Am I Missing Something?

Entirely possible, of course. Our friend Holly R sent us the link to this story:

'Small Businesses Could See Employees' Health Claims under SB9

Business owners with less than 100 workers would be allowed to see data on employees' health claims under SB9 (M. Huffman), with identifying information made anonymous, which could improve their bargaining position with insurance companies, Cleveland.com reports. The bill passed the Senate last week.'

While this is interesting, I;m trying to figure out the point:

After all, for ACA-compliant small group plans, we have the wonder Community rating system whereby the overall health of the group (or its individual employees) is irrelevant.

And self-funded and AHP/MEWA-type plans are fully underwritten, so carriers get fresh, up-to-date medical info on everyone.

And since these plans tend to be "off the shelf" anyway, what possible "leverage" would a given employer actually have with or without this information?

'Tis a puzzler.

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2WiZ5fA

Rainy Days and Mondays...

Well, it's a drizzly, gray day here in southwest Ohio, so a perfect time to re-up our post (previously published at the old Answers.com gig) about the need for a liability insurance umbrella plan:

■ Summary
Insurance is, first and foremost, a risk management tool. That is, it's way to assign some or all of a financial risk to a third party. One such vehicle is an "excess liability" or "umbrella" policy.
 
■ Intro
Typically, auto and home insurance policies include a liability portion which pays others whom you have injured in some way (perhaps an auto accident, or someone tripping in your home and breaking an ankle). Liability payments include reimbursing those whom you've injured for their actual medical expenses, as well as lost wages and other out of pocket costs.

■ Knowing the Risk
Liability payments may also be used to settle court cases when one is found liable for such expenses. For example, perhaps one caused an accident and was sued. The liability portion of one's policy would pick up some or all of any judgment.

The challenge is that judgments often exceed the amount of underlying liability coverage on ones' policy. For example, if your plan has a $300,000 liability limit, and you're found liable for $700,000 of damages, then how are you going to come up with the $400,000 shortfall?

■ Covering the Risk
That's where an excess liability "umbrella" policy comes in. As the saying goes, "you don't have to be a millionaire to be sued for a million dollars." But increasing your homeowner's and auto insurance policies to a $1 million can get quite expensive. And you'd really have to do both: insuring only your home leaves you vulnerable to a major auto claim, and vice versa.

And umbrella policies, because they cover both your home and your cars (and boat, and motorcycle, etc) offer a cost-effective way to buy a large amount of insurance at a reasonable cost. So a momentary loss of focus on the highway, or the waterway, doesn't have to mean a permanent loss of assets.

■ Shifting the Risk
Umbrella policies function as supplements to ones regular liability coverage. For example, if one causes a 3-car pile-up on the way to the dentist, one's auto policy's liability coverage might pay the first $300,000 of the other drivers' personal injury claims, and then the umbrella would pay up to (for example) an additional $1 million. And that extra million of coverage costs only a little more than the existing $300,000.

And it's not just about physical injury to others: umbrellas can provide coverage for claims arising out of slander or libel, as well.

Another benefit to an excess liability umbrella is that many carriers offer multi-policy discounts, driving down the net price even further. And many plans include attorney's and litigation fees which can add up pretty quickly.

■ Conclusion
Litigation and medical costs keep rising, and quickly. An umbrella plan offers a relatively inexpensive way to protect oneself from the risk of loss from high dollar liability claims.

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2WpACp7

Happy Anniversary!

For certain values of "Happy:"

Tomorrow marks the 9th anniversary of the ACA. Will it be a happy one? Which years have been the ACA's best? The worst? We count them down here. https://t.co/oCSnjVltDh

— Greg Fann (@greg_fann) March 22, 2019

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2U6OHdr

Policy Loans: The Dark Side

One of the benefits of cash value life insurance plans (eg Whole Life, Universal Life, etc) is the ability to borrow "against" it. That is, as the cash value (equity) increases, it's available as a loan, with the death benefit as the collateral.

This can be very handy when sudden, unexpected expenses rear their ugly heads. For example:

"Unable to secure a large enough bank loan, Walt Disney borrowed against the cash value from his life insurance policy to help finance the creation of his new theme park, Disneyland."

Other famous folks with similar stories include James "JC" Penney and Ray Kroc.

Of course, there's a balance here: while these loans can be quite helpful, they have the potential to be very dangerous, as well.

How's that, Henry?

Well, generally speaking, if one borrows from a policy and fails to pay it back, then the company merely subtracts the balance due from the death claim. No harm, no foul, no taxes. But what happens if one borrows from the policy, and it dies before the insured? That is, if it lapses while the insured is still alive?

Well, in that case, the borrower (and potentially his/her heir) are in for a nasty surprise: Form 1099-R.

Such was the case for a recently deceased client:

In January of '18, she let her Whole Life insurance policy lapse with a substantial loan balance. This January, she passed away. Yesterday, I got a call from her widower asking why he had received a tax form from Acme Life. I asked for the policy number to which it referred, and advised him that when the policy lapsed last year it created a taxable event, and that the balance due is being treated as taxable income (which would have also been the case if my client was still with us).

I always advise clients who take loans against their plans to at least keep up with the interest each year, to avoid the loan balance snowballing until the policy is unrecoverable.

Now you know.

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2Ohhc2R

A Friend Needs Help

My college roomie and Best Man is married to a wonderful, vibrant, caring woman who has been diagnosed with early onset Alzheimer's. She is fading fast.

Deb and Rich recently moved from Connecticut to Florida to see if the change of environment would be beneficial. Unfortunately, her condition has continued to deteriorate, and she is now in a nursing home. Rich would like to bring her back home to Connecticut, but lacks the funds to do so.

He has set up a GoFundMe to try to resolve that. Please consider donating to it.

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2HJHmdc

Wednesday Roundup: International edition

■ We've written before about the so-called 'Secondary Market' for life insurance:

"And so, as part of HIPAA, a new word entered the popular lexicon: viatical. Basically, one can sell one's plan to a 3rd party with little (or no) tax consequence."

But of course, the good ol' US of A isn't the only place on Earth where this type of sale takes place. Our Neighbors to the North also have this available, but it's getting a little more 'iffy' as to the buyer's benefits. According to FoIB Allison Bell:

"Manulife Financial Corp. and other Canadian life insurers won a legal battle against hedge funds that contended the insurers should be compelled to take unlimited deposits into high-yielding investment policies."

This basically serves to limit the tax-advantaged growth available to certain plans, and re-focuses on the death benefit itself. Will be interesting to see if these restrictions wend their way here.

■ One of our most enduring memes here is that coverage ≠ care; that is, insurance doesn't guarantee that actual care will be available, either quickly or even at all. And so we look again at CanuckCare© as a warning to those who advocate idea of MedicareForAll:

Yes & many USers don't know or just ignore wait time. More info @FraserInstitute https://t.co/YwCFJLN3wn
Beyond waiting is that ppl in Canada can't directly make specialist appts. No looking up online/in yellow pages & just phone for appt. Must go thru GP first & little choice.

— Kitty Antonik Wakfer (@KittyAntonik) March 18, 2019

Be careful what you wish for.

■ And piling on, we look Across the Pond to Britain's Much Vaunted National Health Service©:

"HIP replacements, cat­aracts, varicose veins and tonsillectomies are among a string of surgical operations that will no longer routinely be carried out on the NHS "

[Hat Tip: Sally Pipes]

Since even (especially?) socialized medical care schemes have proven unsuccessful at reining in the cost of care, the only viable alternative is to ration deny it.

Cheerio!

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2TQoMHC

Your DNA: A Parody

Courtesy of FoIB Holly R:

At least, I hope it's a parody:

"Once analyzed, any gaps in your genetic code are filled with our Premium House Blend DNA at no additional cost"

Heh.

Original content copyright © InsureBlog

from InsureBlog https://ift.tt/2Hva7eA