Eldercare is one of the fastest growing benefit options today. While it can help your clients and their employees with direct caregiving issues, it can also impact spiraling healthcare costs. Commonly confused with Employee Assistance Programs, here’s what you need to know about eldercare options in order to help clients retain top talent while keeping them productive and healthy.

You’ve seen the statistics. The aging baby boomer generation and the shrinking of the workforce will create a talent shortfall. According to the U.S. Census Bureau, in 2006, baby boomers were about one quarter of the country’s population and about 75 percent of those were still in the workforce. But beginning next year, boomers are turning 65, the traditionally expected age of retirement.

That’s a big problem for business. In fact, in a 2008 survey for Robert Half International, nearly half of the senior executives surveyed said baby boomer retirement is the most significant workforce trend in the next 10 years; more so than global business issues and outsourcing combined.

Why such a concern? As boomers begin to retire, companies face a loss of leadership, institutional knowledge and experience. Not everyone wants to or can afford to retire at 65 or even earlier. But sometimes they don’t have a choice. An increasing number of workers lose productivity, leave the workforce early and/or damage their own health caring for elderly family members. All these issues are affecting baby boomers and their employers.


What is eldercare and why is it an urgent issue now?
While childcare primarily involves services related to healthy children who live at home, eldercare encompasses a wide range of issues, often at unpredictable times and most likely a long distance from the employee’s home. These issues can range from living conditions (transportation, housekeeping, housing modifications, prescription management) to insurance (Medicare, Medicare supplements, long term care insurance) and health care treatment and coordination (primary care physician, outpatient treatments, rehabilitation, home health insurance, pharmacy, hospital, clinics).

More Americans are facing eldercare issues every day because of the aging population, increased lifespan and the complexity of the health care system. By 2050, the Census Bureau predicts there will be more than 70 million Americans over the age of 65. Whether it is for a spouse, parent, aunt or uncle - family members remain the key source of help. Yet many caregivers are working and raising their own children many miles away. In the past, it used to be a stay-at- home daughter or daughter-in-law who provided care and support for aging parents who probably also lived in the same town. However, the demographics have rapidly changed; in addition to distance, more caregivers are now male, working and in the workforce longer.

Studies funded by the MetLife Foundation show that approximately 44 million Americans provide care for an adult family member or friend, and 60 percent of caregivers continue to hold down jobs as well. Surprisingly, nearly 40 % of all caregivers are men.

For those who assume the caregiving role, it can be very time consuming. In addition to ensuring a safe living environment and filling out paperwork, there is a complicated web of care involving multiple physicians, hospitals, clinics, home care agencies and insurance plans. Caregivers often must handle sudden issues and must reach agencies, insurance companies and doctors during the work day.

The secret company costs for eldercare
Businesses are impacted through both lost productivity and higher health costs. The impact of eldercare on the workplace has a hefty price tag. Recent research from the National Alliance of Caregiving (NAC) and the MetLife Mature Market Institute shows it costs American businesses between $17.1 billion and $33.6 billion per year.

Taking that one step further, research released this year by the same two groups and the University of Pittsburgh Institute on Aging found the total company cost per caregiving employee can run as high as $5,447 per year, based on an average compensation plus benefit rate of $50 per hour. This does not include the cost of employees who do not accept transfers, or the knowledge lost from skilled workers who retire early to handle eldercare issues.

Simple steps
Even if employees want to continue their careers, a lack of a support system may force them to work part-time, quit or retire early. In order to increase retention, tailoring employee benefits to mature workers is a solution for more and more cutting-edge employers.

One simple step is providing education regarding specific benefit needs such as Medicare and Social Security. Employees can be overwhelmed about their benefits and may need support considering the many factors that go into such a decision like the age of their spouse, their health and their financial picture.

With an increased reliance on 401k plans rather than defined benefit pension plans and changes in government benefits, it’s important for employers to help employees understand impacts of decisions such as drawing social security when first eligible versus delaying for a few years. In 2002, data from the Social Security Administration showed that a majority of people (56.1%) began drawing benefits at age 62, even though it reduced their monthly check by 20 percent.

Secondly, ensure that there are benefit options that are geared toward older workers. Making the company’s long-term care plan accessible to both employees and their parents can be beneficial and more cost-effective for the employee, even if paying out-of-pocket for the cost of the policy. Retirement and financial planning benefits can include phased retirement policies, access to financial planners, workshops and career counseling.

Also, access to eldercare services and stress reduction programs are benefits that can help the boomers and other employees as well. Eldercare services can be highly-personalized based upon the needs of the caregiving employee and the senior family member. Such benefits complement existing Employee Assistance Programs, especially with the sudden crises that often occur.

Impact on Company Healthcare Costs
Providing the right support to caregivers can potentially lower their own healthcare costs. While lost productivity is often cited, new research points to higher healthcare costs for caregivers of elderly relatives.

In a recently released study by MetLife Mature Market Institute and the NAC, caregivers reported poorer health and more chronic disease than non-caregivers. They are more likely to suffer from depression, diabetes, high blood pressure, heart disease and lung disease. Eldercare demands are also associated with higher tobacco and alcohol use.

Caregivers may also find it more challenging to take care of their own health - evident in poor diet, lack of exercise and failure to keep up with preventative screenings. Higher medical costs are more significant among younger employees, males, and blue-collar workers. The data showed an eight percent difference in increased health care costs, potentially costing U.S. employers an extra $13.4 billion per year. This estimate is conservative because those caring for a spouse or younger family member were not included.

Thus, implementing eldercare benefits and programs can make a difference for companies and employees. According to the AARP, there is a $3 to $14 return for each $1 spent on eldercare programs and services.

Maximizing benefits for mature workers
Offering benefits alone isn’t enough; additional steps are needed to ensure utilization.

1. Create or enhance a supportive culture.
A culture from the top-down that supports working caregivers is critical. Leading companies provide information and education frequently to front line supervisors so that they can assist employees and encourage them to use company services.

2. Ensure flexibility
Provide options such as flexible work schedules, job sharing, telecommuting and family leave policies including eldercare services above and beyond traditional Employee Assistance Programs.

3. Provide information and assistance
Professional expertise can be invaluable in assessing needs, providing referrals and advice or information to all family members and providers involved whether it’s a part of normal, everyday care or in a crisis.


Focusing on older workers has an impact well beyond the benefits package itself. Supported caregivers have increased productivity and are less likely to quit work or retire early. More and more, it’s a strong component of employer of choice programs.

Employers need the “sandwich generation” who in turn need more workplace-supported options as they care for aging family members. Educating clients about affordable, quality eldercare solutions is one more way you help them prepare for potentially challenging financial and talent management times ahead.



About the author
________________________________________
Jane Niederberger is the president of My Health Care Manager, an award-winning, leading company specializing in managing the issues and options of aging.

She has more than 25 years of success in the health care industry, transitioning strategy into execution.
With deep expertise in technology, health care and health benefits Jane has been on the forefront of enhancing quality of care and transforming operational systems, ultimately benefiting employees and employers alike. As a senior executive, she has led IT efforts at some of the most recognizable names in health benefits including Anthem Blue Cross & Blue Shield and Harvard Pilgrim Health Care.

She can be reached at 800.499.8020 or jniederberger@myheathcaremanager.com or by visiting www.myhealthcaremanager.com and clicking “Contact Us”.

Caregiving by the numbers:

• By 2050, there will be more than 70 million Americans who are 65 or older.

• Approximately 45 million Americans provide care for an adult family member or friend, and 60 percent continue to hold down a job as well.

• Senior caregiving costs American businesses approximately $36.5 to $52 billion annually in lost productivity and higher healthcare costs.1,2

• For businesses, there is a $3 to $14 return for each $1 spent on eldercare.3

References

1) “Caregiving Cost Study: Productivity Losses to U.S. Businesses” (2006): MetLife Mature Market Institute and the National Alliance of Caregiving.

2) “The MetLife Study of Working Caregivers and Employer Health Care Costs” (2010): Met Life Mature Market Institute, National Alliance of Caregiving, University of Pittsburgh Institute on Aging and the Department of Behavioral and Community Health Sciences Building.