In the ever-evolving landscape of employee benefits, certain offerings fade into the background over time—only to resurface when circumstances and solutions shift. Long-term care insurance (LTCI), once a rising star in employer-sponsored benefits programs, experienced a retreat due to high costs and limited flexibility. Today, however, LTCI is making a quiet but impactful comeback. For employers seeking to attract and retain top talent while offering meaningful financial security, now is the time to take a fresh look at long-term care insurance.

The Growing Need for Long-Term Care Solutions

As the American workforce ages and health care costs continue to climb, the need for long-term care planning is becoming increasingly urgent. According to the U.S. Department of Health and Human Services, approximately 70% of people turning age 65 will need some form of long-term care during their lifetime. This care—which includes help with basic daily activities such as bathing, dressing, and eating—is not covered by standard health insurance or Medicare.

The financial burden can be staggering. A private room in a nursing home can cost over $100,000 per year, while assisted living facilities and in-home care services also carry high price tags. For many families, these costs quickly erode retirement savings, placing emotional and financial stress on both the individual needing care and their loved ones.

This looming challenge presents a significant opportunity for employers. By offering LTCI as part of a benefits package, companies can provide employees with a powerful tool for future financial security—fostering goodwill, reducing stress, and supporting long-term retention strategies.

A Look Back: The Rise and Fall of LTCI in the Workplace

In the 1990s and early 2000s, long-term care insurance gained traction as a forward-thinking employee benefit. Many employers introduced group LTCI plans to differentiate themselves and help employees plan for future care needs. These early adopters were responding to demographic trends and growing awareness of long-term care risks.

However, enthusiasm waned as insurers struggled with poor pricing models and underestimated claims. Premiums rose dramatically, and many insurers exited the LTCI market altogether. For employers, maintaining these plans became financially untenable, and for employees, the increasing cost diminished the perceived value. By the 2010s, LTCI was largely off the table for most workplace benefits packages.

The Comeback: What’s Changed?

So why is LTCI making a comeback now? The answer lies in a combination of market evolution, product innovation, and demographic urgency.

1. Improved Product Design – Today’s LTCI products are smarter, more stable, and offer greater flexibility than their predecessors. Insurers have learned from past missteps and now use more accurate actuarial data, resulting in better risk pricing and more reliable premium structures. Many plans now come with guaranteed premiums, hybrid options (that combine life insurance with long-term care benefits), and customizable features that allow employees to tailor coverage to their needs. These hybrid and combination products are especially attractive. They allow policyholders to access long-term care benefits if needed, or pass on a death benefit to their heirs if not used—eliminating the “use it or lose it” concern that plagued traditional LTCI.
2. Broader Access and Portability – In contrast to earlier group plans that were often rigid and difficult to maintain if an employee changed jobs or retired, modern LTCI offerings are portable. Employees can keep their coverage after leaving the company, typically at the same group rate. This added flexibility greatly enhances the value proposition for employees and reduces the employer’s long-term administrative burden. Additionally, newer plans may allow simplified underwriting, making coverage more accessible to a broader range of employees, including those with pre-existing conditions.
3. Tax Advantages for Employers and Employees – Employers can also reap tax incentives for offering LTCI. Premiums paid by a company for employee coverage are generally tax-deductible as a business expense. For employees, employer-paid premiums are typically excluded from taxable income. In certain cases, LTCI premiums paid through a health savings account (HSA) can be reimbursed tax-free, further enhancing the financial appeal.
4. Strategic Recruitment and Retention Tool – In a competitive labor market, offering long-term care insurance demonstrates a commitment to employee well-being that goes beyond the traditional benefits package. As Millennials and Gen X workers take on caregiving roles for aging parents—and start to consider their own long-term care plans—the value of this benefit becomes increasingly clear.

Moreover, as employers strive to support diverse, multigenerational workforces, LTCI is uniquely positioned to address a wide range of needs. Younger employees may see it as a rare opportunity to lock in low rates, while older workers appreciate the access and financial protection it offers. It’s a benefit that spans life stages and provides peace of mind for employees and their families.

How Employers Can Bring LTCI Back Strategically

If you’re considering reintroducing long-term care insurance as part of your benefits lineup, here are some key steps to ensure a smooth and impactful rollout:

1. Evaluate Your Workforce Demographics – Understanding your employee base is the first step. What is the age distribution? Are a significant number of employees approaching retirement? Do you have many workers juggling work and caregiving responsibilities? These insights can guide the structure and communication strategy for your LTCI offering.
2. Partner with a Reputable Insurance Provider – Choose a carrier with a strong track record, experience in group plans, and a portfolio of flexible LTCI options. Your insurance partner should also provide education and support resources to help employees make informed decisions.
3. Offer Voluntary or Employer-Sponsored Options – Employers can offer LTCI as a voluntary benefit (where employees pay the full premium) or as an employer-sponsored plan (where the company covers some or all of the cost). Even if no financial contribution is made, employees typically benefit from group discounts, simplified underwriting, and payroll deduction options.
4. Educate and Communicate – Awareness and understanding are crucial. Many employees may not know what long-term care insurance is—or why it matters. Develop a robust communication strategy that includes webinars, FAQ documents, personalized consultations, and stories that highlight the potential impact of needing care. Open enrollment periods and benefit fairs are great opportunities to spotlight LTCI.
5. Integrate with Broader Financial Wellness Initiatives – Position long-term care insurance as part of a holistic approach to employee financial well-being. Alongside retirement planning, health savings accounts, and life insurance, LTCI helps employees feel secure about their future. It’s especially relevant as part of end-of-career planning resources and pre-retirement education.

A Benefit Whose Time Has Come—Again

While it may have taken a detour due to past challenges, long-term care insurance is regaining its rightful place in the employee benefits conversation. With smarter designs, flexible options, and a growing awareness of aging-related risks, LTCI offers real, lasting value to today’s workforce.

For employers, it’s more than just another checkbox on a benefits menu. It’s a proactive investment in the financial and emotional health of your team—one that signals long-term commitment and forward thinking. As workforce dynamics shift and the demand for meaningful benefits grows, long-term care insurance is no longer a fringe perk; it’s a strategic asset.

By reintroducing LTCI with a modern approach, you can give your employees a gift few will expect but many will someday need: security, dignity, and peace of mind in the years to come.