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Relationship of Cost of Care and Benefits
Because the costs of long term care services will
likely increase over time, you should consider whether
and how benefits under the Federal Program may be adjusted. You have the choice
of receiving benefit
increases under the Automatic Compound Inflation Option or the Future Purchase
Option.
On each anniversary of your original effective date of
coverage (or the date you switch to this option),
your Daily Benefit Amount and the unused portion of your Maximum Lifetime
Benefit will automatically
increase at a rate of 5% compounded annually. These increases are made even if
you are eligible for
benefits, without regard to your age, claim status, claim history or the length
of time your coverage has
been in effect, and will not cause your premium to increase.
Every two years we will automatically increase your Daily Benefit Amount and the remaining portion of your Maximum Lifetime Benefit, except as described below. Increases will occur every two years on January 1st, starting in 2004. Your coverage must be in effect for at least 12 months in order for you to receive your first increase under this provision. The increase will be a percentage based upon the change in the Department of Labor’s Consumer Price Index for Medical Care or another index mutually agreed upon by OPM and us.
If you do not want the increase, you must send us a written rejection before the date the increase will take effect. If you want the increase, you do not have to take any action other than paying the additional premium. The increase will automatically take effect. Increases under this option will be made regardless of your age, but we will not increase your benefits under this option if you are eligible for benefits or if you declined a total of three prior increases.
Increases under this option do not require you to provide evidence of your good health, except as noted in the next paragraph. Each time we send you notice of an increase under this option, we will also offer you the opportunity to receive future benefit increases under the Automatic Compound Inflation Option instead of this option. If you elect to switch to the Automatic Compound Inflation Option, you will not receive the current increase under the Future Purchase Option.
If you have declined a total of three increases under this option and you later wish to resume receiving increases, you must provide, at your expense, evidence of your good health that is satisfactory to us. See the section titled When Your Premium May Change in this outline.
| Call: 1-800-LTC-FEDS (1-800-582-3337) (TTY: 1-800-843-3557) |
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