R&R Insurance Blog

If you died tomorrow, how would your loved ones fare financially? It’s not a pleasant scenario to think about your own death, but not doing so can have serious consequences.

If someone depends on you financially, you need life insurance. It’s that simple. Unfortunately, roughly 70 million adult Americans have no coverage at all, and most of those who do have far less coverage than financial experts recommend. Life insurance provides cash to your family after your death. Known as the death benefit, it can help your family pay for the funeral and other final expenses, eliminate credit-card balances and car loans, and provide loved ones with income to live on for a period of time. Whether a person needs life insurance depends on his or her particular situation and financial objectives. Coverage needs to be an important consideration for the following scenarios:

1. You’re Married. Married people share a life with one another, but also share financial obligations. If you died suddenly, would your surviving spouse have enough money to pay for your final expenses and buy time to adjust to a new way of life? Life insurance can help ensure that these financial goals will be met. Life insurance can be considered mortgage protection. Protect your spouse's ability to keep the home that you live in. Life insurance would offer the funds necessary to keep the home and the mortgage intact.
2. You’re Married With Kids. Having kids is the most obvious reason to own life insurance. If you and your income were suddenly gone, would your spouse and kids be okay financially? Life insurance helps replace lost income to help make sure those who depend on you will be provided for, no matter what life throws your way.
3. You’re a Single Parent. As a single parent, you're the caregiver, breadwinner, cook, chauffeur, and so much more. You need to make doubly sure that you have safeguarded your children’s future in case you are no longer there to care for them. Make sure you have enough life insurance and designate who will take care of your children in case the unthinkable were to happen.
4. You’re a Stay-at-Home Parent. Just because you don't bring home a paycheck doesn't mean you don't make contributions to your family that would be expensive to replace. If you were no longer there, could your spouse afford to pay someone to provide the childcare, transportation, cleaning, cooking and other household responsibilities that you handle every day?
5. You’re Approaching Retirement. The kids may be gone and the mortgage paid off, but that doesn't mean Social Security or your savings will necessarily take care of everything that lies ahead. If you died tomorrow, would your financial strategy, without insurance, enable your spouse to maintain the lifestyle that the two of you worked so hard to achieve?
6. You’re a Small Business Owner. Life insurance can help protect your business in a number of ways in the event you, your partner, or a key employee dies prematurely. A buy-sell agreement funded with life insurance allows surviving business owners to buy the company interests of a deceased business owner at a previously agreed-on price. Key-person insurance can provide business owners with the flexibility to hire a replacement when the key employee dies.

You can get a general sense of your life insurance needs by going to www.lifehappens.org/lifecalculator and using the online calculator offered by the LIFE Foundation, a nonprofit insurance education group. Or, you could contact me and we can have a quick discussion to help you determine the right coverage for you and your family or your business - products that fit your lifestyle and your budget.

If people depend on you financially, (i.e. mortgages, schooling, child or parental care) life insurance is an absolute must, and no one should pay more than they have to.

Over the past few years we have become accustomed to spending less and saving more, due to the economy. Even as the economy rebounds, many people continue to look for ways to keep their household budgets in check. Luckily, spending less doesn’t have to mean doing with less, especially when it comes to life insurance coverage. There are ways you can maintain your coverage, but pay less for it.

Life insurance is a financial safety net for your loved ones, so it’s critical to maintain that coverage especially with the uncertainty that remains in the economy. However, keeping that coverage doesn’t have to be a financial burden.

There are ways to save money on your existing coverage, and I’ve got some tips to help you do just that.

1. You’re healthier. If you have quit smoking, lost a substantial amount of weight or made significant improvements to your health, let your insurance company know. You may be able to qualify for a lower rate on your coverage.
2. Rates are near historic lows. Life insurance rates remain near historic lows. In fact, the cost of basic term life insurance has fallen by nearly 50 percent over the past decade. So if your family’s budget is tight and your health status hasn’t changed much since the time you last purchased coverage, you may want to apply for a new policy. If you do, make sure not to drop your current coverage until the new policy is in force.
3. Circumstances have changed. It is smart to review your policy every year to make sure it’s adequate and up to date. If the kids are out of the house, your mortgage is paid down, you’ve gotten divorced or family members no longer need your financial support, your need for life insurance coverage may have decreased. A smaller face amount policy will likely save you money.

For more information about life insurance, estate planning, business continuation and annuities, contact knowledgebroker Tom Driscoll.

The first cut of the Wisconsin Health Insurance exchange markets have been announced and it looks like slim pickins! Wisconsin's "big 3" (United Healthcare, Humana and Anthem) are not participating in the small group exchanges.

Also, keep in mind that for Wisconsin’s Exchange, we have 16 different rating regions and carriers can file for just specific ones. Carriers have until 9/15/13 to sign contracts/pull out.

Wisconsin Exchange Carriers for Individual and small group markets.

Any way you look at it - this is slim pickins for Wisconsin businesses. There are other options for avoiding the exchanges and the "taxes". More about self funding your health insurance.

Join our group on LinkedIn: Obamacare: Strategies for Business to Survive. We welcome you to join in the conversation with our LinkedIn group dedicated to discussions for business owners on Obamacare: Strategies for Business To Survive. Read articles, download documents, join the conversation, and add your expertise!

Learn how Voluntary Benefits are impacting small businesses and their ability to attract and retain employees during this time of benefit change.

Do you ever find yourself forgetting things that you want to remember? Try a couple of these tricks and let us know how they work.

Remember Names - Look, snap, and listen to their name. Too often, we don’t pay attention. Now make a mental picture (snap!) of their name and face, and mentally connect them.

Get Everything on Your List - Make up a story using the items you need — the more absurd and dramatic, the better!

Recall Online Passwords - Create a template that you personalize for each site. For instance, you might start with a word-number combo that’s meaningful to you, then tack on the initials of the website that needs a password. Example: CoCo was your first pet, and you got him when you were 11 and you're logging into R&R: rrCoco11

Never Miss a Birthday - Use technology! Facebook will send you an email every weekend reminding you of coming birthdays: Go to the "Accounts Notification" page to opt in. Also, while you're logged in like R&R!

When was your last insurance review? Contact a R&R knowledgebroker and we will review it to make sure nothing was forgotten!

The causes of absenteeism are varied, and so is the impact on companies - from decreased productivity to a reduction in profit and morale.

Some employers are finding better ways to manage employee absence. Research shows a direct correlation between these five major employer practices and a better absence management program:

1. A full return-to-work (RTW) program, starting with a written RTW policy and a list of alternative duties for light duty clearance.
2. Referral process for employees to health management programs.
3. A central leave-reporting system for STD and FMLA.
4. Detailed reporting for disability and FMLA usage patterns, costs etc.
5. Use the same resource for STD, FMLA and other benefit programs

7 Positive Outcomes of an Absence Management Program

1. Enhanced productivity
2. Reduction in lost-time claims
3. Decreased overall absenteeism
4. Direct cost reduction
5. Better return-to-work ratios
6. Lower workers compensation premiums
7. Improved employee morale

Employers are recognizing the importance of managing absences, but most have a long way to go in managing their overall presenteeism program.

Implementing strategies to help workers stay healthy is critical to controlling costs. At R&R, we take wellness to a whole new level. Wellness programs will increase the health and longevity of employees and their families –which means that businesses can have a lot of control over their health insurance costs and the productivity of their employees – control that they don’t know they have. At R&R Insurance, we call this program WellCompForLife!

Join our upcoming Work Comp Seminar to learn more!

As an Employee Benefits Producer for R&R Insurance, I have access to some tools of our trade that business owners and HR professionals may not be privy to. I came across an article in Employee Benedit Adviser that discusses the multi-employer study by Health Management and Towers Watson. The study confirms what we've been promoting here at R&R. The bottom line for employers is that if you start to change employee behaviors, you will start seeing health care cost savings very quickly. The research is saying - within 1 year! Here is an excerpt from the research study as well as a few links to this information that I find worth sharing.

Although health risks have been directly associated with higher health care costs, and a growing body of research shows that improving health can generate a positive long-term ROI, there has been limited research on how soon cost savings begin accruing and the relative cost impact of health risk accumulation versus health risk reduction.“This research not only demonstrates the level of savings that can be expected, but it also begins to show how soon employers can expect to begin realizing some change in costs as a result of a change in health risk status,” said Steven Nyce, senior economist at Towers Watson and lead author of the study. “This is crucial information for employers that have made a commitment to improving the health and productivity of their workforce. It also should enable employers to attract more senior management support for investing in these programs.”

Implementing strategies to help workers stay healthy is critical to controlling costs. At R&R, we take wellness to a whole new level. Wellness programs will increase the health and longevity of employees and their families –which means that businesses can have a lot of control over their health insurance costs and the productivity of their employees – control that they don’t know they have. At R&R Insurance, we call this program WellCompForLife!

Join the WellCompForLife discussion on LinkedIn!

StayWell Health Management and Towers Watson’s breakthrough study confirms that population health management will reduce employee health risks and produce short-term cost savings in as little as one year.

Study: Preventing Health Risks Has Rapid Payoff

The study, “Association Between Changes in Health Risk Status and Changes in Future Health Care Costs: A Multi-employer Study,” was published in the November 2012 issue of Journal of Occupational and Environmental Medicine (JOEM) and is available on the JOEM website.

For more information about WellCompForLife, about self-funding your health insurance plan, health care reform or basic employee benefits questions, contact knowledgebroker Riley Enright.

For the past 12 years, Unum reports the leading cause of its long-term disability claims is cancer. “Most people who have been diagnosed with cancer are very motivated to get back to work,” says Kristin Tugman, senior director of health and productivity at Unum. “It helps create a sense of normalcy and control at a time when people often feel understandably overwhelmed.” Cancer is also Unum’s No. 6 cause of short-term disability. Here are the top five LTD and STD causes according to 2012 claims data from Unum.

Top 5 Long Term Disability (LTD) Causes

• #1 LTD cause: Cancer
  Cancer accounts for 16% of LTD claims. Dramatic trends in recovery and return-to-work have improved this number over the past few decades.
• # 2 LTD cause: Back Disorders
  Back problems account for 15.1% of LTD claims. Watch for them to show up again in STD claims. The lesson here: workers need to watch their back.
• #3 LTD cause: Injuries
  Accounting for 9.8% of LTD claims, injuries are among the most difficult to prevent of any health claims. The more unexpected a health risk, the more important to have secure insurance safety nets in place.
• # 4 LTD cause: Behavioral Health Issues
  Essentially a tie with injuries at 9.8% of LTD claims, behavioral health is often not covered under a traditional health plan. So when a disability arises from it, coverage becomes all the more important.
• # 5 LTD cause: Circulatory System Disorders
  We all know we should take better care of our hearts, but are employees? Circulatory disorders come in 9% of LTD claims

Top 5 Short Term Disability (STD) Causes

• # 1 STD cause: Maternity
  Normal, healthy pregnancies make up 18.9% of Unum’s short-term claims.
• # 2 STD cause: Injuries
  Non-back-related injuries make up more than one-in-10 short-term disability claims, or nearly one-in-seven of all STD claims not related to maternity.
• # 3 STD cause: Complications From Pregnancy
  Pregnancy complications account for 8.4% of STD claims.
• # 4 STD cause: Digestive Disorders
  These represent 8% of STD claims, according to Unum's data.
• # 5 STD cause: Back Disorders
  In addition to 15.1% of LTD claims, back problems make up 7.1% of STD claims

With 65% of workers living paycheck to paycheck, employers offering voluntary disability products provide their employees with a financial safety net in case any unforeseen circumstances occur. Wisconsin companies, for more in formation on offering disability insurance to your employees or purchasing disability insurance products for yourself, your professional team or your family, contact knowledgebroker Donald Levings. More information about disability products can be found on our website.

In a time when employers are more budget conscious than ever, an HRA seems like a viable option. Given that HRAs come with few requirements, they provide a great deal more flexibility to employers than HSAs.

Because HRA funds do not belong to an employee, the employer retains any remaining HRA funds when an employee leaves the organization. Companies with high turnover find this to be a very favorable option.

Many employers find an HRA easier to manage. Because the employer is putting money in to the HRA, they are able to determine rules for the benefit plan. An employer has the flexibility to design a plan with a deductible that is not as high as you might see with an HSA-compatible plan. For example, if an employer wants to encourage employees to utilize high-value health care centers or have particular types of care covered at 100%, HRAs allow them to do so.

Wisconsin employers, contact a knowledgebroker to see if an HRA is right for your company.

A major provision of the Healthcare law that would require employers to provide health insurance for their workers has been delayed until 2015. The part that is delayed: the requirement that businesses with more than 50 employees provide health insurance to their workers or pay a penalty. Businesses with more than 50 employees would have paid a fee of $2,000 per uninsured employees after the first 30 employees. The Congressional Budget Office expected those penalties to bring in $4 billion in 2014. Employer Mandate Penalties Delayed Until 2015 - legislative brief.

Jackson Hewitt Tax Service pointed out 4 potential effects of Tuesday’s announcement delaying the implementation of the Affordable Care Act's employer mandate:

1. Fewer employers may cut employee hours in 2014. This one-year respite may make employers (e.g., restaurant and retail establishments) less likely to reduce employee hours below 30 hours per week (so as to classify such employees as part-time for section 4980H penalty calculations).
2. Many families with children will have an unexpected benefit. For employers who offer employee but not dependent coverage, this one-year delay may also cause employers to postpone any offer of coverage to dependents. This may have a positive effect on such families for two reasons. First, children without an offer of employer-sponsored coverage may be eligible for the Children's Health Insurance Program (CHIP) if they meet the state-specific income and other eligibility requirements. Second, children without an offer of employer coverage may be eligible for the new premium assistance tax credits in 2014 even if their incomes are above the state-specific CHIP limit. Indeed, employers may be more likely to cooperate with enrollment efforts to get uninsured employees and their uninsured dependents covered under various ACA programs because they know with certainty that they will not face a penalty in 2014.
3. States may face less pressure from business interests to expand Medicaid. Jackson Hewitt had released a report earlier this year estimating that American employers would incur $876 million to $1.3 billion in penalties in 22 states that were refusing to expand their Medicaid programs as contemplated under the ACA. Today's decision effectively removes that penalty liability for 2014. However, employers will continue to face such penalties in 2015 and thereafter in states that do not expand their Medicaid programs.
4. The Treasury action today addresses anxiety among employers about the lack of final regulations from the IRS. While many employers with large part-time and seasonal employees embraced the flexibility afforded to them by the IRS's proposed approach, they voiced increasingly loud concerns that the IRS had yet to finalize this approach in a final rule. Indeed, the IRS has not publicly pledged to finalize these proposed rules before the major provisions of the ACA take effect in 2014. In an unexpected development late Tuesday, though, the Treasury Department effectively moots this issue for 2014.

Other key parts of the law, including the health exchanges where individuals can buy insurance, are on schedule. The exchanges will open on Oct. 1, wrote Valerie Jarrett, a senior adviser to President Obama, in a White House blog released Tuesday.

The delay also does not change the individual mandate, which requires most Americans to purchase insurance. Some consumers may receive subsidies to help them pay for the insurance depending on their incomes.

The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015. The administration is strongly encouraging employers to maintain or expand health coverage during the 2014 transition period.

Various parts of the law have taken effect since its passage in 2010, including allowing children up to age 26 to remain on their parents' insurance plans and discounts for prescription drugs for Medicare patients. More young Americans have health insurance than before the law, because of that change, and the discounts have saved Medicare recipients billions of dollars.

Consolidated Health Care Reform Resources on one site! Health Care Reform Resources

Join the discussion on LinkedIn: Obamacare: Strategies for Business to Survive

Related Articles: Health Care Reform

There's a lot to keep track of over the next six months, so let's get right to the list. Here are 15 Affordable Care Act requirements that will become effective on Jan. 1, 2014:

1. State Health Insurance Exchanges
Each state must establish a health insurance exchange (or HHS will do so) for use by the uninsured and small employers with 100 or fewer employees (states may set the cap at 50 employees). The exchanges will offer fully insured insurance contracts that provide essential health benefits at differing levels of coverage (bronze, silver, gold, and platinum). Employees of small employers who offer health insurance coverage through an exchange may pay their employee premiums for such coverage on a pre-tax basis through the employer’s cafeteria plan.

2. State Health Insurance Exchange Tax Subsidies
Individuals who do not have affordable minimum essential coverage from their employer will be eligible for tax credit subsidies for their health insurance purchase on a state exchange if their income is below 400 percent of federal poverty level. (In 2013 the federal poverty level for a household of 1 in the 48 contiguous states is $11,490, therefore 400% of that would be $45,960.

3. Individual Mandate Tax Penalty
Individuals are required to obtain minimum essential health coverage for themselves and their dependents or pay a monthly penalty tax for each month without coverage. The monthly penalty tax is one-twelfth of the greater of the dollar penalty or gross income penalty amounts. The dollar penalty is an amount per individual of:

• $95 for 2014 (capped at $285 per family
• $325 for 2015 (capped at $975 per family)
• $695 for 2016 (capped at $2085 per family)
  These dollar penalties will be indexed for inflation starting in 2017.

The gross income penalty is a percentage of household income in excess of a specified filing threshold of:

• 1 percent for 2014
• 2 percent for 2015
• 2.5 percent for 2016 and later years
  In no event will the maximum penalty amount exceed the national average premium for bronze-level exchange plans for families of the same size. Minimum essential coverage includes Medicare, Medicaid, CHIP, TRICARE, individual insurance, grandfathered plans, and eligible employer-sponsored plans. Workers compensation and limited-scope dental or vision benefits are not considered minimum essential health coverage.

4. Automatic Enrollment
Employers with more than 200 employees who maintain one or more health plans must automatically enroll new full-time employees in a health plan. The employer must give affected employees notice of this automatic enrollment procedure and an opportunity to opt out. State wage withholding laws are preempted to the extent that they prevent an employer from instituting this automatic enrollment program. The final effective date will be established by DOL regulations.

5. Pre-Existing Condition Exclusion Practices Eliminated
Pre-existing condition exclusions no longer will be allowed in group health plans or individual insurance policies, not even the limited exclusions previously allowed under HIPAA. This also applies to grandfathered plans.

6. Ninety-Day Maximum Waiting Period
Group health plans and health insurance issuers may not impose waiting periods of more than ninety days before coverage becomes effective. This also applies to grandfathered plans.

7. Cost-Sharing Limits
Group health plans, including grandfathered plans, may not impose cost-sharing amounts (i.e., copays or deductibles) that are more than the maximum allowed for high-deductible health plans (currently these limits are $5,000 for an individual and $10,000 for a family coverage). After 2014, these amounts will be adjusted for health insurance premium inflation.

8. Annual or Lifetime Limits
Group health plans, including grandfathered plans, may no longer include more than restricted annual or any lifetime dollar limits on essential health benefits for participants. Limits will possibly exist in and after 2014 for non-essential benefits.

9. Wellness Program Health Plan Discount
The maximum premium discount an employer can offer under its health plan for participation in a wellness program is 30 percent. (It is possible that this could increase this maximum discount to 50 percent in the future.)

10. Coverage for Those in Clinical Trials
Insurers and health plans, unless grandfathered, may not discriminate against an individual for participating in a clinical trial. If a plan covers a qualified individual, it may not deny or impose additional conditions for participation in a clinical trial.

11. Employer Minimum Essential Coverage Reporting
All employers providing minimum essential coverage must file information with the IRS and plan participants.

12. Large Employer Health Information Reporting
Large employers and employers with at least 50 full-time equivalent employees must submit annual health insurance coverage returns to the FTEs and the IRS. The returns must certify whether the employer offers health care insurance to its employees and, if so, describe the details regarding plan participation, applicable waiting periods, coverage availability, the lowest cost premium option under the plan in each enrollment category, and other information.

13. Medicaid Expansion
The U.S. Supreme Court in effect ruled that the requirement for states to offer Medicaid benefits to all persons with incomes at or below 133 percent of the federal poverty level is optional with each state. States that participate in the expansion will receive full reimbursement of their additional Medicaid costs from the federal government until 2017. At that time, reimbursement will gradually decline to 90 percent of extra costs in 2020 and thereafter.

14. Health Insurance Nondiscrimination Requirements
Code Section 105(h) currently taxes the benefits received by highly compensated employees (HCEs) under discriminatory self-funded health plans. PPACA has extended these nondiscrimination rules to insured plans. Employers with discriminatory insured arrangements will need to consider changing them. Grandfathered plans are exempt from this rule. This new requirement was originally intended to be effective for plan years beginning on or after September 23, 2010. The effective date was postponed in 2010 until IRS publishes a notice, which has not yet been issued. The provision may not be effective in 2014 but it most likely will be.