Welcome to the new InsureBlog (same as the old. Sorta). We’ve imported our 6+ years of posts over from Blogger, bought our own domain (insureblog.net), and made the jump.
Please be patient with us while we get used to the water.
IB at WP…
May 21, 2011>Life(less) Partners
May 20, 2011>
Five months ago, we reported on the bizarre tale of Life Partners (LP), “a fast-growing company in Waco, Texas, [which] has made large fees from its life-insurance transactions.”
There were a number of problems in LP’s business model, not the least of which was their on-call oncologist of dubious reputation, and the apparent lack of transparency on the part of the founding “Partner.”
Adding to their woes this time around is this news from BusinessWeek:
Dun’h!
It seems safe to say that receiving notice that one’s company is the target of an SEC investigation, not to mention a potential civil suit, ranks right up there with arriving at the office and finding the “60 Minutes” crew waiting patiently on the stoop.
There’s little question that the concept behind LP’s business is valuable: look at how many carriers now include an Accelerated Death Benefit with newly-issued policies. The problem is that companies like LP seem to be taking advantage of both the insured and the (prospective) investor. As my father used to say, “bulls make money, and bears make money, but pigs go to market.”
>Told Ya So!
May 20, 2011>
In case you were wondering, it was never about compassion for “those left behind.”
No, I’m not talking about tomorrow’s planned events, but this:
“Last week, we reported on efforts in California and Florida to force life insurance companies to keep (better) track of their insureds …
We opined at the time that “the state does not, in fact, care about whether or not the rightful beneficiary benefits, just that the state itself gets (at least) a cut.”
Bingo!
Does anyone seriously think the state cares one whit about beneficiaries? Of course not: this is simply another means of extracting unearned dollars for financially-strapped state governments. It’s shameful, unjustifiable, and a waste of resources.
Not that I have any strong feelings on the subject, of course.
>Trip: Interrupted?
May 20, 2011>
The Wall Street Journal had an interesting article the other day about risk management and vacation planning. With travel costs at an all-time high, it pays to ensure (and, perhaps, insure) that your hard-earned dollars aren’t wasted.
We covered trip interruption and cancellation policies last year, and this new WSJ piece does a good job of exploring some of the “loop-holes” through which the folks who issue these policies can avoid paying out claims. They recommend “cancel for any reason” plans as the ones most likely to actually “pay off” if your trip is canceled or is cut short.
Which brings us to the other side of the visa: travel medical insurance. Many health insurance plans (and Medicare) “stop at the border.” So it’s important to make sure whether or not your plan will cover you on the high seas, or overseas (or in Toronto or Cancun, for that matter). One thing that most “regular” plans may lack is emergency medical evacuation coverage; these claims can mean big bucks out of your pocket. The article notes that “for less than what you pay through airlines, you can buy an independent policy with $50,000 medical and dental coverage and $250,000 or more in evacuation coverage.”
While we’re not necessarily recommending that much coverage, it’s comforting to know that it’s available. If you’re planning a major (ie expensive) trip any time soon, our own Bob Vineyard may be able to help. He’s set up a helpful site with plenty of options, including some for groups traveling together, exchange students, even folks going on safari. Very cool.
>Breaking: First Nancy, now Harry [UPDATED]
May 19, 2011>
Un-freakin’- believable:
“ENTIRE State of Nevada Scores Obamacare Waiver“
Words fail (for now).
Just two days ago, Bob noted that SanFranNan had scored 20% of the latest ObamaWaiver©s for her district. He wisely observed that “we have to pass the waivers in order to know what is in them.”
The term “prescient” comes to mind:
“The Health and Human Services Department announced late Friday that Nevada had secured a statewide waiver from certain implementation requirements of the Obama administration’s health care law, because forcing them through, the department found, “may lead to the destabilization of the individual market.”
At issue is the new Medical Loss Ratio rules which (among other things) dictate the percentage of premiums collected that must be paid out. It appears that (current) Senate Majority Leader Harry Reid’s home state just dodged a major bullet.
One is tempted to ask, of course, why he was so gung-ho for ObamaCare© in the first place, since he must have known, from a simple reading of the bill, that this was in it.
He did read the bill, right?
UPDATE: Not to put too fine a point on it, but it seems that Harry, Nancy and Barry have replaced Santa, the Tooth Fairy and the Easter Bunny in terms of largesse.
Don’t believe me?
Here’s 1,000 words or so:
>Punishing the Good Guys
May 19, 2011>
[Caution: long rant ahead]
Last week, a good friend and colleague called to ask for help on what had become a rather complicated case. His clients, a husband and wife, were about to lose their health insurance – through no fault of their own – and had asked him for help. While he dabbles in this area, he’s really a (very, very good) P&C guy, and turned to me for advice.
Bill and Mary are in their sixties (he’s 68, she’s 61). Bill was recently (May 3rd) laid off from his long-time job, in anticipation of the company closing its doors. He’d received his COBRA election info, but was unsure of his next step. He called my friend, who then called me.
Bill’s going to be okay: he can (and will) pick up a Medicare Supplement plan, as well as his Part D coverage, on the “open market.”
But Mary has a problem: after a thorough pre-screen, we’ve determined that she’s uninsurable.
You’re probably thinking “okay, Henry, what’s the big deal? They’ve got the COBRA info, she’ll just glom onto that.”
Would that it were so simple:
In its infinite wisdom, the CongressCritters who drafted the Consolidated Omnibus Budget Reconciliation Act made it very clear that COBRA was a continuation of one’s existing group coverage. Implicit in that definition is a major problem: if there’s no group, then there’s no continuation of that coverage, and so there’s no insurance.
Period.
Which leaves Mary with very few, mostly sub-optimal [ed: why not just say "crappy?"] choices:
■ Open enrollment with a local HMO (with a very high premium and some major limitations)
■ Applying – and being declined – for coverage (which gets her on a state-mandated Guaranteed Issue plan)
■ A conversion plan (very expensive, verry crappy)
■ The new ObamaPool©
None of these are really great choices, but it’s that last one that has me seething:
The ObamaPool© plan has decent benefits, reasonably decent rates, is Guaranteed Issue, and will cover her (numerous) pre-existing conditions.
There’s just one catch:
She’ll have to be uninsured for (at least) six months before she’s eligible.
That’s correct: she and Bill have played by the rules, staying insured even when times were tough, and she can’t access the same coverage that her no-goodnik neighbor – who’s never bothered to buy insurance, even though she could well afford it – is free to waltz in this afternoon and buy with basically a signature and a (smallish) check.
This is outrageous. Unconscionable. Immoral.
We are punishing people for playing by the rules, for being responsible, productive citizens, for taking personal responsibility This isn’t about politics, it’s about something far more important: justice.
>Fresh Air PSA
May 19, 2011>
The Fresh Air Fund provides free summer vacations to New York City children from low-income communities. Every year, some 10,000 kids benefit from this opportunity. In its over 130 years of service, the FAF has provided almost 2 million youngsters with access to unique programs and, of course, fresh air.
The Fund’s Sara Wilson tells us that they’re “in need of host families for this summer. Host families are volunteers who open their hearts and homes to children from the city to give them a Fresh Air experience that can change lives.”
Sara’s put together a really useful “microsite” that explains the program and how you (or someone you know) can help. Just click here to be whisked away to fresh air and a chance to help those less fortunate.
>Alphabet Soup Update
May 18, 2011>
■ First up, courtesy of our friend Joe Kristan, next year’s Health Savings Account (HSA) contribution limits:
For singles, the max you can drop in will be $3,100 (up $50 from this year); for families, it’s $6,250 (up $100). Remember, you need to be covered by a qualifying High Deductible Health Plan (HDHP) to make contributions. The 2012 minimum deductible for these plans remain at the 2011 level ($1,200 for singles, and $2,400 for families).
Some HDHP’s include additional out-of-pocket requirements above the deductible (I hate these). These will increase $100 for singles and $200 for family coverage next year.
■ FlexBank’s Lou Gellenbeck sent along this helpful info on how ObamaCare©‘s new W-2 reporting requirements affect Health Reimbursement Arrangements (HRAs). The key take-away is that they’re “exempt from the new W-2 reporting requirements for group health plans.”
But what’s that really mean?
Lou explains:
“Starting in tax year 2012 …employers that file 250 or more Forms W-2 for the preceding calendar year [must] report the aggregate reportable cost of applicable employer-sponsored health insurance coverage provided on each employee’s annual Form W-2…
Aggregate reportable cost does not include amounts contributed to a Health Savings Account (HSA), the amount of any employee salary reduction election to a health Flexible Spending Account (FSA), or the cost of coverage under a Health Reimbursement Arrangement (HRA). This reporting will be for informational purposes only and will not affect tax liability.
Specifically noted in the legislation is the requirement that employer contributions to a health FSA (i.e. matching contributions or where the employer seeds the health FSA with funds) must also be reported in certain situations. FlexBank’s FSA clients will receive additional information on this part of the ruling in the near future under separate cover.”
See why one’s choice of administrator for these kinds of plans are local and accountable? Did your admin alert you to these changes?
She also reminds us that “comprehensive guidance on the W-2 reporting requirement may be found here.“
Thanks, Lou!
>Cavalcade of Risk #131 now up
May 18, 2011>Emily Holbrook makes her CavRisk hosting debut with this outstanding edition. It’s short, sweet and right on point.
>Joe K goes big time
May 18, 2011>
Our good friend (and favorite TaxBlogger) Joe Kristan was recently quoted in the Wall Street Journal.
Mazel Tov, Joe!
