R&R Insurance Blog

Question: What do Suze Orman, Oprah Winfrey and Terry Savage have in common (besides being bazillionaires)?

Answer: They each own Long-Term Care insurance.

WOW! Why would someone so wealthy own long-term care insurance? They surely could afford to self insure their care for years to come couldn’t they?

Interestingly though, the nationally recognized and widely respected advisors such as Suze Orman and Terry Savage own LTCI themselves and are ardent proponents of the product, in fact, they’ve become wealthy by giving people this very advice.

Perhaps the super-affluent own LTCI because, in addition to wealth preservation, the money collected from LTCI benefits can provide them with dignity, and options that might not be available otherwise. LTCI can give people a track to run on and a way for others to know their wishes and desires, even if they are unable to express themselves. LTCI can also reduce or eliminate much family stress and conflict.

As Suze says: "I know, I know - you think , "I'll never end up in a nursing home". Well as with all insurance policies: I hope you'll never need to use any of them, but if you do, they sure are nice to have."

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

A job safety analysis (JSA) is not always best left only to a safety supervisor. Your workers' experience in doing a job gives them superb knowledge of what can go wrong from a safety and health standpoint.

While some hazards can be obvious to everyone, many workers probably encounter situations that haven't been considered by others. Your workers' insights are vital.

Conducting a JSA is also valuable as a training guide for new employees, a "refresher" for existing employees and as a tool for determining why an incident happened.

John Brengosz, loss prevention specialist at R&R, is a resource I consistently offer to my clients as he has extensive experience in conducting JSA's. The other piece is that John has a real talent for getting supervisors to "buy into" the process, which can often times be half the battle. Currently, I have a client doing JSA's department by department and the response by the supervisors and the employees has been terrific. Now, evaluating the work station at the beginning of a worker's shift has simply become a natural "step one" before work begins - It's just a part of the culture!

If you would like to know more about how we help our clients conduct JSA's, keep their employees more safe, and ultimately, make them more profitable, please contact me.

A loading dock worker was loading drywall onto a flatbed truck when a forklift being operated by a co-worker surged forward, fatally pinning him against the truck.

At another workplace, a textile plant supervisor was operating a forklift truck when another forklift fell from a loading dock, causing the supervisor's forklift to flip over. He was crushed under the roll cage and died.

And elsewhere, a warehouse worker died after he was crushed between a reversing semi-trailer and a loading dock. Investigators believe that he was likely paying more attention to the contents of the trailer than to where he was standing.

Loading docks are busy places where machine operators and truck drivers must perform a delicate dance around workers on foot. Along with being congested, loading docks may also be poorly lit, slippery, cramped, crowded with debris, riddled with blind spots and crisscrossed with ramps, stairways and uneven surfaces.

Here are just 5 of the possible hazards:

1. Slips, trips and falls;
2. The possibility of workers on foot being struck by vehicles;
3. Being crushed by unstable loads that shift suddenly;
4. The possibility of a forklift driving over the edge of the dock and having it or its load land on workers below; and
5. The possibility of a trailer whose wheels aren't properly chocked creeping forward or backward into workers.

Loading docks are a hub of activity. Workers need to be trained on how they can protect themselves. If you would like to know more about how R&R is helping keep its clients more safe in this particular area, please contact a knowledge broker.

Many people still believe they will be successful at divesting their estates to their heirs so they can receive “free” skilled care. It's still possible, with a few tricky maneuvers. Advance planning can be key if it is expected that a person might need Medicaid assistance to pay for long-term care.

If you divested any financial resources within 60 months of applying for Medicaid, you may face penalties thanks to the Deficit Reduction Act. Every $100,000 divested equals nearly 16 months of ineligibility ~~ OUCH!

Deficit Reduction Act

The Deficit Reduction Act (DRA) made several important changes to the Medicaid asset-transfer rules. The look-back period for asset transfers was extended from 3 years to 5 years (60 months) and the start of the penalty period or ineligibility period for transferred assets was changed from the date of the transfer of assets to the date when the elderly person applies for Medicaid and is otherwise qualified for Medicaid, generally at the time he or she enters a nursing home. Simply put, one of the key requirements for Medicaid eligibility is that the elderly person lacks assets, meaning he or she cannot afford to pay for nursing home care. However, Medicaid will look back 5 years to see if the elderly person transferred any assets for less than fair market value, and if so, will deny Medicaid benefits for a period of time (the ineligibility period) based on the amount of assets transferred.

The DRA took effect on February 8, 2006, but, because Medicaid is a joint federal and state program, the states are required to apply the DRA to their state programs. Some states will have to change their Medicaid rules, and many of those states are not yet operating under the DRA. Therefore, be sure to find out the law in your state before making any decisions.

Look-Back Period

The look-back period is a balancing act between the government's need to be able to afford providing Medicaid and a person's desire to be able to leave their property to their heirs when they die. An elderly person cannot simply give their property away and begin receiving Medicaid. The look-back period is the time preceding the person's application for Medicaid during which asset transfers will be scrutinized. The look-back period simply means that after a certain amount of time has passed, Medicaid does not inquire whether the elderly person gave away property. However, a transfer within the look-back period will be questioned and, if something of equal value was not received in return, a penalty will be applied, which will prevent the person from receiving Medicaid long-term care benefits until that penalty period expires. The look-back period is 60 months (5 years) for transfers under the DRA. In states that have not yet implemented the DRA, it may be only 36 months for transfers (except if funds are transferred to a trust).

Ineligibility Period

The ineligibility period is a period of time during which Medicaid looks forward. The ineligibility period is triggered by transfers of assets during the look-back period and looks forward to determine a date when the person may become eligible for Medicaid. The ineligibility period begins after the elderly person applies for Medicaid and is seeking long-term care benefits. The length of the ineligibility period is calculated by dividing the total, cumulative, uncompensated value of the transferred assets by the average monthly cost to a private pay patient of nursing home care in the applicant's geographic area as of the date of the application for Medicaid. The best-case scenario is for the elderly person to transfer assets and remain healthy and out of a nursing home until the look-back period has been exceeded. That way, in the eyes of Medicaid, the person has the minimal amount assets that will allow him or her to qualify for Medicaid.

For questions on Medicaid eligibility, long-term care, look0back periods or anything regarding your plans to include some type of long-tern care within your retirement plan, please contact our Long-Term Care Specialists.

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

“Jamie, on behalf of New Berlin Grading, Inc., thank you for the service you and R&R Insurance have given our account. Through your professional and personal attention to our needs and challenges we have been able to lower our EMR from a .99 to a .65. We attribute this success to the direct efforts of you and the resource team.”

Dennis Schmit
New Berlin Grading, Inc.

Like many young companies in the construction industry Squared Away Builders, Inc. concentrated on working hard, staying busy and taking care of their customers. This left little or no time to manage other things like workman’s compensation insurance premiums. In the case of Squared Away, learning how to manage workers compensation insurance was one key to lowering costs, making the company more safe and enabling the company to become proactive instead of reactive when it came to workman’s comp.

A feeling of helplessness…
“When it came to work comp there was an inherent feeling of helplessness” says Brett Wittig, President of Squared Away Builders, Inc. “As a small business you try to do the best you can managing your employees while managing your business for profit at the same time and when the WC premium rolled around it felt like a slap in the face. We had been working hard all year, concentrating on the basics of running a business and it felt like we were helpless and couldn’t do anything about this large premium.”

We didn’t know what was coming…

“After our third year in business, we knew our modifier was 1.71 but we had no idea where this number came from, how it was determined or how it affected our premiums directly. We did know however after three years of large premiums that we had to do something to lower our costs if we wanted to stay competitive.”

The search for knowledge…
“Frustrated about work comp but still trying to concentrate on making a profit and taking care of our employees Bill Katzfey caught our attention. His philosophy of creating a knowledge based culture change in our organization in order to help manage work comp costs was something that Squared Away needed. What’s more important was that Bill was able to give us the knowledge, specifically in regards to the construction industry, which we needed as a company in order to make that culture change. R&R Insurance Services has given us and continues to give us a solid understanding of what it truly costs to have an injured worker”, states Dan Wittig, Operations Manager.

The difference it has made…
“We have had the program we designed with the knowledge and techniques provided by R&R for three years now and we finally are seeing the benefits. We have used the premium savings to invest in our employees and in the future of our company. There is no doubt in my mind that we would not be in the position we are in today without the help and knowledge of R&R Insurance Services has provided us.”

“Since 2001 we have been applying the concepts that R&R teaches in their WC seminar. It took a lot of hard work, consistent communication of a solid message and a little patience.”

Brett & Dan Wittig
Squared Away Builders

“The insurance team at R&R insurance helped me to put in place a safety program that will reduce my Workers’ Comp premium by $30,000 in the coming policy year. R&R tracks our claims and their accuracy. They found additional savings of $14,000 this policy year… R&R Insurance is a necessary tool for Merit Asphalt Inc.”

Bob Pederson
Merit Asphalt, Inc.

"R&R Insurance Services has provided insurance coverage to us for many years. Brad Stehno and Nancy McMurry are both knowledgeable and professional. They have been very helpful in updating our Safety Program and providing help with our Safety Meetings. We have implemented a return-to-work program with their help and have seen the results of employees returning to work sooner and lowering Workman’s Compensation costs. Our Experience Modification has also continued to go down since we have been with R&R. We appreciate their availability when we have questions or concerns. Working with Brad and Nancy has been a great experience.”

Larry Schlueter
D.F. Tomasini

Liability claims often exceed the basic limits afforded by an average home or auto policy. These claims are covered by a personal umbrella liability policy. Personal umbrella liability insurance provides individuals and families with higher limits of liability protection that is excess over any personal automobile, and other liability insurance. Just think of it as an extra layer of coverage, like an umbrella over everything.

Personal umbrella coverage is designed to cover claims that arise out of the activities of a personal or family nature; these types of policies do not cover professional or business activities. Personal umbrella policies are intended for catastrophe-type claims. Not all policies are exactly alike, but in general, the purpose of a personal umbrella policy is not only to provide million dollar excess limits, but to broaden basic liability protection. To adequately protect the insured a personal umbrella policy will provide an additional amount of liability above the limits on the auto and home policy, but it will also provide coverage for some exposures that are not already covered on the insured’s underlying policy, and it will provide coverage for damages caused by slander, libel, defamation, detention, confinement, humiliation, invasion of privacy, wrongful entry and related allegations.

Personal umbrella liability is written with a minimum limit of liability of $1 Million, with higher limits available. The personal umbrella liability policy pays on behalf of the insured person the amount of damages for an occurrence (the accident) that results in the insured person’s obligation to pay for personal injury, or property damages.

If there is a covered liability claim under your auto or homeowners policy and the dollar amount of the judgment is greater than the coverage limits you have purchased on those policies, the umbrella provides the additional limits of coverage.

Is the policy expensive?
Fortunately, catastrophic events happen to very few people. That is why the cost of this type of coverage is very affordable. The average cost is about $150 to $200 a year. The pricing is based on the number of exposures you have (exposures are the number of vehicles you own, the number of homes you own, if you have boats, recreational vehicles, youthful drivers, etc).

How does it work?
You, or a family member living with you, are the cause of an auto accident resulting in serious injury to the driver in another vehicle and his young passenger. Both the driver and passenger have injuries. You are sued, determined to be at fault, and the judgment is almost $900,000. Your auto policy provides coverage in the amount of $500,000. If you had a personal umbrella liability policy it would pay the remaining $400,000. If you did not have a personal umbrella liability policy the $400,000 would come out of your pocket. And what if you did not have $400,000 available? Your assets would no doubt be used to pay the judgment.

You have friends over for a backyard party. Their 16 year old son, while diving into your pool, breaks his neck and is paralyzed. The judgment in the lawsuit is $1 million. Your homeowner’s policy provides $500,000 for liability and responds promptly by paying out the entire $500,000 liability amount. Again, if you have a personal umbrella liability policy it would pay the additional $500,000. If you don’t, you will be paying it out of your pocket! And if you don’t have $500, 0000 your assets would be most likely used.

You have a large yard and you use your ATV on your own property. One summer day your 35 year old neighbor hops on the back for a ride. He either falls off or jumps off hitting his head on a rock and suffers head injury. He never fully recovers. He is married with two young children and three years later he still isn’t able to return to his job and may never work again due to serious brain damage. The judgment is for $1 million. The policy covering your ATV has a liability limit of $300,000, leaving you with a $700,000 out of pocket amount to pay. If you have an umbrella policy it would pay the additional $700,000.

The answer is YES, you probably do need an umbrella policy. For most people $150 to $200 a year or $12 to $15 a month is worth their peace of mind.

What exactly are your assets?
• Home and Personal Property
• Automobiles, Recreational Vehicles, Boats, etc.
• 401k, College Savings, and Future Earnings

What is worldwide coverage?
A Personal Umbrella Liability policy has coverage for things that happen anywhere in the world. Some policies, such as an auto policy, have a territorial limit.

What is the defense coverage?
The policy pays for the cost to defend any claim or suit for damages because of personal injury, or property damage arising out of the occurrence which is covered by the policy.

The Occupational Safety and Health Administration (OSHA) has rolled out its new program, the Severe Violator Enforcement Program (SVEP) to identify employers with repeated, serious citations, and intend to subject them to increased, multi-worksite inspections and higher penalties.

According to OSHA, the SVEP will “focus increased enforcement attention on significant hazards and violations” by concentrating on employers that have demonstrated “indifference” to workplace safety obligations through willful, repeated, or failure-to abate-violations in four areas:

1. Fatality or catastrophe situations;
2. Industries that expose employee to the most severe hazards–among the “high-emphasis hazards” covered by the SVEP are falls, amputations, crystalline silica combustible dust, lead, and excavation and trenching;
3. Industries that expose employees to the potential release of highly hazardous chemicals;
4. Egregious enforcement actions.

Once an employer is selected for the SVEP, OSHA will undertake a number of enforcement steps including enhanced follow-up inspections, as well as inspections at other worksites of that same employer—potentially on a nationwide basis. The program includes new features that will allow OSHA to conduct more aggressive multi-worksite inspections against those employers that fall within the program, as well as a nationwide referral program and closer coordination with states having OSHA state plans.

"Higher penalties and more aggressive, targeted enforcement will provide a greater deterrent and further encourage these employers to furnish safe and healthy workplaces for their employees," said DR. David Michaels, OSHA Assistant Secretary of Labor.

In addition, the agency will be increasing civil penalty amounts under SVEP. OSHA said that companies can expect average penalty for a serious violation to increase from about $1,000 to an average $3,000 to $4,000. Future penalty increases would also be tied to inflation.