If you don't think your employees' elder-care responsibilities will affect your business, think again. By the year 2000, nearly half of all workers will have some day-to-day responsibility for elderly parents. The tab: about $2,500 per year per employee in lost productivity. A handful of companies have discovered a relatively new solution: long-term-care insurance that covers both institutional and home health care.

Two and a half years ago, when Barbara Sheldon, a consulting actuary at Hooker & Holcombe, a 50-employee actuarial firm in West Hartford, Conn., was shopping for long-term coverage for her mother, she found a plan she liked so much she persuaded her company's board to offer it to all employees. "Our company is small enough that insurance agents wouldn't have marketed to us, but when I contacted them, they were very receptive," says Sheldon. The company's membership in a local trade association earned it the largest possible group discount, and 20% of Hooker & Holcombe's employees subscribed. The policy, offered by Reliance Standard Life Insurance, is available to employees and their spouses, parents, and grandparents. It costs Hooker & Holcombe nothing; employees pay the entire premium.

Long-term care is among the fastest-growing segments of the insurance industry. Joan Quinn is president of Connecticut Community Care, a $40-million nonprofit care-management company that offers the insurance to its employees. She advises companies to shop around. Quinn, for example, invited three insurers to make presentations to employees, who then participated in choosing the provider. "Insurers learned very quickly that people didn't want a nursing-home-only policy," says Quinn. "Many policies now give equal coverage wherever you receive care." But, she warns, you should beware of restrictive policies that deny coverage because of preexisting conditions.

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Elder Care Affects the Workplace

According to survey information compiled by Work/Family Directions, a Boston consulting firm, employees caring for elderly or dependent adults miss an average of five workdays annually, and they experience the following difficulties:

  Percentage of employees
Care-related problem experiencing it
Distracting phone calls 91%
Expropriation of vacation time 74%
Stress from unexpected time off 74%
Unscheduled time off 58%
Tardy arrival at and early departure from work 47%