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Activities of Daily Living ADLs in LTC Insurance -- Hollowtree blog
The Six Activities of Daily Living
Under IRC Section 7702B, a tax-qualified long-term care insurance policy must use activities of daily living (ADLs) as the primary benefit trigger. Benefits begin when a licensed healthcare practitioner certifies that the insured cannot perform at least two of six ADLs without substantial assistance from another person, and that this inability is expected to last at least 90 days.
The six ADLs recognized by federal law are bathing (washing oneself by sponge bath, or in a tub or shower, including getting in and out of the tub or shower), continence (the ability to maintain control of bowel and bladder function, or when unable to maintain control, the ability to perform associated personal hygiene), dressing (putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs), eating (feeding oneself by getting food into the body from a receptacle such as a plate or cup, not including cooking or food preparation), toileting (getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene), and transferring (moving into or out of a bed, chair, or wheelchair).
How Insurers Assess ADL Inability
When a claim is filed, the insurance carrier sends an assessor (typically a registered nurse) to evaluate the claimant's functional abilities. The assessment follows a standardized protocol that examines each ADL independently. Understanding how elimination periods coordinate with ADL assessment helps you prepare for the claims process.
The key standard is "substantial assistance," which means hands-on help from another person. Standby assistance (someone nearby in case of emergency) generally does not qualify. If the insured needs someone to physically help them get dressed, that ADL is failed. If they can dress themselves slowly or with adaptive equipment, that ADL is typically not failed.
Some policies use a "hands-on or standby" standard, which is more favorable to the insured. Under this broader definition, needing someone present to prevent injury during an ADL (such as someone standing by while the insured showers to prevent a fall) qualifies as an ADL failure.
When comparing LTC policies, the exact definition of "substantial assistance" in the contract language matters significantly. Policies using "hands-on or standby" will trigger benefits in more situations than those requiring strictly "hands-on" assistance.
Cognitive Impairment: The Alternative Trigger
In addition to ADL inability, tax-qualified LTC policies must include a cognitive impairment trigger. This applies to conditions like Alzheimer's disease, dementia, Parkinson's-related cognitive decline, and traumatic brain injury.
A person qualifies under the cognitive impairment trigger when a licensed healthcare practitioner certifies that they require substantial supervision to protect themselves from threats to health and safety due to severe cognitive impairment. The person does not need to fail any specific ADLs; the cognitive impairment alone triggers benefits.
This is critically important because many individuals with early to moderate dementia can technically perform ADLs (they can dress themselves, feed themselves, use the bathroom) but cannot do so safely without supervision. They might leave the stove on, wander outside in winter, or take incorrect medication dosages. The cognitive impairment trigger captures these situations.
What Employers Should Look for in Policy Language
When evaluating LTC policies for an employee benefits program, pay close attention to several ADL-related provisions. Your policy design choices regarding benefit periods and elimination periods should be coordinated with clear ADL trigger language.
First, check the elimination period definition. Some policies require the insured to fail two ADLs for the entire elimination period (typically 90 days). Others start the elimination period on the first day an ADL failure is documented, even if the insured recovers and re-qualifies. The latter is more favorable.
Second, review whether the policy uses a "calendar day" or "service day" elimination period. Calendar day means 90 consecutive days pass since the ADL failure was certified. Service day means 90 days on which the insured actually receives paid care services. Service day elimination periods take significantly longer to satisfy and delay benefit payments.
Third, examine how the policy handles intermittent care needs. Some conditions (multiple sclerosis, rheumatoid arthritis, certain cancers) cause ADL inability that fluctuates. Policies with a "once qualified, always qualified" provision are more favorable than those requiring ongoing ADL re-certification.
The Assessment Process: What Claimants Should Expect
The in-person ADL assessment typically takes 60-90 minutes and is conducted at the claimant's residence. The assessor observes the claimant attempting each ADL, interviews the claimant and any family caregivers, reviews recent medical records, and documents their findings in a standardized format.
Claimants should be honest about their limitations during the assessment. The natural tendency is to try harder or push through pain during the evaluation, but this can result in an assessment that does not accurately reflect daily functional ability. If dressing causes significant pain, takes 45 minutes, or requires frequent rest breaks, that context matters and should be communicated clearly to the assessor.
Contact Hollowtree to discuss LTC policy options with favorable ADL provisions for your situation. For employers, understanding ADL triggers is essential when evaluating group LTC insurance strategies for your workforce.
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Written by
Cofounder Hollowtree Solutions & Marketplace. Executive MBA from Columbia Business School and London Business School, former attorney. Entrepreneur, investor, adviser.