Long-term care (LTC) coverage is an urgent economic health issue for our island community. As we face the dawning of a new century, we also face concerns about financing LTC because people are living longer. Our population is aging rapidly - the first of the "baby boomers" will turn 65 in 2011.

Hawaii's economic slump of more than eight years has not only affected our pocketbooks as individual consumers but has also decreased the ability of businesses and employees to build funds for retirement and any other long-term business or personal needs. Hawaii's residents face an overwhelming challenge to finance the care of our elderly and persons with disabilities whose long-term care needs will greatly increase as the population ages.

Long-term care financing is a problem because its costs often exceed a family's ability to pay. The current ways to finance long-term care involve Medicaid, medicare, private insurance, and personal assets. Only financially qualified individuals of low income are eligible for Medicaid, the largest payer of LTC services.

Trends show that in the next millennium, Medicaid, Medicare, and Social Security likely will cover even smaller portions of a person's needs. Private insurance is not widespread. As mentioned earlier, very few people have sufficient personal assets to pay for the high LTC costs, and even fewer people are covered by traditional pension plans.

The situation is worse in Hawaii because small businesses - which are the least able to provide pension and other benefits - employ the majority of the workforce. The business community is becoming much more aware of this problem. Ideally, everyone would be able to purchase universal and comprehensive LTC coverage at a reasonable cost. This would require a mandatory tax-based system, spreading the risk more evenly throughout a bigger population pool, and building financial reserves over a period of time.

Given the current state of Hawaii's economy, proposing a universal coverage, mandatory LTC financing package that provides comprehensive care would not be feasible or realistic. Additional taxes would be a burden on the majority of people who simply can't afford it.

With the ever-increasing need for LTC services, we must consider alternative methods to finance LTC services for the majority of residents who do not have the ways or the means to obtain those services.

The Legislature has been fully aware of the urgent need to finance LTC coverage and therefore created the Joint Committee on Long-Term Care Financing during the 1997 session. Since then, we have worked together as co-chairs to explore financing options.

We found that long-term care insurance policies offer a viable means to lessen the financial burden. We believe that the workplace is the ideal setting for providing LTC insurance coverage. The State should encourage businesses to offer LTC insurance, thus giving their employees a sense of financial and personal security.

This past session, the Joint Legislative Committee on Long-Term Care (JLC), along with members of the business community, long-term care providers, advocates and consumer groups, worked hard to pass Senate Bill 131, C.D.1. Governor Cayetano signed the Act into law on June 23, 1999. The provisions of the new law include:

* Requiring employers, unions, and other groups to allow insurers to publicize long-term care insurance policies, and to sell and underwrite those policies.

* Extending the sunset date of the JLC to June 30, 2000.

* Appropriating $100,000 for an actuarial study of universal financing options for LTC, offering comprehensive, protective coverage to the broadest number of people through either a mandatory tax-based system or a voluntary premium method.

We're equally proud of House Bill 170, C.D.1, which Governor Cayetano signed into law on July 6, 1999. The Act was a recommendation of the JLC.

The JLC found that while employers could claim an income tax deduction under existing state and federal income tax laws for amounts they pay for their employees' LTC insurance premiums - considered an employee benefit - individual employees could claim income tax deduction for the premiums only under federal, not state, law. The new law applies to individuals and now conforms Hawaii's income tax law to the federal law.

We believe these laws together represent a big step toward a balanced solution for the long-term social and economic health of our community. But the work is not done. Employers, the government, insurance companies, and employees must continue to work together to find the right solutions for long-term care financing and delivery of services. Our future well-being depends on the partnership.

Companies should consider purchasing "Employment Practices Liability Insurance "(EPL) due to the significant increase of employment litigation. EPL insurance is a new insurance product offered by a substantial number of insurance companies. An EPL policy protects against financial loss due to judgments, settlements and defense costs resulting for claims of wrongful discharge, sexual harassment and other forms of employment discrimination. Liability claims against companies for employment related practices have become a fact of life. The Washington Post recently reported that employment discrimination lawsuits filed in federal courts have risen in number by at least 20% a year since 1992.

In 1997, American workers brought more than 23,000 lawsuits alleging race, sex, disability or age discrimination to federal courts. The EEOC annual caseload of sexual harassment cases has increased significantly from 6,883 in 1992 to 15,889 in 1997. The HCRC (Hawaii Civil Rights Commission) has seen its caseload increase at the same rate.

According to a national jury verdict study, the average jury award for employment claims has increased from $168,000 in 1990 to more than $300,000 in 1997. Even if the judgment is in the employer's favor, the employer could easily spend $200,000 in defense costs to prove that it was right.

Having extensive improvement policies and procedures in place and effectively implementing them are important in defending any employment practice claims brought against a company. Despite the best efforts, an employer can still face a claim that could result in costly damaging litigation.

It may be cost effective to have the EPL insurance protection. There is no standard EPL policy. Nearly all insurance companies will negotiate the terms of their policies. Some EPL insurance coverage is available by endorsement to a D& O liability policy. EPL insurance products vary so widely; employers should carefully compare products and negotiate for broader coverage.

MORE NEWS....

LEAHI SWIM SCHOOL
CELEBRATES 25TH ANNIVERSARY

Leahi Swim School is celebrating its 25th year silver anniversary and has been teaching Hawaii's keiki and adults to swim. It is the only swim school in Hawaii with a specially designed teaching pool. This heated pool for beginners is designed with graduated water depths from 6 inches to 4 feet. Advanced and intermediate students swim in a second larger and deeper, on-site pool.

"Teaching swimming is part technique, part intuition, part experience, and part love," says director Lori Komer, who personally hires and extensively trains each teacher. All teachers are certified Lifeguards and each is required to complete an extensive apprenticeship program at Leahi Swim School before being given their own classes to teach. Student teacher ratios are kept small, and the ages of student's range from 6 months to adults.

Instructors at Leahi Swim School use the philosophy that learning to swim is fun. They work on developing trust with their students to build their self-confidence in the water.

Leahi Swim School has separate swimming programs based upon the age and skill level of each student's swimming ability.

Adult lessons are scheduled in late afternoons and Saturdays and are conducted after the children classes are finished. Private and semi-private lessons are also available.

Lessons are conducted in Manoa Valley behind the University of Hawaii on the grounds of the Saint Francis School in their heated pools.

For additional information give Lori a call at 735-1666.

AIEA PEARL CITY BUSINESS ACTIVITIES

Aiea/Pearl City Business Association Activities
By Fran Egdamin, President

Speaker for the July APCBA luncheon meeting was Chifumi Nagai, who spoke on "HARC and Biotechnology Projects". She was filling in for StephanieWhalen, President of Hawaii Agricultural Research Center, Aiea who had to attend an unanticipated meeting on the mainland. Chifumi did a great job. Her talk was a real eye opener for most of us on the large potential for our Hawaii in the biotech area of high technology.

The highly successful ongoing APCBA "Litter Critter" project continues with our next event planned for September or October. We would be delighted to have you volunteer to participate. Call Wayne Matsuyama at 486-3937 or fax 486-3386. We always have a good time along with exercise, fresh air, and a feeling of accomplishment. Come on along!

We are now formulating our priorities for the next legislative session. Thus far, most input has centered on "tell them to get off our back" and "make them accountable for the mischief they create". Specifics we are lacking. If you are familiar with specific laws, regulations, or government compliance practices which are impeding your service to customers or making it difficult to obtain or hold competent employees please contact Dick Rowland at 487-4959; fax 484-0117. We would like to make solving such problems part of the APCBA legislative agenda for the year 2000.

Speaker for our August meeting will be Dick Rowland who will discuss the need for clear personal, business, and community vision and how we can go about accomplishing that. Be sure to be there!

Speakers for the next few months will be: September: Claire Tomamoto, President, Aiea Community Assn. who will speak on the Aiea, Pearl City, Waipahu, Kapolei, Ko Olina shoreline development project. October: David McCoy, CEO, Campbell Estate who will discuss his organization's plans for the next few years and how they might impact Aiea/Pearl City. November: Courtney Brown, Executive Director, Hawaii Venture Capital Assn who will tell us what his organization is doing to attract business, enterprise, creativity and money to our shores and what we can do to help. SBH members are always welcome at our meetings.

Call Dennis Wong at 486-5999 to reserve a space or two.

Long Term Care Legislation | Employment Litigation

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