The Elder Care Gap

​The need for elder care continues to grow. Are employers meeting the demand?

Washington, D.C.-based Fannie Mae had a compelling reason to implement a formal elder care benefits policy: Of its 3,900 employees, 70 percent expected to take on elder care responsibilities within the next several years.

To accommodate that need, Fannie Mae hired Lisa Yagoda, an on-site care manager, to provide the home mortgage finance company’s employees with free consultations. Yagoda—a licensed clinical social worker affiliated with the nonprofit agency IONA Senior Services in Washington, D.C.—helps employees assess their caregiving situations and coordinate services and options. Employees can meet with Yagoda in Fannie Mae’s Health and Work/Life Center or contact her via e-mail or a toll-free phone number.

Since Fannie Mae started its program last July, Yagoda has fielded at least 1,000 inquiries and consultations.

Of the employees who use her services, 75 percent say Yagoda saved them considerable time away from work, according to Judy Dale, director of the Health and Work/Life Center. What’s more, 28 percent say their caregiving situations were serious enough that they would have quit their jobs if they had not gotten help through the company’s services. "That’s a pretty strong indicator of the need," Dale says.

Fannie Mae estimates that one element of the program alone—helping employees research elder care services—saves workers at least one to two days of effort. And for every dollar it spends on elder care benefits, the company estimates a return of $1.50 through higher productivity, retention, reduced absenteeism and turnover.

Fannie Mae is one of the first organizations to offer on-site guidance and is an uncommon example of how some, but not nearly all, employers are responding to employees with elder care responsibilities.

Employers and Employees Pay the Price

Financial and demographic data suggest that HR professionals take a close look at creating elder care policies. For example, a 1997 MetLife study of more than 1,500 employees found that U.S. businesses lost between $11.4 billion and $29 billion annually in productivity due to elder caregiving.

The cost for employees is significant as well. Caregiving can force employees to take time off, pass up promotions or "plum" assignments, retire early or even quit their jobs. On average, these actions cost employees nearly $659,000 over their lifetimes in lost wages, Social Security and pension contributions, according to a 1999 study conducted for the MetLife Mature Market Institute in New York by the National Center for Women and Aging at Brandeis University in Waltham, Mass., and the National Alliance for Caregiving in Bethesda, Md.

The MetLife study focused on 55 people ages 45 and older who spent more than eight hours per week providing unpaid care. Although it involved relatively few participants, the study is the first to detail financial losses for caregivers, the researchers say.

"We call it the caregiver’s glass ceiling," says Sandra Timmermann, a gerontologist and director of the MetLife Mature Market Institute. "It’s an issue that will become even more critical within the next five to 10 years."

"It’s important for American businesses to really pay attention to what [elder caregiving is] going to mean for them," says Joyce Ruddock, vice president of MetLife’s Long-Term Care Group. "It’s not only an emotional issue, but a financial one, too. Until it hits home, it tends to be viewed as someone else’s issue," she adds. "But demographics will change that and put elder care on a lot more employers’ radar screens."

Employee demographics were a big factor for Fannie Mae. The firm’s employees average 40 years of age. Further, 58 percent of Fannie Mae’s employees—and 44 percent of the company’s management group—are women. Research shows that women are more likely than men to be elderly caregivers.

Dale also acknowledges that the four senior executives above her experienced some form of elder care problem, and that this experience helped cement the corporation’s commitment to the program.

Aging Population Spurs Caregiving’s Rise

The reason for the rising need for elder care is clear: As with employees at Fannie Mae, the need for caregivers will grow as the nation’s population ages.

The segment of the population age 65 and over will grow from 34.6 million in 1999 to 82 million in 2050—a 137 percent increase, according to the latest national population projections by the U.S. Bureau of Census. The projections, released in January, also show an especially rapid surge in the elderly population as baby boomers (those born between 1946 and 1964) begin reaching age 65 in 2011. Between 2011 and 2030, the number of elderly in this country will nearly double from 40.4 million to 70.3 million.

Over the next decade, the total number of employed caregivers nationwide will reach between 11 million and 15.6 million, or roughly one in 10 employees, according to a large-scale 1997 study by the National Alliance for Caregiving.

For many, however, this is not an issue to be dealt with in the future; it’s here and now. Nearly 25 percent of American households had at least one adult who provided care for an elderly person (over the age of 50) at some point during 1996, the study found.

Observers say such statistics prove that elder care is a broad issue that either is affecting, or soon will affect, a large portion of every employer’s workforce, including senior-age employees, older employees with ill spouses and those with elderly parents and relatives.

Formal Policies Grow Slowly

Despite the fact that elder care imposes growing needs on employers and em ploy ees alike, many employers have yet to implement formal elder care programs.

For example, only 23 percent of companies with 100 or more workers have formal programs in place to support caregivers, according to a 1998 study by the Families and Work Institute in New York.

The 2000 Society for Human Resource Management (SHRM) Benefits Survey offers similar findings: Just 15 percent of companies surveyed offer an elder care referral service. Only 1 percent offer a company-supported elder care center or subsidize the costs of elder care. Most of the firms that do offer services have between 500 and 1,000 employees or more than 5,000 employees; this reflects a trend that has been virtually unchanged in the past five years.

According to an annual survey of 1,020 employers by Lincolnshire, Ill.-based consultants Hewitt Associates, elder care programs doubled in number at Fortune 100 and Fortune 500 employers from 1993 to 1998. Of those firms, 42 percent now offer some kind of elder care assistance to employees—such as resource and referral services or long-term care insurance—up from 20 percent in 1993.

Instead of creating formal policies that deal exclusively with elder care, many employers have extended their existing work/life or flexible scheduling perks to cover employees’ needs, consultants say.

"Mainstream flexible work arrangements seem to be, at the moment, meeting the need for elder care at a lot of companies," says Michelle Miears, a principal at the Houston office of Buck Consultants, a human resource consulting firm. "But it’s difficult to predict if that will always be enough."

Looking Ahead

As the elder care issue grows, so will companies’ use of multiple elder care benefits, consultants and HR professionals predict. What will such benefits entail? Here is a sampling of some common programs in place today:

Flexible work arrangements. Flextime, compressed workweeks, telecommuting, part-time hours and job-sharing are ways employers can help caregivers better manage their time and balance their responsibilities. A majority of employers surveyed by Hewitt offer flextime (79 percent) and part-time employment (66 percent).

Resource and referral programs. As the most popular elder care benefit offered to employees, 81 percent of employers use this option, Hewitt reports. The programs are often outsourced to work/life consultants and tend to be relatively inexpensive on a per-employee cost basis.

Long-term care insurance. This fast-growing insurance product can help pay for certain aspects of long-term care, either for employees or their dependent spouses or parents. These policies usually cover medical care, skilled nursing care, custodial care, nursing home care and other assistance for chronic illness or extended disability. The Health Insurance Association of America in Washington, D.C., estimates that the number of long-term care insurance policies sold continues to rise by about 20 percent annually.

Expanded Family and Medical Leave Act (FMLA) benefits. Companies may look into expanded FMLA leave to provide more time for employees with elder caregiving responsibilities. Under the FMLA, employers with 50 or more workers must provide employees up to 12 weeks of unpaid, job-protected leave per year for qualified situations, including caring for a family member. But 12 percent of 1,020 employers surveyed by Hewitt now offer more than the 12 weeks required by the law—a nod to the fact that caregiving duties can require longer leaves of absence.

Flexible spending and dependent care accounts. These plans allow employees to set aside pretax dollars—thus reducing their taxable income—in an account that can be used to pay for care and services that elderly dependents require but insurance doesn’t cover.

Adult day care and community-based programs. In his State of the Union speech in January, President Clinton proposed spending $1.25 million to expand the network of state aging information and respite services to support home and community-based care.

Employers also are supporting local senior centers or aging services with financial contributions. The American Business Collaboration for Quality Dependent Care (ABC), a coalition of 18 corporations that is managed by Work/Family Directions of Boston, has invested more than $100 million to help increase the supply of child care, school-age and elder care resources since its founding in 1992. Of these funds, $5 million have been targeted for elder care projects and resources.

Among the organization’s funding initiatives: 43 elder care fairs for 8,500 employees at work sites across the country; improved transportation alternatives for more than 7,500 seniors in 20 communities; geriatric evaluations; and adult day care facilities.

Seminars, fairs and support groups. Educating employees about available resources in their communities or within their own companies is an important and inexpensive piece of the elder care strategy, HR professionals say. Several corporate members of ABC hold on-site caregiver fairs that feature elder care service providers, mini-workshops and representatives from state or local offices of the Agency on Aging.

Dallas-based Texas Instruments Inc. (TI), holds five or six "TI Brown Bag Seminars" a year on elder care topics chosen by employees. The company also started an employee e-mail newsgroup as "an electronic support group for employees to share and talk about their experiences together," says Betty Purkey, manager of work/life programs at TI. "These types of things, although they seem small, can really help employees who deal with the issue every day," Purkey says.

Fannie Mae sponsors quarterly educational seminars and developed an Elder Care Tool Kit last fall. Along with reference materials, the kit includes a record book in which employees can keep track of important financial, medical and personal information related to their caregiving situation.

Making Sure Programs Are Used

Implementing elder care programs, while admirable, may not be enough on its own. There is evidence that employees are reluctant to take advantage of work/life benefits tied to elder care.

Case in point: Although 75 percent of 1,004 employees rated such work/life benefits as being very important, 43 percent said they had not used them in the past year, according to a study by The Gallup Organization for Intracorp, a Philadelphia-based health care and disability management consultant.

Indeed, 36 percent of caregivers in the 1999 MetLife study said they never sought support for their elder care issues at work.

Fannie Mae’s Dale points to a certain stigma surrounding elder care and the workplace as a possible cause. "Elder care as it relates to the job is very difficult; people sometimes tend to keep quiet about it," she says. "They’re concerned that the employer just won’t understand."

MetLife’s Timmermann agrees. "The thing that struck me [about the MetLife study] was that employees didn’t see how employers could help them with this issue. I think it calls for some awareness-building on the employer’s part to create acceptance in the workplace for employees to feel comfortable taking advantage of benefits employers provide."

In this regard, elder care may be similar to child care. Initially, employees did not expect their employers to help with this aspect of their lives. But times have changed.

"From an employer perspective, it’s quite accepted for employees to feel that employers are going to accommodate child care," says MetLife’s Timmermann. "I think, in this decade, we’re going to see an awareness by employers and a growing confidence by employees to expect the same thing with elder care."

Ruddock adds: "Elder care will be to the 21st century what child care was to the last few decades."

Susan J. Wells is a business journalist based in the Washington, D.C., area with nearly 16 years of experience covering business news and workforce issues.