I had an interesting conversation with a business owner recently. An employee had been off work for the past eight weeks caring for a spouse who had by-pass surgery. The employer has no idea how long the convalescence will last or if, or when she will be back to work.

The employer now incurs the cost of training a new person. There is a loss of an experienced person who must be substituted with one who is inexperienced. Not only is there the cost of training but the cost of lost productivity, the loss of valuable time and money. The average cost per year to an employer in this situation is between $3000 and $4000 per employee. This could have an even more serious impact on the business if the employer were in this caregiver situation.

If the employer allows the employee to return to work there is the dilemma of whether or not to keep the old employee and let the new one go. In addition the employer is faced with the uncertainty that the original employee may require additional time off. Above and beyond the lost money, productivity and peace of mind, the families of all three parties are also at the very least inconvenienced.

This scenario could have been avoided had the employer had some forethought. The employer could have provided Long Term Care insurance for both the employee and the spouse. The premium depending on the structure of the business could be 100% tax deductible as a regular business expense.

Here are three different ways an employer can solve the caregiver problem.

1. Provide Long Term Care insurance to employees as a benefit
2. Provide a basic Long Term Care insurance plan for employees and if they have an interest give them the option to buy-up to a more comprehensive plan.
3. Offer the plan as a voluntary employee benefit. In this option the employer does not pay for the insurance but arranges so that a number of employees can receive a group discount.

In any of the above three options coverage may also be offered to: spouses, parents, parents in law, or children of the employee.

Long term Care insurance premiums are not currently deductible under section 125 of the IRS Code and there are no government provided programs. The Federal Government realizes however that there is an urgent need for LTC insurance and the funds are just not available. Americans must self-insure this risk.

There is some consideration being given to have these premiums pre-taxed similar to the way IRS section 125 currently treats the employee portion of premium for medical insurance costs. Whether or not this ultimately happens, we as a responsible society must accept responsibility for Long Term Care expenses.

Dorothy McMahon is a Long Term Care Insurance Specialist, a Certified Senior Advisor and President of McMahon And Associates. She can be reached at 800-727-0045. Call for your complimentary Shopper’s Guide to Long Term Care Insurance or to discuss some of the many excellent Long Term Care insurance policies that are available through her agency.

Visit Dorothy on line at http://www.mcmahonltcins.com.