In conversations with HR professionals and benefit brokers, we find that the topic of long-term care insurance (LTCi) is often covered in less than two minutes during renewal meetings. When I ask why the topic of conversation is so short, they tell me, “Employees just aren’t asking about it, so they must not be interested.”

If employees aren’t asking about LTCi, does it mean they aren’t interested? They just may be unaware of the value of LTCi and that it can be offered by their employer with concessions not available in the open market. Here are the top seven reasons why LTCi should be a bigger part of the employee benefits conversation.

  1. Do you know LTCi can be offered as an employee benefit?
    There are multiple employer-sponsored products, including those with pricing discounts, guarantee issue, and payroll deduction.
  2. Do you believe Medicaid and Medicare will provide long-term care for employees?
    This is a popular misconception. Medicare and Medicaid will restrict your employees’ choices of where and how they receive care. These options will either not offer custodial or home care, or they’ll force employees to spend down their assets for care.
  3. Do you think LTCi is too expensive, or that your employee population is too young to need it?
    Many plans can be customized to meet personal budgets and potential care needs. It’s also important to know that rates are based on employees’ ages. The younger the employees are, the lower their rates will be.
  4. Are you aware of the variety of LTCi plans?
    Many policies offer flexible coverage options. Depending on the policy an employer selects, LTCi can cover a wide range of care—in some cases even adult day care and home safety modifications.
  5. Do you believe the market is unstable?
    Today’s products are priced based on conservative assumptions, and employers are enrolling very stable LTCi plans for their employees. Each month, we see new plan options and products being introduced along with new carriers entering the market.
  6. Do you already offer an LTCi plan but it’s closed to new hires?
    Being able to offer a similar LTCi benefit to all employees is crucial for most employers. Find a partner that can assist with the current LTCi plan and can assist with bringing in a new LTCi offering for new hires.

 

By Christine McCullugh
Originally Published By United Benefit Advisors

Few people are prepared to handle the financial burden of long-term health care. In fact, many people have a false sense of security when it comes to long-term care. Let’s separate fact from fiction:

“Medicare and my Medicare supplement policy will cover it.”

FACTS:

  • Medicare and “Medigap” insurance was never intended to pay for ongoing, long-term care. Only about 12% of nursing home costs are paid by Medicare, for short-term skilled nursing home care following hospitalization. (Source: Guide to Long-Term Care Insurance, AHIP, 2013)
  • Medicare and most health insurance plans, including Medicare supplement policies, do not pay for long-term custodial care. (Source: 2017 Medicare & You, Centers for Medicare & Medicaid Services)

“It won’t happen to me.”

FACTS:

  • Almost 70% of people turning age 65 will need long term care services and supports at some point in their lives. (Source: LongTermCare.gov, November 2016)
  • About 67% of nursing home residents and 70% of assisted living residents are women. (Source: Long-Term Care Providers and Services Users in the United States, February 2016, National Center for Health Statistics)

“I can afford it.”

FACTS:

  • As a national average, a year in a nursing home is currently estimated to cost about $92,000. In some areas, it can easily cost well over $110,000! (Source: Genworth 2016 Cost of Care Survey, April 2016)
  • The average length of a nursing home stay is 835 days. (Source: Centers for Disease Control and Prevention, Nursing Home Care FastStats, last updated May 2014)
  • The national average cost of a one bedroom in an assisted living facility in the U.S. was $43,539 per year in 2016. (Source: Genworth 2016 Cost of Care Survey, April 2016)
  • Home health care is less expensive, but it still adds up. In 2016, the national average hourly rate for licensed home health aides was $20. Bringing an aide into your home for 20 hours a week can easily cost over $1,600 each month, or almost $20,000 a year. (Source: Genworth 2016 Cost of Care Survey, April 2016)

“If I can’t afford it, I’ll go on Medicaid.”

FACTS:

  • Medicaid, or welfare assistance, has many “strings” attached and is only available to people who meet federal poverty guidelines.

Whether purchased for yourself, your spouse or for an aging parent, long-term care insurance can help protect assets accumulated over a lifetime from the ravages of long-term care costs.

By Bill O’Quin

Originally Published By Lifehappens.org

Insurance has become the method by which most Americans have their health-care costs paid. By paying a regular monthly bill for health insurance, the cost of expected health care events is spread out into even payments and the cost of major unexpected medical incidents is absorbed by insurance. Lack of health insurance can have a profound negative effect on personal finances.

Bankruptcy

Lack of health insurance can come about due to lack of income to pay for it, or when a breadwinner is between jobs that would otherwise provide health insurance as an employment benefit. If a major illness or accident occurs during the time a person is uninsured, it can lead swiftly to bankruptcy, reports the Oregon Public Broadcasting News. Under-insurance, that is, health insurance which is not sufficient to cover the costs of a major health incident, can also lead to bankruptcy. A study published by the American Journal of Medicine in August 2009, reported that well over 60 percent of U.S. bankruptcies filed. in 2007 were due to inability to pay medical costs. Most of these debtors had medical debts over $5,000, which represented a significant portion of their household annual income; three-quarters had health insurance insufficient to cover their bills, and one-quarter had no insurance.

Reduction in Income

Lack of health insurance can lead to a breadwinner's death, further causing the most severe reduction on household income. According to a Harvard Medical School study reported by Reuters news, about 45,000 people in the United States die each year due to lack of health insurance. Thus, people who could otherwise serve as breadwinners or care-givers are removed from being able to do so. The Urban Institute points out that people lacking health insurance create the significant economic impact of reduced personal earnings, because poorer health means less productive work years and more time off work due to illness or injuries during those working years.

Penalties

Beginning January 1, 2014, most people will be required to maintain health insurance, and individuals who do not obtain health insurance will have to pay a penalty under the federal Patient Protection and Affordable Care Act of 2010. The insurance requirement penalty provision exempts people with income below the poverty level, as well as those in jail, members of registered Indian tribes, those whose religious tenets preclude health insurance, and individuals for whom essential health insurance coverage cost for one month would exceed 8 percent of their household gross income for the year. People who do not meet one of these exemptions, but who decline to purchase health insurance, may be penalized up to $95 in 2014, $350 in 2015, $750 in 2016, and $750 plus a cost of living increase for subsequent years. According to SmartMoney, the penalty provision is likely to have the strongest impact on the personal finances of younger, unmarried consumers. Although the statute exempts the poorest people from its provisions, the penalty for failure to have health insurance will negatively impact the personal finances of those to whom it applies.

By Cindy Hill
Originally Published By LiveStrong.com

One of the perks of having a full-time job with a good company is the benefits package that comes with it. Often, those benefits include life insurance coverage, which is great. And everyone who can get life insurance at work should definitely take it, as there are many advantages to company-funded life insurance, also known as group life insurance. These advantages include:

1. Easy qualification. Often, enrollment into group life insurance is automatic. That means everyone qualifies, as there is no medical exam required. So people who have preexisting health conditions, like diabetes or previous heart attack, can get life insurance at work, and may get a better rate compared with what an individual life insurance policy might cost them.

2. Lower costs. Employers’ insurance plans tend to be paid for or subsidized by the company, giving you life insurance at a low cost or even free. You may even have the option to buy additional coverage at low rates. Costs tend to be lower for many people because with group plans, the cost per individual goes down as the plan enlarges.

3. Convenience. It’s easy to subscribe to an employer’s life insurance plan without much effort on your part and if a payment is required, it’s easily deducted from your paycheck in much the same way as your medical costs are deducted.

These are all great advantages, but are these the only considerations that matter when it comes to life insurance? The answer, of course, is no.

Life insurance should first and foremost fit the purpose—it should meet your needs.

Life insurance should first and foremost fit the purpose—it should meet your needs. And the primary purpose of life insurance is to care for those left behind in the event of your death. With group life insurance, it’s often set at one or two times your annual salary, or a default amount such as $25,000 or $50,000. While this sounds like a lot of money, just think of how long that would last your loved ones. What would they do once that ran out?

There are several other disadvantages to relying on group insurance alone:

1. If your job situation changes, you’ll lose your coverage. Whether the change results from being laid off, moving from full-time to part-time status or leaving the job, in most cases, an employee can’t retain their policy when they leave their job.

2. Coverage may end when you retire or reach a specific age. Many people tend to lose their insurance coverage when they continue working past a specified age or when they retire. This means losing your insurance when you need it most.

3. Your employer can change or terminate the coverage. And that can be without your consent, since the contract is between your employer and the insurer.

4. Your options are limited. This type of coverage is not tailored to your specific needs. Furthermore, you may not be able to buy as much coverage as you need, leaving you exposed.

Importance of Buying a Separate Life Insurance Policy
It’s for these reasons you should get an individual life insurance policy that you personally own, in addition to any group life insurance you have. Individual life insurance plans offer superior benefits, and regardless of your employer or employment status, they remain in place and can be tailored to meet your needs and circumstances.

Most importantly, an individual life insurance policy will fit the purpose for which you purchase it—to ensure your dependents continue to have the financial means to keep their home and lifestyle in the unfortunate event that you’re no longer there to care for them.

 

Originally Published By LifeHappens.org

When we hear the word insurance, most of us tend to think of things like car or health insurance. Critical illness insurance most likely isn’t one of the types of insurance that comes to mind.

It makes sense—we often don’t want to think about the scarier health-related risks in life—especially not critical illness. Unfortunately this inclination to turn away also often leaves us vulnerable and unprotected should we be diagnosed with a critical illness.

The reality is by the time we reach retirement age, one out of every four of us will be out of work due to illness or injury for longer than our accrued paid time off allows.

What Counts as a Critical Illness?
Illnesses can happen to any of us, at any time. They might be simple like a cold, or one of the several critical illnesses that affect Americans. The three major critical illnesses are:

  • Cancer
  • Heart attack
  • Stroke

Other critical illnesses can include:

  • Blindness
  • Multiple sclerosis
  • Organ transplants
  • Kidney failure
  • Paralysis
  • Heart valve replacement

According to The American Association for Critical Illness Insurance, statistics show annually:

  • Some 1.4 million Americans are diagnosed with cancer.
  • Every 40 seconds someone in the U.S. has a stroke; 600,000 people will experience their first stroke.
  • Every 34 seconds, an American will suffer a heart attack; 785,000 will have a new coronary attack.
  • 1.5 million Americans will declare bankruptcy this year; 60% are due to medical bills (up 50% over six years).

These numbers are alarming and that’s why protecting your income with disability and/or critical illness insurance is so important. Naturally, when we’re unfamiliar with certain types of insurance, many questions come to mind:

• Why do I need critical insurance?
• If I already have disability insurance should I get critical illness insurance as well?
• Which one is the best option?

Differences Between Critical Illness Insurance and Disability Insurance
Critical illness insurance pays you a lump-sum cash amount if you are diagnosed with any one of the critical illnesses covered by your policy, even if you make a full recovery. Disability insurance on the other hand pays you a regular payout when you’re ill or hurt and can’t work. It protects your income from the very real possibility you’ll become disabled for a period of time during your career, whether due to injury or illness.

There are several differences between critical illness and disability insurance.
Income protection: Critical illness insurance is meant to provide you a source of income to pay for your health costs if you are diagnosed with a critical illness, while disability insurance is meant to pay a portion of your income in the event that you cannot work.

Frequency of payment: Critical illness insurance generally provides you a lump sum payment as specified in the policy while disability insurance pays you a monthly benefit, usually a percentage of what you earned before becoming disabled.

Qualification of benefits: Critical illness benefits depend on the diagnosis of one of the policy-listed illnesses, while disability insurance benefits rely on your inability to work.

Tax implications: Critical illness gives you a lump sum tax-free cash payout, while disability coverage is calculated as a percentage of your after-tax income and is paid for a certain amount of time.

Requirement of proof of loss: Critical illness insurance generally doesn’t require any ongoing proof of loss of income, and is not affected by any other income you make, while disability insurance requires ongoing proof of loss of income. Disability insurance payments can stop when you go back to work and start earning income.

Which Critical Illness Policy Is Right For You?
Each critical illness policy has specific terms and conditions, which must be reviewed very carefully. Make sure you understand which types of illnesses are considered critical and will qualify for payment.

If your diagnosed illness is not included on the policy list, your claim may be denied by the insurance company. Also, be aware of the survival period of your policy. Critical illness policies typically have a survival period or waiting period, This is a period of time which specifies how long you must wait after you’ve received your medical diagnosis to collect the lump sum benefit from the insurance company. This period can vary from one policy to another.

Be sure to ask all your questions before buying a critical illness policy. This is where an insurance agent can be a valuable resource. They can help you understand the language in your policy, explain the specific terms and conditions, and guide your decision around which critical insurance policy is right for you.

 

By Sean Hanson
Originally Published By ThinkHr.org

On May 4, 2017, the U.S. House of Representatives passed House Resolution 1628, a reconciliation bill aimed at “repealing and replacing” the Patient Protection and Affordable Care Act (ACA). The bill, titled the “American Health Care Act of 2017” or “AHCA,” will now be sent to the Senate for debate, where amendments can be made, prior to the Senate voting on the bill.

It is widely anticipated that in its current state the AHCA is unlikely to pass the Senate. Employers should continue to monitor the text of the bill and should refrain from implementing any changes to group health plans in response to the current version of the AHCA.

The AHCA makes numerous changes to current law, much of which impact the individual market, Medicare, and Medicaid. Some provisions in the AHCA also impact employer group health plans. For example, the AHCA removes both the individual and the employer shared responsibility penalties. The AHCA also pushes implementation of the Cadillac tax to 2025 and permits states to waive essential health benefit (EHB) requirements.

The AHCA removes the $2,500 contribution limit to flexible health spending accounts (FSAs) for taxable years beginning after December 31, 2017. It also changes the maximum contribution limits to health savings accounts (HSAs) to the amount of the accompanying high deductible health plan’s deductible and out-of-pocket limitation. The AHCA also provides for both spouses to make catch-up contributions to HSAs.

The AHCA provides for a “continuous health insurance coverage incentive,” which will allow health insurers to charge policyholders an amount equal to 30 percent of the monthly premium in the individual and small group market, if the individual failed to have creditable coverage for 63 or more days during an applicable 12-month look-back period. This provision is slated to begin in 2019, or in the case of a special enrollment period, beginning in plan year 2018. The AHCA also allows states to obtain a waiver and underwrite policies for individuals who do not maintain continuous coverage.

The AHCA would also return permissible age band rating (for purposes of calculating health plan premiums) to the pre-ACA ratio of 5:1, rather than the ACA’s 3:1. This allows older individuals to be charged up to five times more than what younger individuals pay for the same policy, rather than up to the ACA limit of three times more.

It is unknown at this time if the AHCA can pass the Senate, or what might be changed in the text of the bill in order to earn votes in an attempt to pass the bill.

 

By Danielle Capilla
Originally Published By United Benefit Advisors

 

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