Thursday, November 18, 2010

Understanding the Need for Disability Insurance

An old adage in the insurance business regarding the subject of disability insurance goes like this:

"The odds are good that you will be laid up long before you are laid out!"

While this statement may seem somewhat amusing, it is also very true. Individuals (especially males) between the ages of 30 and 50 will likely suffer an incapacitating injury or illness before they die. However, for many people, it is easier to imagine dying than becoming disabled.

Click here to read more ...

Friday, October 29, 2010

Check out a Community Health Center near you

Each day, an average of 3200 people use the feature to find high quality, affordable health care at a HRSA supported community health center.  All you do is type in your zipcode and local community centers pop up on a map.
If you aren’t familiar with community health centers, there are more than 7,900 service delivery sites nationwide that provide preventive and primary care to 19 million patients, about 40 percent of whom have no health insurance.  It’s important to remember that community health centers will treat you, regardless of your ability to pay; charges for service are set according to income.
The Affordable Care Act Affordable Care Act provides $11 billion in funding for the operation, expansion and construction of community health centers across the country.  This expansion will help community health centers nearly double the number of patients they can see—a critical step in ensuring that all Americans can access quality, affordable health care.

Wednesday, September 22, 2010

Plan now before 2011: Why you need to call your estate planning attorney

Need for Estate Planning

In 2011 unless Congress acts to extend the estate tax credit all estates over $1,000,000 in value will be taxed at 55% of the entire value. This means that many people who previously would have had few estate tax issues presently need to examine planning options to protect their assets for their heirs.
That means that If planning has not already begun, the clock is ticking. What do you need to do in order to be ready?

The first thing you need to do is determine what your net worth is. Compile your account statements as well as your real estate holdings. The combination of these two basic  totals will give you an initial basis of your basic net worth. If you are a business owner a valuation of your interest n the business will be necessary to include in the calculation. Once your net worth is established it is imperative to sit with an estate planning attorney to determine how to preserve your assets

When you sit with your estate planning attorney make sure you bring with you your net worth documentation so that the planner may review the assets to determine what else may be included in the calculations. That will make sure all information is available to make the best plan for you and your family ensuring the assets you worked hard to obtain will be able to be there for your children.

The estate planning attorney will explain the various options for you. They will start talking about different trust vehicles that may fit your needs. Listen carefully and understand certain trusts will divest you as the earner of this income of control of the assets. Others will allow you to maintain control but may lose certain benefits to you. Each individual’s circumstance is extremely specific so meet with your planner to best determine your need and the right planning to protect your assets as well as ensure your family is able to enjoy what you have worked hard to attain rather than the US government.

Monday, September 20, 2010

OTC Drugs No Longer Reimbursable After 12-31-2010

The Internal Revenue Service has released guidance on this provision of the Patient Protection and Affordable Care Act (PPACA) affecting consumer and employer benefits.

IRS Guidance on 2011 Changes to OTC Drug Reimbursements for FSAs, HSAs and HRAs
On September 3, the Internal Revenue Service issued Notice 2010-59 and Revenue Ruling 2010-23, which provide guidance reflecting the PPACA’s statutory changes effective January 1, 2011 with respect to medicine and drug reimbursements under FSAs, HSAs and HRAs. Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eyeglasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after January 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.

A similar rule goes into effect on January 1 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Click HERE to view the Affordable Care Act: Questions and Answers on Over-the-Counter Medicines and Drugs section of the IRS' website.

Thursday, September 16, 2010


In 2001 and 2003, some convoluted political maneuvering by Congress resulted in a series of tax cuts that came with an expiration date. Known familiarly as the “Bush tax cuts,” these provisions are set to end on December 31, 2010. If no new legislation is approved, tax rates that were in effect prior to 2001 will return.
Some of the highlights (or lowlights) of what a return to 2001 tax rules would mean:

•           Higher Income Tax Rates – for everyone. The top income tax rate would revert to 39.6%, and the special low 10% bracket would be eliminated.

•           A Revival of the Estate Tax. For individuals dying in 2010, there is no federal estate tax. In 2011, the estate tax returns with a $1,000,000 exemption and a 55% maximum rate.

•           An Increase in Capital Gains and Dividend Tax Rates. The maximum long-term capital gains tax rate goes back up to 20% from 15%. A lower 10% tax rate is used by individuals who are in the15% tax bracket is eliminated. In addition, all dividend income (other than capital gain distributions from mutual funds) is taxed as ordinary income at your highest marginal tax rate.

•           A Reduction in the Child Tax Credit. The credit of $1,000 per eligible child reverts to $500 after 2010. After 2010, none of the child tax credit will be refundable to taxpayers unless their earned income is more than $12,550.

•           A Reinstatement of the so-called "marriage penalty." Some married couples filing jointly in the 15% tax bracket could have a higher tax bill since the standard deduction for couples filing jointly would again be less than double the deduction for single filers.

•           Dollar limits will be placed on itemized deductions and personal exemptions. In contrast, there are no limitations for 2010.

The political debate to extend the tax cuts, allow them to expire, or enact new legislation has been spirited. Some argue that deficit reduction can only come about through higher taxes, while others fear a double-dip recession in the economy if more taxes are applied. Many observers expected compromise legislation this summer, since reinstating the 2001 tax provisions would violate promises by some politicians not to raise taxes for anyone with adjusted gross incomes below $250,000. But with the November elections looming and tax increases decidedly unpopular with voters,

Congress seems inclined to wait to address the issue as late as possible, making last-minute legislation a strong possibility. The consensus from most commentators is that some compromise will eventually be reached, but opinions about the specifics vary greatly.

While a long-standard nugget of financial wisdom asserts that no investment decision should ever be made based exclusively on taxes, the reality is that taxes impact almost every financial transaction. The uncertainty about what may transpire in regard to taxes leaves individuals hanging. Should a profitable investment be sold before December 31 to minimize the capital gains tax? Should 401(k) contributions be deferred until next year, when the resulting deduction might be higher? Are current estate plans still valid?

The only general response that makes sense for individuals in the face on these unknowns is to pay attention, keep some resources in reserve, and stay in touch with your financial and tax professionals regarding potential changes to your accounts and strategies.   


(Disclaimer: we do not provide professional tax advice. Please check with your tax professional regarding your situation.)

Wednesday, September 15, 2010

Health Care Reform Brings About First-Dollar Preventive Care

The Patient Protection and Affordable Care Act, signed into law earlier this year, is beginning to bring about changes to the nation's health care system. In July, a summit between the U.S. Departments of Labor, the Treasury, and Health and Human Services came together to issue new Preventive Regulations, in accordance with the President's health care reform bill.

The new regulations require non-grandfathered health care plans to provide complete coverage of many preventive services for newborns, children, and adults, regardless if deductible costs are met. These regulations will apply for the first plan year on or after September 23, 2010.

The government has put these regulations in place in order to increase patients' access to numerous services, such as diabetes and cholesterol tests, prostate and other cancer screenings, child/adult vaccinations, pre-natal services, and routine checkups for children and infants. In the past, many patients were required to cover deductible costs or share the cost of these services, but now preventive care will be covered on a full first-dollar basis. The new regulations only apply to in-network providers.

The Department of Health and Humans Services, or HHS, hopes that the increased access to high-quality preventive care will lead to earlier detection of disease and improve Americans' overall health, essentially lowering health care costs. In the United States, 7 out of every 10 deaths are caused by chronic diseases, like cancer, diabetes, and heart disease. HHS estimates that 75% of the country's health care dollars are spent on fighting diseases and illnesses that can be prevented. Additionally, the HHS states that Americans receive preventive services about half as much as they need to.

Increased Coverage
Here are a few health care services that will be covered under the new regulations:

Preventive Care
The U.S. Preventive Services Task Force selected a variety of services to be covered, including screenings for colon and breast cancer, screenings for high blood pressure and cholesterol, checkups during pregnancy, help for smokers trying to quit, and other high-priority preventive care services.

Routine vaccinations selected by the Advisory Committee on Immunization Practices for children and adults are fully covered by the new regulations. These vaccines include Hepatitis A and B, MMR, Meningococcal, Tetanus, flu shots, and others.

Care for Children
All new plans will now cover the preventive services recommended by the American Academy of Pediatrics in their "Bright Futures” guidelines. Services include access to pediatricians until the age of 21, regular wellness checkups, hearing and vision screenings, developmental assessments, vaccines, and care that addresses childhood obesity.

Women's Care
Health screenings for anemia and other risk factors in pregnant women are covered, along with screenings for breast cancer and osteoporosis in older women, as well as other preventive measures. An independent council of doctors and medical experts are currently working on new preventive care guidelines for women.
Prescription contraceptives are not currently listed as a covered preventive service, but officials from the Planned Parenthood Federation of America hope that contraceptives will begin to receive first-dollar coverage within the next year or two.

Information on all of the covered services can be found on the government's website.

Guidance Tells How to Maintain-or Lose-Grandfathered Status Under the Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act enacted a package of health insurance reforms for group health plans, including benefit mandates and health insurance market reforms. "Grandfathered plans" - plans in effect on March 23, 2010 (the date of enactment) are exempt from certain-but not all-of the law's provisions.

The Internal Revenue Service, Department of Labor's Employee Benefits Security Administration and Department of Health and Human Services have jointly issued an interim final rule regarding grandfathered plans, in particular, what changes to grandfathered plans will and will not affect a plan's status.

Among the Act's provisions that do not apply to grandfathered plans are the following:
  • The requirement that preventive care services, including immunizations and screenings, are covered with no cost-sharing for plan participants.
  •  Requirements under Sec. 105(h) of the Internal Revenue Code that plan provisions do not discriminate in favor of highly compensated employees.
  • Maintenance of claims and appeals processes that include external review.
  • Certain benefits requirements involving provider choice, emergency services and clinical trials.
According to the interim final rule, if a grandfathered plan does any of the following, it will lose its grandfathered status:
  • Eliminate all or substantially all benefits to diagnose or treat a particular condition. This includes the elimination of an element necessary to treat the condition (for example, if a plan provides counseling and prescription drugs for a mental health condition, and eliminates the counseling benefit while maintaining the prescription drug benefit, it will be considered to have eliminated substantially all benefits for the condition and lose its grandfathered status).
  • Increase coinsurance rates, to any extent at all, for plan participants.
  • Increase participant copayment levels by more than the greater of $5 (adjusted annually for inflation) or a percentage equal to medical inflation plus 15 percentage points.
  • Increase a fixed-dollar cost-sharing requirement other than a copayment-such as a deductible-by more than medical inflation plus 15 percentage points.
  • Lower employer cost-sharing by more than 5 percentage points (for example, decreasing employer cost-sharing while increasing the percentage of employee cost-sharing from 10% to 20%).
  • Add or tighten limits on what an insurer pays (for example, capping or lowering the annual dollar amount covered by a plan for specific services or adding an annual dollar limit maximum where one did not exist on March 23, 2010).
  • Change insurance carriers or purchase a product from a new insurance carrier.
Plan changes such as premium increases and changes in third-party administrators will not cause a plan to lose its grandfathered status.

The interim final rule includes special provisions for insured collectively bargained plans. If the collective bargaining agreement was ratified before March 23, 2010, a fully insured plan will be considered grandfathered until the date on which the last agreement relating to the coverage in effect on that date is terminated. Self-insured collectively bargained plans are subject to the same rules as grandfathered plans that are not under a collective bargaining agreement.

As noted above, while grandfathered plans are not subject to some of the Act's provisions, they are subject to others, such as the prohibition on lifetime limits on the dollar value of benefits and the prohibition on coverage rescissions, except in cases of fraud or an intentional misrepresentation of a material fact by an enrollee.

A grandfathered plan also is required to disclose to plan participants that, as a grandfathered plan, it may not include certain elements of the consumer protections provided for under the Act.
While grandfathered status can offer significant advantages, especially in regard to avoidance of some of the Act's benefits mandates, employers will need to assess how these balance against the need or desire to modify plan provisions or change carriers in response to rising plan costs and rates.

Voluntary Benefits Are More Than an Accessory to an Employer's Core Benefits

Today, more employers than ever before are offering at least one type of voluntary employee benefit. The growing interest in voluntary benefits reflects tight human resources budgets, the changing face of employer-sponsored health insurance, and the varied and multi-faceted needs of a workforce that is ever-growing in diversity.

A study from Eastbridge Associates found that, overall, 66% of employers offered at least one voluntary benefit in 2009, compared with 54% that did so in 2006. The growth in voluntary benefits offerings has been especially noticeable among the smallest employers (10 - 100 employees), with 65% offering at least one type of voluntary benefit in 2009, compared with only half that did so in 2006.
A separate survey from the International Foundation of Employee Benefit Plans characterizes voluntary benefits as a "fundamental part of employers' benefits packages, a "significant part of plan sponsors' strategic benefits approach.  In that study, 84% of the surveyed employer group offered voluntary benefits.

What's making voluntary benefits more popular and more important? Here are some of the reasons-
Tight benefit budgets have constricted the growth of employer-paid-for benefits. Voluntary benefits enable workers to have access to coverages that are popular with employees-such as vision and dental-when the employer can't afford to include these in the basic benefits package, either on a contributory or noncontributory basis.

The shift from employer paternalism to employee responsibility that began with the introduction of 401(k) plans has continued in full force, with employees now firmly in control of providing for their families' financial security. Thus, popular voluntary benefits include supplemental life insurance, disability insurance and long-term care insurance-coverages that come into play when potentially cash-draining life events occur.

 In workplaces where consumer-directed health plans are offered, employees who are enrolled in these plans may turn to voluntary supplemental medical coverages to fill in the gaps left by these plans. Vendors have developed products that do just this, helping employees who buy the coverage to offset the higher deductibles or coinsurances of the underlying plan.

Other types of supplemental medical plans have long been offered on a voluntary basis and they continue to play a role. These include plans that cover the indirect costs of an injury or illness, such as critical illness insurance that pays a cash benefit upon the diagnosis of a life-threatening disease or condition, and which can be used by the insured, or the insured's survivors, for any purpose they see fit; disease-specific insurance, such as cancer insurance, that may provide coverage beyond the primary medical plan for treatments associated with the disease; and hospital indemnity insurance, which supplements the primary plan in the event of an illness that requires a hospital stay.

A primary driver of the voluntary benefits market has been the growing demographic diversity of the workplace, and the recognition that today's workers have a wide range of needs. Voluntary coverages that address this include long-term care insurance, financial planning, pet insurance, a sampling of life insurance products, and childcare and eldercare assistance.

Another marker of today's workforce is how time-pressed employees are, and certain types of voluntary products directly address this reality. For example, by bringing products that most individuals need-such as auto insurance and homeowners/renters insurance-into the workplace, employees save the time of researching these necessary coverages on their own, and also enjoy the convenience of paying for the
insurance through payroll deduction and the cost savings of a group rating.

Though the voluntary insurance marketplace has been around for some time, it is growing in importance for the reasons noted above. Today, voluntary benefits are more than an accessory to an employer's core benefits; they are a seamless, strategic and essential component of a total compensation package.

Saturday, January 9, 2010

Take an Active Role in Your Medical Care while Hospitalized

When you arrive at the hospital, you expect excellent care from your medical team. After all, highly trained doctors and life saving equipment surround you.  According to the Institute of Medicine, what you may not be aware of is that as many as 98,000 patients die each year as a result of medical errors during a hospital stay. That's more people than die from car accidents, breast cancer, or AIDS.
You can greatly reduce your odds of accidental injury or death by asserting yourself and showing interest in your care. Your number one priority is to not become passive when entering the hospital.
Here are some additional steps to take:

Research your treatment plans. It's easier to give up control, when you don't know what's going on. If you know what to expect in the hospital, you can take a more active role in monitoring your treatment.
Many common procedures have pre-admission classes. Such classes explain what will occur each day in the hospital for a hip replacement surgery, open heart surgery, etc.

Ask Questions.  Know what medications are being prescribed and why.  Pay attention to what dose you're being given before taking it. Do not assume the dosage is correct just because a nurse tells you it's what the doctor ordered. Medication mistakes are the most common errors in hospitals, according to the IOM.
It is also important to write down questions as they arise. When a doctor drops in, be sure to reach for your list.

Make sure that everyone who gives you medications checks your hospital ID bracelet every time. Patient mix-ups are more common than most hospitals would like to admit.  Make sure the medical staff knows who you are by checking your ID bracelet.

Request that any allergies are noted prominently in your chart, and mention them to everyone who attends you. Furthermore, make sure your chart details every medication you are taking, including over-the-counter medicines and dietary supplements such as herbs and vitamins.
Quiz your doctor. Especially if you require complex surgery, be sure that your medical team consists of experienced professionals. Quiz the doctor on the number of such surgeries they have performed and the associated outcomes. Ideally you want a specialist who has performed a large volume of the type of surgery you require.

Have a family member or friend nearby. Your medications may make you groggy and not allow you to operate at peak awareness. Arrange for someone to help you. Make sure they have been educated on your surgery just as well.

Upon discharge, ask medical staff to thoroughly explain the treatment you need to follow at home. Doctors and nurses often assume patients understand more than they do about follow-up care.  It is best to ask questions before you leave the hospital, and to make note of who to call if more questions arise.