FLTCIP contract extension

The U.S. Office of Personnel Management (OPM) extended the contract with John Hancock Life & Health Insurance Company (John Hancock) effective May 1, 2023, to continue providing insurance coverage to all FLTCIP enrollees for another seven-year term. There will be no disruption in coverage or services for FLTCIP enrollees as long as your premiums are paid and remain current, and you have not exhausted your benefits.

An important note about premiums

John Hancock, the Federal Long Term Care Insurance Program (FLTCIP) insurance carrier, is required to monitor FLTCIP experience and propose corrective action to the OPM when experience indicates that it may be needed. Recent analysis of the program's actual and projected claims costs concludes that many FLTCIP enrollees will be subject to a premium rate increase effective January 1, 2024. Enrollees in FLTCIP 3.0 will not be impacted by this premium rate increase. You do not need to take action at this time.

Premiums are not guaranteed. The premium for your group (for example, those with the same plan design or set of benefits) may only increase if it is determined to be inadequate. While the group policy is in effect, OPM must approve any increase in premium.

An important note about the premium stabilization feature

As described in the FLTCIP 3.0 Benefit Booklet, the premium stabilization feature (PSF) percentage may be adjusted, with OPM approval, due to actual and projected FLTCIP experience. The PSF percentage for FLTCIP 3.0 enrollees is currently 20% and will not be adjusted at this time.

The PSF is designed to reduce the potential need for future premium increases, and, under certain conditions, the PSF amount may be used to offset your future premium payments or provide a refund of premium death benefit. The PSF percentage is used to calculate the amount of premium paid that may be available under the PSF.

Any adjustment to the PSF percentage does not change your current premium or any of the other benefits under your FLTCIP plan. Please note, however, that premiums are not guaranteed. If the PSF percentage reaches its minimum of 10% in the future, and an adjustment is needed, a premium rate increase would then be necessary.

You can find more details and see examples of the PSF starting on page 32 of Book One: Program Details and Rates.