Already under fire, long-term-care insurer sends bad data to workers

By Joe Davidson
Monday, November 16, 2009

The already beleaguered long-term-care program for federal employees has mailed out more than 70,000 forms with mistakes about potential premiums, and as a result, it is pushing back the selection deadline for those workers to March 15, 2010.

Long Term Care Partners, the company that runs the insurance program, sent forms containing the mistakes to 71,600 people in late October and early November, a notice said.

The Friday notice from Long Term Care Partners said: "Regrettably, for enrollees with the automatic compound inflation option (ACIO) whose anniversary date for their annual benefit amount increase falls in November, December, or January, there are errors in these forms. We apologize for these errors and regret any inconvenience they may have caused."

Letters being sent with the notice to two groups of enrollees went into more detail. One letter says there were three errors in information sent to some subscribers. It reads, in part: "the Benefit amount row does not include the 5% compounded increase that is effective on your anniversary date for benefit increases. . . . It should have included that increase." That error is repeated in another section of the form.

"Finally, the premium shown for this option is incorrect as well," the notice continues. "The amount shown is too low."

The letter says Long Term Care Partners, a wholly owned subsidiary of John Hancock Life & Health Insurance, will send enrollees "a letter with a corrected personalized options form in the coming weeks. In the meantime, to ensure you will have sufficient time to make an informed choice once you receive your corrected information, we have extended your deadline for making a decision until March 15, 2010."

A company spokesman said the federal Office of Personnel Management, which oversees and administers the long-term-care insurance program, instructed Long Term Care Partners not to have any public comment on the errors. Long Term Care Partners may face consequences as a result of the mistakes. The OPM has the ability to charge the company if it does not run the program properly, but an OPM spokesman said he did not believe a decision has been made yet.

For months, federal employees have expressed outrage at the operation of the program since they learned that premiums for automatic compound inflation option subscribers were slated to go up as much as 25 percent. Materials provided to them when they signed up for the insurance seven years ago led them to believe that option would not have a premium increase.

Two Senate panels held a joint hearing on the program after the Federal Diary reported about the increase, and a House subcommittee also is considering a probe into the issue.

As a result of the fee increase, enrollees were already awaiting information about accepting reduced benefits at the same premium level or maintaining their current benefits with a premium increase.

The OPM said it asked Long Term Care Partners to immediately correct the misinformation.

"Getting accurate, easy-to-understand information to our enrollees in a timely manner is my top priority," OPM Director John Berry said in a news release. "All companies participating in this program must take steps to ensure that similar errors are avoided in the future."

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