R&R Insurance Blog

You will never be younger or healthier than you are today. That's the reason to start planning now when you have the most options. The average age for new individual long-term care insurance applicants is 57; an age when many are able to qualify for good health discounts. This discount reduces costs and remains even if your health changes.

Incorporating long-term care insurance into your financial plan can help you protect your assets and reduce the burden of care that would otherwise fall on family members.

Why now? Because changes in health happen and can make it impossible for you to obtain coverage.

Contact a knowledgebroker to start planning for your long-term care.

For millions of Americans, celebrating an 80th, 90th and even a 100th birthday is increasingly likely. When you live a long life, there is a very high probability that you will need the type of care that's referred to as long term care. 72% of women and 44% of men will need some form of long term care after reaching age 65. (A woman's risk is higher because she has a longer life expectancy.)

Needing long-term care places an enormous emotional and physical strain on loved ones and family members. That's why having a plan is so important. Incorporating long term care (LTC) insurance into your financial plan can help you protect your assets. It can reduce the burden of care that would otherwise fall on family members and enable you to receive care in the setting you most prefer, including your home.

What's the most important question to ask?

Start with the ones like, "Where do I ultimately want to receive care?"  (at home, in an assisted living community) and "What does care cost where I live now?" - or wherever you plan to reside.

When looking into long term care insurance, ask what discounts you qualify for. If you or a spouse have some health conditions or take prescription medications, ask which conditions are acceptable as they can vary from one insurer to another.

For more questions on long term care insurance, contact our Certified Long Term Care Specialist Jane Shevey at jane.shevey@rrins.com or call 262-953-7123.

Information taken from American Association for Long Term Care insurance.

Are you trying to save money or clear up the clutter from this holiday season? These tips are sure to help!

• Create a color-coded filing system. Use a different color for each family member and organize a pocket for bills that need to be paid sorted by date (it's not a bad idea to write the due date on the top, so you don't forget to pay it on time!) . You can then move them to the appropriate file once they've been paid.
• Use your cell phone. Take pictures of schedules, lunch menus, and grocery lists.
• Go paperless. Did you know some of our companies will give you a discount for moving to this option? They also may offer you a discount if you opt to have it electonically withdrawn. If you are already going to make the payment and pay an installment fee - why avoid the headache of remembering to pay the bill and the fee by electing this option!! The same is to be said if you're going to pay in full, you may get a discount!
• Consolidate with binders. Binders keep everyint sorted neatly. If you make it simple to locate you'll use it properly and make use of the system.
• Set a date in your calendar. One a week or once a month or whatever it takes - put aside hte time to get organized and maintain your filing systems!

It's that time of year again in Wisconsin - time to start thinking about turning on the heat in your house.  When was the last time you took a look at your furnace?  Better yet, when was the last time your furnace had a tune-up?

R&R client, ServiceMaster Recovery Services, gives tips on a "Do-It-Yourself Furnace Tune-Up" and Carbon Monoxide safety measures:

1. Take a look at your furnace - is there black soot or residue?
2. Turn up the thermostat - are the flames blue in color?
3. Dust & wipe down the furnace; check the tension and condition of the fan belt.
4. Change the furnace filter once a month during heating season. 

A furnace that is not properly maintained runs the risk of leaking Carbon Monoxide.  Detection of this colorless, odorless gas can be aided with installation of Carbon Monoxide detectors throughout your home.

Not only does regular maintenance of the furnace help to lower heating bills, it could also save you money on your homeowners insurance: 12 Ways to Lower Your Homeowners Insurance Costs.

Wisconsin residents, contact a R&R knowledgebroker to ensure all aspects of your home are properly covered.

A week after Hurricane Sandy/Super Storm Sandy, businesses and homeowners are working to figure out the impact of the storm on their property and their income.  There will be many questions regarding what losses are and are not covered.

Two areas of potential uncovered claims include Flood Damage and Loss of Business Income.

An article in the NY Times answers some basic questions that homeowners may have regarding Flood Insurance and other potential loss drivers.  Businesses may have similar questions.  
 
Homeowners and Business Owners have the ability to purchase Flood Coverage through the National Flood Insurance Program or coverage may be available from your insurance carrier.
 
Businesses have an added impact to consider, the Loss of Business Income loss and possibly the Loss of Income due to damage at a non-owned location (Contingent Business Income). 
 
For Business Income Coverage and Contingent Business Income Coverage, the insurance policy that is in force must include these coverage's as well as the Covered Cause of Loss.  

What  is Covered Cause of Loss? 

A business or homeowner must purchase the coverage's they want to insure.  In the case of Sandy, if the business or homeowner did not purchase Flood Coverage, then any damage caused by Flood, Surface Water, or water inundation would not be covered.  Some policies may also exclude the additional damage caused by Mold.  

How does this apply to Business Income / Contingent Business Income?

If the business did not buy Flood coverage and Flood drove the loss, then any losses from the Flood are most likely excluded.
 
If you are a manufacturer in Wisconsin and you rely on a supplier (or major customer) in the storm affected area, you can purchase Contingent Business Income Coverage to protect you from a loss to your supplier or customer.  Remember to protect from a Flood loss you must purchase Flood Coverage and Contingent Business Income Coverage on your insurance policy.  
 
I have posted a number of documents related to business income, business continuity planning within my LinkedIn profile.  For more details. If you have questions on how your business could be affected by disasters occurring in a supply or customer scenario, please contact Scott Brookes or call 262-953-7180.  I have taught courses in business income including how to evaluate your exposures, develop a limit, and possible risk management solutions to minimize the exposure.

Related articles:

Direct Damage and Business Income
85% of Companies Experience Supply Chain Disruption

President Barack Obama has been re-elected for a second term in office. Obama’s re-election, along with last summer’s Supreme Court decision upholding the health care reform law, cements the Democratic Party’s dedication to the legislation.

What do employers have to do next?

With the landscape of employer-provided health care potentially changing over the next few years, employers should consider their future plans related to their role in employee health care. They may have to make some big decisions about whether to continue providing coverage to their employees. The “pay or play” penalties provide some incentive for employers to continue coverage, since they will be at risk for significant penalties if they do not. However, employers may decide that paying the penalty is more cost-effective than continuing to pay the ever-increasing costs of health care for employees and their families.

On the other hand, uncertainty among employees about the quality and cost of individual health coverage continues to make employer-provided health coverage an attractive recruiting and retention tool. Because of these advantages, most employers plan to continue offering coverage for now. The additional uncertainty for employers, with compliance obligations hinging on court decisions and the political process, has made many companies hesitant to make any large-scale changes. 

Whatever their future decisions may be, employers that will continue to sponsor group health plans for the near future must prepare for upcoming deadlines. Significant health care reform provisions with looming effective dates include:

• Summary of Benefits and Coverage. Health plans and issuers must provide an SBC to participants and beneficiaries that includes information about health plan benefits and coverage in plain language. The deadline for providing the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period is the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.
• 60-Days’ Notice of Plan Changes. A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan.
• $2,500 Limit on Health FSA Contributions. The health care law will limit the amount of salary reduction contributions to health flexible spending accounts to $2,500 per year for plan years beginning on or after Jan. 1, 2013.
• W-2 Reporting. Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are issued in January 2013.
• Preventive Care for Women. Effective for plan years beginning on or after Aug. 1, 2012, non-grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements. Calendar year plans must comply effective Jan. 1, 2013.
• Employee Notice of Exchanges. Effective March 1, 2013, employers must provide a notice to employees regarding the availability of the health care reform insurance exchanges. HHS has indicated that it plans on issuing model exchange notices in the future for employers to use.
• Additional Medicare Tax for High-wage Workers. In 2013, health care reform increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Employers will have to withhold additional amounts once employees earn over $200,000 in a year.

What guidance will we see?

Regulations on a number of issues remain outstanding. The regulatory agencies responsible for implementation and enforcement of the health care reform law—the Departments of Labor, Treasury and Health and Human Services—began issuing additional guidance once the Supreme Court upheld the law. Additional guidance is expected now that the election is over.

Issues that will likely be addressed in future guidance include:

• Employer Pay or Play Mandate. The agencies are expected to, and have indicated that they will, issue more guidance for employers to help them determine how to comply with the shared responsibility provisions of the law.
• Automatic Enrollment. The Department of Labor is required to issue regulations implementing the rule requiring large employers that offer health coverage to automatically enroll new employees in the health plan (and re-enroll current participants).
• Nondiscrimination Rules for Fully-insured Plans. Under health care reform, non-grandfathered fully-insured plans will not be able to discriminate in favor of highly-compensated employees with respect to their health benefits. The IRS delayed the effective date of this rule for additional regulations, which have yet to be issued.

State governments may also take further steps to establish the health insurance exchanges required by the health care reform law. The federal government will step in and set up exchanges for states that fail to establish their own exchanges. Many states have delayed implementation and will need to accelerate their efforts if they want to run their own exchanges.

Challenges for implementation:

As we get closer to full implementation of the health care reform law, questions linger about whether the framework is in place for all pieces to be operational by their deadlines. Insufficient staffing of the responsible agencies is one potential issue, along with employer and state government hesitation or inability to implement certain parts of the law. Compliance efforts are likely to pick up now that the election is over.

R&R Insurance Services' Benefits Practice Group will continue to monitor progress of the health care reform law and its implementation and will keep you informed of important developments.

This information is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
© 2012 Zywave, Inc. - republished from Zywave.

Trick-or-treating, costume parties, bonfires, and visiting haunted houses, are all part of Halloween traditions; typically all are done in lighthearted, fun fashion.  As we all know, accidents happen we least expect.  Propertycasualty360.com has compiled a list of "5 Bizarre Halloween Lawsuits" - you may think you are reading the script of a horror film except these are real life stories!

Business owners need a heightened awareness to protect themselves and consumers during this festive season.  Halloween is also the start of seasonal part-time hiring.  These seasonal employees are great temporary help, however if injured on the job it can have long term workers compensation affects.

At home, some tips to keep trick-or-treating safe and fun for everyone.

For more information on how R&R Insurance can help your business, visit our website.

All commercial insurance policies have some type of vacancy clause limitation.  These clauses kick in when 70% or more of the building is vacant.  If the vacancy clause is applied to a location that has a loss it could mean a reduction in the claim payment by 15% or more or in the case of some carriers, no coverage at all.

If you have a building that is 70% or more vacant, there is an endorsement available that waives the vacancy clause.  Your insurance agent must specifically request it from the insurance carrier.  The insurance carrier will place conditions on the business on what must be maintained to continue adequate insurance.  These may include some or all of the following:  maintaining heat, light, power, alarms, sprinkler system, security systems.  Some carriers may also request frequent visits by a contracted guard service. 

I recently received from a notice and endorsement from a carrier changing how they will handle vacant property on a go-forward basis.  I found this form and noticed a few interesting  items:

1. There is no coverage for the property after the 60th day if you do not notify the carrier.
2. If you do notify the carrier, they still reserve the right to cancel that location / building from the policy and provide a return premium.
3. Coverage can continue if acceptable underwriting requirements are maintained including fire protection, watch, and alarm services

Bottom line, in this tough economic market with increased vacancies, make sure you and your agent are communicating to ensure a comprehensive and complete insurance program. Wisconsin business interested in more information on property insurance or confirmation that their business insurance is comprehensive, contact Knowledgebroker Scott Brookes.

Insurance companies and banks are often compared to one another. Both need to underwrite a customer. Banks underwrite to fund capital or access to capital. Insurance companies do the same when there is loss that needs to be funded. Thus, the insurance company is often called a crisis banker. Another similarity is that losses/profits for both banks and insurance companies are spread between the total number of customers. Pricing therefore is key.

Insurance Policy = Bank Loan or Line of Credit

The insurance policy is essentially a bank loan or line of credit. Basically, total of all policy limits = total loan amount. The premium charged is the fee to access the full loan amount if needed. The rate charged is underwritten based on market conditions and historical credit rating or in the case of insurance the losses from prior claims. 

This example is fairly straightforward when viewed as one annual policy period. However, the future length of extending the loan terms is generally unknown so it forces the issue on each renewal. In other words, how long an insurance company wishes to continue to extend satisfactory terms is unknown.

The Underwriter's Point of View

Every underwriter that originates a loan/policy is going to need to defend the loan to  bank/insurance company management. In the case of a bank, if the loan terms are appropriately applied, and the loan agreement is well underwritten, it should be jointly beneficial for each party. In the case of an insurance carrier, if losses mount or the loan amount cannot be repaid the loan or line of credit is non performing.

Thus, when a bank or insurance company prices itself out of the running, or fails to renew its commitment, it is often because the losses have been too high or they have not built enough rate into the program. Hence, they did not underwrite the loan properly to begin with.

Why do some bank/insurance company relationships last for dozens of years through many cycles and others for only a year?

The main factors really come down to trust and sound underwriting. Both sides in the proposition understand the expectations. They did proper due diligence and established a sound loan program with proper expectations of performance. When the market cycles or money/loan capacity gets lean, or performance on the loan are not positive the relationship endures because of trust. Terms are adjusted to make it palatable on both sides. In both the insurance and banking world this type of partnership is very valued.

As we live through tough economic times the one thing that rises to fore is the valuable  lesson of proper loan underwriting. Finding a way to build the right policy "loan" terms, do the proper due diligence, and understand the expectations will be rewarded via  a long term relationship.

Wisconsin businesses, for more information on establishing a broker relationship that encompasses exceptional coverage, the proper due diligence and lasting relationships that positively affect your bottom line, contact Knowledgebroker Scott Huibregtse.