.  Those who do not receive a federal or military salary or annuity (or relatives) must authorize a debit from a bank or credit card. 

4. No Matching Government Contribution.  There will be no matching government contribution in the LTC program.  Although participants will pay 100 percent of the premiums, the cost is anticipated to be 15 to 20 percent below standard premium rates because this is an employer-sponsored group plan.  OPM also expects to provide better value and stability because it will select the best insurance carriers available and monitor the program over the years.

5.  Coverage Guaranteed Renewable.  Coverage will be guaranteed renewable.  The insurance carrier cannot cancel an enrollee’s coverage unless the enrollee stops paying premiums.   

6. Coverage Fully Portable.  Coverage will be fully portable.  Participants who leave federal employment or the uniformed services can keep their policies at the same premiums.  Enrollees who divorce a spouse who is a federal employee can also keep their policies at the same premiums. 

7.  No Premiums After Benefits Begin.  Enrollees in the plan will no longer pay premiums once they begin using covered health services and benefits begin to be paid.  If the enrollee uses the care coordination plan, premiums are not paid during the waiting period (see section D4).

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