R&R Insurance Blog

In the 2014 budget, the President is looking to raise estate tax rates and lower exemptions that applied in 2009. While nothing is finalized yet, Jonathan Forster & Jennifer Smith provide interesting opinions on the potential impacts of the proposed budget: Weighing The Obama Budget's Impact on Estate Planning.

Under the President's proposal, as of 2018 the top estate, gift, and GST tax rates would return to 45% (up from 40%), the estate and GST tax exemptions would revert to $3.5 million, and the gift tax exemption to $1 million (all down from $5.25 million). In their opinion, this would make lifetime gift planning more complicated for wealthy families and closely-held business owners who want to transfer ownership to their family members.

Additionally, this year's budget would only tax property transferred to trusts through sales or similar transactions that are "disregarded" for income tax purposes under the grant trust rules. The potential impact: even in its more restricted form, passage of this proposal would adversely affect planning with grantor trusts.

The Obama administration wants to terminate a trusts' GST-exempt status on its 90th anniversary and subject the trust assets or subsequent distributions to GST tax. Potential impact: this would limit the long-term tax leverage afforded by GST exempt trusts and a family's ability to preserve wealth over time.

The Administration would also limit the availability of the GST exemption to qualified transfers made directly by a living donor and not through trusts. Generally, direct payments to medical care providers or tuition for another person are gift and GST-tax exempt. The potential impact, in their opinion, is that it would affect all non-exempt trusts, not just HEETs.

Now is the time to make the contact Pat Driscoll and take advantage of current estate planning laws.

If you're starting your own business - Good for you! It's a big leap of faith and can often times be a big hit on your pocket book. If you're leaving a full-time employer to make this move, chances are you are also walking away from your health insurance coverage - or some form of it anyway. For those that have health insurance currently, but are making the move, here are some suggestions that will help you either find health insurance or try to extend what you've got for the first year or so.

How to Get or Keep Health Insurance if You Are Self Employed

1. Enroll on spouse's plan
   If you have an insured spouse that has health insurance, this is probably your most affordable option. On average, workers pay $4,129 toward their annual health insurance premiums. This averages to $344 a month. You'll be hard pressed to find individual health insurance for that price. (Younger workers are taking a huge increase with reform, and older workers, well, they are more risky - so your age may not get you a better price in the new age of reform).
2. COBRA Extension
   Under the COBRA (Consolidated Omnibus Budget Reconciliation Act), employers are required by federal law to offer COBRA extensions for health and dental coverage up to 18 months for you an your dependents when you leave your job. Drawback: It's really expensive. If you have planning time before you leave, consider dropping to the lowest cost plan your company offers - when the enrollment period allows. This will at least get you a lower monthly COBRA payment.
3. Purchase your own policy
   Be leery of websites that offer you dozens of quotes for affordable health care insurance. Sure you'll get some numbers - sometimes too many numbers. But once they have your information, you'll be hounded by a plethora of independent insurance agents all clambering for the same piece of business - yours! Health insurance rates are set by the federal government - so no one company is going to be different than the other - the real difference is service from an independent agent. An independent agent can provide free quotes and handle all of the shopping for some of the best choices and value in health care coverage. An independent agent knows the marketplace, knows the product, knows the carriers and most of all will get to know you and your needs, and protect you - that's their job. See 5 Mistakes to Avoid When Buying Individual Health Insurance and 7 tips on How To Pick The Best Individual Health Insurance Coverage.
4. Join a professional organization that offers a health insurance benefit
   Some professional and trade associations offer health insurance with group coverage rates. If you are over 55, consider AARP.org. The National Association for the Self Employed offers insurance plans as well. Chambers of commerce or business alliances can often have a consortium offering for health care insurance too - check with your local chamber of commerce for their options.
5. Opt to hire one person - making your own small group
   Because individual insurance is fairly expensive, some self employed people have opted to hire an additional employee to qualify them as a small business. Most independent agents like R&R Insurance can offer group premiums with 2 or more employees - this could make a significant difference in your monthly cost.
6. Stay employed
   Probably the least desirable for someone with an entrepreneurial spirit, but the suggestion to stay employed is worth mentioning. Stay employed either with your current company or with a company that offers health insurance coverage for the minimum number of hours a week - most often times its 30 hours a week. This keeps your pocket book in line, continues coverage for your family and gives you more time to chase your dream - although a little more slowly.

For more information on insurance for self employed individuals please visit our website. R&R Insurance Services is an independent insurance agency serving all of Wisconsin. We offer businesses and families access to affordable insurance coverage with excellent 24/7 service. For more information on individual health care plans contact knowledgebroker Donna Wahl.

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Reform is well underway, which means that more individuals are forced to search for, and purchase, their own individual health insurance. In an effort to equip our customers with the most information possible, we are sharing what we are finding to be the 5 most common mistakes people make when buying individual health insurance.

5 Mistakes to Avoid When Buying Individual Health Insurance

1. Not buying health insurance or postponing your plan
   Never go without health insurance. Granted we now have badger care - for those that meet the income requirements. But for individuals who are self-employed, retired or in between careers, taking a gamble on your health is a huge risk - one that can devastate you financially for the rest of your life - and ruin your credit too boot. Even a simple catastrophic illness plan is better than nothing - make sure your agent covers all of the options within your budgetary constraints.
2. Deductible - too low if you are young and healthy - too high if you are in need of care
   The number one mistake people make is not choosing the deductible that is right for your health and age. If you are young, healthy and only see the doctor once a year for preventive care - then take that gamble! Go with a high deductible ($1,200 or more a year for individual and $2,400 a year for families is considered high). High deductibles will cost you less on a monthly basis. If on the other hand you are in poor health or climbing in years and you find yourself using more medical care that you used to, then go with a lower deductible - but weigh the overall yearly cost of the plan. That will help you determine how low to go on the deductible.
3. Out-Of-Pocket Max Not Understood
   Outside of your monthly payment, this is the single most important thing you want to concern yourself with when buying health insurance. There is nothing more important than knowing how much money you could potentially have to pay for a serious medical procedure. Make sure your agent goes over several scenarios with you so that you fully understand what your out-of-pocket expenses will be should something major occur. A lot of plans will not include the plans deductible in consideration of out-of-pocket max. This is a very important coverage topic to fully understand!
4. Pre-existing Conditions
   After 2014, insurance carrier can no longer deny insurance to anyone based on a pre-existing condition. Great! That means if you do have a pre-existing condition, you'll be able to get coverage - whereas you most likely couldn't before reform. The misconception is that this insurance is "free", or even "affordable". Don't think for one minute that insurance companies are not going to take into consideration your "insurability". They will and it will be reflected in your monthly payment - and it will be expensive! They can't turn you away - but they can make you pay! For previously uninsurable risks (pre-existing), we are seeing 40%-400% increases in rates. There is a high risk pool for Wisconsin that can be considered if this option is too costly.
5. Not working with an independent agent
   Yes, you can go through the on-line quoting process, fill out all the forms, submit your email address and then within 24 hours you'll be bombarded via email and phone calls with companies and agents trying to collect even more information on you - they all work for someone different. Quoting sites conglomerate your information and feed it to paying agencies as a "lead". Why would anyone want to go through that hassle? Contact R&R Insurance - or if you are in a state other than Wisconsin, contact an independent insurance agency that will be your one main contact. We shop it for you. We collect your information, always with the utmost respect for your privacy and protection of your personal identifiable information - and we field the quotes coming in. You'll receive valuable insight, have your pick between all the major companies and be reassured each year you are paying the best rate, all for no extra charge.

Your insurance agent does not get paid until you purchase a plan, at which point they are paid a commission directly from the insurance company. Health insurance prices are fixed by law, that means you will pay the same rate for that health insurance no matter where or who you buy it from.

Related articles: 7 Tips on How To Pick The Best Individual Health Insurance Coverage

There are two main reasons for a huge upsurge in individual health insurance inquiries. One is that thousands of baby boomers are retiring daily, and those that aren't lucky enough to have a health insurance option in their retirement plan, have to purchase health insurance/supplemental insurance elsewhere. Secondly, reform is well underway, which means that more individuals are forced to search for, and purchase, their own health insurance - depending of course the decision that their employer makes.

7+ Tips on How to Pick The Best Individual Health Insurance Coverage

1. Identify the “must-haves.” You can’t foresee a sudden injury or illness, but some medical needs can be anticipated. Maternity coverage, for example, is an obvious must-have if you’re starting a family, and not all policies offer it. If you have a family history of heart disease, you may want to make sure your coverage includes the cost of cardiac screening tests and cholesterol-lowering drugs. Under the Affordable Care Act, individual insurance plans must cover the full cost of more than two dozen preventive services for men, women, and children, including vaccinations and tests for high blood pressure, cholesterol, colon cancer, and diabetes, as long as they’re provided by a practitioner in the plan’s network.
2. The right plan for your age/health. If you’re relatively young and healthy, consider choosing a policy with a high deductible, the amount you must pay out of pocket before certain benefits kick in. A plan with a deductible of $1,000 or more is likely to cost you considerably less per month, and could save you money in the long run. If you middle aged or older, and things just don't work the way they used to, consider a plan that would address those issues, with a slightly lower deductible - because you know you are for certain going to use it. Do the math. Add your deductible out-of-pocket cost to the monthly cost of the plan - are you ahead at the end of the year if you use your coverage consistently?
3. Make sure your drugs are covered. You’ll want to make certain that the plan’s list of covered medications, includes those you take regularly, especially if they are expensive.
4. Check the network. If you have a primary care physician and specialists you like, be sure they’re in the network of any plan you consider buying. Policies generally cover a lower share of the cost of out-of-network care—or none at all. R&R Insurance can supply you with links to the plan's network of physicians to help you in your decision making.
5. Know your share of the costs. Plans are required to state how much you’ll pay out-of-pocket, through flat fees called co-pays and through coinsurance, a form of “cost-sharing” in which you pay a percentage of a medical service. Find out whether the out-of-pocket includes the deductible - or is it "in addition to" the deductible?
6. Coverage for a spouse or dependents? An "individual" plan, again means that it isn't connected to your employer, but it can cover multiple people. Make sure you factor in the needs of your spouse, their age, affordable deductible etc. If you have children under age 26 without health insurance coverage through an employer, the law permits them to be on your insurance. Policies also can no longer exclude kids under age 19 from coverage because of pre-existing conditions.
7. Walk through several plans. It only takes a few minutes to review the main benefits associated with each plan, and some plans that look appealing at first glance may turn out to have cost-sharing features that could burden you with heavy medical costs.

BONUS SUGGESTION: If you are retiring, always check with your employer to see if it is part of your retirement package, or if your employer offers the option to purchase their health insurance plan to retirees. This a lot of times can be a more affordable option as you settle into retirement. COBRA coverage can also be helpful during your transition phase.

At R&R Insurance, we value your time and your privacy. We will take your call, collect the minimum amount of information necessary to submit a quote, and then review those quotes with you to make sure you fully understand the coverage and the costs. Avoid the hassle of filling out multiple forms online to then be bombarded with email blasts you don't want. We will trust your privacy, get you the right information in a quick and professional manner, and make sure you are covered in the end.

Wisconsin residents contact Donna Wahl, Individual Health Insurance agent for R&R Insurance, or call 1-800-566-7007 to get started on a quote.

Insurance carriers use credit scores as part of their calculations to determine the level of risk you would pose to them as an insured. They have found a direct correlation between credit scores and claim activity. Knowing that, it's important to keep your credit scores in good shape so that your insurance premiums stay in line.

Here are 10 ways to increase your credit score by 100 points - most often this can be done within 45 days.

1. Check your credit report. Get a free credit report from each of the three credit reporting agencies (Equifax, Experian and TransUnion) once a year at annualcreditreport.com. Look for errors that lower your credit score and take action to correct them. Review the negative factors in the report and work on improving them, such as paying bills on time or reducing debt.
2. Pay your bills on time. Set up automatic payments using your bank's bill pay service or sign up for e-mail alerts from your credit card company if you sometimes have trouble paying bills before the due date.
3. Pay off any collections. Paying off a collection will increase your score, but be aware that the record of a debt having gone into collection will stay on your credit report for seven years.
4. Get caught up on past-due bills. If you missed a payment, get current as soon as you can. A missing payment can lower your score by as much as 100 points. It may take a some time for this black mark to fade from your credit report, but take heart: your credit score usually depends more on your most recent activity than on past credit problems.
5. Keep balances low on your credit cards. A common rule of thumb is to keep the balance at or below 10 percent on each line of credit to improve your credit score. A balance close to or over the limit will significantly reduce your credit score.
6. Pay off debt rather than continually transferring it. While a balance transfer to pay zero interest or a lower interest rate on your debt can be worthwhile, make sure you pay down the balance before increasing your debt load. FICO says paying down your overall debt is one of the most effective ways to boost your score.
7. Don't close paid-off accounts. Closing unused credit card accounts reduces your available credit and can lower your credit score. Keeping them open and unused shows you can manage credit wisely. And think twice before closing older credit card accounts, because a long credit history improves your score.
8. Shop for new credit over a short time period. If you are shopping for a mortgage, a car loan or a credit card, lenders typically pull your credit report to see if you qualify and to determine the rate they will charge. Too many inquiries over time can negatively impact your score, but if you cluster these applications within a few days or a week, the FICO scoring system will recognize that you are comparing rates for a single new loan or credit card rather than attempting to open multiple new lines of credit.
9. Have a mix of credit types. FICO prefers to see consumers with both installment loans and credit cards . If you are repaying student loans or have a car loan or a mortgage, then having one or two credit cards is also a good idea. While having too many credit cards can be a negative factor, you should have at least one to prove you can handle credit appropriately.
10. Apply for new credit sparingly. Only apply for new credit when you actually need it and not simply to boost your available credit. Opening several new credit accounts in a short time frame can lower your score.

One of the many advantages of working with an independent insurance agency like R&R Insurance is that we represent many different insurance companies. We are not a "one size fits all", or "call 1-800 for no real service or no real relationships” type of agency. The benefit to our clients is that we find the right company for your exact needs.

Two of the many great companies we represent are West Bend Mutual Insurance and Secura Insurance. They offer discounts from 5-18% depending upon the group! West Bend Mutual and Secura already have some pretty attractive rates without the discounts! Below is a list of the groups that qualify for these discounts. Wisconsin residents, please contact us for the eligibility requirements for your specific group.

West Bend Mutual Group Discounts:

Alumni Association Paid Member
American Council of Engineering
American Probation and Parole
Architects
Associated Builders and Contractors
Certified and/or Licensed Professional Engineers
Certified Public Accountants
Chiropractors
Classic Car Club Member
Commercial Partners
Community Bankers of Wisconsin
Condo Unit Owners
Credit Union Employee Association
Dental Association
Educators
Insurance or Financial Professionals
International Brotherhood of Electrical Workers
Law Enforcement Association
Mercy Health System
Midwest Dental
National Association of Women Business Owners
Pharmacists
Physicians Health Network
Post Graduate Degree Individuals
Prime Rewards
Robert W. Baird & Company
State Bar of Wisconsin
Vetrinarians
West Bend Mutual Insurance Agents
West Bend Mutual Associaties
Wisconsin Auto Collision Technicians
Wisconsin Auotmotive Aftermarket Association
Wisconsin Funeral Directors Association
Wisconsin Green Industry Federation
Wisconsin Optometric Association

Secura Insurance Group Discounts:

Architect
Attorney
CPA Association
Dentist
Doctor
Educator
Engineer
Nurse
Pharmacist
Veterinarian

Voluntary benefits enable employers to offer their employees the ability to choose from a menu of benefits that meet the employee’s needs, even if the employees pay the full cost of those benefits. Offering voluntary benefits for your employees through a group purchase platform can be better for both you and the employee.

Here are 7 great reasons to add voluntary products to your benefits strategy:

1. Voluntary benefits are not just for large accounts.
   Today carriers are much more eager to offer opportunities to smaller or medium sized businesses, and third party administrators can be used to relieve any burden on the employer’s human resources department. (Historically, carriers were only interested in selling these plans to large employers, and only big employers had the resources to administer multiple benefit streams.)
2. Voluntary benefits work well for both fully funded and self-insured clients.
   In either scenario, voluntary benefits are a way to fill in the coverage gaps for employees who want supplemental benefits that are not provided within the plan. Voluntary benefits can also help in the negotiation process utilizing the voluntary products that reinsurers offer. Sometimes bundling can help seal the deal or sweeten the offer for your plan negotiations.
3. Voluntary benefits are ideal for clients moving to defined contribution plans.
   In a defined contribution model, employees receive a set amount of funding to purchase the benefits that best fit their needs. For this approach to succeed, employers need to offer a wide variety of voluntary benefits that extend beyond the primary health care coverage. These could include dental plans, vision coverage, life insurance, accident insurance, critical illness insurance and even lifestyle products such as pet insurance, gym membership, ID theft protection or legal advice. These options will make the transition from full health care coverage to defined contribution benefits much easier for employees.
4. Voluntary Benefits can offer higher guarantee issue limits.
   A guaranteed issue limit is the maximum amount for which an insurance company will insure an individual without receiving information concerning their insurability, i.e. a medical exam. Any time you can get higher limits without proving insurability - that's a good thing!
5. Voluntary benefits offer fewer underwriting hassles.
   Guaranteed issue limits which don't require proof of insurability reduces the paperwork and underwriting headaches associated with processing applications that require underwriting scrutiny. Therefore - faster enrollment and quicker turn-around for HR administration. With everything else on the HR plate - less is certainly more!
6. Voluntary benefits usually offer lower premiums than can be obtained through individual policies.
   Voluntary benefits purchased in bulk - or in group packages will offer group discounts or often times better products from which employees can choose. If employees where to purchase, for instance, dental coverage on their own, the pricing for an individual policy would be prohibitive. Offering affordable voluntary benefits for employees that won't break their budget, but yet give them the coverage they need, is a terrific benefit for employers to consider.
7. BONUS: many of these benefits can be paid with pre-tax dollars, which is a plus for both the employee and the employer.

Change always brings opportunities, and smart companies are adapting by using different strategies to continue to improve their benefit plans, and attract and retain the talent they need to succeed. Voluntary benefits are one more tool that can help them succeed.

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Voluntary Benefits to the Rescue

Building a workplace culture of wellness is one of the best things employers can do to boost employee health – and to improve the bottom line.

When employers and workers join forces to battle high healthcare costs, everyone wins. Organizations across the U.S. are making incredible strides to achieve higher productivity, lower absenteeism and reduce claims. People who take a more active role in managing their own health enjoy the payoffs, too, in quality of life and cost savings.

Research shows that health risks are directly related to costs. As the risks increase, so do the costs. Heart disease, obesity and other costly conditions can be prevented when people engage in healthy behaviors both short term and long term.

Wellness Statistics:

• For each employee who loses low-risk status, health costs go up $350/year. If they regain their low-risk status, they save $150/year.
• High BMI individuals cost an average of $2326 (1996 dollars) more in annual health claims compared to healthy BMI individuals.
• High-risk health plan members cost approximately $2000 over the average for annual medical claims.
• High-risk employees (5+ risk factors) between ages 35-65 have medical claim costs of $3007-$4182 higher/year compared to low-risk employees in the same age group.

The most effective way to increase the proportion of employees in the low-risk category is to keep them from developing risk factors.

Encouraging physical activity and balanced nutrition, along with other healthy behaviors, is central to any health promotion program. Employees spend a significant portion of their waking hours on the job. Employers can significantly influence lifestyles by developing worksite programs to maintain healthy behaviors.

Creating a healthy workplace can involve 4 primary areas:

1. Environment – Healthy food, smoke-free facility, physical activity and injury prevention policies.
2. Programs – Health promotions, recreation programs, employee assistance programs and coaching.
3. Culture – Incentive systems, role models, education.
4. Policies – Medical coverage for preventive care, flextime, guidelines to monitor and reduce stress.

A review of 42 published studies on worksite health promotion programs shows these averages:

• 28% reduction in sick leave absenteeism
• 26% reduction in health costs
• 30% reduction in workers’ compensation and disability management claim costs
• $5.93 –to-$1 savings-to-cost ratio

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!

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

The Secretary of Labor shall have the power, in order to determine whether any person has violated or is about to violate any provision of this title or any regulation or order thereunder...to make an investigation, and in connection therewith to require the submission of reports, books, and records, and the filing of data in support of any information required to be file with the Secretary under this title...

The above is a small part to the DOL's "Intent to Audit' letter employers have or will be receiving. There is an extensive push from the DOL to police ERISA and PPACA compliance to the extent that their 2013 budget included the hiring of more than 1000 auditors! However, the biggest issue is that most employers don't know that they are out of compliance or how to become compliant.

The DOL's audit letters are looking for information and documentation concerning particular aspects of the PPACA, such as the plan's grandfather status, coverage for adult children, lifetime and annual limits, and claims and appeals procedures

Employers should consider taking a serious look at their group health plans, not only for compliance with the PPACA, but also with the long standing mandates for group health plans - ERISA, HIPAA, COBRA and others laws.

If you have any questions regarding your ERISA, HIPAA, or PPACA compliance or any issues regarding your health insurance or benefits packages, please contact knowledgebroker Jane Shevey.

There is no doubt that voluntary benefits have moved into the benefits mainstream. Today, voluntary benefits are rightly regarded as a high value benefit strategy by both employers and their employees. Voluntary benefits satisfy employee preference for more benefits choice without adding to a company’s benefits budget.

The biggest challenge with voluntary benefits is choosing the right products that will drive employee participation and satisfaction during this time of extreme workforce diversity – one that is multigenerational, at different life stages and experiencing different economic circumstances, and at a time of immense changes in benefits offerings. There are now four generations in the workforce with a variety of personal needs, as well as fundamental differences in attitudes and expectations that will shape the future of voluntary benefits.

How should voluntary benefits be mixed and matched to provide a flexible product suite with broad appeal? What features will drive positive participation? Psychological, emotional and economic issues come into play in any purchase decision and the decision to open one’s wallet to buy a voluntary benefit is no exception.

A voluntary benefit must offer a solution to a real-life problem that could be experienced by the employee. It is important to offer a broad and rich portfolio of voluntary benefit products to enable individuals to identify “benefits that work for me” in the available mix. Voluntary benefit options that seem more personally relevant can contribute to an employee feeling more valued by the employer and more loyal to the organization.

Insurance needs change with life transitions – a new baby, a teen driver, or divorce. Help employees navigate this by connecting their new needs with a suggested suite of relevant benefit solutions to consider as changes occur - a generational approach.

Examples of generationally appropriate features could include guaranteed issue with no eligibility restrictions for pre-existing conditions, which might be more important for an older workforce. Whereas portability of the benefits may appeal more to younger workers who expect to change jobs more often.

In the end, designing the optimal voluntary benefit strategy is not only good for your employees; it also has advantages for the business. It contributes to a robust and competitive benefits program to attract and retain talent without adding to benefit costs. And it generates goodwill towards the company which can translate into increased employee loyalty and productivity.

For more information about voluntary benefits and their increasing role within today's benefits landscape, contact knowledgebroker Stephanie Riesch-Knapp.

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Voluntary Benefits to the Rescue!