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2018 Future Purchase Option  (FPO) Offer

2018 Future Purchase Option (FPO) Offer

Notice: Your FLTCIP 2018 future purchase option decision deadline is December 1, 2017.

Select a question below:

  • I recently received a letter that includes an FPO offer and outlines my options. It states that my benefits and premiums are going to increase. Why?
  • We mailed letters at the beginning of October to enrollees who chose the FPO inflation protection as part of their coverage. FPO, as described in your benefit booklet, provides for an increase to your daily or weekly benefit amount every two years, as well as the remaining amount of your maximum lifetime benefit. This increase to your benefits comes with a corresponding increase to your premiums, if you choose to accept it.
  • I received a premium increase last fall. Why are my premiums going up again?
  • The recent future purchase option (FPO) offer letter you received is not connected to the premium increase that occurred in the fall of 2016. You are receiving an offer to increase the benefits of your plan because you chose the FPO inflation protection as part of your coverage. FPO, as described in your FLTCIP Benefit Booklet, provides for an increase to your daily or weekly benefit amount every two years, as well as the remaining amount of your maximum lifetime benefit. This increase to your benefits comes with a corresponding increase to your premiums, if you choose to accept it.

    If you wish to accept the FPO increase, you do not need to do anything; your benefits and premium will automatically increase effective January 1, 2018. If you choose to decline the FPO increase and want to retain your current coverage, you must select Option 2 on the offer form, sign it, and submit it back to us by December 1, 2017.
  • Who is eligible for the 2018 FPO offer?
  • All enrollees who:
    • have selected FPO as the inflation protection for their coverage
    • will have had coverage for at least 12 months as of January 1, 2018
    • are not eligible for benefits
    • have not declined three previous FPO offers (for those with a FLTCIP 1.0 plan or Alternative Insurance Plan) Note: For those with a FLTCIP 2.0 plan, there is no limit as to how many times you can decline the FPO offers. It will not prevent you from receiving future FPO offers.
    • have not exhausted their maximum lifetime benefit
  • I did not receive a recent letter outlining my 2018 FPO options; can you send me a copy?
  • Yes. Please call our Customer Service Center at 1-800-LTC-FEDS (1-800-582-3337) TTY 1-800-843-3557 to request that we mail you a copy of your letter. You will receive it within 7 to 10 business days depending on mail time.

    Note: This mailing is only for those enrollees who selected the FPO when they enrolled or as part of plan changes to their coverage. If you are currently enrolled in the automatic compound inflation option (ACIO) you will not receive a letter.
  • How is the 2018 FPO increase calculated?
  • For FLTCIP 2.0 enrollees, the Consumer Price Index for All Urban Consumers (CPI-U) is used to measure inflation increases.

    The 2018 FPO increase for FLTCIP 2.0 enrollees is 3.02%.

    For FLTCIP 1.0 and Alternative Insurance Plan (AIP) enrollees, the Consumer Price Index for Medical Care (CPI-M) is used to measure inflation increases.

    The 2018 FPO increase this year for FLTCIP 1.0 and AIP enrollees is 6.79%.

    Note: The additional premium for the increase, if you choose to accept it, is calculated using current premium rates and your age as of January 1, 2018.
  • Why does the inflation index used to calculate the FPO increase differ between FLTCIP 1.0, Alternative Insurance Plan (AIP), and FLTCIP 2.0?
  • There is no specific index that measures inflation as it relates to long term care services, which are provided in a variety of settings, for a number of reasons. For enrollees in a FLTCIP 1.0 plan or AIP, the Consumer Price Index for Medical Care (CPI-M) is used to measure inflation increases. The CPI-M measures costs associated with technology, lifesaving medical equipment, complex procedures performed by specialists, prescription drugs, and malpractice insurance premiums.

    For enrollees in a FLTCIP 2.0 plan, the Consumer Price Index for All Urban Consumers (CPI-U) is used to measure inflation increases. The CPI-U measures the average change over time in the prices paid by urban consumers for specified consumer goods and services, including food and beverages, housing, transportation, and medical care, among others. The underlying cost drivers for long term care are predominantly contained within this index, making the CPI-U one of the most suitable indices for tracking current and future changes in long term care costs.

    While past performance is not a reliable indicator of future performance, it may be helpful to note historical CPI-U trends for those interested in the FPO. The following chart compares historical changes in the CPI-U over time against 5% and 4% annual percentage increase benchmarks.

    Annual Consumer Price Index Increases - 50 Years 1965-20014

    Source: U.S. Department of Labor, Bureau of Labor Statistics. "Consumer Price Index for All Urban Consumers," www.bls.gov/cpi (accessed May 2015).

    The average CPI-U increases from 1965 to 2014 are as follows:

    Average Period CPI-U
    10 year 2005-2014 2.3%
    20 year 1995-2014 2.4%
    30 year 1985-2014 2.8%
    40 year 1975-2014 4.0%
    50 year 1965-2014 4.2%

    Source: U.S. Department of Labor, Bureau of Labor Statistics. "Consumer Price Index for All Urban Consumers," www.bls.gov/cpi (accessed May 2015).

    John Hancock's proposal for the second FLTCIP contract term included using the CPI-U as the measuring index for FPO. Based on the information provided, OPM agreed to this change for those individuals applying for FLTCIP 2.0.
  • What do I need to do to accept the FPO increase?
  • If you wish to accept the increase to your FLTCIP coverage, you do not need to do anything; the increase will happen automatically on January 1, 2018. If you send a signed FPO offer form back to us and do not check one of the options, you will receive the FPO increase.
  • Will I be sent anything after January 1, 2018, confirming that the increased benefits and premiums are in effect?
  • Yes. If you accept the FPO offer (or an option other than decline), we will send you an updated schedule of benefits.

    If you decline the FPO offer, we will send you a confirmation of your decline. This letter will provide the total number of declines you have made if you are enrolled in a FLTCIP 1.0 plan or AIP. Note: For enrollees with a FLTCIP 2.0 plan, there is no limit as to how many times you can decline the FPO offers. It will not prevent you from receiving future FPO offers.
  • I did not decline the offer. When will I see the increase in my premiums?
  • All 2018 FPO premium increases take effect on January 1, 2018. Depending on your payment method, you will see an increase to your premiums as follows:

    Payment method: Increased premium first appears on the:
    Direct bill January 2018 bill
    Automatic bank withdrawal January 2018 withdrawal
    Payroll deduction Payroll deduction covering the first full pay period in January 2018
    Annuity deduction January 2018 annuity payment, which is paid on February 1
  • What do I need to do to decline the FPO increase?
  • If you choose not to accept the FPO offer and want to retain your current coverage, you must select Option 2 on the offer form you receive, sign it, and submit it back to us by December 1, 2017.

    Mail the form to:
    Long Term Care Partners, LLC
    P.O. Box 8330
    Greenland, NH 03802

    Or fax it to:
    1-866-921-4513

    Note: Each request to decline the FPO offer must be signed by the insured (e.g., one spouse cannot sign for the other). If you are enrolled in a FLTCIP 1.0 plan or AIP, and you have declined three FPO offers, you will no longer receive future offers. Your FPO offer letter will include how many previous offers you've declined, if any. If you are unsure, you may also call our Customer Service Center at 1-800-LTC-FEDS (1-800-582-3337) TTY 1-800-843-3557.
  • How many FPO increases can I decline and still receive future offers?
  • If you are enrolled in a FLTCIP 1.0 plan or AIP, you can decline up to two offers and still receive future offers. As indicated in your benefit booklet, once you have declined the FPO offer three times, you will no longer receive offers to increase your coverage under this option.

    If you are enrolled in a FLTCIP 2.0 plan, there is no limit as to how many times you can decline the FPO offers. It will not prevent you from receiving future FPO offers.
  • How can I find out how many times I have declined FPO increases?
  • For FLTCIP 1.0 and AIP enrollees, your FPO offer letter will include how many previous offers you've declined, if any. Or, you may call our Customer Service Center at 1-800-LTC-FEDS (1-800-582-3337) TTY 1-800-843-3557 and we can provide you with a detailed history of your FPO offers.
  • What if I decline three times and then decide that I want additional coverage?
  • For FLTCIP 1.0 and AIP enrollees, if you want to resume receiving future FPO offers after you have declined the offers three times, you must provide, at your expense, evidence of your good health that is satisfactory to us. Call us at 1-800-LTC-FEDS (1-800-582-3337) TTY 1-800-843-3557, and we will let you know specifically what you need to do.

    Note: For enrollees with a FLTCIP 2.0 plan, there is no limit as to how many times you can decline the FPO offers. It will not prevent you from receiving future FPO offers.
  • Is there a deadline for responding?
  • Yes. To decline the offer, you must respond by December 1, 2017.
  • What if I am eligible for (or receiving) benefits during the FPO offer?
  • If you are eligible for (or receiving) benefits as of December 31, 2017, you will not be eligible for this FPO increase. However, if you are no longer eligible for (or receiving) benefits as of December 31, 2017, you will receive an FPO offer with revised response time frames.
  • What other inflation protection features do you offer?
  • We also offer the automatic compound inflation option (ACIO). With this option, your daily or weekly benefit amount and remaining portion of your maximum lifetime benefit will automatically increase by either 4% or 5% (depending on the percentage you choose when you apply) compounded every year. The increases under this option 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. Your premium does not increase annually as a result of this annual increase in benefits.

    Note: Premiums are not guaranteed. Premiums can increase only if you are among a group of enrollees whose premium is determined to be inadequate and both the U.S. Office of Personnel Management and the insurer agree to the rate change.
  • Can I switch to the automatic compound inflation option (ACIO)?
  • For FLTCIP 1.0 enrollees, you may switch to ACIO during the 2018 FLTCIP 1.0 FPO offer period on a guaranteed-acceptance basis (meaning you do not have to answer any questions about your health), as long as you are not eligible for benefits and have not declined three FPO offers in the past. If you switch to ACIO instead of accepting the FPO increase, you will not receive the FPO increase offered at that time. Your FPO offer letter provides details and a selection option to switch to ACIO.

    For FLTCIP 2.0 enrollees, you may request to switch from FPO to ACIO at any time. However, you will be required to provide, at your expense, evidence of your good health that is satisfactory to us.

    Note: Each written request to switch to the ACIO must be signed by the insured (e.g., one spouse cannot sign for the other). If you switch to ACIO, you will not receive the 2018 FPO increase. In most instances, the effective date of the change to the ACIO will be January 1, 2018, and the first automatic increase to your benefits will take place on January 1, 2019.