Interesting DI Option

Since May is DIAM (Disability Insurance Awareness Month), it seems like a good idea to post about a case I'm currently working on. This happens to be a young lady who drives a food service delivery truck (like the ones that supply Speedways or 7-11's, for example). She's in her mid-40's and makes a decent wage, but has no employer-sponsored disability insurance, so she reached out to me to see if we could help.

Individual Disability Insurance (DI) plans are one of the two most complicated insurance products in our portfolio (the other being its cousin, Long Term Care insurance). Plans and pricing are based on a number of factors: age and sex, tobacco use (she smokes), occupation and salary, and a few others. The occupation part can limit what plans and options are available. In this case, her Occupation Class is 1A, so she's eligible for a maximum benefit period of 2 years (which is far better than the 0 years she currently has). One other factor is the Elimination Period; that is, how long she's willing to wait from the date she's disabled until she begins receiving checks. This can range from a month to several years; the longer the wait (ie "deductible") the lower the premium.

My experience has long been that the EP "sweet spot" is generally 90 days (3 months). Much shorter than this is usually "spendy," while there's increasingly diminishing returns on going longer. Of course, there's also the fact that you're going without a paycheck for 3 months...

One of my go-to carriers for these plans is Assurity Life, and I usually just call them up and give them the case particulars (I always do a pre-screen with the client beforehand), and ask them for recommendations. We discuss those and put together an individualized plan.

In this case, my client doesn't have a lot of extra options from which to choose, but one is something I hadn't been aware of: the 'retro injury rider.' And just what is this magical beast?

Well, it's pretty darned cool:

If my client is injured, she still has to wait the 90 days for benefits to kick in, but this rider then generates a lump sum check for the 3 months of benefits she forewent. So, nice lump sum and monthly benefit checks. And in her case, the rider costs less than $10 a month (for a $3,400/month benefit).

Sweet!

So: helping out a client, and learning something new.

Doesn't get much better than that.

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Misleading "Research"

Our friend Rick B tipped us to this bit of propaganda:

"Four in 10 residents in states that have not expanded Medicaid may be uncovered by health insurance because of COVID-related unemployment."

Do tell. Are they somehow no longer eligible for COBRA, or Special Open Enrollment?

Oh:

"Those affected by loss of coverage would be forced to enroll in Medicaid, purchase coverage through the Marketplace or become uninsured."

Right, because there are no other options.

"[O]nly about 33% of the newly unemployed will enroll in Medicaid, which means the uninsured rate in those states will increase to almost 40%."

Um, all those folks on Medicaid are still uninsured. Nice try, though.

"The research brief highlights several policy options"

None of which is about allowing true cat plans, and (in those states that currently outlaw them), STM plans.

Gee, Henry, what do you mean?

"Sale of Short Term Medcial plans is disallowed in "In New York, New Jersey, Maine, Massachusetts, Rhode Island, Vermont, California, Colorado, Hawaii, Connecticut, and New Mexico."

These plans offer more (and usually less expensive) options, and most are PPO-based instead of HMO (as ObamaPlans now tend to be). Wonder what the insured rates in those states would be if they allowed STM plans.

Hint: To ask is to answer.

And there are other options, as well, including Direct Primary Care, Sharing Ministries, and (of course) "Daves' Plan."

But hey, #NarrativeUberAlles.

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Hubris: DC, BI and CV-19

Via email from FoIB Sean K:

"DC City Council Withdraws Business Interruption Coverage Proposal"

Okay, interesting, but so what?

Oh:

"I wanted to flag today’s District of Columbia’s City Council proceedings, where they withdrew draft legislative language that would have forced insurers to pay pandemic-related claims."

Heh.

So let's unpack this, shall we?

First - and really, the only thing that matters - is under what sense of delusion did a city council decide it could arrogate unto itself the power to force insurance companies to cover anything? Regardless of its status as our nation's capital, DC is, after all, a city: not a county or state or country.

What I find even more amazing (and arrogant) are quotes from some council members which completely miss this point. For example:

"As an attorney, I feel we are stepping into uncharted territory in a way that I would not advise us to do. I don’t see why we would insert ourselves in this situation when there are already court cases out there trying to work this through."

He then expresses concern that this action may actually undercut federal efforts.

No, sir, they won't, for the simple reason that your council's actions (or lack thereof) are 100% irrelevant: you do not matter.

On the other hand, this is a good take:

"It's going to perhaps send a false sense of hope and promise to a community of folks who need action and relief now."

Precisely, and for the exact same reason as the first quote: what the DC council says has no legal weight, but the "hurry up and do something" nature of this effort could cause folks who are in desperate financial straits to falsely believe that help is on the way.

No, it's not. And we should actually be grateful for this. First, because we already know that "[f]orcing insurers to foot the bill for losses not covered by policies “would do great damage. It would bankrupt the industry."

Beyond that, forcing carriers to automatically include such coverage going forward would mean that only large commercial accounts will be able to afford coverage of any kind, forcing the permanent closure of countless small businesses.

Sheesh.

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More CV-19 Alphabet Soup

From our good friends at FlexBank/Navia, two new items:

First up, 'Claims Run-out Deadline Extended for COVID-19 FSAs & HRAs.' At the end of last month, The Feds (Departments of Labor, Revenue, and Treasury) issued guidelines relaxing the benefit extensions for "certain group health plans" during this meshugas. These include disregarding the "Outbreak Period," that is, The Feds "recognized that participants may find it difficult to comply with certain pre-established timeframes."

Paging Captain Obvious.

To that end, the "date within which participants must file a claim under your tax-free FSA or HRA plan's claims procedures has been extended to 60 days after the end of the Outbreak Period." Note that folks still have to incur eligible expanses in order to be reimbursed, just that there's now some flexibility in the timing of those reimbursements.

Click here for more details on that.

Next up, 'COBRA Timeframe Extensions During COVID'. So in addition to FSA/HRA extensions, COBRA gains some flexibility, too:

"The goal of the benefit extensions is to minimize the possibility of individuals losing benefits because of a failure to comply with an applicable timeframe."

Typically, one has a 60 day "window" in which to elect COBRA once one loses eligible group coverage. Obviously, this will prove .... challenging for a lot of Americans, so the The Feds' new guidance "requires benefit plans to disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency, or such other date announced by the Agencies in a future notice (the "Outbreak Period")."

Which is also helpful.

For more on the COBRA aspects, click here.

As always, consult with your own benefits admin folks for specific details on your situation.

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Carrier Kudos

A few weeks ago, we posted on efforts being made by various insurance carriers to ease the premium burden during the pandemic:

"Amica: 20% credit on April and May premiums

The Hartford: 15% refund on April and May premiums (but only for policies in effect as of April 1)"

And others. But FoIB Bill M alerts us to a unique effort being made by Erie Insurance to help promote local businesses, and particularly restaurants, during the lockdown:

"Want to buy a restaurant or store gift card but fear being stuck if the business never reopens after the coronavirus pandemic?In a generous move in these uncertain times, Erie Insurance will add gift card and gift certificate reimbursement coverage to its 2.2 million homeowners’ policies at no cost."

Well first, who doesn't like free? And  more important, what a generous and useful gesture: the plan covers up to $500 in gift cards - that's a lot of take-out (and coffee, and knick-knacks).

Nice job, Erie!

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May = DIAM

That is, May is Disability Insurance Awareness Month, and of course it's quite timely this year. As the Council on Disability Awareness informs us:

"Two months ago, few Americans understood the impact this novel coronavirus and COVID-19 would have on our business and personal lives. The good news is that after about six weeks of operating with new precautions governing many of our daily activities, we know more about this virus as well as how people are responding to and behaving during a pandemic."

There are still plenty of good, strong carriers and plan choices available, and we've seen no increase in rates as a result of the pandemic (yet).

Another thing that the CDA notes is this:

"Peter Sandman, a well-respected risk communication consultant, developed a framework for how to discuss risk. He coined an equation long ago that summarizes how people assess risk:

Risk = Hazard + Outrage"

Where Hazard is how much harm the risk is likely to cause, and Outrage is how upset folks are likely to be as a result.

So what does this mean to you? Well, take a look at your own financial and employment position, and decide if maybe now's the time to consider insuring at least a part of your income.

Before it's too late.

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CV-19: Benefits, Furloughs, and Layoffs, Oh My!

Our friends at FlexBank (now FlexBank/Navia) have posted a very informative FAQ-type explication of the differences between furloughs and layoffs, and what those differences may mean towards your (and/or your employees') health insurance.

For instance:

"Furloughs are meant to be temporary periods of leave for a defined and finite period. With furloughs, your employees will remain as employed during their time away. Unlike a furlough, layoffs are permanent with no expectation for the employee to return."

Okay, good to know, but what does that have to do with my benefits?

Well:

"With a furlough, employees remain with the company and generally stay on any benefit programs they were already enrolled in. With a situation like the coronavirus pandemic, the furlough timeframe is largely unknown. This makes it very difficult for companies to predict how long they can afford to offer benefits to individuals that have been furloughed."

Okay, that makes sense.

There are also some interesting, under-the-radar issues like 'Pre-payment' and 'Catch-up on return' that folks might find helpful.

Click here for the whole thing.

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